The BBC's bid does not include the costs of targeted help for special groups when the analogue signal is switched off. The funding decision will be taken by the Government next year as part of the process around the BBC's new Royal Charter starting in 2007.
To meet additional industry costs related to switchover, such as the marketing costs of DigitalUK, the industry-funded body coordinating the 2008-2012 switchover timetable, and spectrum tax, the total increase needed is a further inflation plus 0.5%, taking the total to inflation plus 2.3%.
The corporation cited research by pollsters at MORI in support of its bid: more than 80% of viewers said it was important for the BBC to roll out digital services, and 81% said the licence fee represented good value for money. Over 40% were even prepared to pay twice the current licence fee, or more.
In a BBC statement, Grade said: "Our document Building Public Value outlined the BBC's vision for serving the public in the digital age. The Government's subsequent Green Paper endorsed and refined that vision after consultation with the public. This bid has been thoroughly and independently scrutinised by the governors. We commend it to Government as an efficient business plan designed to meet licence payers' expectations at the lowest cost."
Thompson added: "Our audiences, rightly, have very high expectations of the BBC. They themselves are driving incredible change by the way they want to access our programmes and services. The BBC needs to transform itself to ensure we are providing the very best content, accessible to and valued by everyone across Britain, and the licence fee will help us achieve our vision to be the best creative digital broadcaster and content provider for audiences in the world."
Jowell is expected to appoint an independent expert or committee to recommend the licence fee settlement for its new charter period.
Lovelace Consulting | 11.10.2005