A Facebook post claims the BBC has lost £50 million “this year” from non-payment of licence fees. It also states that 260,000 over-75s had “refused to pay” for the TV licence.
Neither of these points are right.
No suggestion the BBC has lost £50 million in licence fees
The £50 million figure seems to have come from an interview in July on the Today Programme with Julian Knight MP, chair of the Digital, Culture, Media and Sport Select Committee.
Mr Knight said: “We’re seeing a degree of non-payment which we’ve not seen since the early 1990s and the poll tax campaign.
“We’re now looking at, by my estimates and the NAO’s recent report, we’re looking at an extra £50 million that has been lost through non-payment in the last year and that is quite a major hit to the bottom line.”
We understand Mr Knight, who has repeatedly expressed his opposition to the licence fee, was referring to the National Audit Office’s (NAO) report on “The BBC’s strategic financial management” published in January.
However, there is no £50 million figure in the NAO report, something the NAO confirmed to Full Fact.
Where does the figure come from then?
It’s not clear what Mr Knight meant by non-payment. It’s possible this could mean loss of previous licence fee payers, payments yet to be made or payment evasion.
Mr Knight’s office said his estimate was extrapolated from a Digital, Culture, Media and Sport Committee hearing in June 2020 where BBC Director of Policy Clare Sumner said “from memory, every 1% increase in evasion costs the BBC around £40 million.”
The figure is not only £10 million off Mr Knight’s estimate but Ms Sumner’s estimates seem to be a rough sum for calculating evasion costs in any given year and not how much the BBC lost in evasion or “lost” licence fees last year.
We spoke to the BBC who told us that data for evasion in the 2020/21 financial year had not been collected due to the pandemic, so a precise cost was not available either.
It did state that evasion had reduced from 12.7% in 1991 to 6.5%-7.5% in 2019/20 since the BBC took over licence fee collection from the Home Office.
Other BBC data collated by the House of Commons Library, suggests between 2018/19 and 2019/20 the evasion rate increased by less than one percentage point.
Reports show the number of licences in force decreased in 2020/21 (from 25.5 million to 24.8 million).
Despite this, the BBC’s last annual accounts show that its licence fee collection income actually increased by £230 million in 2020/21, from £3.52 billion to £3.75 billion.
The BBC told Full Fact the increase in revenue was due in part to the CPI inflation-linked increase in the licence fee from £154.50 to £157.50 in April 2020. The income also included some licence fee payments from those over-75 who are now eligible to pay.
So overall, it’s wrong to suggest the corporation lost money from the licence fee last year in particular.
It’s unlikely that all 260,000 pensioners have “refused” to pay
If, as the original Facebook post perhaps implies, the £50 million is a loss caused by 260,000 over-75s refusing to pay, that too would be misleading.
The requirement for over-75s to pay the licence fee was introduced in July this year. The introduction of the fee for over-75s was meant to happen in 2020, but was delayed in light of coronavirus.
The BBC says 260,000 over-75s haven’t made licence fee payment arrangements yet.
However, this does not mean all 260,000 of those people have refused to pay. We cannot conclude whether all of these over-75s are refusing or not. The BBC says it will be writing to all these customers with details of how to set up a licence.
This update also shows 709,000 over-75 licence holders have now converted to a new free TV licence, with 74,000 applications still in progress.