House of Commons Welsh Affairs Committee
S4C
Fifth Report of Session 2010–12
Volume 1: Report, together with formal minutes, oral and written evidence
Written evidence is contained in Volume II, available on the Committee website at www.parliament.uk/welshcom
Ordered by the House of Commons to be printed 27 April 2011
HC 614 Published on 11 May 2011 by authority of the House of Commons London: The Stationery Office Limited £20.00
The Welsh Affairs Committee
The Welsh Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Office of the Secretary of State for Wales (including relations with the National Assembly for Wales).
Current membership David T.C. Davies MP (Conservative, Monmouth) (Chair) Stuart Andrew MP (Conservative, Pudsey) Guto Bebb MP (Conservative, Aberconwy) Alun Cairns MP (Conservative, Vale of Glamorgan), Geraint Davies MP (Labour, Swansea West) Jonathan Edwards MP (Plaid Cymru, Carmarthen East and Dinefwr) Mrs Siân C. James MP (Labour, Swansea East) Susan Elan Jones MP (Labour, Clwyd South) Karen Lumley MP (Conservative, Redditch) Jessica Morden MP (Labour, Newport East) Owen Smith MP (Labour, Pontypridd) Mr Mark Williams MP (Liberal Democrat, Ceredigion)
The following Members were members of the committee during the Parliament:
Glyn Davies MP (Conservative, Montgomeryshire) Nia Griffith MP (Labour, Llanelli)
Powers The Committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk
Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/welshcom
The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some or all written evidence are available in printed volumes.
Additional written evidence may be published on the internet only.
Committee staff The current staff of the Committee is Adrian Jenner (Clerk), Anwen Rees (Inquiry Manager), Jenny Nelson (Senior Committee Assistant), Dabinder Rai (Committee Assistant), and Jessica Bridges-Palmer (Media Officer).
Contacts All correspondence should be addressed to the Clerk of the Welsh Affairs Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 3264; and the Committee’s email address is [email protected]
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Contents
Report Page
1 Introduction 3 Our inquiry 3
2 The importance of S4C to Wales 5 Context 5 Remit 5 Funding 5 Publisher-broadcaster 6 S4C’s distinctive place in Wales 6 Economic importance 7 Cultural impact 9
3 Performance of the channel 11 Reliability of viewing data 11 Viewing time, share, and reach 12 Viewing time and share 12 Audience reach 14 Programme output 18 Audience perceptions 19 Efficiency and value for money 20 The provision of private healthcare to staff 22
4 The Government’s proposed changes to S4C 24 A new funding model for S4C 24 Guaranteed funding for S4C 26 Independent producers 27 The S4C-BBC partnership 28 Management and oversight of S4C 29 Current arrangements 29 Changes in senior personnel 30 Arwahanrwydd 32 Ensuring the independence of S4C 33
5 The future accountability of S4C 36 A fundamental review 38
Conclusions and recommendations 40
Formal Minutes 45
Witnesses 48
List of printed written evidence 48
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List of additional written evidence 49
List of Reports from the Committee during the current Parliament 50
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1 Introduction
Our inquiry 1. We undertook this inquiry into S4C (Sianel Pedwar Cymru) in response to concerns about the current performance and future status of the publicly-funded Welsh language broadcaster. The broadcasting environment in Wales, as elsewhere in the UK, is undergoing significant change. The ongoing evolution of broadcasting from analogue terrestrial channels to the digital age, with huge volumes of content available through a wide range of platforms and services, continues to proceed rapidly. Adapting to this changing landscape has provided a significant challenge for broadcasters, not least S4C. In addition, S4C has come under scrutiny in respect of its funding, management, accountability and the quality of its output.
2. The Government of Wales Act 2006 did not devolve broadcasting matters to the National Assembly for Wales (NAW) and responsibility for English and Welsh language broadcasting remains with the Department for Culture Media and Sport (DCMS). In recent years our predecessors on this Committee undertook an inquiry into the declining provision of English language broadcasting in Wales.1 However, this is the Welsh Affairs Committee’s first major inquiry into S4C, the nation’s primary Welsh language broadcaster, for a number of years.
3. There have, however, been a number of initiatives which have considered aspects of S4C in recent years. In 2009, the “Hargreaves Review” of the creative industries in Wales was published by the Welsh Assembly Government.2 In 2010, the BBC and S4C undertook a joint review of their working relationship and in the same year S4C commissioned an independent review of its corporate governance by Sir Jon Shortridge, a former permanent secretary to the Welsh Assembly Government.3 Ofcom, the broadcasting regulator, has also considered S4C in its reviews of public service broadcasting.
4. This Report and the evidence we publish with it are our contribution to the public debate on S4C. Chapter 2 describes the cultural and economic importance to Wales of S4C. Chapter 3 examines the broadcaster’s performance and output. Chapter 4 considers the management of the broadcaster and the implications of the proposed changes to S4C’s funding and its relationship with the BBC. The final Chapter looks at suggestions for improving the accountability of S4C.
5. We took evidence from a wide range of individuals and organisations including Arwel Ellis Owen, Interim Chief Executive of S4C and Rheon Tomos, Vice Chairman of the S4C Authority, Professor Ian Hargreaves, Geraint Talfan Davies, Ron Jones, the Welsh Language Board, the Welsh Language Society, TAC (the Welsh independent producers association), Ofcom, Mark Thompson, BBC Director General, Hywel Williams MP, Ed
1 Welsh Affairs Committee, Eleventh Report of Session 2008–09, English Language Television Broadcasting in Wales, HC 502 2 The Heart of Digital Wales: a review of creative industries for the Welsh Assembly Government, 19 July 2010. 3 Shortridge Review of the Corporate Governance of S4C, 11 February 2011.
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Vaizey MP, Minister for Culture, Communications and Creative Industries, DCMS, and Alun Ffred Jones AM, Welsh Assembly Government Heritage Minister.4
6. We also met with officials of MG Alba, the Gaelic language channel, at their headquarters on Stornoway, Isle of Lewis. We are grateful to those who helped with the arrangements for our visit.
