But the Government instead determined the figure using September’s rate of inflation, rather than an average across the last year.

Addressing the Commons, Frazer said the Government will launch a review of the BBC’s funding model.

She explained: “The review will look at how we can ensure the funding model is fair to the public, sustainable for the long term and supports the BBC’s vital role in growing our creative industries.”

Frazer said the review will be led by the Department for Culture, Media and Sport and supported by an expert panel, adding: “It will assess a range of options for funding the BBC. We are clear that we want the BBC to succeed.

“The review will include looking at how the BBC can increase its commercial revenues to reduce the burden on licence fee-payers.

“Given pressure on household incomes, I can explicitly rule out that this review will look at creating any new taxes.

“The findings of the review will support the Government to make an informed choice on whether to consult the public on moving to alternative funding models.

“This would take place as part of the charter review process, where any final decision on reforming the BBC’s funding model would be taken.”

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