IPA backs ITV's criticism of BBC licence fee request

LONDON - The Institute of Practitioners in Advertising has backed calls to temper the BBC's request for an increase in the annual licence fee in response to an independent study commissioned on behalf of commercial broadcaster ITV.

The IPA said the study "supports the joint submission made by the IPA and ISBA earlier this year", which pointed out the concern shown by both trade bodies about "the excessive nature of the BBC's funding bid of inflation plus 2.3%", which the IPA said "would perpetuate the corporation's 'jacuzzi of cash' to fund its activities".

The industry bodies also pointed out the danger this could cause potentially cause to the commercial sector, "granting the corporation the ability to outspend all its competitors on broadcast and new media platforms", diverting audiences up operating and talent costs.

The ITV report states that the BBC has the potential to increase its revenue by £800m, which would be sufficient to cover what it said is the BBC's "overstated" digital switchover costs of £640m.

The findings also state that the "increased funding of the BBC appears, in part, to be fuelling the super-inflation it is designed to offset".

The report said that steady increases in staff costs for the BBC will make it more difficult for the commercial sector to attract talented staff or presenters and that any proposed increase would further exacerbate this trend, and that this level of unconstrained expansion in the scope of the BBC's activities would crowd out innovation and investment in new services by commercial operators.

The IPA also said the report supports its view in separating out costs incurred by the BBC for digital switchover from any potential licence fee settlement, and that the corporation should be encouraged to fund future activities through cost savings, not increases in its annual tariff. 

The industry body called upon the government to ensure that a new licence fee should be either minus inflation or certainly no more than inflation.

Geoff Russell, director for media affairs at the IPA, said: "The ITV independent study underpins all our concerns -- and those of the commercial sector as a whole. Everyone knows that the BBC licence bid is excessive and unnecessary -- for the health of UK media as a whole, it is now down to the government to trim it back severely."

Charles Allen, the ITV chief executive, recently hit out at the validity of the BBC's claim for more money for the licence fee, referring to the BBC's calculations for the proposed licence fee as having been done on the "back of a fag packet". 

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