The former director general of the BBC has suggested that the television licence be scrapped, arguing that it will be harder to collect with the growth of internet television. He says a government grant would save up to £200 million a year spent collecting licence fees, which he described as a “desperately unfair tax”.

Acknowledging that there would be outrage from some in the BBC that its previous director general could suggest scrapping the licence fee, Greg Dyke said it will be increasingly difficult to collect the television licence in the future.

“A licence fee to what — owning a computer?” he said. “Already, you don’t need to pay a licence fee to watch most of the BBC’s original programmes if you watch them on the computer via the iPlayer.”

While a television licence is not required for accessing on-demand programmes online, the BBC is planning to introduce live streams, for which it argues a television licence is required.

He suggested that the BBC should be funded by an exchequer grant and the money currently spent on collecting the licence fee could be used for a public service fund. He said some of the money could be used to fund local television.

He was speaking at a Public Service Broadcasting and Local Television conference hosted by Kent County Council, which is itself experimenting with broadband television services.

His comments came on the day that the BBC published its annual report. This showed that the corporation spent £123 million collecting the television licence last year, compared to £134 million the year before. The total licence fee income is around £3.4 billion a year.

The standard argument against funding the BBC through general taxation is that it would potentially compromise the political independence of the BBC. However, the BBC World Service is funded by a government grant and is generally recognised for its editorial impartiality.

Mark Thompson, the current director general of the BBC, described the last year as a significant one for the future of the corporation. “We developed and launched the strategy that will create a smaller BBC focused on delivering high quality content to all licence fee payers, and then put that into action with the phenomenally successful iPlayer.”

The BBC chairman Sir Michael Lyons also made reference to the BBC iPlayer. “Reaching everyone in the 21st century requires investment in new technology,” he said. “That the BBC has maintained its overall reach and grown its television reach is a remarkable achievement. Even so, the arrival of the BBC iPlayer has been a landmark event and an important illustration of the public’s appetite for on-demand.”

The annual report says robust reach figures are not yet available for the BBC iPlayer, but by March 2008 it was reaching over a million users a week, requesting up to half a million programmes a day. In the same month over 12 million hours of BBC radio were streamed within the United Kingdom, over 17 million globally. Over 12 million adults in the UK use the BBC web site a week, while 11 million use the interactive television service BBCi.