Wednesday, July 8, 2015

Statistics etc

A timely reminder from former BBC Trustee and economist Diane Coyle on why George Osborne has made the BBC cover licences for the over-75s, taken from her piece in today's Guardian.

"The problem dates from an obscure judgment by the Office for National Statistics back in 2006. The statisticians then concluded that the BBC should be reclassified, from being a public corporation to a part of central government. This meant that licence fee income was redefined as a tax, not a fee; that BBC and BBC Worldwide borrowing scores against the public borrowing requirement; and that the chancellor can now meet his target for reducing welfare spending in part by piling part of it on to the licence fee."

The ONS in 2006 was run by Karen Dunnell. The BBC's borrowing limit has been stuck at £200m for yoncks; the borrowing limit for the BBC's commercial ventures was set at £350 million in 2002. The limits are one reason that the BBC has had to do deals with developers for new buildings, which, like PFI deals in health and education, load the cost into annual fees.

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