BBC hit with $1.3bn blow amid mass license fee refusals

The BBC has lost more than £1 billion ($1.3 billion) in revenue as millions of UK households either canceled their television licenses or refused to pay, according to a new report from the House of Commons Public Accounts Committee (PAC).

Published on Friday, the report warns that mass cancellations and rising evasion are rapidly eroding the broadcaster’s primary source of funding. The BBC currently relies on the license fee for around two-thirds of its annual budget.

Mass Non-Payment and Evasion Surge

Under UK law, households must pay the annual £174.50 TV license to watch or record live programs or use BBC iPlayer. But the PAC found that the BBC is struggling to sustain this decades-old funding model.

3.6 million households now claim they do not need a license — 300,000 more than last year.

Another 2.9 million people are using BBC services without paying.

The BBC and its enforcement contractor made two million home visits in the last year — a 50% increase — but recorded fewer prosecutions.

“Declining household participation and rising evasion has not been successfully tackled,” the committee said.

Funding Crisis Ahead of Charter Renewal

The report arrives at a critical moment for the BBC, which will soon begin negotiations with the UK government over the future of the licence fee. The broadcaster’s current Royal Charter, which governs its structure and funding, expires in 2027.

Culture Secretary Lisa Nandy has said the charter review process will begin “imminently,” fueling speculation about whether the license fee model will survive in its current form amid competition from global streaming platforms like Netflix and Disney+.

Scandal Adds Pressure

The funding debate has intensified after recent controversy involving the broadcaster. Earlier this month, the BBC issued a formal apology to US President Donald Trump after a documentary included a misleading edit of one of his speeches from before the January 6 Capitol riot.

The fallout led to the resignations of Director-General Tim Davie and BBC News chief Deborah Turness. The White House previously accused the broadcaster of being a “Leftist propaganda machine” and “100 percent fake news,” calling the edit “purposefully dishonest.”

A Model Under Strain

With revenue declining, evasion rising, and political pressure mounting, the PAC warned that the BBC must urgently confront the fragility of the license fee system.

The committee concluded that the broadcaster faces “significant risks” to its financial stability unless reforms are introduced — underscoring an uncertain future for the BBC’s long-standing funding model.