The government is expected to decide that the licence fee will rise less than the rate of inflation in the coming years, according to a report in The Times today.
The BBC has been in negotiations with the government about the level of funding it will receive through the licence fee over the next five years until 2027, when the current charter expires.
The cost of a licence is currently £159 a year, raising around £3.5 billion annually, but under the government's new proposals the fee will rise by less than inflation for the next two years - a real-terms budget cut - before rising to above inflation for the final three years of the period.
"The BBC is a hugely important national institution," a source told the newspaper. "But equally these are hard times.
"Nobody wants to punish the BBC but it's got to be subject to the same efficiency savings as everyone else."
Over the last few years the corporation has been engaged in a significant cost-cutting drive and aims to save £1 billion a year from the 2021-22 period.
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