TV Licensing

Financial Information

How is TV Licensing funded and what is the cost of collecting the TV Licence fee?

The revenue source for TV Licensing is the TV Licence fee settlement by the Government to the BBC. More information on this is contained in the BBC Annual Report and Accounts and in the TV Licensing Annual Reviews.

The TV Licensing Costs of Collection chart, below, sets out the total licence fee revenue collected and collection costs over the last ten financial years.

Section 365 of the Communications Act 2003 (opens in a new window) requires the BBC to pay all licence fee revenue it collects (via TV Licensing), less any sums required for making refunds, into the Government’s Consolidated Fund. TV Licensing doesn’t retain any of the licence fee revenue it collects; all monies are passed to the Government, and then the revenue collected is passed back to the BBC as Grant-in-Aid from the Department for Digital, Culture, Media and Sport (opens in a new window).

The Secretary of State for Digital, Culture, Media and Sport may retain a proportion of the licence fee revenue for other purposes (refer to the BBC’s Royal Charter and Agreement with Secretary of State).

TV Licensing costs of collection

Per TV Licence:

* TV Licensing collected around £3.5billion (£3,520million) in revenue in 2019/20, a decrease of £170million on the previous year attributable to the reduction in fixed funding from the Department of Work and Pensions for the issue of free licences to the Over 75s.

** Collection costs include call centres, field force, detection and over the counter services (net of recharges re over 75s).

*** Communications including reminders and information campaigns.

In 2019/20 TV Licensing collected £3,520million in revenue, however this figure includes only the fixed amount of £253million received from the Department of Work and Pensions for free Over 75 licences issued, whereas the actual value of free licences issued in the year was £707million.

Further breakdown of the specific services within the collection contracts is not readily available as the fee structure for our main contractor Capita is based on revenue collected and encompasses all aspects of the service provision across the call centres and the field operations.

The cost per licence reflects the average cost, per licence depending on the level of enforcement required.

Fines collected for licence fee evasion are not given to the BBC or TV Licensing - they are a matter for the courts.

TV Licensing costs of collection 2010-2015

	2014/15		2013/14		2012/13		2011/12		2010/11
	£ million	% of costs	£ million	% of costs	£ million	% of costs	£ million	% of costs	£ million	% of costs
Collection costs**	71.7	70.7	71.6	70.1	83.0	74.5	95.0	75.3	92.7	74.5
Depreciation of new systems	2.2	2.2	2.1	2.1	2.1	1.9	2.5	2.0	2.5	2.01
Comms***	14.1	13.9	15.5	15.2	14.0	12.6	13.9	11.0	16.6	13.34
Postage	10.8	10.7	10.8	10.6	12.2	11.0	9.5	7.5	8.7	6.99
Admin and contract management	2.6	2.6	2.2	2.2	0.1	0.1	5.2	4.1	3.9	3.14
Total	£101.4		£102.2		£111.4		£126.1		£124.4
Licence fee revenue	3,735		3,722		3,705.7		3,697.8		3,678.6
Costs as % of revenue	2.7%		2.7%		3.0%		3.4%		3.4%
Licences in force (exc ARC)	25.508		25.419		25.338		25.226		25.103

Per TV Licence 2010-2015:

	2014/15	2013/14	2012/13	2011/12	2010/11
Cost per licence	£3.98	£4.02	£4.40	£5.00	£4.95
Cost per licence as % of licence fee*	2.7%	2.8%	3.0%	3.4%	3.4%
Collection costs**	£2.81	£2.82	£3.28	£3.77	£3.69
Depreciation of new systems	£0.09	£0.08	£0.08	£0.10	£0.10
Comms***	£0.55	£0.61	£0.55	£0.55	£0.66
Postage	£0.42	£0.42	£0.48	£0.38	£0.35
Admin and contract management	£0.10	£0.09	£0.00	£0.21	£0.15
Total	£3.98	£4.02	£4.40	£5.00	£4.95

What portion of the licence fee revenue is spent on collection costs?

The cost of collection has increased from £102.6m in 2018/19 to £119.5m in 2019/20. This represents 3.4% of the total licence fee revenue collected (£3.5 billion) in 2019/20. As shown in the TV Licensing Costs of Collection chart above, the costs of collection covers call centres, field force, detection and over the counter services, communications including reminders and information campaigns, postage and administration and contract management.

How much in licence fees do you collect from [X] location?

Figures on licence fee revenue by area aren’t available, as it isn’t necessary to generate this type of information for the purpose of issuing licences, and licence fee collection and enforcement. Please see the About TV Licensing section for information on licence fee revenue.

How much TV Licence fee revenue is collected from areas such as Scotland, Wales, North East England, Isle of Man, Jersey, and Guernsey?

The BBC doesn’t collate information on licence fee revenue by location. For the purposes of administering the television licensing system, licence fee revenue is not configured by geographical location, as the BBC has no reason for doing this. The total licence fee revenue collected from 2010/11 to 2019/20 is detailed in the TV Licensing Costs of Collection chart above.

Further information is published in the BBC’s Annual Report and Accounts. The latest Annual Report (2019/20) is available on the BBC website at - www.bbc.com/annualreport.

How much does TV Licensing spend on advertising? How much is spent on specific campaigns e.g. online advertisements?

For the 2019/20 financial year (the latest figures available) £14.9 million was spent on communications, including reminders and information campaigns. The TV Licensing Costs of Collection chart, at the top of this page, contains a break-down of TV Licensing’s top-line costs over the last ten financial years.

Specific advertising costs (including the cost of production and airtime to broadcast trails) is exempt from disclosure under section 43(2) of the FOI Act.

Note: The BBC does not advertise the need to be licensed, the ways to pay and the consequences of non-payment on commercial TV stations. TV trails are shown on BBC channels. Communications shown on BBC channels are referred to as ‘trails’ because the BBC, as a public service broadcaster, does not raise revenue through advertising.

Are the expenses and pensions of staff engaged by TV Licensing contractors paid from the TV Licence fee?

‘TV Licensing’ is a trade mark of the BBC and is used under licence by companies contracted by the BBC to administer the collection of television licence fees and enforcement of the television licensing system.

The BBC does not hold the information requested here. It is a matter for each contractor to determine how it chooses to spend the money it receives by way of remuneration from the BBC. Any information that a contractor holds in this regard is not held by them on behalf of the BBC and is therefore exempt from disclosure under section 3(2) of the FOI Act.

Who audits TV Licensing?

The National Audit Office (NAO). They review statements from TV Licensing contractors as part of annual independent audits of the BBC.