Campaigners have urged the government to block any increase in the TV licence fee until the BBC agrees to make it free for the over-75s.
The levy has been frozen for two years at £159 but is due to rise in line with inflation for four years from next spring.
This will add nearly £15 to the fee next year, taking it to £173.30 – the biggest hike in 40 years – if it is increased to match wider price rises.
A decision on the precise method for calculating the inflation-linked increases could be made before the end of this week.
Ministers are also expected to announce a formal review of licence fee funding amid concerns in Whitehall that it is becoming unsustainable.
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In a clear signal that the government could intervene to prevent or reduce the increase, Rishi Sunak said the BBC should be “realistic” about what it can expect people to pay.
He said all public organisations should “cut their cloth accordingly”.
The licence fee was free to the over-75s until the BBC axed the concession in 2020.
Silver Voices, a campaign group for older people, said the government should resist any hikes until this is reinstated.
Its director Dennis Reed warned: “The Government should block any increase in the TV licence fee until the BBC agrees to negotiate the restoration of free licences for the over 75s and measures to support those householders struggling with energy and food prices.
“The Government has urged the BBC to act in both these areas, but the BBC has done nothing.
“Tim Davie and his executive team have shown high-handed arrogance in rejecting the pleas from Silver Voices for more support for struggling senior citizens and have even boasted that they ‘got away’ with scrapping free licences for the over 75s.
“Now is the time for their complacent bubble to be burst and the Government to insist on a more compassionate approach as a condition for any increase in the licence fee.”
Downing Street said it would not comment about specific details of the review, but said a decision was close.
The Prime Minister’s official spokesman said: “You can expect a decision on the licence fee very soon. We have committed to carrying out that review ahead of the charter in 2027.
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“That will include the potential to include alternative ways to ensure the BBC remains appropriately funded.”
If the licence fee increases by nine per cent, in line with the consumer prices index (CPI) measure of inflation over the year to September 2023, it will bump the price up by £15.
The monthly September figure of 6.7 per cent could also be used, which would push up the cost by £10.65 to £169.65.
Ministers are also considering alternatives including a subscription model, a levy on broadband and advertising revenue.
Any reform is likely to come into effect in 2027, when the BBC’s Royal Charter is up for renewal.
In January 2022, then culture secretary Nadine Dorries announced the BBC licence fee would be frozen at £159 for two years, before being allowed to rise in line with inflation until March 2028.
The Government estimated then that a TV licence would cost “less than £175” by 2027-2028 and forecast a price rise of about £3.50 in 2024 to reach £162.50.
But since that time inflation has been significantly higher than expected, which is why next year’s increase is set to be so large.
Culture Secretary Lucy Frazer warned BBC chiefs a £15 rise in the licence fee is “very high”.
Speaking to Sky News, Ms Frazer hinted the licence fee would not see such a significant increase.
She said: “I’m concerned that that’s a very high level. It’s a decision that I’m looking at at the moment and we’ll be making an announcement on this very shortly.”
“It is due to rise, but we want to make sure that it rises by an appropriate amount that people can afford.
“The media landscape is changing. 400,000 people did not renew their licence fees last year. And that’s why I’m also doing a broader review on the licence fee in the round and how we should fund the BBC.”
BBC spokesperson said: “The Government and BBC agreed a six-year licence fee settlement in January 2022, which froze the licence fee for two years with increases in line with inflation from 2024.
“As is usual practice the Government sets and confirms the cost of a licence each year and this remains unconfirmed for 2024/25. The BBC will continue to focus on what it does best: working to deliver world-class content and providing great value for all audiences.”
Labour leader Sir Keir Starmer said he would have to “wait to see” what the current Culture Secretary does when asked whether he would consider stopping a rise in the BBC licence fee.
“We’re going have to see what the Government does first,” he said.
He added it was a “problem of the Government’s making” and one for them to solve.
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