Government pressure has forced the BBC to freeze the licence fee until 2013, but the Corporation warns this will probably mean cuts in TV and radio programming budgets.
The BBC has agreed to give up a planned 2% increase in March 2011 and the chance of a smaller rise in 2012. The licence fee is currently £142.50 and will now remain at that level until 2013.
The BBC Trust asked BBC executives, led by director general Mark Thompson, to find short-term savings in June "given the exceptional pressures the current economic climate is placing on licence fee payers".
BBC management warns that the freeze will mean taking £144m out of the budget and "will require some on-air changes". This will almost inevitably mean cuts in programming budgets.
More after the break