6 Jul 2015

BBC’s new benefits responsibility confirmed

The Culture Secretary John Whittingdale has confirmed the Sunday Times story that the government is handing over responsibility for the free licence fees for the over-75s policy to the BBC.

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It is protected as per campaign pledges for this parliament but after that it is in the BBC’s hands. Government sources dismissed my suggestion they might hand over responsibility for winter fuel payments to energy companies at some point in the future as well.

The cost for the BBC will start at £250m in 2018/19 and then is expected to increase to £450m the following year, and £750m by 2020/21. In return, the BBC gets to increase the licence fee in line with inflation and start charging for some I-player services.

The culture secretary was asked by the SNP’s John Nicolson if he would support the BBC trying to means test the over-75s’ benefit in future, a reminder of the complications of out-sourcing a benefit to an outside body. The Culture Secretary didn’t really engage with the premise.

This is not a major off-load of government welfare cost in the short term as it will be phased in later in the parliament. But it is a giant piece of messaging. For Tories who portray the BBC as hostile to cuts, here’s an opportunity, some of the chancellor’s allies say, for the BBC to see how it likes coming face to face with tricky welfare choices. And it’s a very significant cost saving in the medium to long term as the demographics send the bill upwards.

The culture secretary praised the BBC for embracing the new policy but the first the BBC seems to have heard about it was when the chancellor made direct contact with the BBC director general last week.

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