As part of reforms to the BBC to make sure it remains a “valued public broadcaster for the future”, culture secretary John Whittingdale today announced the BBC licence fee will increase in line with inflation for five years from 2017/18.

The licence fee has been frozen since 2010 and it currently costs £145.50 per year (£49 for a black and white licence). After 2021/22, Whittingdale said there would be a new settlement which means the price could potentially rise further.

However, a more flexible payment plan is set to be introduced to pay the licence fee and the licence fee concession for over-75s will be protected during this parliament.

In March the culture secretary said he would close the iPlayer ‘loophole’ which allows people to catch-up on shows just minutes after the live transmission, as “soon as practicable”.

And today he confirmed that anyone watching a BBC programme on demand will need a TV licence “like everyone else”, though no time-scale has yet been set.

A draft version of the new BBC charter is expected to be published in the coming months and the government expects it to come into force from 1 January 2017.