Purnell considers ending BBC hold on licence fee

The licence fee could be shared between other broadcasters, the culture, media and sport secretary has said.

Speaking at a convention on the future of the media yesterday, James Purnell mooted the possibility of other broadcasters sharing licence fee funding if it benefits public service programming.

The government is working towards a new communications act in 2011 and Mr Purnell promised he would be “bold” in creating a new broadcasting structure.

The BBC’s sole claim to the licence fee is the “huge elephant in the room”, the culture secretary said.

Mr Purnell said it was “perverse” not to ask whether other providers should share the funding, but added he was merely putting the question into debate.

He asked: “Do we think it’s sustainable for every penny of the licence fee to go to a single organisation in an industry which now has very many providers?

“Would some form of contestability for licence fee funding help to sustain quality, innovation and efficiency? Or would the potential risks … outweigh any benefits?”

This is the first time a Cabinet member has publicly raised the suggestion of “slicing-off” BBC funding.

It is understood Mr Purnell decided to include it in his speech to the IPPR/Media Guardian Oxford Media Convention after the BBC chairman Sir Michael Lyons warned splitting the licence fee would harm the BBC’s output.

Rival broadcasters have long argued for a share of the funding.

Such a move, if enacted with a public service proviso, could see channels such as ITV and Channel 4 put more resources into regional news and children’s programmes.