Culture Secretary Tessa Jowell has announced that the BBC colour TV licence fee will rise to £135.50 in April.
The full settlement will see a rise of 3% over each of the next two years, with the cost gradually reaching £151.50 in 2012.
Is the money being spent wisely?
Here, members of the BBC News Youth Panel discuss where the BBC is getting it right and what the coporation could be doing better.
AMY HALL, 19, SHOP ASSISTANT, CAMBORNE
The biggest part the BBC plays in my life is through radio. I am a massive music fan and radio is a good way to keep up to date with this and the latest news while still being able to do something else such as driving or reading. I mainly listen to Radio 1 and 2 but also sometimes BBC local radio and Radio 4.
I think the BBC should spend the licence fee on keeping their output fresh and entertaining by doing things like challenging dominant ideologies in society and helping audiences to see the world and others in a different way.
I think the BBC should exist in the 21st century as its role as a public service broadcaster is very important, especially when other providers depend on audiences so much.
The BBC is in more of a position to challenge people's perceptions by giving them something that they may not have thought about before but may find that they enjoy.
JONATHON WOODRUFF, 19, STUDENT, WARRINGTON
I think that the BBC licence fee should not be entirely scrapped or made to be voluntary, but needs to be reformed.
Modern TV differs significantly from when the BBC channel was first launched. Sky offers 24 hour news, entertainment shows and factual documentaries. In order to compete with this competitioon the BBC is spending vast amounts of money on entertainment shows.
I believe the BBC should re-develop its targets. The BBC should exist to provide high-quality impartial news, which in public control protects the media from corporate domination. I also believe it should provide extensive political coverage and allow the public to ineract more in politics. I watch Question Time and think it's the best example of what the BBC can provide.
The BBC should also promote British culture, perhaps televise classic British cinema, plays, drama. It should perhaps allow the public to choose the TV schedule or vote on which programmes are made.
ANDY GALLANT, 16, N E LINCS COUNCIL FOR YOUNG PEOPLE
I think that it is vital that the BBC is properly funded so that it can keep up with interactive TV and online services which are enjoyed regularly by millions of people worldwide.
A lot of the BBC services are worth the money; however I feel that sometimes too much is spent on creating new TV channels and radio stations, seemingly for the sake of it. I also think that it can be wasteful not to broadcast throughout the daytime on channels such as BBC Three.
The BBC should definitely spend more of the licence fee on improving interactive services such as interactive TV and the BBC website which are accessed by millions of people worldwide.
The BBC is necessary in the 21st century to keep people with busy lifestyles informed and up-to-date. However, it certainly needs to make sure it stays up-to-date itself, so it can remain accessible to the public in fast-changing and exciting times.
AMY FINBOW, 18, GAP YEAR STUDENT, COLCHESTER
The BBC has become an institution in this country and I think that when we switch on our TVs, radios or get the BBC web site running, we know that what we are going to see and hear is up-to-date information. Obviously there is competition around and the BBC has got to provide the best services so the public win each time. Everyone will use the services differently, some may not watch the TV, but would prefer to listen to the BBC radio channels and I am sure that the majority of Schools in the country will recommend to their students to log onto the BBC Bitesize site.
I think that the money should be invested in similar things to what it is now. I do believe however that the BBC has the chance to be of major influence with regards to education, and the internet site should be further developed to offer more coverage of different subjects so that it can include all forms of students around the country.
The BBC has become part of everyday life for probably everyone in the country. I doubt if there is someone who is unaware of the work that the BBC does. It is like an institution to our country and one that has influenced and educated many people, whether it is through the news, health programmes and sport coverage to name just a few.
Our world and society is constantly changing and as long as the BBC can adapt to the changes then I don't see why it should go.