A panel of MPs has recommended that the cost of the BBC license fee should be cut and extended beyond TV, while saying that the corporation should not pay "over the odds" for the rights to international shows.

The recommendations from the Digital, Culture, Media And Sport Committee (DCMS) come ahead of the government’s expected finalisation of its proposals for the next BBC Royal Charter later this year.

The new charter will determine how the corporation will be governed, regulated and funded from 2028 onwards.

A report by the group said the license fee’s current model was "outdated and no longer fit for purpose", and suggested for it to be modernised so it covers all BBC services, while also suggesting that the BBC reduced the cost from the current price of £180 per year.

The report read: "The best next step is for the government to reform the licence fee, so it reflects modern media consumption and is no longer linked to a television set.

"This would be an easier sell to licence fee payers if expanding the base is paired with a drop in the individual cost."

The report added that a household levy would be difficult to introduce, but added that the government "should not have ruled out this option entirely."

The committee also suggested the corporation should develop an international TV licence so it can "maximise the potential global audience and increase its revenue".

They also called for the next charter to be made permanent so that the BBC’s existence and funding terms aren’t called into question every decade - the current charter duration.

The report said that BBC director-general Matt Brittin had told the committee had lost around £1.2 billion to £1.3 billion of licence fee funding over the last decade.

It added that the BBC had told it that while 94% of households were using the BBC, only 80% were paying the license fee.

Elsewhere in the report, the committee recommended that the BBC "should not be paying over the odds for overseas content, particularly when it's a bidding war against commercial UK broadcasters".

While the BBC produces a lot of its own shows, the corporation buys some international programmes such as Suits, Schitt’s Creek and Scooby Doo for its TV channels and iPlayer.

The committee added that they "did not believe that this provides value for money for the licence fee payer".

The report also said the committee’s members support the BBC hosting content from other public service broadcasters such as Channel 4 on iPlayer.

The committee also supported the BBC making original content for YouTube.

Dame Caroline Dinenage, chairwoman of the DCMS, said in a statement: "This is a pivotal moment for the BBC. Continue along the current path and we condemn a national institution to managed decline, squandering the immeasurable benefits it brings to our economy and society."

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