On 21 February 2000, the Government announced their conclusions on the recommendations of the independent review panel on the future funding of the BBC. In addition to a range of measures designed to improve BBC efficiency and accountability, the Government introduced a new funding formula providing for changes in the licence fee of RPI plus 1.5 per cent for each year from 2000–01 to 2006–07. This formula will enable the BBC to provide a strong and distinctive schedule of high quality programmes and remain at the forefront of broadcasting technology.
Application of the RPI figure of 1.7 per cent for the year to September 2003, plus 1.5 per cent, to the current unrounded licence fees produces new rounded totals of £116 for a colour licence and £38.50 for a black and white licence. The necessary regulations to bring these fees into force will be laid before the House in due course. The changes will come into effect from 1 April.