TV Licence fee will increase by £10 next year to £169 in blow to BBC as Rishi Sunak puts a stop on bosses' demands for a £15 rise

The TV Licence fee is set to increase by £10 next year to £169 in a blow to the BBC as Rishi Sunak puts a stop on the broadcaster's bosses' demands for a £15 rise.

BBC Chiefs had hoped for the bigger hike but ministers pushed for them to settle for an increase in line with September's 6.7 per cent inflation rate instead of the longer-term nine per cent inflation rate.

Previously, MailOnline reported that Prime Minister Rishi Sunak was poised to block the biggest Licence fee hike in 40 years after it was estimated the fee would increase by £15.

The Government also hinted that the method to calculate the inflation-linked fee would be adjusted to match more recent and lower inflation rates, the Sun reported.

 Mr Sunak said the BBC should 'do what it can' to limit the burden on struggling families in a clear indication that the Government intended  to intervene. 

Asked if the licence fee was sustainable, the PM told reporters: 'First thing to say is I think it is welcome that the BBC are looking at making savings and efficiencies in how they operate. It's really important that when things are difficult, everyone is doing what they can to ease the cost of living on families.'

Mr Sunak said he had himself made difficult decisions over the past year to help bring down inflation.

'The BBC, like any other organisation that serves the public, should be looking to do that and cut its cloth appropriately,' he added.

The Licence fee was expected to be increased by 9 per cent, which is in line with inflation for four years to next spring.  

However, Culture Secretary Lucy Frazer previously said that 9 per cent was 'too high'. 

Ms Frazer told Times Radio: 'As the licence fee rises, the BBC needs to be realistic about how much it can rise by. We want to make sure we protect licence fee payers and make sure that it just rises at an amount that people can afford.'

Asked about a rise to over £170, she said: 'Well, obviously, that's high. This is something that we're looking at, at the moment. And we'll be making a decision on this in due course.'

Ms Frazer told Sky News that the BBC provided a great service but needed to give 'value for money'.

The corporation is seeking to make £500million of savings in the face of high inflation and a two-year freeze to the price of a TV licence, which provides most of its funding.

MailOnline has contacted the BBC and the Department for Culture Media and Sport.