UK Culture Secretary Lisa Nandy is to scrap a review of the BBC's funding model that was set up by the previous government and is disbanding its expert panel.
Instead, the government will examine the issue of BBC funding as part of the charter review process, before the BBC's current royal charter expires in 2027.
The expert panel advising on future funding for the BBC was announced in March by former UK Culture Secretary Lucy Frazer before the general election. The panel included figures from across the broadcasting and media sectors, including Sir Peter Bazalgette, David Elstein and Dame Frances Cairncross.
In a statement, the government said it will use the charter review “to consider funding options to support the national broadcaster’s long-term future, safeguarding the world-class content that millions of people know and love.” The charter review will include a public consultation.
The charter sets out the terms and purposes of the BBC's existence and normally lasts for about a decade. The current BBC charter began on 1 January 2017 and ends on 31 December 2027.
The government also confirmed that the BBC licence fee will rise in line with annual CPI inflation in 2025. It means the cost of an annual colour TV licence from April 2025 will now be £174.50, an increase of £5, or an extra 42p a month.
The government said it is committed to upholding the licence fee until the end of this charter period in 2027.
Foreign Secretary David Lammy also announced an extra £32.6m for the BBC World Service in 2025-26.
Nandy said: “The BBC provides much-needed programming for households across the country, including children's education, world-class entertainment and trusted news for all people in all parts of the UK. I want to see it thrive for decades to come.
“Through the Charter Review, we will have an honest national conversation about the broadcaster’s long-term future, ensuring the BBC has a sustainable public funding model that supports its vital work but is also fair and responsive to those who pay for it.
“In the short term, we are providing the BBC with funding certainty, while supporting thousands more households facing financial hardship to spread the cost of a TV licence.”
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