Rishi Sunak has said the BBC should be looking to “cut its cloth appropriately” as the country continues to deal with the heightened cost of living.

The corporation is seeking to make £500 million of savings in the face of high inflation and a two-year freeze to the price of a TV licence, which provides most of its funding.

The Prime Minister said “final decisions haven’t been made” about the future of the licence fee but the broadcaster should be “realistic” about what they can expect people to pay at this stage.

Discussing how sustainable he feels the licence fee is, Mr Sunak told reporters: “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.”

Speaking while on his trip to Dubai for the Cop28 climate summit, 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.

BBC Stock
The BBC is making savings (Ian West/PA)

“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.”

The BBC announced its nightly current affairs show Newsnight would be cut to a 30-minute programme as part of the cost-cutting measures.

The BBC Two show will continue to air on weeknights as an “interview, debate and discussion show” but more than half of Newsnight’s 60 jobs will go.

As part of further changes, an extended hour-long edition of BBC News At One will relocate to Salford while BBC Breakfast, also broadcast from Salford, will be extended by an extra 15 minutes daily, the corporation said.

More focus will be put on digital storytelling and live coverage across the BBC News division, with a “reduction in the amount of television packaging”.

The corporation expects the raft of changes to save £7.5 million.

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.”