BBC director-general Matt Brittin has said the corporation needs to be “open to all options” for funding, including a household levy.
It comes after it was revealed that the BBC’s licence fee income has dropped by more than £1 billion in real terms over the past decade, with the 2026 BBC annual report revealing that TV licences dropped by more than half a million in the 2025/26 financial year.
BBC chairman Samir Shah said ahead of the release of the annual report on Tuesday that the corporation’s funding model meant it “cannot maintain its public service mission”.
Asked about a possible household levy at the House of Lords Communications and Digital Committee as part of the BBC charter review, Mr Brittin, 57, said: “What I’ve looked at with Dr Shah and with colleagues is, what do you need in order to maintain that universal remit under charter, with a level of funding that is sustainable.
“It’s very, very hard to run an organisation that can attract the best creative, journalistic and technical people if you’re going to have to cut costs every year, it’s an unpredictable but downward spiral.
“So we need universality, we need sufficiency, and we need the scale to be able to do whatever the set of purposes the charter sets us in the best possible way.
“We’ve talked about that, whether it’s at a programme level, whether it’s a genre level, like music, whether it’s a technology level, so you’ve rightly illustrated some of those choices, so that’s what centrally we need.
“There are many mechanisms and variants that could achieve that.
“We talk particularly about the household levy because the committee had heard from various witnesses who had pointed at that as something that might be a solution, and I think we should be open to all options that could deliver that sort of set of outcomes.”
The new director-general has previously described the licence fee model as a “busted flush” which is “no longer fit for purpose”.
Culture Secretary Lisa Nandy appeared to rule out introducing the levy earlier this month.
She told BBC Radio 4’s Today programme: “I think there are different ways of of doing a household levy. But every time I have a discussion about the BBC licence fee, if an option is put to me, people assume if I don’t rule it out that the Government has some kind of secret plot to introduce it.
“I can tell you, hand on heart, that we have made no decisions about this.
“We’re talking to the BBC about it. We’re also about to go out, as part of the charter process, and consult with the public. We’re determined to get this right.
“What is not negotiable is that we will fund the BBC properly. That is a commitment that we have made.
“What is up for negotiation is how we do that, because it has to be sustainable and it has to command public support.”
Mr Brittin stressed the need for the BBC to reinvent itself.
The former Google executive told the committee: “I think the onus on us is to reinvent the BBC for the world we’re now in, and that requires us to focus on the audience value, the public service value, of the BBC, what does that mean today?
“The economic impact, and I think last week we published a sort of an updated report that shows the scale of that impact.
“And in this moment of geopolitical and international disruption by the scale of technology and innovation to come, the sovereignty impact, British values and how they’re portrayed in the world and how the world sees us.
“And I think on that third one, we also published last week a report that shows that the BBC is reaching over half a billion people around the world, something we should be really proud of.
“So the opportunity, I think, for us is to reinterpret the BBC’s mission with today’s technology and today’s setting – that will imply quite a lot of change, and as we discussed last week, also a rethink of the funding mechanism, if we’re to have a BBC that has sufficient universality, scale and sustainability.”
The annual report said the BBC’s financial outlook “deteriorated” in the second half of 2025.
