The government has a total say in it. The licence fee does go to the BBC but the government decides how much it will be. The BBC puts in its request and it's usually reduced. (A bit like all Ministry budget requests).
The government pulled a bit of a stroke on the Beeb by getting them to fund the digital conversion from their licence fee income instead of a government department doing it. This is not that well known and the regular attackers (such as Mail and Murdoch) don't mention it.
Don't get me wrong, the BBC is a top-heavy over-bureaucratic organisation and needs to get its house in order organisationally. I know a little bit about how in some instances they will use three or four personnel to the independent broadcaster's one, for instance. Also recently they have made the mistake that is made all over industry and commerce in paying greater than inflation salary increases to senior management while tightening the purse strings for lower levels.
But a lot of the flak the BBC attracts is unfair and much comes from vested interests.
The current colour television licence costs £10.54 a month. compare that with what we pay for cable or satellite. The BBC's report and accounts tells us that of that amount £6.04 goes towards network television, regional television and local radio accounts for £1.72, Radios 1,2,3,4 and 5 Live take £1.12, transmission and collection costs are £1.08, new media 36p, BBC jam 14p and Interactive TV (BBCi) 8p.
BBC jam? I had no idea what it was either, so I looked it up. It's an online interactive service for 5 to 16 year olds to help them learn various subjects. I had a look at it and think it's very good.
Personally I think that over all we get good value from the BBC licence fee thougb I know that there are many on here who take a different view. I've got no desire to enter into an argument on the subject (and anyway, I'm off tomorrow for a while so that deals with that!)
The licence fee requirement is reduced by the profits from the BBC's commercial enterprises - merchandise rights to products based on Tele Tubbies, Bob the Builder etc, the sale of programmes to overseas broadcasters, advertising carried by BBC World (the charter banning advertising doesn't apply in foreign countries), books and video spin-offs from programmes and other profit-making enterprises.
Finally, the BBC World Service is not funded by the licence fee. It is financed by a direct grant from the Foreign Office.
