BBC licence fee level 'not settled' - John Whittingdale - BBC News
The future level of the BBC licence fee is not settled and is "dependent on the outcome of charter review", Culture Secretary John Whittingdale has said.

Mr Whittingdale told BBC Radio 4's The Media Show it was "an open question" as the size and scope of the BBC was being considered as part of charter renewal.

But BBC director of strategy James Purnell said they had an agreement "absent to fundamental change".

The BBC's current royal charter is due to expire at the end of 2016.

'Full public consultation'

In July it was announced that the BBC would take on the 608m cost of free TV licences for people over the age of 75.

In return the government promised to allow the 145.50 fee to increase in line with inflation and close a loophole that made it possible to watch on-demand television without a licence.

At the time, ministers said the move would be phased in from 2018-19.

But Mr Whittingdale said: "What happened in July was not the licence fee settlement.

"We've made it quite clear that the decision as to the future level of the licence fee is connected with charter review, where we are having a full public consultation in which everybody is invited to express a view.

"The decision taken in July was about the necessity of getting down the amount of government spending particularly in the welfare budget and it was the case that the DWP (Department for Work and Pensions) was having to write, every year, a very sizable cheque to the BBC to compensate them for free TV licences for those over 75.

"So it was understandable that the chancellor, who was looking to find savings in the welfare budget, would regard that as a legitimate area to ask for savings to be made."

The BBC licence fee of 145.50 has been frozen for seven years.

"Our understanding is that quite properly if the government tried to change the BBC then of course the money would need to be looked at again," Mr Purnell said.

"If there is an intention to have a different licence fee settlement after that... I think we would have a hard think about that.

"We have reached an agreement to our finances absent to fundamental change.

"If the government decides it wants to have a further licence fee discussion you would have to look at all of the elements which were up for grabs, both extra costs and extra income, and so you would have to start again."