The BBC licence fee has been frozen at £145.50 for six years – a real terms budget cut of 16 per cent.

David Cameron has consistently said that the BBC must “live within its means” and it has been unable to swerve austerity measures that will ultimately force existing television and radio budgets to be cut.

In frantic negotiations ahead of the coalition’s spending review announcements, director general Mark Thompson also agreed to pay for the World Service, meet the cost of rolling out broadband internet access to rural areas, paying for local TV and online services and bailing out the struggling Welsh language broadcaster S4C.

It is believed Thompson swallowed the additional outlay, which will total £340m by 2015, to avoid paying the £556m it costs to provide free licence fees to households with a family member over 75.

Thompson is also expected to announce that senior managment salaries have been cut from around £80m to £70m in the past 12 months. Executive expenses have also fallen “by nearly a fifth” in the second quarter of 2010 compared to the same period last year.

(Source: MediaGuardian)

This article appears in issue 257 of Media Digest.

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