Yes and that's the point. The license fee is going up in order to fund this vanity project.
I am a free-market thinker, always have been, and I make no apologies for that. This ludicrous idea just solidifies the case for the privatisation of the Corporation, and what there truly is market demand for, survives thanks to advertising. What there is not, is either funded by premium subscription or axed as there is not the demand.
Commercial broadcasting is great for serving the mass audience, but minorities (of taste, interest, language, ethnicity, age, socioeconomic class, or what have you) need public broadcasting, and ultimately, we are all minorities in one respect or another. That's why publicly funded broadcasting exists in every developed country I can think of.
After all, commercial radio and television, for all their innovation, are ultimately a method of delivering audiences to advertisers, so they reflect the needs of the advertisers. We -- the audience -- are essentially the product that they are selling. Only public broadcasting can reflect the full range of the human experience, free from the constraint of ratings.
It's precisely minority projects like this one that underscore the need for the BBC. Anyone can produce mass-audience entertainment like
Strictly Come Dancing,
but only the BBC can provide comprehensive services for minority audiences.
AFAIK, the only Western countries that don't have public service television are Mexico and New Zealand. I don't know much about Mexican TV, but I do know about TV in New Zealand, having lived there.
TVNZ, whilst owned by the government, is funded entirely from commercial revenue. That being said, some programmes do get government funding through the agency NZ On Air; however, said funding is not exclusive to TVNZ - NZ On Air can, and do, also fund programmes on other channels.
I can say that the quality of TV in NZ isn't especially high - there tends to be a lot of lowest common denominator type stuff - think of it as having two ITVs competing against each other, as opposed to the BBC and ITV. Yes, the BBC do make a lot of mainstream stuff, as they should; however, they also do a fair bit of highbrow stuff to counterbalance that - something which doesn't really exist on New Zealand TV. Ironically, there is an arts channel there, but it's locked behind a subscription on Sky!
The thing about TVNZ is that very few people there particularly like the current system of state ownership but commercial funding. The NZ Labour party (who are, of course, currently in power) would prefer to have a public broadcaster akin to the BBC - indeed, there were plans (which seem to have been scrapped since the Broadcasting Minister resigned in disgrace) to increase funding for the public radio broadcaster, Radio New Zealand, and to give it a television station. The National Party (centre-right), on the other hand, would prefer to sell TVNZ, in line with their pro-free market views. However, for various reasons, neither outcome has so far come to fruition. Indeed, there's been talk as recently as today of TVNZ possibly merging with Radio New Zealand, or even buying a stake in online newspaper Stuff - two vastly disparate outcomes, which I think gives you an idea of the state of limbo TVNZ is in.
It is worth noting that TVNZ has had varying public service commitments over the years, depending on which party has been in power. When Labour were in power during the 2000s, they gave TVNZ a public service charter, assisted by government funding. As part of this, two commercial-free, public service channels were set up - one focusing on news and documentaries, and the other a mixture of children's and arts programmes. However, after National were voted into government in 2008, the public service charter was abolished, with the two PSB channels I mentioned being closed down at the end of their funding cycles, ostensibly due to low ratings. Now that Labour are back in power, they do seem to be upping their game with PSB output (much of it funded, as I touched upon earlier, by NZ On Air).
So that's that little history lesson over - I could go into a lot more detail, but will perhaps save that for another time. This may or may not be completely relevant to BBC Scotland, but it does, I think, show you what the broadcasting environment is like in a country without public service television.