The British Broadcasting Corporation will continue to be financially supported by a tax on television-watching households in the United Kingdom through at least 2027, the country’s leading communications official affirmed this week.

The TV tax, or license, that British households must pay for the privilege of watching linear programming from the BBC and other channels will adjust with the rate of inflation for the first time in three years, Culture Secretary Lisa Nandy said on Friday, with the TV license costing most British households £174.50 (around U.S. $222) in 2025 and going up from there for the next two years. Those who have a black and white TV set in their homes will pay less toward the license.

Nandy says the adjustment to the TV license will ensure the BBC is able to continue providing “much-needed programming for households across the country, including children’s education, world-class entertainment and trusted news for all people in all parts of the U.K.”

A spokesperson for the BBC said the organization welcomed “confirmation that the license fee will increase in line with inflation next year.”

“We want everyone to get value from the license fee, and we are committed to delivering trusted news, the best homegrown storytelling and those special moments that bring us together,” the spokesperson said. “We also look forward to the debate about the future and working with the Government to ensure sustainable, long-term public funding. As part of these discussions, we will run our biggest ever public engagement exercise in 2025 so that audiences are at the heart of shaping our future.”

The TV license provides funding for the BBC’s domestic television and radio operations, and has for decades. By charter, the BBC’s programming is not allowed to air commercial advertisements. The BBC’s international business, called BBC Studios, is a commercial operation that helps the broadcaster earn additional revenue to supplement its domestic and global output.

The commercial side of the BBC’s business earned £1.9 billion (around U.S. $2.4 billion) in revenue during the 2023-24 fiscal year, the broadcaster revealed in July, around 10 percent lower than the £2.1 billion (around U.S. $2.7 billion) earned during the prior fiscal period.

Meanwhile, BBC executives say the operating deficit is expected to grow to £263 million (around U.S. $340 million) this year, and projected to increase to £492 million (around U.S. $635.3 million) by 2025. The deficit was attributed to a two-year freeze on the BBC’s TV license fee during the coronavirus pandemic, and a slight adjustment to the fee last year that was not in line with the rate of inflation.

Like other broadcasters, the BBC has faced mounting pressure from streaming services like Netflix, Amazon’s Prime Video and Disney Plus, which have chipped away at its traditional and digital audiences. Over the past few years, the state of the BBC’s television license — and much of the operation itself — has come under fire mainly from the UK’s Conservative party, which has also taken issue with the perception that the BBC’s news output is too partisan.

Nandy didn’t address the political issues on Friday, but did say that further review to the BBC’s funding model was needed to ensure the broadcaster can “thrive for decades to come.”

“Through the Charter Review, we will have an honest national conversation about the broadcaster’s long-term future, ensuring the BBC has a sustainable public funding model that supports its vital work but is also fair and responsive to those who pay for it,” Nandy affirmed.

The TV license fee increase is meant to be a short-term remedy to a long-term problem. British officials are also looking at the possibility of taxing streaming services that operate within the country, with the funds going to support the BBC’s operations.

While the BBC is keeping an open mind about additional revenue sources, the top boss at the broadcaster in September dismissed suggestions that the BBC should charge a subscription for its programming or supplement its live channels and on-demand service with advertising.

Instead, BBC Chairman Samir Shah suggested the broadcaster could be funded over the long term by a “universal service fee,” though he didn’t offer specifics.