BBC trustees have had to be reassured by Trust chair Rona Fairhead and director general Tony Hall that the government will stick to its commitment to raise the licence fee in line with inflation.
Trustees raised concerns about conditions attached to the inflation link, which was designed to mitigate the more than £700m cost of making the BBC fund free TV licences for the over-75s, minutes from a Trust meeting on 6 July, the day the government unveiled its settlement for the future of BBC funding, reveal.
The minutes say that trustees were “concerned about the conditions attached to the licence fee plus Consumer Price Index (CPI) commitment” but that “both the chairman and the director-general confirmed that they were confident of the assurance that had been given by the Chancellor of the Exchequer”.
Trustees are understood to have been partly concerned the deal left room for the treasury to change the base rate of the fee while retaining the inflation link.
The commitment to link the licence fee to inflation comes with the caveat that it would only be put in place as long as the “purposes and scope” of the BBC do not change.
In an interview with the Guardian less than a week later, Fairhead said: “The word of a chancellor and a secretary of state you should be able to trust.”
However, when unveiling the green paper on the future of the BBC last month, culture secretary John Whittingdale said it would “question whether the BBC should try to be all things to all people”. The paper includes a number of suggestions which would see the scope of the corporation change radically.
The green paper is designed to shape negotiations over a new BBC Royal Charter, and the BBC has said it “would appear to herald a much diminished, less popular BBC”.
The 6 July minutes show the trust believes that the CPI link is integral to the BBC’s future financial stability.
The meeting at the Trusts’s office in Great Portland Street followed three days of conference calls between the trustees spurred by negotiations between Fairhead, Hall and chancellor George Orsborne held on 2 July to hammer out the deal.
In an earlier meeting on 29 June, Fairhead informed the trust that Whittingdale had told her the government was planning to make the BBC take on the over-75s bill and that the “imposition of such a cost would have very serious implications for the BBC and potentially require immediate channel or service closures”.
