Director general insists plan agreed with George Osborne is a strong one, despite criticism that it was struck behind closed doors

Tony Hall has come out fighting against claims that forcing the BBC to bear the cost of free television licences for the over-75s turns the corporation into a branch of the Department for Work and Pensions.

Lord Hall, BBC director general, insisted the £750m cost of the plan, agreed ahead of Wednesday’s budget after a week of secret talks, was more than matched by the deal he had struck with with the Treasury.

He pointed to George Osborne’s vow to allow the £145.50 licence fee to increase in line with inflation, an end to top-slicing of money to fund rural broadband and the “modernisation” of the fee’s structure.

George Osborne forces BBC to pay for over-75s' TV licences Read more

Speaking to John Humphrys on BBC Radio 4’s Today programme, he said: “I think we have a deal here which is a strong deal for the BBC. It gives us financial stability.”

Hall was on the defensive after widespread criticism of the deal, revealed on Monday, including from former Labour culture secretary Ben Bradshaw who said it would turn the corporation into a branch of the DWP.

Former director general John Birt told the House of Lords that the “deeply shocking deal” amounted to a breach of the BBC’s independence, while BBC Trust chair Rona Fairhead criticised the secret negotiations from which she was excluded.

On face value, the cost of the deal seems disastrous for the broadcaster, coming on the heels of the announcement of 1,000 job cuts to deal with a £150m funding shortfall next year due to increasing numbers of people not paying for licences.



But Hall insisted he had got a good deal. “The government’s decision here to put the cost of the over-75s on us has been more than matched by the deal coming back for the BBC.



“When I was confronted with this policy a week ago my bottom line was if I can use this as an opportunity to get back for the BBC things I think are really important for the BBC … then I think that’s really important. And that’s exactly what we’ve done.”

In the face of criticisms that the BBC was taking on a political role by taking charge of licence fee policy, Hall said that the change would bring the broadcaster in line with other arts organisations.

“I think being in control of our income in all sorts of ways is a very grown-up response for the BBC and a grown-up response for any organisation,” he said.



The new licence fee settlement was a surprise announcement in the House of Commons on Tuesday in response to urgent questions by Labour a day after Osborne accused the BBC of being “imperial in its ambitions”.



Hall said after the announcement by culture secretary John Whittingdale that the new formula, which would also close a loophole over online catchup services, would mean the BBC’s income could even rise over the next five years.

BBC sources, however, refused to rule out future closure of channels or radio stations as a result of the deal and the charter renewal negotiations expected to be launched with a government green paper in the coming weeks.