Currie: Switchover surplus exists

Lord David Currie

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Ofcom chairman Lord David Currie has insisted the £800m licence fee surplus from the cost of digital switchover does exist, and has rejected Sir Michael Lyon's assertion that it is a myth. 

Speaking at the London Business School, Lord Currie set out his logic for why the money does exist.

He said: "There is a sum of £800 million over the lifetime of the current licence fee settlement which is not within the BBC's baseline but which is administered by the BBC to help fund Digital UK and the switchover help scheme for the elderly and vulnerable.

"The licence fee is not expressed in terms of so many billion pounds a year. It is set by Parliament each year in a statutory order as so many pounds and pence per licence fee.  By 2012, the pounds and pence figure will have that £800 million factored in.

"From 2013, switchover will have been completed and the annual expenditure that the £800 million funded will no longer be incurred. There is thus a switchover surplus."

Lord Currie also attempted to clarify the debate about what to do with the money. He said the decision was one for the Government, and spelt out three options. They are:

• Reduce the 2013 licence fee statutory order – in effect giving the surplus back to every household in Britain through a lower licence fee;

• Hand the money to the BBC for it to spend as it sees fit;

• Apply it to another purpose, including the funding of public service content by other organisations.

Lord Currie said the BBC claimed the switchover surplus does not exist because it is already being applied to their sixth Charter purpose 'building digital Britain'.

He said that view was based on the BBC applying the money "pre-emptively to a new category of BBC activity without considering the alternatives fully first".