BBC takes over World Service funding from British government
The BBC warned of "difficult choices" ahead after the government confirmed Wednesday that the broadcaster will take over the funding of the World Service from the foreign ministry.
Finance minister George Osborne said the BBC would pay for the World Service and the BBC unit monitoring foreign media, plus part-fund the Welsh-language channel S4C.
The moves will save the government 340 million pounds (386 million euros, 539 million dollars) a year by 2014-2015.
In return, the BBC licence fee, which every British householder must pay to watch television and listen to radio, will be frozen for six years at 145.50 pounds a year.
Until now, the World Service has been funded by the Foreign Office because of its role as a provider of predominantly radio news in English and 31 languages around the world.
Osborne, who announced the freeze as part of a package of sweeping public spending cuts, said: "This deal helps almost every family and is equivalent to a 16 percent saving in the BBC budget over the period, similar to the savings in other major cultural institutions."
He added: "The BBC also agreed to reduce its online spend and make no further encroachments into local media markets."
BBC director-general Mark Thompson hailed the freezing of the licence fee as a "realistic deal in exceptional circumstances."
Broadcasting workers' union Bectu accused the corporation of "throwing in the towel" by agreeing to the deal, having already voiced fears of a fresh round of job cuts as a result of the decision to freeze the licence fee.
Michael Lyons, the chairman of the BBC Trust, the corporation's governing body, said it was a "tough settlement", but added: "It's also a settlement that delivers certainty and stability for the BBC."
"There is no doubt that the settlement will present us with some difficult choices, but importantly, these choices will remain firmly in the hands of the BBC Trust and we will of course seek the views of licence fee payers."
© 2010 AFP