BBC licence fee: collection enforcement approach becoming less effective, PAC warns

- Mission to ‘serve all audiences' at risk as younger audiences go elsewhere while planned digital shift could exclude others

- Broadcaster's relevance across the UK under pressure as PAC urges better representation of local communities

If the collection and enforcement of the licence fee is not modernised, the BBC risks compliant fee payers questioning the fairness of the system. In a new report on the BBC's accounts, the Public Accounts Committee (PAC) warns that the broadcaster's mission to ‘serve all audiences' is at risk, and that while the BBC is a trusted institution, its relevance across the UK is under pressure.

The BBC is not doing enough to enforce collection of the licence fee. While licence fee enforcement has traditionally relied on household visits, this approach is becoming less effective. Officers made 2 million visits to unlicensed homes in '24'-'25 - a 50% increase on the previous year - but this has not translated into higher sales or successful prosecutions. The BBC told the PAC it has become harder to get people to answer their doors compared to five years ago, which limits enforcement effectiveness, and that it has moved to a more marketing-led approach – but prosecutions for licence fee evasion have been in long-term decline since 2017.

Declining household participation and rising evasion has not been successfully tackled, and BBC users not purchasing a licence is unfair to the vast majority of households who do pay for theirs. Licence fee evasion and households not purchasing a licence together represented over £1.1bn in potential lost income in '24–'25. The PAC is recommending the BBC develop and implement approaches to collection and enforcement suited to monitoring online viewing.

In a time of intense competition for attention, younger audiences are choosing other media providers, putting the BBC's mission to ‘serve all audiences' under pressure. Only a little over half of younger people feel the BBC reflects them – while the BBC's digital-first strategy shifting to the use of platforms like TikTok risks alienating non-digital audiences. When questioned on the timeline for a switchover from broadcast to online, the BBC told the PAC that without universal affordable broadband, a switchover would be “a self-inflicted wound” and reiterated the BBC's commitment to maintaining significant broadcast services during the transition. The PAC is seeking an explanation from the BBC of how it will ensure access with all audiences across all platforms, in line with its role as a universal public service.

While the BBC is a trusted institution, gaps remain in how well different audiences feel represented. The PAC questioned the BBC on whether choices labelled “local”, such as moving operations to Manchester or Birmingham, are genuinely relevant to smaller communities, particularly in radio and local news. The report stresses that local radio remains a lifeline for older audiences, and that in Sheffield, for example, “local” should mean “Sheffield”, rather than pooled content from larger hubs. The restructuring of regional news hubs may have unintentionally diluted connections with the communities the BBC aims to serve, and it acknowledged it could work to ensure reporters remain truly local, rather than stretched over larger footprints.

The BBC has sought to offset reduced licence fee income by boosting returns from its commercial arm. But the BBC does not provide clear information about its commercial returns. While the BBC says decisions such as the recent acquisition of Britbox are based on assessments of expected returns, these assessments are not visible to Parliament. The PAC welcomes the BBC's commitment to report commercial returns clearly in the future.

Sir Geoffrey Clifton-Brown MP, Chair of the Public Accounts Committee said: “The BBC is an organisation under severe pressure. Its own founding aspiration to be a truly universal broadcaster reflecting all its viewers means that this pressure, from both within and without, is inherent in its mission. Our report offers a snapshot of the BBC's efforts to deliver value for money as it seeks to thrive in an increasingly fragmented media landscape, and illustrates the tensions it must navigate in multiple areas of its business – in efficiently collecting the licence fee; in providing that universal service; in staying relevant to its audiences.

“On the licence fee, our report makes clear that the ground is shifting beneath the BBC's feet - the traditional enforcement method of household visits is seeing fewer and fewer returns at a time of heightened competition for almost every aspect of the BBC's activities. Our report shows that without a modernised approach focused more on online viewing, the broadcaster will see faith in the licence fee system ebb away. Similarly, while efforts to distribute itself more equitably across the nation are welcome in principle, the BBC must ensure that greater distribution does not equal greater dilution of the authentic local quality of its coverage.”

Notes to editors

The evidence underpinning this report was taken prior to the announcement that Tim Davie would be stepping down as BBC Director General.

PAC report conclusions and recommendations 

The BBC is not doing enough to enforce collection of the licence fee, which is unfair to the vast majority of households who do pay for a licence. Licence fee evasion and households not purchasing a licence together represented over £1.1 billion in potential lost income in 2024–25; with evasion at 12.5% (£550 million) and 3.6 million households declaring they did not need a licence (£617 million). While enforcement has traditionally relied on household visits, this approach is becoming less effective. In 2024–25, officers made 2 million visits to unlicensed homes, a 50% increase on the previous year, but this did not translate into higher sales or successful prosecutions. Prosecutions fell by 17% in the year to December 2024 compared to the year before, continuing a long-term decline since 2017. The shift to digital consumption has made both selling licences and pursuing prosecutions harder, and the BBC itself expects prosecutions to fall further. Yet without visible enforcement, licence fee payers who do comply may start to question the fairness of the system. Despite these trends and the importance of licence fee income, the BBC has no published targets for sales or evasion reduction that could provide the public and Parliament with clarity over performance.

Recommendation 1. The BBC should:

• modernise licence fee collection and enforcement by developing and implementing approaches suited to monitoring online viewing, and
• report annually in the Television Licence Fee Trust Statement progress against targets for reducing "no-licence needed" declarations and evasion.

