The two UK ad bodies have made a submission to Tessa Jowell, the embattled Department of Culture, Media & Sport secretary, on the future funding of the BBC, raising concerns about the 2.3% above-inflation rate, which could see the licence fee rise to as much as £180 in eight years' time.
The IPA and ISBA said the increase would lead to an over-funded BBC, which would in turn harm commercial media and advertiser access to audiences. It called on the government to keep the fee below RPI.
"We are mindful that an 'over-funded' BBC, which is capable of outspending all its competitors on broadcast and on new-media platforms -- and, in consequence, of 'unfairly' stealing their audiences -- could seriously damage the commercial media sector on which we depend to deliver the advertising messages so important to the continued health (and growth) of British business," the submission said.
The DCMS is set to publish its White Paper setting the proposals for the next charter period in May.
On April 1, the TV Licence will go up to £131.50, an above-inflation increase of 4.2%. At present, the BBC is proposing for increases at the retail price index rate plus at least 2.3%.
In addition to the IPA and ISBA's submission, a House of Lords select committee has criticised the government for loading additional costs onto the BBC.
The committee is pushing for Parliament, and not the government, to be responsible for deciding what the increase in the licence fee should be, with the help of the National Audit Office.
The committee's argument is that the BBC is being asked to bear additional costs that previously had been paid from general taxation, such as being required to help the elderly and disabled pay for digital switchover.
If the BBC was not asked to bear these costs, then increases in the licence fee could be kept at the rate of inflation and closer to its current level of £126.50.
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