The TV licence and where does the fee go, is one of life’s perennial questions. They say they are two certainties in life, taxes and death; if you live in the U.K. and watch TV, then there’s a third, the TV Licence.

It harks back to an era of small-screen black and white TV sets, of dinner-jacketed, home-county accented presenters announcing the latest government farming initiative and the good old British Broadcasting Corporation.

And as regards the TV Licence revenues, things haven’t changed that much; it still all goes to the BBC, much to the annoyance of many other broadcasters. Bear in mind that although there are only two independent broadcasters in the U.K., the BBC, funded by the TV Licence, and Channel 4, funded by advertising, there are a myriad of other media companies out there.

With the funds from the cost of colour TV Licence at £139.50 and £47 for a black and white (who still watches a black and white TV?), the BBC is charged by the Government to produce programming for itself and S4C, without recourse to commercial advertising. By the way, the first TV Licence set you back £2 per year!

Now, in this enlightened age of multi-channel digital TV, and with many of the other TV stations moaning about the BBC’s unfair commercial position (not for them sensitive advertising budgets which tend to head south in times of economic difficulty), the TV Licence is a very contentious issue within the media community. Many claim its simply not a level playing field.

Even the Government department which ‘handles’ the BBC, the Department of Culture, Media and Sport, has admitted that the digital age, together with the ever increasing number of programme delivery platforms (mobile phones, internet for example), is beginning to make the licence look anachronistic. But, the Government hasn’t come up with a plan for its change, or demise.   But, enough of that. What does the TV Licence generate in terms of revenues and where does it go. Firstly, it raises a staggering £3.2 billion per year; enough for quite a few programmes of Strictly Come Dancing. Where it goes can be broken down into five key areas and the percentages are provided by the BBC Trust. TV gets the largest percentage at 67.58%, with network radio the next largest at 10.45%. The next largest chunk, 9.30%, gets spent on transmission and licence fee collection costs. Local radio has its hand out for 7.61% and bringing up the rear, is the 5.05% to web-sites. That’s basically where your money goes.

Now the BBC is bigger than just those parts of course and interestingly, other bits are funded in other ways. The BBC World Service is bank rolled by a governmental grant and BBC World, and some of its other independent enterprises, are funded by advertising and normal commercial practices.

So when your child asks that embarrassing question, the TV Licence – where does the fee go, just tell him, or her, not to worry. By the time they’ve grown up, it will have all changed.

If you look at the statistics of when the TV Licence started it just been increasing over the year ten told so enjoy your Strictly Come Dancing, your paying well for it!