The BBC has not adopted opportunities to digitise the licence fee, resulting in missed opportunities for cost efficiency and more customer engagement. The cost of collecting the licence fee is rising, partly because of the BBC's reliance on postal correspondence and its increasing cost. Around 40% of households still receive a paper licence by default, yet the BBC has not set any target to increase take-up of paperless licences. Enforcement also depends heavily on letters sent to households without a licence or declaring they do not need one, which adds to costs and is a less efficient way of engaging with customers. We are concerned that delays to Capita's IT upgrade programme, intended to improve the website and customer experience, have further limited progress towards digital engagement. Although the BBC has now moved this contract to a “payment by milestone” basis, we note that the change was made late and that this approach has not been used more widely with the BBC's contactors. The absence of meaningful incentives in the Capita contract, and in other contractual arrangements, may have contributed to slow progress in increasing digital delivery, improving customer engagement, increasing sales and reducing licence fee evasion.

Recommendation 2. To achieve cost savings and improve customer engagement, the BBC should in its response to this report:

• set a timeframe for moving to digital licences to further reduce reliance on costly paper licences and letters
• set out its plans to capture and use customer email addresses to enhance digital engagement and streamline customer communications
• outline the lessons learned from managing the Capita licence fee contract and how it will establish clear milestones and incentives in all areas of the business to increase income and reduce evasion.

The BBC does not provide clear information about its commercial investments, or targets and actual returns from its commercial activities. The BBC has sought to offset real-terms reductions in licence fee income by increasing savings and boosting returns from its commercial arm. It has reported transparently on progress against its savings target, making savings of £564 million to date against a target of £700 million for 2022-23 to 2027-28 in its PSB activities. However, the BBC failed to report in its 2024-25 Accounts progress against its commercial returns target of 1.5 billion over the same period, and we note that the previous reporting of commercial returns lacks clarity. We welcome the commitment to report this clearly in future, and note the stated £1 billion achieved to date. We recognise the BBC must balance reinvesting in commercial growth with providing returns to support public service broadcasting, and that this often involves using its increased debt limits to fund growth. The recent acquisition of BritBox illustrates the strategy of investing to monetise content and secure longer-term returns. However, while the BBC told us it does assess expected returns and debt serviceability when making such decisions, these assessments are not visible to Parliament.

Recommendation 3. In addition to its commitment to report transparently in its Annual Report and Accounts on its current commercial returns target, the BBC should report annually on its returns on investment from commercial activities and how it has optimised use of its debt limit and cash reserves.

Progress in developing new IP remains behind target, which in turn will limit sustainable long-term revenue streams. The BBC told us that it has achieved 31% of income for 2024-25 from its most profitable streams through new intellectual property (IP), against a 40% ambition for generating revenue from new (IP). Owning and developing IP is central to securing sustainable long-term returns; the success of Bluey, for example, illustrates the commercial value this can bring. While the BBC recognises the importance of strengthening its IP portfolio, this is a complex area with high stakes as new content carries a real risk of failure, even as it offers the potential for significant future income. To address this, the BBC told us that it is investing in talent within its commercial operations, supporting independent production companies, and acting earlier to identify promising IP opportunities. We note that these are positive steps, but progress must accelerate if the BBC is to develop intellectual property and long-term sustainable returns in a fast-changing media environment.

Recommendation 4. The BBC should:

1. a) set out in its response to this report how it will prioritise generation of new IP given its importance in delivering viewers and generating sustainable long-term returns; and
2. b) report clearly on progress against its IP target in its Annual Report and Accounts, to support accountability.

The BBC's mission to 'serve all audiences' is at risk as younger audiences choose other media providers, while the BBC's digital-first strategy could risk alienating non digital audiences. As younger viewers turn to other platforms and older or less digitally connected audiences' risk being left behind, the BBC's ability to serve all audiences, a core part of its public mission, is under pressure. Just 51% of younger people feel the BBC reflects them, and their overall use of BBC services, whether TV, radio or online, is significantly lower than other age groups. With audiences now able to access an unprecedented range of content from a variety of providers, the BBC faces intense competition for attention. Its digital-first strategy is an important response, and there are promising signs of innovation, such as using platforms like TikTok to share news content with new demographics. However, this shift also carries a risk: those without reliable digital access could find themselves excluded from core BBC services. Ensuring access across all platforms is essential if the BBC is to remain a universal public service.

Recommendation 5. The BBC should set out clearly in its response to this report how it will ensure access and engagement with all audiences, including innovation in digital access.

The BBC is a trusted institution but its relevance across the UK is under pressure. While the economic benefits of the "Across the UK" programme moving production outside of London are now clearly quantified, in response to this Committee's past recommendations, there remain gaps in how well different audiences feel represented. The BBC highlighted steps it has taken, including, for example, relocating the Asian Network to Birmingham and commissioning content set in Scotland and Yorkshire. However, audience data shows that some groups - across nations, regions and socio-demographic lines - remain less engaged and feel less reflected in BBC content. We are also concerned that decisions labelled as "local", such as moving operations to Manchester or Birmingham, risk overlooking the identity and needs of smaller communities, especially in radio, where consolidation has widened geographic footprints and reduced local specificity. Reforms such as the restructuring of regional news hubs and changes to the Local Democracy Reporting Service may have unintentionally diluted the BBC's connection with the communities it aims to serve.

Recommendation 6. As part of its response to this report, and in its Annual Report and Accounts, the BBC should clearly communicate how its Across the UK programmes and other initiatives will lead to better representation of the UK's local communities, to sustain trust and relevance in the future.