7. We were assisted in this inquiry by our Specialist Adviser, Ray Gallagher.5
4 For a full list of witnesses see page 49 5 See Formal minutes of 26 October 2010 www.parliament.uk/business/committees/committees-a-z/commons- select/welsh-affairs-committee/formal-minutes/
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2 The importance of S4C to Wales
Context 8. S4C began broadcasting in November 1982, the same year that Channel 4 was launched, following a concerted campaign in Wales over a number of years for the establishment of a dedicated Welsh language television broadcaster.6 Established after initial reluctance by successive UK governments, the creation of S4C was seen by its supporters as vital to the aim of preserving Welsh as a living language. Since 1982 the channel has established a distinctive identity in three particular ways.
Remit 9. First, S4C is the world’s only publicly-funded Welsh language television broadcaster. S4C’s services are provided under statute by the Welsh Authority, also known as the S4C Authority. Its remit is set out in successive Broadcasting and Communication Acts since 1980. Within that remit, the broadcaster is expected to provide a broad range of high quality and diverse programming in which a substantial proportion of the programmes overall, and the majority of programmes in peak-time viewing, consist of programmes in Welsh.7 Since 2003, Ofcom has been responsible for independently regulating certain aspects of the Authority’s public services, including compliance with requirements and quotas agreed with or set out by Ofcom.8
Funding 10. Second, S4C has distinctive funding arrangements. For the first fifteen years of S4C’s existence, its Government grant was linked to the level of UK television advertising income in the previous year. The Broadcasting Act 1996 replaced the link between S4C’s income and the level of UK television advertising revenue by a new link to retail price inflation, based on S4C’s share of advertising revenue in 1997. In 2009–10 this comprised approximately £100 million of public funding. In contrast, the BBC is funded primarily through a television licence fee while Channel 4 does not receive direct public funding but generates all of its income commercially (principally through the sale of advertising time and programme sponsorship). S4C’s funding has also been linked to changes in the Retail Price Index (RPI) under provisions set out in the 1996 Broadcasting Act. This surety of funding is complemented by additional commercial income (approximately £3 million in 2009–10) derived principally from advertising. Further public funding for S4C’s activities is provided indirectly through the BBC which supplies S4C with at least 10 hours a week of programming financed by the television licence fee (to the value of approximately £20 million in 2009–10) rather than by S4C’s budget.
6 Including acts of civil disobedience, refusals to pay the television licence fee, sit-ins in television studios and a threatened hunger strike. 7 Ev 111 8 Ev 78
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11. The Government has announced its intention to end the link of S4C’s budget to the RPI and has made provision to do so in the Public Bodies Bill.9 Further changes to the funding of S4C and to its relationship with the BBC were also being considered prior to this report’s publication and are considered further in Chapter 4 of this Report.
Publisher-broadcaster 12. S4C is a “publisher-broadcaster”; unlike, for example, the BBC and ITV, which make a significant proportion of programmes in-house, S4C commissions all of its programming from external suppliers, including the BBC and ITV, but primarily from independent television companies in Wales. When it was launched in 1982, S4C broadcast its commissioned Welsh language programmes and either simultaneous or deferred English language broadcasts supplied by Channel 4. Following digital switchover at the end of March 2010, S4C ceased its analogue television service and became an entirely Welsh- language broadcaster with the full English language Channel 4 service available on digital terrestrial, satellite and cable platforms in Wales.
13. In April 2010, S4C launched a new high definition channel, S4C Clirlun, to complement its main service. S4C also has an online presence, including Clic, an on- demand service on the S4C website providing “catch-up” television viewing.
S4C’s distinctive place in Wales 14. The importance of S4C to life in Wales and to Welsh identity was asserted by a wide range of witnesses.10 A combination of factors including its history and its status as the world’s only Welsh-language broadcaster means that S4C holds an iconic position in Wales. Following its nearly thirty years of broadcasting, a broad consensus has developed that S4C has helped shaped the identity of the Welsh nation. Ed Vaizey MP, Minister for Culture, Communications and Creative Industries, told us that the UK Government recognised the importance of S4C, “We are very conscious of S4C’s place in Wales and in Welsh culture [...] I absolutely understand the importance, the impact, and the way in which S4C is cherished in Wales”.11
15. Geraint Talfan Davies, Chairman of the Institute of Welsh Affairs and former Controller of BBC Wales, told us that S4C had gained this position in Wales based on three distinctive values:
One is what you might call the intrinsic value of S4C as a broadcaster and what it does on television. There is, secondly, what you might call the instrumental benefits of S4C, the public value that it can deliver in educational terms and in economic terms. And then there is an institutional value to S4C.12
9 Public Bodies Bill [Lords Bill 55 (2010-12)] 10 Ev 74, Ev 9 and Ev 99 11 Q 396 12 Q 11
S4C 7
Economic importance 16. Without S4C there would be no significant indigenous independent television production sector in Wales. In 2010, an economic impact assessment commissioned by the S4C Authority undertaken by DTZ and the Welsh Economic Research Unit at Cardiff University estimated that it was responsible for sustaining 2,111 jobs (full time equivalents) in the independent sector and other fields in Wales including 156 full time staff at S4C.13 The study put the net value of S4C to the economy in Wales as worth in the region of £90– £100 million per annum.14
17. All S4C services are transmitted from its headquarters in Llanishen, Cardiff, and most S4C staff and independent producers are located in the Cardiff area. In addition, S4C and the media industry have a presence in the area around Caernarfon, Gwynedd, North West Wales and Llanelli, West Wales.
18. The development of the broadcasting industry in Wales since 1982 is considered so important to the Welsh economy that the Welsh Assembly Government included it at the heart of its development strategy for promoting growth.15 Professor Hargreaves described it as:
One of the legacy strengths that Wales has in creative industries arises from the investment that has been made in the independent broadcasting sector. So it is of first-rate economic importance for Wales.16
19. We heard during our inquiry that over the last decade, S4C has encouraged a process of business consolidation within the independent sector. Where once there were many smaller independent television companies commissioned to produce programming, now the lion’s share of the channel’s output is provided by larger companies such as Tinopolis, Rondo, Cwmni Da and Boomerang.17 S4C currently uses 32 independent production companies to supply its programming where once it used 80.18
20. Although we received a great deal of evidence underlining the importance of S4C to the Welsh economy, concerns were expressed that:
• the independent sector is too dependent on S4C’s commissioning and market place in Wales; and
• the economic benefit provided by S4C was concentrated too closely on Cardiff.
