A plan to end the BBC’s sole claim on the £3.2 billion licence fee and parcel it out to other broadcasters is being considered by David Cameron, The Times has learnt.

A string of scandals involving the BBC, including questions over phone-in quizzes and a faked trailer involving the Queen, has led the Conservative Party to question whether the licence fee can be justified.

Now Mr Cameron, the Tory leader, fears that the arrival of 30 channels in every house could leave only the BBC with the resources to commission more ambitious dramas, documentaries and news programmes. The party is also concerned that multichannel television could undermine Channel 4, handing the BBC a monopoly of public service broadcasting.

Mr Cameron’s culture team has begun a policy review into public service broadcasting which is looking at ways to ensure Britain will have a “plurality of public service broadcasters” in the digital era. It will report early next year.

This comes weeks after a cross-party committee of MPs also recommended that BBC licence fee income should be cut and money handed to ITV, Channel 4 and other broadcasters to make up for a shortfall in children’s and regional programming.

Jeremy Hunt, the Shadow Culture Secretary, said that in future the BBC might not be the sole recipient of the licence fee. “That’s one option because we want to make sure we aren’t exclusively dependent on the BBC for high-quality television. We want choice for consumers, and the BBC is not the only silo of good-quality television.”

He said that other channels had shown they were providing “public service content”, but ability to watch programmes on the internet and the large choice faced by consumers could make it harder for commercial competitors to compete.

“On the news, we have BBC, ITV and Sky [which is part owned by The Times ultimate parent company, News Corporation]. We have costume dramas on ITV as well as BBC. With digital switchover, the minimum number of channels is 30. It will be a lot more competitive.”

The Conservatives insisted that there was no plan for the radical dismembering of the BBC, but the decision would reduce the licence fee further and is likely to have a radical effect on the corporation. They said that they were not reviving the suggestions of David Elstein, the former Channel 5 chief executive, who carried out a review of the BBC in 2003 and concluded that the licence fee should be sent to the Treasury.

This week, George Osborne, the Shadow Chancellor, also fired a warning shot by calling for Parliament to oversee the corporation’s finances.

He said: “Given that the licence fee has now been classified as a tax by the Office for National Statistics, it is clear that greater financial oversight and scrutiny of the BBC is needed. This would not only be in the interests of licence fee payers. The BBC, too, would benefit from external advice on how to achieve value for money.”

Over the summer, the corporation caused controversy after a BBC One trailer was edited to imply that the Queen had stormed out of a sitting with Annie Leibovitz, the photographer. Asked if the revelations made it harder for the BBC to justify the licence fee, Mr Hunt said: “If they don’t sort this out very quickly then yes. We will, in the next few years, be going back into the debate about whether the licence fee can be justified.”

Some advisers have been urging Mr Hunt and Mr Osborne to shut Radio 1 and Radio 2, BBC Three and BBC Four and sell off most of the commercial arm, BBC Worldwide.

John Whittingdale, Conservative chairman of the Commons Culture Select Committee, said in November that “there was a case for intervention” to plug a supposed gap in quality. Ofcom, the independent regulator for the communications industry, is also preparing for an analysis of public service broadcasting next year.

What the fee buys

More than 25 million households pay an average of £10.96 per month for the licence. Of this:

49p is used to develop the BBC’s 240 websites
£7.54 keeps on air the eight television channels, including BBC One and BBC Two
£1.17 ensures that the ten national radio channels broadcast a range of music, news and sport
75p goes to the 40 local radio stations, from Radio Jersey to Radio nan Gaidheal
£1.01 covers the cost of broadcasting all television and radio output and collecting the fee

Source: bbc.co.uk

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