S4C has been given to understand that the funding it receives from the Department for Culture, Media and Sport will be reduced over the four years from 2016/17 to 2019/20. Incremental cuts will be implemented during the period bringing the annual contribution down from the present £6.7m to £5m by 2019/20.
The Chairman of the S4C Authority, Huw Jones, said; "The decision to reduce the funding S4C receives from central government is disappointing, particularly as the reduction is substantially greater than the overall reduction which the Department has received.
"Today's announcement puts even greater emphasis on the result of the discussions we are holding with the BBC Trust with regard to the funding which S4C receives through the licence fee. At the moment, S4C receives approximately 90% of its funding through the licence fee and the Secretary of State has suggested that S4C should implement savings in proportion to those which the BBC is expected to implement.
"Although every effort will be made to prioritise expenditure on programme content and quality, it is inevitable that cuts of this nature will have implications for the range and diversity of the service that we provide and for our ability to take advantage of new opportunities.
"Once the overall picture is clear, discussions will be held with producers and staff to consider the difficult decisions which lie ahead of us."