Bringing the BBC's 87-year old monopoly over the licence fee to an end, the UK government in its much-hyped Digital Britain report spelled out that it will take portion of the licence fee to help fund local and regional news on ITV.
The culture secretary Ben Bradshaw told MPs that the government intends to take some amount of money left over from a fund established to propel the introduction digital TV services, and use it to back commercial rivals to the corporation's news gathering operation.
In its proposed plans, the government said that from 2013 around £130 million a year from the licence fee would be utilised to fund local and regional news as well as children's shows.
Mr. Bradshaw further notified that a small portion of the ring-fenced money would be used to fund three new ITV regional pilot projects in Wales, Scotland, and an English region before 2012.
Responding to the government's move, the BBC Trust opposed the government's proposals by saying, “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”.
In addition, Mr. Bradshaw noted that the “topslicing” from BBC's annual £3.4 billion budget could stay there even after licence fee structure is reviewed in 2013. In his response to BBC's claims to have exclusive rights over the licensing fee, he said, “There is nothing that says the BBC must have exclusive rights to it”.
That is a tough decision imposed on the corporation but one which will mean that hundreds of jobs might be saved/created and a fragile ecosystem maintained. The £130 million fee collected only amounts to around 4 percent of the total revenues generated by the TV licence fee and this is set to decrease as the revenue increases over time.