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Sir John Bourn, Head of the National Audit Office reported today that there has been a downward trend in TV Licence fee evasion. But evasion is costing the BBC an estimated £141 million a year in lost revenue, and more on some estimates. This is equivalent to an extra £6 being available to the BBC for each licence payer.

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The TV licence fee is used to fund public service broadcasting and the BBC has been responsible for collecting the licence fee since 1991. In 2000-01 over 23 million licences were issued, which provided net income of £2,371 million and cost £132 million to collect. Progress has been made in tackling evasion and encouraging prompt payment. Nonetheless, based on the Department for Culture, Media and Sport’s statistical modelling, which is currently being revised, evasion is still running at between 5.2 per cent and 7.6 per cent, and on some estimates it is higher.

An important part of reducing evasion is making it easy to pay the licence fee and the BBC has been successful at introducing a range of payment methods. It has increased the number of people paying by direct debit from 15 per cent to 49 per cent and is aiming for further increases. However, some instalment schemes require the licence fee payer to pay one and a half times the full cost of a licence in the first year – an upfront cost which may be acting as a barrier to joining these schemes.

The report shows that much is being done to deter and detect evaders. It also shows that:

  • Among the factors which informed a review that set the level of the television licence fee were forecasts of increased licence sales. These forecasts depended on assumptions about household growth and reductions in evasion. Sales increased in 1999-2000 and 2000-01 but fell below those forecasts. Were the trend to have continued, net revenue could have been £200 million lower than expected over the period to March 2007.
  • Enquiry officers, who conduct door-to-door visits, sold licences worth £69 million in 2000-01 and caught 398,000 suspected evaders. But 79 per cent of visits resulted in no customer contact – the majority (57 per cent of visits) because the occupant was not at home or did not answer the door. As an illustration, increasing by ten per cent the proportion of visits that resulted in a sale would result in additional revenue of at £5 million, allowing for the costs involved.
  • A key factor in getting the most out of enquiry officer visits is accurate data. In 2000-01 enquiry officers made 646,000 visits (20 per cent of all visits) to properties that were vacant or under construction, 70,000 (2.1 per cent) to properties that did not exist, and 79,000 (2.4 per cent) to properties that turned out to be properly licensed. The BBC is working to improve the quality of data, in part through using enquiry officers’ visits themselves to improve data accuracy.
  • Contrary to statutory obligations placed on retailers, commercially available data suggests that up to 40 per cent of equipment sales and rentals may not be notified to the BBC, at an estimated cost to the BBC of up to £7.7 million in 2000-01.
  • Significant numbers of offenders still do not buy a licence after conviction. Enquiry officers made almost 47,000 ‘prosecution follow up visits’ in 2000-01 and took a second prosecution statement in almost one in three cases.

"Television licence fee evasion affects all licence payers. Even on conservative estimates the cost of evasion represents approximately £141 million a year, or £6 for each licence payer, that would otherwise be available to the BBC. The BBC has already done much good work to reduce the evasion rate and continues to take steps to strengthen the collection and enforcement arrangements. My report highlights opportunities to make further progress".

Sir John Bourn


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