BBC and ministers urged to find way to save free TV licences for over-75s

An influential committee of MPs said it was "absurd" that only those claiming pension credit will be eligible for a free licence when it becomes means tested from next year.

The BBC is set to scrap free TV licences for up to 3.7m people aged over-75 after it was handed responsibility for funding the benefit by the Government in 2015.

The House of Commons Digital, Culture, Media and Sport Committee blamed both sides for the secret nature of the negotiations.

It came as Labour MPs across the West Midlands slammed the Government for its handing of the situation, accusing ministers of "political cowardice" for handing over responsibility for licences to the broadcaster.

The BBC said it cannot afford to fund the £154.50-a-year benefit, which costs taxpayers £745 million annually.

The new report criticised the “behind closed doors” process which led to the BBC taking over responsibility for free licences.

Committee chair Damian Collins MP said: “This is an invidious position for the BBC to put itself in.

“It agreed to fund a pensioner benefit that it couldn’t afford and as a result, false reassurances were given to the over-75s that their free licence fees would be maintained.”

He added: “The BBC finds itself here as the result of a deal done behind closed doors that allowed no transparency for licence fee payers.”

While the BBC complained about the Government's approach, MPs "found little evidence of transparency in the corporation's decision-making either".

It was a "flawed process on all sides," the report added.

Labour deputy leader and Shadow Culture Secretary Tom Watson, the MP for West Bromwich East, called on the Government to commit to funding free TV licences.

"The Tory government should never have foisted the responsibility for funding free TV licences onto the BBC in the first place," he said.

"It was an act of political cowardice and now 3.7 million older people are set to lose out next year."

Wolverhampton South East Pat McFadden, said: “The decision to pass responsibility for funding the free TV licence to the BBC and then withdraw Government funding for it was always a hospital pass.

"The committee is right to say that the BBC and the Government have a responsibility to ensure that the free TV licence for the over-75s continues.

"This is a welfare benefit costing hundreds of millions of pounds and should be funded as such.

"No matter how much Gary Lineker or other stars are paid, the Government cannot just pass the buck and evade its responsibility to fund this as a welfare benefit.

"TV is a lifeline for many older people and it is simply impractical as well as unjust to prosecute people in their 80s and 90s who haven’t paid for a TV licence.”

The committee said the BBC could have acted earlier to communicate the likelihood that it would not be able to fund the concession from 2020.

But it was wrong of the then Government to seek to "bounce" the BBC into accepting a deal", it added.

A government spokesman said: "We're disappointed with the BBC's decision not to continue free licences for the over-75s.

"We've been clear that we want and expect it to continue this concession.

"Taxpayers want to see the BBC using its substantial licence fee income in an appropriate way to ensure it delivers for UK audiences. We will respond to the select committee report in due course."

Sir David Clementi, chairman of the BBC, said: “Under the 2015 agreement, the BBC was given responsibility for the policy, and related funding, of the concession for over-75s.

"We are pleased that the committee recognise that there was no automatic assumption that the BBC would continue to bear the cost of these free TV licences. There is also clear recognition from the committee that it would be unsustainable for the BBC to take on the full cost of all these free licences alone.

"The report is also clear that the value of the licence fee will continue to be under pressure from inflation in the TV sector.

“The committee say that the Government’s process in 2015 was flawed and we agree with this; it was never a process the BBC would have chosen. That’s why there must be a different way of doing things in the future. In terms of the agreement itself, we are satisfied that it was properly discussed within the BBC and properly authorised.”

“We will continue to implement the decision we have taken – after extensive consultation – on over 75s licence fees with great care and responsibility.”