BBC plans £500 million budget cuts as financial pressures mount

The BBC is planning to cut more than £500 million from its annual budget by 2029 — roughly 10% of its overall costs — raising the prospect of job losses and programme reductions across the corporation. With operating costs standing at just over £6 billion last year, the projected savings could amount to around £600 million, British media reports.

Outgoing director-general Tim Davie informed staff that the reductions would affect all parts of the organisation, including its licence fee-funded public service operations and its commercial arm, BBC Studios. He said the broadcaster must “adapt and innovate with purpose and pace” to remain competitive and relevant, adding that over the next three years the BBC would need to continue redirecting resources to priority areas.

The new cuts come on top of an existing £700 million savings and reinvestment programme, which still faces a £150 million funding gap. In January 2025, the BBC World Service also announced plans to cut 130 jobs in order to save about £6 million in the next financial year.

The corporation, which is primarily funded by the annual TV licence fee paid by UK households watching live television or using iPlayer, has faced mounting financial pressure amid falling traditional TV audiences and intensifying competition from streaming platforms such as Netflix, Disney+ and Prime. Earlier this month, it was confirmed that the licence fee will rise from £174.50 to £180 per year from April 1, following an earlier increase from £169.50 in April 2025. The BBC generated £3.8 billion from the licence fee in 2024/25.

However, the number of licences purchased fell from 24.1 million to 23.8 million in 2024/25, contributing to a loss of more than £1 billion in income over the year. The licence fee had previously been frozen at £159 for two years under a 2022 agreement with the Conservative government, before being linked to inflation until at least 2027. Rising inflation later prompted revisions to the projected fee level.

The Government has defended the latest increase, saying it is intended to help keep the BBC on a stable financial footing, while insisting it remains committed to addressing the cost-of-living pressures facing households. Downing Street rejected suggestions that the BBC was being rewarded despite recent controversies.

The financial tightening also comes against the backdrop of turmoil following a misleading edit of a speech by US President Donald Trump. Trump has filed a $10 billion defamation lawsuit against the BBC in Florida, with a federal judge setting a trial date for February 2027. The controversy prompted Tim Davie to announce he will step down, with his departure scheduled for April 2.

By Tamilla Hasanova