In March 2018 the UK Government accepted all the conclusions of an independent report into Welsh-language broadcaster S4C. This paves the way for changes to what the broadcaster’s remit says it can do, how it is organised and how it is funded: though it says nothing explicitly about the level of funding S4C should receive.
Background
Following campaigning, S4C was established by legislation in 1982. It is the only Welsh language television broadcaster, and is 98% publicly-funded. In 2017 Euryn Ogwen Williams – former S4C director of programmes – conducted a review on behalf of the UK Government Department for Digital, Culture, Media and Sport (DCMS) into the channel, the first since 2004.
Although responsibility for broadcasting is reserved to Westminster, the Assembly’s Culture, Welsh Language and Communications Committee was keen to influence the planned DCMS review. In 2017, it therefore published Outside the Box, a report into S4C. During this inquiry, S4C published Pushing the Boundaries, its vision for the future of the service.
How should S4C be funded?
In 2010, S4C faced both reductions in its funding and changes in how that funding was provided. Whereas most of S4C’s revenue had previously been provided directly by the DCMS and linked to inflation, from April 2013 the majority of that funding has come via the BBC Trust through the licence fee, with the DCMS continuing to provide a comparatively small grant (currently £6.7 million). S4C’s commercial income represents approximately 2% of the broadcaster’s overall income.
The following graph demonstrates the channel’s declining public income since 2010: 
Between 2010 and 2016-17 S4C’s public funding fell from £101.6 million to £81.3 million. This was a real-terms cut of 27%.
The DCMS review proposes moving all of S4C’s public funding to the licence fee from 2022-23, when the next licence fee settlement begins. It states that this is the “only way to achieve funding stability” for the channel.
This proposal is contrary to the views of the Assembly Committee, S4C and the BBC, who had all proposed maintaining the status quo. In Outside the Box, the Assembly Committee recommended maintaining a funding stream from the DCMS “so that there remains a line of direct accountability for spending to elected representatives”.
S4C had stated that “plurality of funding needs to be safeguarded”. It said that this had been “vital for S4C’s continued independence and for our ability to carry out our Welsh language remit”. Responding to the DCMS review, the BBC said that it supported S4C in wanting to maintain plurality of funding sources for the channel.
What should S4C do?
S4C’s remit – which sets out what the channel should do – remains fundamentally the same as when the channel was launched in 1982. It states that the channel should provide “television programme services” “for reception wholly or mainly by members of the public in Wales”.
The Assembly Committee heard that this remit was not suitable in a world of digital media consumption where 45% of S4C’s viewers were from outside of Wales. S4C had called for “an updated remit, moving away from the geographical and TV only restrictions to enable multi-platform Welsh language provision throughout the UK and beyond.” The Committee supported this view.
The DCMS review has endorsed these calls, calling for an updated remit “to include digital and online services and remove the current geographical broadcasting restrictions”.
How should S4C be organised?
S4C is currently governed by a non-executive board, known as the S4C Authority. Its members are appointed by the Secretary of State in consultation with the Wales Office and the Welsh Government. Mr Williams proposes that a “new unitary board that includes executives is required to provide the strong leadership needed to steer S4C through the challenges ahead”.
This supports the views of the Assembly Committee, though Outside the Box went further by recommending that a new unitary board be “protected by statute or Charter, along the lines of the current BBC model”.
How much money should S4C get?
Arguably the elephant in the room during the DCMS review was how much public money S4C should get. Mr Williams states that “as per the terms of reference, the review does not consider levels of funding for S4C”. The report, and the DCMS response, are also silent on what will happen to the money currently provided by the DCMS to S4C – over £6m a year – once the station’s funding is moved entirely to the licence fee.
Although S4C has fallen short of calling for a specific figure for its total budget, it states that its current content budget is “not sufficient”, and states that it needs an extra £6 million a year to enable it to deliver its services over broadcast TV and digital platforms and invest in new content on digital platforms without adversely impacting on current levels of investment in content. Last year S4C’s Chief Executive noted that funding cuts had led to the station airing 57% repeats – compared to a 20% aim when the station was launched – which he felt was “far too high”.
The Assembly Committee stated that “there was no dissent from witnesses that S4C’s funding is now insufficient and needs to be increased significantly”. It called for a future funding settlement for the channel “based on a clear definition of the service requirements that S4C is expected to deliver and funding set at a level to enable S4C to successfully deliver these requirements.”
The difficult conversation about how much the channel should receive has been postponed until another day.
Article by Robin Wilkinson, National Assembly for Wales Research Service Source:
Figure’s taken from S4C’s Annual Reports and Accounts. “Public income” refers to annual grants received from the UK Government DCMS and, since 2013, funding from the licence fee.
*This funding period covers the fifteen month period 1 January 2013 to 31 March 2014. Previously S4C had reported on a calendar year basis. It moved to a financial year basis to coordinate its reporting arrangements with those of the BBC, in line with the new funding relationship between the two broadcasters. The funding figure from this year is a pro rata figure provided by S4C.
