BBC licence fee overhaul - 'Fight is on' as 300,000 households stop paying

The BBC has admitted it is looking into a licence fee overhaul as 300,000 more households have stopped paying it.

The annual report published today says the battle with its streaming rivals like Netflix has created “a moment of real jeopardy for the sector”.

The report revealed 23.8m licences were in force at the end of the year, down from 24.1m in 2023-24. The drop means a loss of about £50m in revenue for the corporation.

READ MORE: Good Morning Britain host apologises as they hold back tears during emotional interview

READ MORE: Beloved BBC daytime show suddenly pulled from schedules as fans left devastated

It comes following a string of major controversies for the BBC including the streaming of Bob Vylan's Glastonbury set, Gregg Wallace's misconduct hearing at MasterChef and a probe into the coverage of Gaza.

BBC Chair Samir Shah says in the annual report: “The fight is on, and it is vital we now think very carefully about the kind of media environment we want for the UK.”

He added they were searching for “the best future funding model for the BBC”.

Shah said: “I have already set out some views on this and the board will be saying more over the coming months,” he said. “But all of us are clear that we want to make sure we protect the BBC as a universal service and help it not just to survive, but thrive, for a generation and more.”

Licence fee income increased slightly year on year, totalling £3.8bn in 2024-25. However, the small rise was down to the 6.7% inflationary increase in the fee to £169.50 a year.

“The current collection method remains fair, effective, and good value for money,” the report said. “As we approach the end of the charter, we will proactively research how we might reform the licence fee to secure the benefits of a well-resourced, universal BBC of scale for the long term.”

The annual report also revealed the highest paid presenters on the BBC. And the Director general Tim Davie also spoke about the challenges they face for crisis hit programme MasterChef.

Davie has said he and the corporation’s leadership team will not “tolerate behaviour that is not in line with our values” following the independent report into allegations of misconduct against MasterChef presenter Gregg Wallace.

The 58-year-old was speaking as the BBC unveiled its annual report, the day after the report into Wallace found a total of 45 out of the 83 allegations of misconduct made during his time on the show were substantiated, including one allegation of “unwelcome physical contact”.

Speaking about the independent report commissioned by MasterChef producer Banijay UK, Davie said: “From our side, it’s simple, we’re not going to tolerate behaviour that is not in line with our values.

“The industry needs to change, and we want to lead in the front, myself and the BBC leadership team will not tolerate people who are behaving inappropriately.

“There is no place in or on the BBC for those who are not prepared to live by our values, whoever they are. This is a time of transition for the industry, a reset, and the changes we are driving are overdue.”

On Monday, Wallace’s MasterChef co-host John Torode confirmed he had a standalone allegation of racist language upheld in the same report.

He said had “no recollection of the incident” and was “shocked and saddened” by the allegation in an Instagram post.

In November 2024, the show’s production company, Banijay UK, announced Wallace would step away from his role on the BBC cooking show while historical allegations of misconduct were investigated.

The report concluded that the “majority of the substantiated allegations against Mr Wallace related to inappropriate sexual language and humour”, adding that “a smaller number of allegations of other inappropriate language and being in a state of undress were also substantiated”.

Several staff members dismissed

During the release of the annual report, BBC chair Samir Shah revealed for the first time that several members of staff had been dismissed as a result of an independent review of workplace culture commissioned by the BBC.

He said: “This is the first time we’re going to say this publicly, several people have been dismissed as a result (of the review).

“But that, alongside the way the executive responded to the Banijay report into MasterChef yesterday, and I want audiences to feel confident that we are addressing these challenges.

“Finally, at the same time as acknowledging and dealing with the things they’ve gone wrong, the BBC has delivered an outstanding range of content to licence.”

Davie later turned his attention to the Gaza: How To Survive A Warzone documentary, after a review found it had breached the corporation’s editorial guidelines on accuracy.

The programme was removed from BBC iPlayer in February after it emerged that the child narrator, Abdullah, is the son of Ayman Alyazouri, who has worked as Hamas’s deputy minister of agriculture.

Davie added: “There was a breach of our editorial guidelines, there was no breach on impartiality and no evidence of any outside interest impact on the programme.

“But there was a breach of accuracy, and that is not acceptable, so we are taking action to ensure proper accountability and we’re taking immediate steps to stop a failing like this being repeated.

“Despite this mistake, I do want to credit thousands of people across the BBC for delivering such brave impartial journalism despite immense challenges and very significant personal pressure.

“Personally, I remain utterly committed to delivering impartial coverage without fear or favour. It is needed now more than ever in this polarising world.”

On Monday, Ofcom announced it would investigate the documentary under its broadcasting code, which states factual programmes “must not materially mislead the audience”.