21. Critics of the Welsh independent producers argue that they owe their existence to the consistent and substantial stream of public funding from the public service broadcasters over decades. Some witnesses also argued that very few companies in the Welsh
13 Economic Impact of S4C 2007–2010, DTZ and Welsh Economic Research Unit (WERU), September 2010 14 Ev 105 15 Ev 105 16 Q 30 17 Ev 92 18 Q 28
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independent television production sector have matured into units capable of operating throughout the UK and beyond and were too reliant on S4C.
22. It was acknowledged by witnesses, however, that some independent producers including Tinopolis have grown substantially outside of Wales; while others such as Green Bay, Presentable, Rondo Media, Cwmni Da and Telesgop have created strong niche businesses based on successful and acclaimed programming.19 Other witnesses argued that the limited market for Welsh language programmes in the UK and beyond was an inevitable constraint on the sector’s potential development outside of Wales.20
23. Another concern expressed by witnesses was that S4C’s location near Cardiff meant that investment from the independent sector was naturally drawn to the area in and around the city, at the expense of other areas of Wales. It was argued further that if the organisation were to reach out beyond its headquarters in Cardiff, then it would not only better reflect the interests of its audience but would also provide much needed jobs and investment to other areas of the country. Ron Jones, Director of Tinopolis Ltd and Chairman of the Welsh Assembly Government’s Creative Industries Panel, argued that S4C should expand its activity beyond Cardiff:
I believe the expenditure could provide much more economic and social value if it tried. Too much of Welsh television production is unnecessarily located in Cardiff when much of Welsh and English language programming could be located elsewhere [.…] S4C itself should be relocated to North or West Wales. Culturally the organisation would benefit from being closer to its core audience.21
This argument was reinforced by other witnesses who proposed that the organisation should move its headquarters from Cardiff to North or West Wales.22
24. However, it was also recognised in the evidence we received that the phenomenon of “clustering” occurs in many industries, particularly when, as in the case of S4C, companies are reliant on one commissioner. It was also noted that the presence of the BBC and other facilities in the area, soon to be bolstered by the BBC drama village, Roath Lock in Cardiff Bay, provided the potential for efficiencies and economies of scale within the industry that would not exist elsewhere in Wales. Other witnesses, including TAC, argued that moving from Cardiff would be impracticable, hugely disruptive and that the option was not viable in the present economic climate.23
25. We welcome the significant contribution that S4C has made to the Welsh economy since 1982. S4C and the independent television sector, from which it commissions much of its output, contribute approximately £90 million per year to the Welsh economy and are responsible for employing over 2,000 people. This is a story of success for the Welsh economy and should be built on in the future.
19 Q 79, Ev 92 20 Q 80 21 Ev 77 22 Ev 77 23 Q 83
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26. We note concerns that too much of the economic benefit from S4C is gained by the region in and around Cardiff where S4C headquarters and most independent television producers in Wales are based. While we are not presently persuaded of the case for moving S4C from Cardiff in the current economic climate, we do, however, consider that it merits consideration at a future date. In the meantime, we urge the DCMS and S4C to make every effort to spread S4C’s activities beyond its established bases to all corners of Wales.
Cultural impact The Welsh language is one of the most important cultural artefacts for Britain. It is a huge cultural asset, I think, for the whole of these islands. It is fundamental to the history of these islands.24 (Geraint Talfan Davies)
27. The influence of S4C is not limited to the employment it provides or to ensuring that pictures are transmitted to television sets, but also the significant contribution it makes to the cultural and social life of Wales. In addition, S4C plays a major role in promoting the Welsh language through a medium which reaches children and young people in particular and in many cases complementing bi-lingual education in schools—seen as crucial to preserving Welsh as a living language.25
28. The last twenty years or so have witnessed a significant increase in the number of Welsh language speakers. In the 2001 census, nearly 600,000 of the population of Wales (around 21%) were Welsh speakers, an increase over the previous decade of more than 80,000 or 16%. Another 200,000 people profess some knowledge of the language. One million people, a third of the Welsh population, live in households which contain at least one Welsh speaker, but nearly a quarter of Welsh speakers live in households by themselves or where no one else speaks the language.26
29. Witnesses argued that S4C has been central to the increase in the number of Welsh language speakers and those interested in learning Welsh, particularly children or young people. David Donovan, National Officer for Wales, BECTU argued that S4C gave Wales “the ability to work and to observe ourselves in our own language”.27 Urdd Gobaith Cymru argued that S4C had “normalised” the Welsh Language:
It was a new use of the language and a new medium—it was a crucial development in that age and a “modern” development. No comparable thing happened with other languages across Britain or Europe with the result that the Welsh language survived whilst others have died out. Therefore the existence of a Welsh channel and radio services and all other technological media are vitally important to the language.28
24 Q 37 25 Ev w2–4 [Note: references to ‘Ev wXX’ are references to written evidence published in the volume of additional written evidence published on the Committee’s website.] 26 Q 131 27 Q 126 28 Ev w1
10 S4C
30. In written evidence Dr Simon Brooks of Cardiff University argued that, despite the overall increase in Welsh speakers, the existence of the Welsh language was actually under threat because the number of first language speakers of Welsh had recently decreased. S4C, according to Dr Brooks, plays a key role in its preservation:
Welsh has declined considerably as a community language in Wales during the past 50 years. As the language declines at a community level, it will require increasing support from dedicated Welsh-language institutions [...] S4C on broadcasting for children shows a corporate awareness of the importance of language planning – this age group is key to Welsh language maintenance and preservation.29
31. In addition, witnesses argued that S4C remained an important symbol for the Welsh language especially because it was operating in an environment where the number and range of Welsh language media had declined.30 We were told that there has been a shift within radio stations in north and west Wales from bilingual to mainly English-language output. In addition we were told that the Gwynedd Welsh-Language weekly newspaper, Yr Herald Cymraeg, has closed, and attempts to establish a Welsh-language daily newspaper, Y Byd, have failed. According to the Welsh Language Society, S4C remained a mainstay of indigenous content and made significant contributions in the supply of children’s programming, whose quality is widely recognised, and “drama such as Pen Talar and Teulu, live events such as the Eisteddfod and the Royal Welsh Show, and sport”.31
32. We welcome the key part that S4C has played in bolstering the everyday use of the Welsh language, which we consider to be a cultural asset not just of Wales but of the entire United Kingdom. Through a wide range of its broadcast output, S4C has brought the Welsh language into many homes where it may not have been heard previously. In addition, S4C has provided the opportunity for Welsh people to learn, through its education and children’s programmes, and hear their language spoken as a normal part of their daily lives. We also recognise, however, that while the cultural benefit provided by S4C is compelling, the channel’s prime purpose is to provide its viewing audience with popular, high quality television programmes which inform, educate and entertain.
