Changes to the rules about free TV licences for the over-75s are the subject of an upcoming oral question in the House of Lords on 6 July 2020. Lord Foulkes of Cumnock (Labour) is due to ask the Government what plans it has to discuss with the incoming director-general of the BBC the postponement of the withdrawal of free TV licences for people aged over 75. 

The BBC Board appointed Tim Davie as the BBC’s new director-general in early June. He will replace Lord Hall of Birkenhead in the role from 1 September 2020. 

Free TV licences for the over-75s 

Since 2000, people who are aged 75 or over have been entitled to a free TV licence that covers their whole household. Anyone who watches, records or streams television programmes as they are being broadcast, or who uses the BBC iPlayer service to download or watch programmes, needs to be covered by a TV licence. A standard TV licence currently costs £157.50 a year.  

However, the entitlement to free TV licences for the over-75s is due to change from 1 August 2020. In future, only households where someone aged over 75 receives pension credit will be entitled to a free TV licence. 

Why is the entitlement changing? 

This change is happening as part of a wider agreement on BBC funding reached by the Government and the BBC in July 2015. For most of the period since free licences for the over-75s were introduced, the Government met the cost by reimbursing the BBC. However, the new BBC funding model included an agreement that the BBC would take on the full cost of the over-75s TV licence concession. The cost of providing free TV licences to the over-75s amounted to £655 million in the 2017/18 financial year. To phase in the new arrangement, the Department for Work and Pensions contributed £468 million in 2018/19 and £247 million in 2019/20. The BBC took on the full costs from this financial year. 

Following the 2015 funding agreement, the Government legislated in 2017 to transfer responsibility for age-related licence fee concessions to the BBC. From 1 June 2020, the age-related fee concession is no longer determined by regulations made by the Secretary of State. Instead, the BBC has the power to make changes, including changing the eligibility criteria, the level of the concession and the qualifying age (although this may not be lower than 65) or ending the concession altogether. 

The BBC Board announced a year ago that from 1 June 2020, the BBC would only fund free licences for people over 75 who receive pension credit. The BBC Board said this was the “fairest option to help the poorest pensioners” and “the fairest option for all licence fee payers”. It estimated that under the new scheme, over 1.5 million households could get free TV licences and this would cost the BBC up to £250 million by 2021/22. In comparison, continuing to provide free licences to all over-75s was expected to cost £745 million. In 2019, there were more than 4.6 million over-75s free licences in force, accounting for around 18% of all licences. 

To receive a free TV licence in future, over-75s will have to apply with evidence that they (or their partner if they are living at the same address) are receiving pension credit. TV Licensing, the licence-issuing body, says that suitable forms of evidence will be: 

  • A photocopy of a letter from the Department for Work and Pensions, the Pension Service or the equivalent bodies in Northern Ireland confirming the pension credit award. 
  • A copy of a bank statement showing the pension credit payment. 
  • A Warm Home Discount letter. 

What impact has the coronavirus outbreak had? 

Delaying the change 

The change in entitlement to a free TV licence has been delayed because of the coronavirus outbreak. On 16 March 2020, the BBC and the Department for Digital, Culture, Media and Sport (DCMS) said in a joint statement that recognising the exceptional circumstances, the change would now happen on 1 August 2020 instead of 1 June 2020. The statement said that during the coronavirus situation, “as the national broadcaster, the BBC has a vital role to play in supplying information to the public in the weeks and months ahead”. The BBC Board said it would keep the licence fee issue under review as the situation evolved. Free licences that were due to expire on 31 May 2020 have been automatically extended to the end of July. 

Age UK, a charity representing older people, described the delay as “welcome” but “not good enough”. It said the pandemic has shown that older people rely on television more than ever. It urged the Government and the BBC to work together to find a long-term solution to protect what it described as a “vital lifeline”. Age UK argues that it should be the Government’s responsibility, not the BBC’s, to design and deliver what it says is “arguably a state benefit”. It is calling for the Government to take back the funding and administration of the free TV licences scheme. 

During an earlier an oral question about the provision of free TV licences and the impacts of Covid-19, Lord Foulkes suggested the Government and the BBC should decide to delay the change indefinitely. 

BBC position 

The BBC reviewed the impact on its finances of the delay in implementing the change, and of Covid-19 generally, in its annual plan published in May 2020. It said: 

Across the media industry, the impacts of Covid-19 have been severe. The BBC has the stability of the licence fee, but the coronavirus has reduced our income, increased our operational costs and changed how we work. The Board’s decision to delay implementation of the over-75s licence fee reform this year will cost a significant sum at a time when revenue from the licence fee is also down because of the UK-wide changes to our operations. Our commercial operations are also severely affected because of the fall in the advertising market and the halting of productions. We estimate the additional costs of all of this for the first year will be at least £125m.

The BBC said it had had to re-plan its budget for this year at speed, and “given the scale and complexity of the impact, we will have to review and update plans in response to unfolding events”. 

Government position 

The Government has stated that any decision to reconsider the provision of free TV licences for people over the age of 75 is the responsibility of the BBC. Oliver Dowden, Secretary of State for Digital, Culture, Media and Sport, said in May that if the country was still in a similar situation with regard to coronavirus at the beginning of August, he hoped the BBC would show flexibility again. 

There are also broader questions about the future of the licence fee and BBC funding. In response to a question about whether it planned to review the licence fee in response to the Covid-19 outbreak, the Government said that it had: 

committed to maintain the licence fee funding model for the duration of this 11-year Charter period, until the end of 2027. However, we have been clear that, ahead of the next Charter Review process, we will undertake a detailed look at the future of the TV licence model itself. 

The Conservatives said in their manifesto for the 2019 general election that they supported free TV licences for the over-75s and believed they should be funded by the BBC. Boris Johnson questioned the long-term future of the licence fee during the election campaign. The Government ran a consultation between February and April 2020 on decriminalising licence fee evasion. It has not yet responded to the consultation. 

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Image by Ron Porter from Pixabay.