Free TV licences cannot be saved with cuts to salaries, says BBC

Cutting the pay of stars and senior managers would only save a fraction of the cost of free TV licences for older people, the BBC has said.

The broadcaster has defended its decision to end universal free licences for over-75s because of the £745m cost.

In a letter to the Daily Telegraph, BBC director of policy Clare Sumner said the BBC could only save £25m if it kept all salaries at or below £150,000.

Up to 3.7 million pensioners stand to lose the free licence from next year.

The BBC was responding to Daily Telegraph columnist Allison Pearson, who criticised the decision to restrict free licences to over-75s who claim the pension credit benefit from June 2020.

Ms Pearson accused the broadcaster of having a "culture of ludicrously inflated salaries" and being "dangerously out of touch" with the public.

She called for cuts to the salaries of senior staff earning over £150,000, as well as cutting the pay of stars and presenters.

According to the BBC annual review last year, among the highest-paid stars were Match of the Day presenter Gary Lineker (£1,750,000-£1,759,999), chat show host Graham Norton (£600,000-£609,000) and Radio 2 presenter Steve Wright (£550,000-£559,999).

The top-earning female star was Claudia Winkleman, whose salary is estimated at £370,000-£379,999.

The total pay for on-air talent was £148m in 2017/2018.

Concern over the loss of free licences prompted Animal Park presenter Ben Fogle to donate a year's salary for his work fronting the show, saying that "we owe it" to over-75s.

But in her letter to the Daily Telegraph, Clare Sumner said: "Even if we stopped employing every presenter earning more than £150,000, that would save less than £20m.

"If no senior manager were paid over £150,000 that would save only £5m."

She said spending on senior managers' salaries has been cut by £38m since 2010 and 94% of the BBC's budget was spent directly on programmes and services.

The highest-paid senior manager is director general Tony Hall, with an annual salary of £450,000. In total, 94 executives earn more than £150,000, nine of whom are paid more than £250,000.

Providing free TV licences to over-75s who claim pension credit will cost the BBC about £250m by 2021-22, depending on take-up.

But continuing the universal scheme would cost £745m, a fifth of the BBC's budget and equivalent to the cost of BBC Two, BBC Four, the BBC News Channel, the BBC Scotland channel, Radio 5 Live and a number of local radio stations.

"If we had continued with the current scheme, its rising cost would have meant closures of services that we know older audiences, in particular, love, use and value every day," Ms Sumner said.

Free licences were first introduced by the Labour government in 2000.

In 2015, the Conservative government announced the BBC would take over the cost of providing free licences for over-75s by 2020 as part of the fee settlement.

An Age UK online petition for calling for the government to take back responsibility for funding free TV licences has now passed 500,000 signatures.

Charity director Caroline Abrahams said the petition "demonstrates the strength of public feeling about the unfairness of the government scrapping free TV licences for over-75s".

Ms Abrahams added that the numbers were particularly remarkable given that half of the age group impacted are not online.