29 Ev w2 30 Ev w2 31 Ev 101
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3 Performance of the channel
Reliability of viewing data 33. Our inquiry was wide-ranging, covering many aspects of S4C’s broadcasting performance. Much of the debate among witnesses about S4C’s performance involved competing interpretations of the data.
34. Figures from the Broadcasters’ Audience Research Board (BARB), published before we began our inquiry, indicated that over a 20 day period in February and March 2010, 196 of the 890 programmes broadcast by S4C—almost one quarter—were rated as having “zero” viewers (fewer than 1,000 viewers). Over the same period, the figures suggested that only 139 S4C programmes (16%) had more than 10,000 people watching them.
35. Some witnesses claimed that the audience figures supplied by BARB, which were used as a key measure of S4C’s performance, were either unreliable or used in a misleading manner by S4C’s critics. Ron Jones, Chair of the Welsh Assembly Government’s Economic Renewal Creative Industries Sector Panel and Executive Chairman of Tinopolis Ltd, told us that:
I first complained about inaccurate audience numbers to S4C back in the early 1990s when I was complaining that the audience figures being shown for some of our programmes were too high. They were irrationally high. If you look back at the BARB information we get, realistically, that BARB information is not designed for this purpose. It doesn’t give you correct numbers. There are 309 Welsh speakers on the panel. Spread that across the linguistic differences inside families, across the geography of Wales, and you are going to end up with very dangerous numbers.32
36. This argument was reinforced by Ahgharad Mair, Chair of Tinopolis Wales and an S4C presenter, who stated that there is “a need to correct some of the damaging misconceptions and myths about S4C and in particular its viewing figures”.33 She went on to argue that in Wales “the BARB panel is accepted as statistically insufficient” and that even the “boosted” panel which includes additional Welsh viewers “is likely to provide misleading data”. According to Ms Mair:
A high level of variation in language use across districts and families[…]is likely to produce results that are statistically inaccurate[…]The BARB figures purport to take into account homes of various degrees of fluency but given the small number of households sampled and the difficulties of identifying accurately household language use, the mathematical algorithms are being applied to already questionable data.34
Similarly, a number of witnesses noted that most of the programmes with a “zero rating”, which critics used to criticise S4C’s performance, had been award winning children’s
32 Q 51 33 Ev w11 34 Ev w11
12 S4C
programmes for which viewers under four year olds, the target audience, were not counted by BARB.35
37. Ofcom, S4C and the BBC dismissed arguments about the reliability of the BARB figures. Both the BBC Director General and the Interim Chief Executive of S4C described the BARB figures as the television industry’s “gold standard” and asserted that the methodology used by BARB to collect its data was sound.36 Mr Arwel Ellis Owen also agreed that the BARB panel was sufficiently representative of viewers in Wales and provided a reliable estimate of the viewers watching S4C.37
38. A further complication that arises when comparing viewing figures is that until the end of March 2010, S4C’s broadcast output was through both an analogue and a digital channel, with the analogue version additionally containing English language programmes supplied by Channel 4. However, since April 2010, when the process of digital switchover was completed in Wales, S4C has operated a solely digital, Welsh language, service. A number of witnesses, including S4C, argued that comparing historical viewing figures for S4C’s total output—“all hours” viewing—before and since digital switchover is not an appropriate way to judge the organisation’s performance.
39. However, it is the case that historical figures up to digital switchover provide a picture of audience use of the service during its years of bilingual broadcasting on a like-for-like basis. It is also the case that S4C’s output in peak time—on both analogue and digital services—predominantly comprised Welsh language programmes, providing a comparable measure of peak time performance over the years before and after digital switchover.
40. We note the claims by a number of witnesses that the figures provided by BARB and used by S4C to judge its performance are not reliable, particularly because they take no account of the number of viewers under four years old. We regret the misleading use of these figures by some commentators and note that the BARB figures are regarded by the BBC, S4C and other commentators as the industry “gold standard”. We have not been presented with any compelling evidence to suggest that the figures produced by BARB are unreliable.
Viewing time, share, and reach 41. We received detailed information from Ofcom about the performance of S4C’s output measured against audience share, and reach for the five-year period from 2005 to 2009.38 Here we highlight a number of issues.
Viewing time and share 42. The figures provided by Ofcom show the average number of hours of Welsh language programming viewed has varied between 2005 and 2009 with the 2009 figure (21.1 hours)
35 Ev 93 36 Q 243, Q 348 37 Q 243 38 Ev 78
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an increase on the average hours watched in 2005 (19.8 hours), but lower than the average hours watched in 2008 (21.4 hours).39 It should be noted that Ofcom’s data do not differentiate between Welsh and non-Welsh speakers and it is therefore unclear as to what extent each group increased or decreased their total S4C viewing time over the period.
43. Ofcom also provided audience share figures, both for all hours viewing and for peak time viewing of S4C for the period from 2005 to 2009. These figures represent the percentage of viewing time spent with S4C by viewers in Wales, as a proportion of all their television viewing, across all hours and during their peak time viewing.
