By Daniel Boal, ITV News Multimedia Producer

Culture Secretary Lucy Frazer has denied the government is “tearing up” a license fee deal with the BBC after reports that Rishi Sunak plans to block a 9% increase in the annual fee.

For the last two years the license fee has been frozen at £159 a year. However, it was previously agreed that it would rise in line with inflation after April 2024.

The group is trying to recoup £500m worth of savings amid soaring inflation and the two-year fee freeze that covers most of its funding.

As the cost of living crisis continues, many may not be able to afford to add another financial strain to their already tight budgets.

How much is the BBC license fee?

Currently the BBC license fee is £159 and has been at this level for two years.

However, as bosses look to recoup their savings, a 9% increase has been proposed for the next financial year.

This would be an increase of around £15 per year to a projected £173.30.

When asked about an increase above £170, Culture Secretary Lucy Frazer replied: “Of course that’s a lot. That’s something we’re thinking about at the moment. And we will make a decision on that in due course.”

When do the costs rise?

If royalties increase, they would likely change in April 2024.

What did the government say?

Culture Secretary Lucy Frazer has confirmed the Government is reviewing the planned price rise as concerns grow over the impact on the cost of living.

She said: “I wouldn’t put it that way at all, no. What concerns us is the cost of living. And as a government we have taken a number of measures in recent years to protect people from rising costs of living.

Culture Minister Lucy Frazer has confirmed that the government is reviewing the planned price increase. Photo credit: PA

“We look at the appropriate inflation rate. And we think about that in the context of wanting to make sure that people can continue to pay their bills.”

Ms Frazer said a decision would be made “very soon”.

The Prime Minister said that “no final decisions have yet been made” about the future of the license fee.

Asked how sustainable he believes the license fee is, Mr Sunak told reporters: “Firstly, I think it’s welcome that the BBC is seeking savings and efficiencies in the way it operates.”

“It is really important that in difficult times everyone does what they can to reduce the cost of living for families.”

Speaking during his trip to Dubai for the Cop28 climate summit, he added: “The BBC, like any other organization that serves the public, should strive to do this and behave accordingly, so I think this is very welcome.”

A longer one-hour edition of BBC News At One is moving to Salford to cut costs elsewhere. Photo credit: PA

How else is the BBC planning to cut costs?

The BBC had previously announced that its evening program Newsnight would be reduced to a 30-minute program as part of cost-cutting measures for its news production.

The BBC Two show will continue to air on weekdays as an “interview, debate and discussion programme”, but more than half of Newsnight’s 60 jobs will be axed.

As part of other changes, an extended hour-long edition of BBC News At One will move to Salford, while BBC Breakfast, also broadcast from Salford, will be extended by an additional 15 minutes each day, the company said.

There will be a greater focus on digital storytelling and live reporting across the BBC News department, with a “reduction in the amount of television packaging”.

The company believes the numerous changes will save £7.5 million.

A BBC spokesman said: “The government and the BBC agreed a six-year license fee agreement in January 2022, which froze license fees for two years and provided for an increase in line with inflation from 2024.”

“As usual, the Government sets and confirms the cost of a license each year and this remains unconfirmed for 2024/25.

“The BBC will continue to focus on what it does best: working to deliver first-class content and delivering great value to all viewers.”

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