Culture Secretary Lucy Frazer said she is “concerned” the planned nine per cent rise in the licence fee is “very high”.
She said the Government will be making an announcement amid speculation Rishi Sunak will block the hike in the annual charge, which provides most of the BBC’s funding.
Ms Frazer highlighted the cost of living crisis as she said she wanted to ensure the cost of a TV licence – currently £159 – rises by an “appropriate amount that people can afford”.
The Culture Secretary told Sky News: “I’m concerned that that’s a very high level.
“It’s a decision that I’m looking at the moment and we’ll be making an announcement on this very shortly.”
Pressed again on whether the increase would go ahead, the Culture Secretary added: “Well, I’m concerned about that level of rise so it’s something that we’re looking at very carefully.”
The licence fee, which has been frozen for two years, is due to jump by almost £15 next April to £173.30.
The BBC is seeking to make £500million of savings in the face of the freeze and high inflation.
The Prime Minister insisted “final decisions haven’t been made” about the future of the licence fee.
But he said the corporation should be “realistic” about what it can expect people to pay at this stage.
Speaking while on his trip to Dubai for the Cop28 climate summit, Mr Sunak said: “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.
“That’s certainly what I have done over the last year and made a bunch of decisions that haven’t been easy.
“But that’s helped to bring inflation down to ease the burden and the cost of living.”
He added: “The BBC like any other organisation that serves the public should be looking to do that and cut its cloth appropriately so I think that is very welcome.
“I think going forward, look the BBC – final decisions haven’t been made obviously – but the BBC should be realistic about what it can expect people to pay at a time like this. That, I think is the right approach.”
A BBC spokesperson said: “The Government and BBC agreed a six-year licence fee settlement in January 2022, which froze the licence fee for two years with increases in line with inflation from 2024.
“As is usual practice the Government sets and confirms the cost of a licence each year and this remains unconfirmed for 2024/25.
“The BBC will continue to focus on what it does best: working to deliver world-class content and providing great value for all audiences.”