Table 1 S4C audience share (% all television viewing) all hours peak time (1830–2130) 2005 3.7% 3.1% 2006 3.6% 3.4% 2007 3.0% 3.2% 2008 2.7% 3.3% 2009 2.2% 3.1% Source: Ofcom 44. The table shows that S4C accounted for 2.2% of all television viewing in Wales in 2009, a significant decrease from 3.7% in 2005. However, this figure is for all hours viewing including English language programming on S4C’s analogue service during the period supplied by Channel 4. This was also a period of significant growth in digital multichannel television, during which Channel 4 itself become increasingly available to viewers in Wales directly on digital platforms. Some witnesses argued that to some extent, a decrease in S4C’s all hours share during this period is therefore not surprising.
45. During peak time, which comprised Welsh language programming throughout this period, S4C’s share of viewing at 3.1% remained the same in 2009 as it was in 2005. Regarding comparative figures for other broadcasters, Ofcom noted that only BBC One and ITV1 recorded all hours audience shares greater than 15% in Wales and even those had been gradually falling in recent years.40 Ofcom further noted that while the aggregated share for the commercial channels viewed in multichannel homes has been increasing significantly over the last few years to around 50%, the shares for individual channels during 2009–10 remained low.41 Ofcom concluded that “S4C’s overall share at 2.2% and peak time share 3.1% should therefore be considered in this context”.42
46. We recognise that S4C is operating in a competitive and fast-moving digital market where television viewers have a much wider choice of channels than ever before. In the light of this, it is a positive achievement that S4C’s share of the viewing audience during peak times in recent years has held up remarkably well.
39 Ev 78 40 The audience share for each of the other public service broadcasters provided by Ofcom is below 10%, with BBC 2 at 6.1%, Channel 4 at 4.4% and Five at 4.5%. 41 BBC News 1.1%, G.O.L.D. 0.9%, Discovery 0.1% and Eurosport 0.1%. 42 Ev 78
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Audience reach 47. A further measure of S4C’s performance can be made by an analysis of its “reach” figures representing the number and percentage of its potential audience who watch the channel for a minimum amount of time over a given period.43 Measuring S4C’s performance against this criterion is made difficult by the absence, among witnesses, of an agreed acceptable target for S4C’s audience reach.
48. S4C generally chooses to report its performance using BARB 3-minute weekly reach data.44 This represents the number and/or percentage of the audience (aged four and above) who have either viewed the channel as a whole, or its Welsh language programming, for at least three consecutive minutes each week. Ofcom also reported weekly reach figures for S4C based on this measure in its evidence.
49. Ofcom noted that, while the average number of hours watched per year of Welsh language programmes on S4C has increased fractionally since 2005, average weekly reach has fallen. The percentage of people who have viewed Welsh language programming on the channel for at least three consecutive minutes each week was 17% in 2009, the lowest achieved in the five year period from 2005. As the figures do not include the English language content previously provided on S4C, they are a consistent measure of weekly reach of Welsh language programming during the period.45
50. S4C stated that between January and October 2010 there was an increase in the average weekly reach during Welsh-language hours to 460,000 from 445,000 for the corresponding period in 2009. Taking into account viewing of S4C elsewhere in the UK (e.g. satellite viewers outside Wales), S4C claimed an increase from 537,000 in mid-October 2009 to 619,000 in October 2010, an increase of 82,000. S4C also stated that in peak time (18.00– 21.30hrs) viewing figures were stable between 2002–09, ranging between 27,000 and 32,000.46
51. S4C further stated that in terms of Welsh language hours, in 2010 S4C attracted a weekly reach figure of 616,000 viewers across the UK, an increase of 65,000 on the 2009 figure of 551,000. 47 S4C’s most successful five programmes in 2010, it noted, attracted 26% more than in 2009, with the highest rated programme (Bristol City v Cardiff City in the FA Cup) reaching 459,000. It reiterated that the figures during peak hours have been remarkably stable (an average of 30,000) despite the switchover to digital TV. It also stated that its ‘Clic’ online catch-up viewing service had more than 1.6 million viewing sessions across 2010.48 Moreover, S4C stated that “viewing figures in the first weeks of 2011 have
43 Which, in these figures, represents the percentage of individuals aged four and above who have viewed Welsh language programming on the channel for a least three consecutive minutes each week. 44 Ev 113 45 Ev 77 46 Ev 113 47 Ev 113 48 In its subsequent submission (Ev 113), S4C defined an online viewing session as “the number of successful viewing sessions that have come to an end. “ It stated that the average time spent viewing catch-up programmes online was 8 minutes and 30 seconds per programme in 2010, and that the figure of 1.6 million viewing sessions (including live viewing) in the year was an increase of 44% on 2009. The number of unique users to S4C’s websites each month in 2010 was 91,000 on average.
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been very encouraging. Almost one million viewers tuned in during the week ending 23 January. 653,000 different individuals in Wales and 304,000 outside Wales, a total of 957,000 viewers, watched S4C during that week”.49
52. S4C argues that it reports its viewing figures using BARB’s 3-minute reach data because it is:
The industry standard, used by most broadcasters save for the BBC. This measurement is used by channels that include advertising as it gives a better metric by which to assess the commercial impact and value of a channel.50
53. However, unlike S4C, the other public sector broadcasters—the BBC and Channel 4— include “15-minute” reach figures51 in their annual reports including when reporting on the reach of their smaller audience channels including BBC Four, BBC Parliament, BBC Alba, More4 and Film4.52
54. There is a strong argument that because advertising revenue comprises only a fraction of S4C’s income, and that the channel is a publicly-owned, public service broadcaster, it is appropriate to assess S4C’s performance on a range of measures. As a “3-minute weekly reach” does not give any indication of how many viewers have watched even a quarter hour of any particular programme, or at least 15 minutes’ consecutive viewing across two programmes, it is not unreasonable for 15-minute reach figures to be considered among measures of public value.
55. We requested additional information on S4C’s reach, on both 3-minute and 15-minute weekly measures, for the period since digital switchover. We also asked for reach figures excluding the programmes supplied (and generally funded) by the BBC, and the reach of programmes other than sport. The tables below show the reach figures provided by S4C for the approximate period between digital switchover in spring 2010 into January 2011.
