Britain on Monday said that it would freeze funding for BBC for two years at £159, or about Rs 16,125, which is paid by households annually, reported the news channel.

Culture Secretary Nadine Dorries said in the House of Commons that the government could “not justify extra pressure on the wallets of hardworking households”. She said that after the freeze, the news channel will be in line with inflation for the next four years.

“The BBC must support people at a time when their finances are strained, make savings and efficiencies, and use the billions in public funding it receives to deliver for viewers, listeners and users,” she said.

British households that watch BBC are charged a flat fee every year, called the licence fee, which is used to fund shows and services offered by the public broadcaster. In exchange for the licence fee, BBC provides public service broadcasting.

The licence fee has come under criticism for the past few years for various reasons. Since it is a flat rate, questions are raised as the poorest households are paying as much as the richest. Also, people have questioned if non-payment of the fee is serious enough to justify threatening someone with imprisonment or a criminal record.

However, the existence of the licence fee has been guaranteed till 2027 end by the BBC’s royal charter that sets its funding and purpose.

On Monday, Dorries said discussions about the future of the funding model of the public broadcaster, has editorial independence from government, from 2028 will “start shortly” but the change was needed because of evolving media consumption and technological advances, reported AFP.

“This is 2022, not 1922,” she said. “We need a BBC that is ready to take the challenges of modern broadcasting, a BBC that will continue to engage the British public and that commands support from across the breadth of the UK, not just the London bubble, a BBC that can thrive alongside Netflix and Amazon Prime and all of its other challengers which attract younger viewers.”

The Department for Culture, Media and Sport has said the BBC is expected to receive about £3.7 billion, about Rs 37,500 crore, in licence fee funding in 2022 and £23 billion, around Rs 2.7 lakh crore, over the duration of the settlement period.

It added that the national broadcaster also receives more than £90 million, or approximately Rs 9,127 crore, per year from the government to support the BBC World Service.

However, analysts said a below-inflation budget will force BBC to cut services, according to Reuters.

‘Will have to absorb inflation’: BBC chief

In a joint statement, BBC’s Director General Tim Davie and chairperson Richard Sharp said the move would mean that the broadcaster “will now have to absorb inflation”.

They called the decision disappointing “not just for licence fee payers, but also for the cultural industries who rely on the BBC for the important work they do across the UK”.

They said that income for the services was already 30% lower than it was 10 years ago.

“We will continue to drive an ambitious programme of reform moving more of our output across the UK, transitioning the organisation to a digital future and delivering distinctive and impartial content,” they added.

Labour spokesperson Lucy Powell said the freeze on funding was an attack on one of the biggest institutions in British public life, accusing Dorries of “cultural vandalism”.

“Is the licence fee really at the heart of the cost of living crisis or is this really about their long-term vendetta against the BBC?” she asked.