A Facebook post claims the BBC has lost £50 million “this year” from non-payment of the TV licence fee. It also states that 260,000 over-75s have “refused to pay” for the TV licence.
Neither of these points are right.
No evidence the BBC has lost £50 million in unpaid licence fees
The BBC hasn’t published any official figures on the amount lost to non-payment of the licence fee in 2020/21—it says data on evasion in the 2020/21 financial year wasn’t collected due to the pandemic.
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 (DCMS) 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 the National Audit Office (NAO) report referred to by Mr Knight here was its work on “The BBC’s strategic financial management” published in January, though it doesn’t itself contain the £50 million figure.
It’s important to note that Mr Knight’s estimate was for the “extra” amount lost through non-payment—so even if his estimate is correct, it’s only an estimate for part of the money lost due to licence fee non-payment, not the total amount lost as the Facebook post suggests.
Where does the £50 million figure come from then?
When we first asked how Julian Knight’s estimate was calculated, we were told it was extrapolated from a 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.” When we asked the BBC for more detail on this it pointed us to a consultation response published last year. This stated that if the BBC moved from the current system of fines for evading the licence fee to a civil penalty model, the corporation expected evasion to increase to 10%. It said that “each percentage point increase in evasion [would cost] the BBC around £44 million”.
Since we first published this article the DCMS committee has now supplied us with additional information explaining Mr Knight’s estimate.
The BBC aimed to reduce licence fee evasion to 5.9% by March 2021. However the evasion rate (calculated based on the number of licences the BBC expect to be in force and the number that actually are) was actually 7.25% at the end of 2019/20. (As noted above, no figure is available for March 2021 due to the pandemic).
Mr Knight took the percentage point gap between the evasion rate in 2019/20 and the target by March 2021, applied Ms Sumner’s rough calculation to it and estimated that the BBC had lost out on around £50 million in extra licence fee revenue which it could otherwise have collected had the evasion rate been 5.9%.
However, Mr Knight wasn’t suggesting—as the Facebook post appears to—that this is the overall amount the BBC lost in licence fee income.
Overall, BBC licence fee income increased this year
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 were newly eligible to pay.
There’s no evidence 260,000 pensioners have ‘refused’ to pay
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. The BBC says it will be writing to all these customers with details of how to set up a licence.
Recent figures from the BBC also show 709,000 over-75 licence holders have now converted to a new free TV licence, with 74,000 applications still in progress.