49 This included the FA Cup game between Cardiff City and Stoke broadcast on Tuesday 18 January attracting 608,000 viewers throughout the UK. 50 Ev 117 51 Indicating the number or percentage of people who have viewed a channel for at least fifteen consecutive minutes in a given time period 52 The BBC’s Annual Report includes average 15- minute weekly reach figures for each of its channels, while Channel 4 includes 15-minute monthly reach for each channel in its portfolio. 3-minute weekly reach figures for these and other broadcasters are also published by BARB (Broadcasters Audience Research Board).
16 S4C
The weekly reach for S4C since digital switchover, when output became 100% Welsh language, among Welsh speakers in Wales, non-Welsh speakers in Wales, and viewers outside of Wales:
Table 2 Welsh Non-Welsh Speakers in Speakers in Outside of Wales Wales Wales Wales 3-min 455,000 199,000 256,000 142,000 Reach 15-min 306,000 155,000 151,000 55,000 Reach Source: BARB53
The weekly reach for S4C since digital switchover excluding BBC supplied programmes:54
Table 3 Welsh Non-Welsh Speakers in Speakers in Outside of Wales Wales Wales Wales 3-min 331,000 169,000 162,000 98,000 Reach 15-min 185,000 117,000 68,000 31,000 Reach Source: BARB The weekly reach for S4C since digital switchover excluding (live & repeated) sporting events:
Table 4 Welsh Non-Welsh Speakers in Speakers in Outside of Wales Wales Wales Wales 3-min 310,000 174,000 136,000 74,000 Reach 15-min 189,000 127,000 62,000 23,000 Reach Source: BARB The weekly reach for S4C since digital switchover excluding both BBC-supplied programmes55 and sporting events:
Table 5 Welsh Non-Welsh Speakers in Speakers in Outside of Wales Wales Wales Wales
53 Week 14 2010 to Week 4 2011 54 S4C notes that the majority of programmes supplied by the BBC to S4C under the statutory requirement and the strategic partnership consist of the nightly soap Pobol y Cwm, news, sport and certain important events (e.g. the National Eisteddfod). They are largely broadcast during peak hours, where most broadcasters achieve their highest audiences. 55 This includes BBC supplied programmes paid for by S4C. S4C contributes more than £3m to the BBC each year for the provision of the weekly omnibus and summer episodes of Pobol y Cwm.
S4C 17
3-min 260,000 155,000 105,000 61,000 Reach 15-min 146,000 109,000 37,000 18,000 Reach Source: BARB 56. As the data shows, the reach figures provided by S4C for the period since digital switchover indicate that some 455,000 viewers in Wales tune into S4C for at least three consecutive minutes each week, around 200,000 of whom are Welsh speakers and over 250,000 non-Welsh speakers.56 It appears that the majority of Welsh speakers do not view the channel for even three consecutive minutes a week. Taking the universe of Welsh speakers, as a number of witnesses have claimed, as around 600,000 people, this means approximately one in three Welsh language speakers watch the channel.
57. Just over 300,000 viewers in Wales watch S4C for at least fifteen consecutive minutes a week, almost evenly divided between Welsh and non-Welsh speakers. However, an even smaller minority of Welsh speakers watch S4C for at least 15 consecutive minutes a week. Again taking the universe of Welsh speakers as around 600,000, the reach figure of 155,000 Welsh speakers suggests this is around one in four people.
58. Recently published figures show that the highest individually viewed episode of Pobol y Cwm, a Welsh language fictional drama, was watched by 102,000 viewers, a figure equivalent to 17% or around one in six of Welsh language speakers. This compares well with the highest viewed episode of the BBC One fictional drama EastEnders, which in the same week was watched by 9.6 million viewers, representing approximately 15.5% or also around one in six of potential viewers in the UK.57 Similarly, Pawb a’i Farn, was watched by 37,000 viewers, equivalent to 6.1% of Welsh speakers, and BBC One’s Question Time, was watched by 3.1million viewers equivalent to 5.1% of the UK population.
59. A significant proportion of S4C’s reach is accounted for by BBC supplied programmes and by the single genre of sport, particularly among non-Welsh speakers.58 In Wales, the weekly reach of S4C output other than sporting events is 310,000 on a 3-minute basis and 189,000 for those watching fifteen or more minutes a week. Among Welsh speakers, 174,000 watch weekly for at least three minutes and 127,000 watch weekly for at least fifteen minutes. Among non-Welsh speakers in Wales, weekly reach for S4C programmes other than sporting events is 136,000 on a 3-minute basis and 62,000 on a 15-minute reach basis. This indicates, among other things, that only around 1 in 5 Welsh speakers in Wales watch anything other than sport for at least fifteen consecutive minutes a week. Reach outside Wales, excluding sport, on a 3-minute reach basis is 74,000 viewers, while 15- minute reach is just 23,000.
60. By presenting figures for those who watch S4C for just three minutes or more a week, S4C’s viewing figures appear more impressive than when using the comparative 15 minute metric reported by the BBC and Channel 4.
56 In October 2010 S4C stated that non-Welsh speakers form 57% of the channel’s average weekly reach. In oral evidence to this inquiry, it further stated that 26% of its peak time viewing was from non-Welsh speakers. 57 BARB website, Top 10 viewed programmes by channel for week ending 3 April 2011. 58 Since 2008, S4C has made available English language commentary as well as Welsh language commentary for many sporting events through the ‘red button’ option on some digital platforms.
18 S4C
61. While 3 minute reach may be a useful metric to assess the commercial impact of a channel that carries advertising, S4C, as a public service broadcaster, should be assessed on a range of measures, including the number and proportion of those who watch the channel for at least fifteen consecutive minutes a week, a standard figure published by the BBC—including for its smaller, niche audience channels. We recommend that S4C include 15-minute reach measures in its future reporting.
62. Assuming the number of Welsh speakers is approximately 600,000 people, the viewing performance of some S4C broadcasts including the Welsh language fictional drama Pobol y Cwm, and Pawb a’i Farn compare favourably with equivalent BBC productions such as Eastenders and Question Time.
63. It appears that the majority of Welsh speakers do not watch S4C for three consecutive minutes a week. Approximately 155,000 Welsh speakers watch S4C for at least 15 consecutive minutes a week. This is a figure on which S4C itself acknowledges that it must improve.
