BBC condemns low licence fee increase and warns of impact on creative sector

The BBC's governing body has warned that the UK's creative sector will be hit after the government said it would limit the expected licence fee increase to £10-a figure which is below the inflation rate.

- Alexandra Topping

The culture secretary, Lucy Frazer, raised further alarm at the highest levels of the UK's public service broadcaster yesterday when she announced that its taxpayer-funded model would be reviewed and "alternative models" of funding explored.

In a move that will raise fears about the privatisation of the BBC and further cuts to its budget, Frazer told MPs that the review would "look at how we can ensure the funding model is fair to the public, sustainable for the long term and supports the BBC's vital role in growing our creative industries".

In a statement to the Commons, in which she did not mention the phrase "public service broadcasting", Frazer confirmed that the licence fee, which funds much of the corporation's operations, would rise by £10.50 to £169.50 a year. The BBC board, in a strongly worded statement, said the below-inflation increase would "require further changes on top of the major savings that we are already delivering".