The BBC has hired the company chaired by former cabinet secretary Gus O’Donnell to explore how to get over-75s to voluntarily pay the licence fee and examine how the £700m annual costs might be reduced in the future.
The corporation has hired consultancy Frontier Economics to investigate how to decrease the £700m-plus costs it is taking on as part of the deal imposed by chancellor George Osborne in July.
O’Donnell, known in the corridors of power by his initials “GOD” for his deft handling of politics under four prime ministers, is the non-executive chairman of Frontier Economics tasked with leading the BBC project.
“We want to explore the options, in particular on how voluntary payments might work,” said a BBC source. “It’s early days, this work is only just beginning.”
The BBC is to take on the cost of licence fees for over-75s in stages, with the government covering £468m of the total cost in 2018/2019 and £247m in 2019/20.
The BBC, which will assume the full £700m cost from 2020/21, has also asked Frontier Economics to look at whether there might be options to “reform” the free deal for over-75s.
Frontier Economics is not expected to file a report until mid to late next year.