64. We recognise that S4C could perform better and therefore recognise the case for creating a new S4C: a multi-platform, multi-media broadcaster/publisher, which is answerable to Welsh audiences, and commissions and broadcasts Welsh language content only.
Programme output 65. While supporters of S4C argue that the channel remains popular and relevant to the people of Wales,59 there have been criticisms that S4C has somehow lost touch with its audience. Ron Jones told us that S4C had become:
Increasingly detached from Welsh speakers and their interests. There has been insufficient understanding of the changes in viewer taste. Programmes became more traditional as they tried to defend their older, known audience. There was an aversion to new media. There was a refusal to co-ordinate their output for children with the needs of the curriculum. 60
He also stated that:
Programming strategy was replaced by gut reactions to the latest viewing figures. Major and costly developments such as Clirlun [S4C’s high definition TV channel], the children’s channel, the attempted move into English-language news and investments in technology companies were ill-considered.61
66. According to Ofcom Welsh language output on S4C in 2009 was 5,696 hours.62 Repeats made up the majority (62%) of S4C’s output; Ofcom states that in the case of S4C, “the
59 Ev w11 60 Ev 77 61 Ev 77 62 The volume of first run originated Welsh language programmes on S4C reached 2,095 hours in 2009. Of this, 25% were factual programmes, 19% children’s programmes and 15% news and current affairs. Sport comprised 14%, music and arts 11% and drama programmes 8%.
S4C 19
repeat level reflects the broadcaster’s policy of ensuring multiple opportunities to view peak time Welsh-language programming, maximising the investment made in these programmes”.63
67. Of the 2,095 hours of S4C’s approximately 40 hours a week of first run originated Welsh language output (averaging 5.7 hours a day), a minimum of 10 hours are supplied and funded by the BBC, via the television licence fee, rather than from S4C’s budget.
68. The BBC states that the output it provides S4C is highly valued by S4C’s audience, accounting for about one fifth of S4C’s total output yet attracting around two fifths of the channel’s viewing. Our findings confirm this.
Audience perceptions 69. S4C states that “For a public service broadcaster, measures besides crude audience figures are a valuable and acknowledged measure of performance”.64 One measure used by public service broadcasters is standardised Audience Appreciation (AI) scores. These are scores out of 100 indicating enjoyment and appreciation. According to S4C, data show great appreciation of S4C programmes among Welsh speakers and non Welsh speakers alike, with S4C scoring higher than the other major public service channels—BBC1, BBC2 and ITV1—in Wales. The table below shows data for 2010 for S4C and other channels in Wales:65
Table 6
Al’s January–December 2010
All Viewers Welsh Speakers Non-Welsh Speakers
S4C Welsh Language Progs 80 80 79
Other Channels 78 78 77
Source: Kantar Media (Other Channels = ITV1, BBC1, BBC2) 70. Another measure of audience perceptions was the opinion poll conducted by YouGov in October 2010 referred to by a number of witnesses in our inquiry. This poll indicated that:
• The majority (55%) of the “all panel” of Welsh and non-Welsh speakers disagreed with the statement that “There is no need for a Welsh language television channel”; a significantly larger proportion (84%) of Welsh speakers disagreed with the statement.
• The majority (55%) of the “all panel” of Welsh and non-Welsh speakers agreed that “S4C is important in safeguarding the future of the Welsh language”; a significantly larger proportion (79%) of Welsh speakers agreed with it.
63 Ev 82 64 Ev 199 65 Ev 113
20 S4C
• 19% of Welsh speakers said they watched S4C every day, 14% said they did so at least three times a week, 16% said at least once a week. Therefore, approximately half of Welsh Speakers did not indicate that they watched the channel once a week.66
71. It became clear during our inquiry that there was little authoritative data about audience perception of S4C’s output. The DCMS and the S4C Authority have a statutory duty to make arrangements for ascertaining the state of public opinion concerning programmes broadcast on S4C, the effects of such programmes on the attitudes or behaviours of viewers and the types of programmes that the public would like to be broadcast on its services. In S4C’s Annual Report, the Authority states that it “gives full consideration to this independent research on a monthly basis” and that it also receives quarterly presentations. Nonetheless, S4C presented little supporting information on this research in the inquiry. We also note the finding of Sir Jon Shortridge, in his recently published review of the corporate governance of S4C, where he states:
If the Authority had more information and intelligence of this nature it would be in a better position to make decisions about future broadcasting priorities.67
72. To address a full range of issues relating to understanding the audience, S4C, the BBC and the Welsh Language Board announced in September 2010 a joint study intended to achieve an understanding of: audience behaviour across Welsh language television, radio and online; barriers to audience engagement; and the identification of opportunities to promote greater consumption of Welsh language media.
73. This is clearly critical and useful information which is important to serving the present and evolving needs of Welsh language audiences. It is not clear, however, why much or most of this information is not already in hand. Indeed, it is questionable how hundreds of millions of pounds of public funding on Welsh broadcasting has been spent without it.
74. We recognise the high quality of some of S4C’s output, such as its children’s programming and drama. It is also the case that S4C has reached and continues to reach significant audiences with particular programmes and coverage of events.
75. The DCMS should ensure that greater information about S4C’s audiences and performance should be available to policy makers and the public. Although we welcome S4C’s joint study with the Welsh Language Board on audience perceptions of S4C, we are surprised that it has taken the S4C Authority until now to address this shortcoming.
Efficiency and value for money 76. Ofcom provided us with a chart showing the pattern of expenditure per head on broadcasting output in 2010. The chart sets out four types of expenditure:
• the value of networked television spending in Wales – programmes that are produced in Wales (e.g. Doctor Who) and broadcast to all UK viewers;
66 http://today.yougov.co.uk/sites/today.yougov.co.uk/files/YG-Archives-Pol-ITVWales-S4C-291010.pdf 67 Shortridge Review of the Corporate Governance of S4C, 11 February 2011
S4C 21
• BBC spending on radio services for listeners in Wales (e.g. Radio Wales);
• spend by the BBC and ITV1 Wales on television programmes specifically for viewers in Wales (e.g. Wales Tonight); and
• Welsh-language television programmes commissioned by S4C.
