The BBC has said that it will be forced to make 'tough choices' in the near future following the government's decision to freeze the licence fee.
Earlier today culture secretary Nadine Dorries confirmed that the price of a TV licence will remain at £159 for the next two years rather than rise in line with inflation, which is currently running at around 5.2%.
Dorries also confirmed that she will shortly begin work on a review of the longer-term funding of the BBC, following on from a social media post she made at the weekend suggesting that the licence fee will be scrapped entirely from 2028.
In response, a joint statement from BBC chairman Richard Sharp and director-general Tim Davie said: "Given the breadth of services we provide, the Licence Fee represents excellent value for money. There are very good reasons for investing in what the BBC can do for the British public and the UK around the world.
"A freeze in the first two years of this settlement means the BBC will now have to absorb inflation. That is disappointing - not just for Licence Fee payers, but also for the cultural industries that rely on the BBC for the important work they do across the UK.
"The BBC's income for UK services is already 30 percent lower in real terms than it was 10 years ago. We will set out the implications of the settlement later, before the end of the financial year, but it will necessitate tougher choices which will impact Licence Fee payers.
"While there will be challenges, we do have the financial stability of the Licence Fee, which is crucial. We have the certainty of a six-year deal for the funding of the BBC: two years cash flat and four years keeping pace with inflation.
"We have great faith in the BBC and its future. We will do everything to ensure the BBC continues to punch above its weight for Britain and for audiences around the world.
"We will continue to drive an ambitious programme of reform, moving more of our output across the UK, transitioning the organisation to a digital future and delivering distinctive and impartial content. We have a uniquely talented team of people at the BBC who are focussed on delivering this for the public.
"We actively look forward to the national debate on the next Charter and, of course, all options should be considered. The BBC is owned by the public and their voice must always be the loudest when it comes to determining the BBC's future."
The corporation is projected to bring in around £3.7 billion through the licence fee this year.
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