The BBC TV licence fee may soon be decriminalised as part of a major government shakeup of the network.

Government chiefs have warned the corporation needs to “move wit the times” or face going the way of video rental firm Blockbuster.

Nicky Morgan, the culture secretary, has launched a consultation on evasion of the licence fee.

People will be asked for their views on whether criminal sanctions for the non-payment of the licence fee should be replaced by an alternative enforcement scheme.

It could see the non-payment of fees decriminalised, meaning those who don’t pay will avoid sentences like prison terms – and potentially move to a civil fine system like to a parking ticket.

Baroness Morgan said “accountability and value for money must be at the heart of how the BBC is funded” as she launched the review.

It comes as BBC announced the government is raising the licence fee by £3, taking it to £157.50 per year from April 1.

Not paying your TV Licence could be decriminalised

Baroness Morgan wrote in the Daily Mail that the Government's role was to "help public service broadcasters be better prepared to meet the challenges of the digital age".

Referring to high street video shop Blockbuster, which fell into administration in 2013, she wrote: "As the world around us changes, our laws must change too.

"It will require the BBC to be innovative and to move with the times.

"We don't want a beacon of British values and world-class entertainment ending up like Blockbuster."

The BBC will focus on its digital services

Baroness Morgan will also announce a flexible payment scheme for the TV licence, which will allow "vulnerable people, including those over the age of 75" to split the bill into instalments.

From June next year, the current scheme of all over-75s receiving free TV licences will be restricted to those who claim pension credit.

The BBC has previously said it cannot afford to take on the financial burden from the Government.

The move towards allowing flexible payments has been criticised by Age UK's charity director Caroline Abrahams, who said that the new payment scheme will not necessarily help those who find it difficult to afford a licence.

The BBC is under pressure

She said: "If you are a pensioner in the position of struggling to pay an extra £157.50 a year for a licence, being able to spread out your payments will not change the fact that the sum is simply unaffordable on your low fixed income."

In 2018, more than 121,000 people were convicted and sentenced for licence fee evasion and issued with an average fine of £176.

Last year there were about 26 million active TV licences in the UK, generating an income of £3.69 billion for the BBC.

Any move to decriminalise licence fee evasion will not come into effect until April 2022, according to the Department for Digital Culture, Media and Sport.

Nicky Morgan compared the BBC to Blockbuster

The department said: "The consultation does not ask for views on any other changes to the TV licence and is clear decriminalisation of TV licence fee evasion would have an impact on BBC funding."

A spokesman for the BBC said any proposals to decriminalise non-payment of the licence fee should be considered at the time of the settlement.

He added: "A detailed Government-commissioned review found the current system to be the fairest and most effective.

"It did not recommend change - in part because the current system is effective in ensuring payment with very few people ever going to prison."

Campaigners protest the government's move to pass responsibility for funding the TV licence for over-75s onto the BBC

In 2018 five people in England and Wales went to prison for not paying fines, he said, adding: "There is a question about what issue this repeat consultation is trying to solve."

Any changes "must be fair to law-abiding licence fee payers and delivered in a way that doesn't fundamentally undermine the BBC's ability to deliver the services they love," he said.

Prime Minister Boris Johnson has previously hinted at a major shake-up of the licence fee while he was campaigning for the General Election in December.

He said: “At this stage we are not planning to get rid of all TV licence fees, though I am certainly looking at it."

Boris Johnson has hinted at reform of the BBC

Johnson added: “He added: "But you have to ask yourself whether that kind of approach to funding a TV, a media organisation still makes sense in the long-term given the way other organisations manage to fund themselves - that's all I will say.

"I think that the system of funding by what is effectively a general tax, isn't it, everybody has a TV, it bears reflection - let me put it that way.

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"How long can you justify a system whereby everybody who has a TV has to pay to fund a particular set of TV and radio channels - that is the question."

And meanwhile, this week the BBC announced last week it was having to cut 450 jobs in a bid to save £80 million – including cutting popular current affairs programme Victoria Derbyshire.