Former BBC boss Mark Thompson attacks the Government over the licence fee negotiations

New York Times boss says it is “totally inappropriate” for the licence fee to be used to pay for over 75s

Former BBC director general Mark Thompson has attacked the Government for forcing the Corporation to shoulder the cost of providing free licence fees for the over-75s.

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Thompson, who is now chief executive of the company that runs The New York Times, said it was “inappropriate” to force the BBC to pay for social costs like this at an estimated cost of around £650m. 

“It’s welfare … It’s totally inappropriate to use BBC to support social transfer in this country,” Thompson told The Guardian.

In 2010 Thompson said he would resign if the Government imposed the same burden when he was negotiating the fee.

“In 2015 the political circumstances are very different and it is much tougher for the BBC. In 2010 it was the coalition government and the Liberal Democrats … [who] played a very big part in securing a different and better settlement. That recourse has not been available to the BBC this year.”

In July, the BBC accepted a government proposal to take on the costs of providing free TV licences for the over-75s.

Under current rules people aged over 75 have to apply for a free TV licence – now costing £145.50 – and can claim a refund on fees paid after their 75th birthday.

However Chancellor George Osborne has compelled the BBC to pick up the cost for the cost of the free licences in his charter review negotiations with the Corporation. It is estimated that the cost of the exemption is around £650m and represents around a fifth of the BBC’s £3.17bn licence fee revenue.

The controversial changes are scheduled to be phased in from 2018-19 with the BBC bearing the full cost by 2020-21.

The first impact of taking on the cost of free licence fees for over-75s will be felt by the BBC in 2018/19, when it will amount to £250m. Its financial commitment will nearly double to £450m the following year, and £750m by 2020/21.

In return the Government has promised to bring in proposals on paying to use catch-up services like iPlayer, meaning that the BBC could potentially charge people to use the service. It also secured guarantees that the licence fee would rise in line with inflation.

Thompson (pictured below), who now runs the company behind the New York Times, believes BBC bosses should not have been made to agree a financial settlement more than a year before the formal renewal of the charter in 2017. However he said his comments were not a criticism of the BBC’s current management.

“You have to be in the room and I am not going to second guess anything that [current director general] Tony [Hall] and the current leaders of the BBC have done”, he said.

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“I am just very anxious at the end of all the questioning that we come up with the right answers. And for me the right answer is a strong, properly funded BBC of scale and scope.”