BBC licence money 'topsliced' to fund ITV regional news

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The BBC is to lose its monopoly over the licence fee for the first time in the corporation's 87-year history.

Ben Bradshaw, the culture secretary, told MPs that the Government wants to take money left over from upgrading to digital services Photo: EPA
Ministers will take money from the corporation and use it to help fund regional news on ITV, the struggling commercial network.

Ben Bradshaw, the culture secretary, told MPs that the Government wants to take money left over from a fund set up to pay for the introduction of digital television services and use it to fund commercial competitors to the BBC's newsgathering operation.

Lord Carter's Digital Britain report: BBC faces loss of £130m to pay for broadband roll-outMr Bradshaw said that a "small part" of the ring-fenced money would fund three ITV regional news pilots in Scotland, Wales and one English region between now and 2013.

Mr Bradshaw said the "topslicing" from the BBC's £3.4bn annual budget could continue even after the licence fee is reviewed in 2013.

ITV has said it can no longer afford to provide regional news, as it is obliged to do under its broadcasting licence, but will continue to provide airtime for other media organisations to supply replacement programming.

The BBC has been lobbying hard to keep its exclusive claim on the licence fee, but Mr Bradshaw said: "There is nothing that says the BBC must have exclusive rights to it."

As well as being aimed at regional news provision, the surplus – which ministers said will be overseen by a new "independent and transparent body" – will also be used to boost homegrown children's programming.

The BBC Trust, the corporation's governing arm, yesterday said it still opposed the government's proposals and would fight the plans strongly.

The trust said: "The licence fee has a clear aim, clear benefits, is clearly understood and has stood the test of time. Top-slicing would damage BBC output, reduce accountability and compromise independence.

"The licence fee must not become a slush fund to be dipped into at will, leading to spiralling demands on licence fee payers to help fund the political or commercial concerns of the day. This would lead to the licence fee being seen as another form of general taxation. The Trust will not sit quietly by and watch this happen."

Lord Carter, the communications minister who wrote the Government's Digital Britain strategy, said the Government is determined to push ahead with the "topslicing" plans despite the controversy.

However, his plan offers no such decisive answer to the problems facing Channel 4, which also has financial troubles.

Channel 4 has said it faces an annual funding gap of £150 million from 2012.

One answer suggested by some media industry leaders is for the Channel Four to merge with BBC Worldwide, the corporation's profit-making international arm.

Despite expectations of a clear lead from Government, Lord Carter said ministers will not take a view on whether a merger should happen.

He said: "If in commercial terms BBC Worldwide and Channel 4 wished to come together in a joint venture and if it required some debt financing the Government stands ready to facilitate it."

However, he added that it would not be a "forced marriage".

BBC licence money 'topsliced' for first time to fund ITV regional news - Telegraph