The BBC has hired an economic consultancy to explore options to cut the over-75 TV licence bill.
Frontier Economics, which is chaired by former top civil servant (Lord) Gus O'Donnell, has been tasked by the BBC to explore ways of encouraging over-75 year olds, who are normally entitled to a "free" TV licence, to voluntarily pay the fee. The company will also research alternative ways of cutting the £725m annual bill.
The Department for Work and Pensions currently covers the full cost of providing "free" TV licences to the over-75s, but under the terms of its next Royal Charter the BBC will begin shouldering some of the cost from 2018/19. The BBC will be fully responsible for funding the over-75 TV licence from 2020/21, so naturally wants to do so as cheaply as possible.
Under current arrangements, a household is entitled to a "free" TV licence if any of the occupants is aged 75 or older. In an effort to reduce costs, the BBC is understood to want a tightening in the qualifying criteria. One way of doing that is by changing the terms of the concession, so that it only applies to households where all of the occupants are aged 75 or older. Such a move would immediately slice the £725m bill in half.
A BBC source told Broadcast magazine: "We want to explore the options, in particular on how voluntary payments might work. It's early days - this work is only just beginning and Frontier won’t be reporting back until later next year."
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