BBC licence fee 'under scrutiny' next year

The government intends to discuss whether a TV licence fee is the right way to fund the BBC as early as next year, five years before the end of its charter.

Jeremy Hunt, the culture secretary, told Media Guardian that the coalition is "committed to the principle that the BBC should have a ringfenced pot of money over a multi-year period" and stressed his support for the BBC and its independence.

However, he believes changing viewing habits, with an increasing number of people watching TV content online, will make the annual charge for television ownership obsolete sooner rather than later.

"We support the principle of the licence fee and always have done," says Hunt in his first interview since joining the cabinet. "But we also recognise, as technology changes, we may need to adapt the way it's collected. It is not going to be possible to have a tax every time anyone buys a computer."

Keen to avoid making any pronouncements on the BBC before its charter renewal period, Hunt, who criticised the pay of corporation executives when in opposition, said the public wanted "value for money" from the corporation. "All I can do is advocate changes at the BBC while respecting editorial independence upon which the success of the BBC rests. I can't do anything that requires the BBC to pay certain people certain amounts."

His focus this year is likely to be on making the cuts to his own department. Pressure will also be put on quangos such as media regulator Ofcom to cut costs.

The department is also drawing up plans to cut regulation government the industry, which Hunt believe date back to a "pre-internet era".

One of these is Contract Rights Renewal, the set of rules which govern the price at which ITV can sell its advertising slots. The rules, which mean the broadcaster gets less money for declining audiences, were drawn up to stop a merged ITV dominating the industry when the Granada and Carlton merged in 2004.

"CRR is an example of micro regulation that we can do without. Telling people the price at which they can sell airtime is an example of regulation inherited from the pre-internet era. It's very important if we are going to have, not just a strong BBC but strong competion to BBC, that we look at whether that regulation is appropriate."

Officials are currently looking at whether primary legislation is needed to unpick CRR. The Queen's Speech made a reference to a communications act and the department is also looking at legislation to enable infrastructure to build out superfast broadband.

In his review of the industry commissioned by the Tories in opposition, former BBC director general, Greg Dyke, is understood to have backed scrapping the licence fee in favour of direct taxation. This was rejected by Labour as well as some members of Dyke's own review team.

Hunt, however, said that the report was never finished. "I hope Greg will deliver that report," he said. "I never saw sight of it before the election and I shall look forward to reading it."

As for what should replace the licence fee, Hunt admits he doesn't know. "If you've got any ideas pop them on a postcard please. I seriously don't know. It's think it's a really difficult problem."