S4C efficiency measures on course to meet targets


S4C’s comprehensive efficiency programme is making good progress and is on course to meet its targets, Huw Jones, Chair of the S4C Authority, announced today as the Channel published its Annual Report and Statement of Accounts for 2011.

Huw Jones said that since 2010 when the strategy was implemented, it has realised £2.5m in savings, a sum which has been reinvested in the programme service giving value for money for viewers.

In 2010, the S4C Authority put in place a programme of efficiency measures and certain service reductions designed to maximise the investment that could be made each year in S4C’s content. S4C management were asked to undertake a root and branch review of S4C’s activities, to restructure S4C’s operations and ensure that the amount invested in S4C’s content would be maximised by ensuring efficiency savings in S4C’s internal costs.

It is estimated that the minimum amount that will be invested in S4C’s content moving forward will be £65m plus any efficiency savings which will be reinvested in the content budget. This is a reduction of 19% compared to the figure for 2010. The Authority is therefore expecting to see S4C deliver efficiency savings in excess of 20% between 2010 and 2014, and for the cash released as a result of these efficiency savings to be invested directly in S4C’s content and services for audiences.

“To date these measures and reductions have realised savings of over £2.5m and further savings are expected to be realised in the current year,” said Huw Jones.

As part of the efficiency measures, S4C’s high definition service – Clirlun – is to be discontinued from the end of this year. The Channel today announced that the high cost of Clirlun – about £1.5m a year – meant discontinuing the service was unavoidable. The Authority has also identified that Clirlun as a service is not able to deliver value for money for S4C’s audience in the current climate.

Ian Jones, S4C’s Chief Executive, said, “The decision comes in the wake of the considerable reduction in our public funding. There’s no way of avoiding such a decision made inevitable because of the 36% reduction in our budget in real terms. It’s important we invest the greatest proportion of our budget in content in order to ensure value for money and in order to offer the best programme service to our viewers.

“We hope to be able to consider different options for using HD on several digital platforms in the future.”

S4C has had its public funding cut from £101.6m in 2010 to £83m in 2012 as part of the Government’s Comprehensive Spending Review.

In his presentation to the Report, Huw Jones, Chair of the S4C Authority, said, “I’m confident that those concerned about the future of Welsh language television can look forward with a great deal more confidence than a year ago, despite the considerable challenge of having to work with a considerably lower budget.”

Referring to the new partnership between S4C and the BBC Trust, Huw Jones said that extensive and comprehensive discussions had been held between the two broadcasters regarding the funding arrangements and the accountability that will be adopted from 2013 onwards. “I believe the Operating Agreement between the BBC Trust and the S4C Authority will provide further reassurance that S4C’s future, and its ability to operate independently, are secured, while providing appropriate measures for being answerable to the BBC Trust for the use made of licence fee money,” he said. A public consultation on the Operating Agreement will be held soon.

Although S4C will be funded primarily from the licence fee from 2013-14 onwards, the Chairman, in his presentation, called for an assurance that the financial contribution from the Department for Culture, Media and Sport would continue at least through to 2017.

“One matter of great importance to us which we have raised with the Government is that in reaching an agreement with the BBC, we have had to make the assumption that the funding which we are set to continue to receive from the DCMS in 2013-14 and 2014-15 – circa £7m per annum – will continue, at least at that rate, through to 2017. Failure to secure continuation of that funding would leave S4C in a truly parlous state, given that the new level of funding, by 2015, will already be some 36% lower than that which would have applied under the previous formula,” said Huw Jones.

He added, “Confident as we are of the value of our new partnership with the BBC, and of those public service objectives we share with the BBC Trust, it is important to retain the principle of parliamentary responsibility for the provision of the only Welsh language television service that we have.”

The Report can be downloaded on:

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