Chart 1
77. The chart shows that spending on broadcast-based output in Wales was £59.87 per head in 2009, up from £57.49 a year earlier. This represents the highest spend per head across the four UK nations, driven particularly by the programming budget of S4C, which accounted for £26.20 of the total. The year-on-year increase was brought about in part by higher spending on Welsh-language programming and in part by output that was produced for UK-wide audiences.
78. The DCMS argued that S4C was not providing value for money at the current level of Government funding:
The Government considers that the benefits to the Welsh language and culture expected from this level of funding are not being achieved. 68
This view was supported by Ron Jones, who agreed with the suggestion that S4C had become bloated:
68 Ev 111
22 S4C
S4C has developed over recent years to think of itself as a large and significant organisation. To that extent, the costs associated with that are the costs associated with a large and significant organisation. I wouldn't mind a quick side bet that S4C could run its operational side much more efficiently on a stand-alone basis and more cost effectively if it began again to think of itself as a small organisation providing a service.69
79. S4C denied these claims and asserted that it operated efficiently when compared with other broadcasters informing us that S4C’s overheads of 4.5% compared favourably to 12% at the BBC (which unlike S4C undertakes substantial in-house production), concluding that S4C “is a very lean and mean operation”.70 It is, however, difficult to make direct comparisons between the two channels because of S4C’s status as a publisher-broadcaster rather than a producer of television programmes.
80. We did not receive a great deal of evidence to either substantiate or contradict the Department’s argument that the benefits to the Welsh language and culture expected from the level of S4C funding (and therefore value for money) were not being achieved. We do note, that S4C’s Interim Chief Executive told us that S4C employed 55 posts responsible for its administration, compared to 694 at Channel 4. Arwel Ellis Owen told us that S4C had recently cut its staff numbers and that it intended to reduce staff numbers by a further 40 posts in the next two years.71
81. It also appears that S4C has been subject to significantly less internal or external evaluation of efficiency and value for money when compared to other public broadcasters. We note, for instance, that the National Audit Office has played a role, soon to be expanded, in external scrutiny of the BBC, conducting a range of efficiency and value for money studies. No similar scrutiny is carried out on S4C.
82. In his recent Review of the Corporate Governance of S4C, Sir Jon Shortridge stated:
At present little is being done to commission studies of value for money. Neither the Risk Management and Audit Committee nor the Content Committee has an explicit responsibility for this. Unless appropriate scrutiny arrangements are embedded within the Authority’s governance structures there is a risk that value for money considerations will not be routinely taken into account when programmes are commissioned or contracts are let.72
The provision of private healthcare to staff 83. During our inquiry it emerged that S4C provided private healthcare for some of its staff, although the Vice Chairman of the Authority, Rheon Tomos, who also chairs the Audit and Risk Management Committee, told us that he was unaware of its provision.73 Mr Arwel Ellis Owen, Interim Chief Executive, however, confirmed that S4C had used public
69 Q 9 70 Q 218 71 Q 218 72 Shortridge Review of the Corporate Governance of S4C, February 2011 73 Qq 225–227
S4C 23
money to pay for private health care of senior staff. When asked whether or not it was appropriate for public money to be spent in this manner, he told us that he planned “to address the issue”.74
84. However, S4C subsequently informed us that:
Private health insurance has been offered to members of staff and 118 members have taken up this offer. This benefit was withdrawn in May 2009 and no new members of staff have been offered contributions to private health insurance since that date.75
85. Mark Thompson the Director General of the BBC told us that the provision of healthcare was viewed as an industry standard and that S4C was by no means unusual in providing this particular benefit to staff.76 This information did not provide us with reassurance that taxpayers’ money was being spent wisely.
86. Spending per head on broadcasting output in Wales is the highest of any of the four UK nations, driven particularly by public funding of S4C. While we received no hard evidence that S4C was operated inefficiently, the fact that S4C intends to reduce 40 administrative staff within the next year indicates there have been opportunities to make savings without necessarily affecting the quality of the channel’s broadcast output.
87. We are concerned that S4C has for many years received substantial sums of public money without sufficient internal or external evaluation of its efficiency and the value for money of its service. The DCMS, over a number of years, has failed to provide this assurance. This is unacceptable and we recommend that the DCMS take immediate steps to redress the gap in S4C’s financial accountability by subjecting S4C to regular audits by the National Audit Office.
88. We are surprised that the BBC uses licence fee money to purchase private health care. We are also concerned that S4C has over a number of years provided private health care insurance for more than 100 employees. Although in May 2009 this benefit was not offered to new employees, it was not closed to existing staff. This has clearly been an inappropriate use of taxpayers’ money, even more so at a time when the public sector, including S4C, is charged with making sometimes painful efficiency savings. S4C should set an example to other publicly funded broadcasters and end immediately this taxpayer-funded perk for all employees.
89. We conclude that, although there is scope for making efficiencies in its operations, in terms of providing Welsh language broadcasting, S4C provides value for money.
74 Ibid 75 Ev 115 76 Q 364
24 S4C
4 The Government’s proposed changes to S4C
90. On 20 October 2010, as part of the Government’s announcement of its Comprehensive Spending Review (CSR), the DCMS included proposals for significant changes to how S4C is funded, to the amount that it receives, and to the organisation’s relationship with the BBC.
A new funding model for S4C 91. The October 2010 CSR underlined the Government’s intention to eliminate the UK’s fiscal deficit by 2015, in major part through significant reductions in public spending. The departmental spending allocation for the DCMS, S4C’s main source of funding, was to be reduced by some 40% in real terms by 2014–15. In the light of this, the DCMS told us that its current funding provision for S4C was not sustainable:
At a funding level of almost £100million per annum, S4C’s viewing figures are disappointingly low. It is on this basis that Government concluded in the Spending Review that the S4C model is not sustainable in its present form and that the future of the channel lies in the partnership with the BBC proposed in the Television Licence Fee settlement recently agreed.77
92. The 1996 Broadcasting Act linked S4C’s grant-in aid to annual changes in the Retail Prices Index (RPI). However, in May 2010, following the general election, the Secretary of State for Culture, Media and Sport, Rt Hon Jeremy Hunt MP, asked S4C to accept an in- year reduction in funding in 2010–11 of £2million. At the same time, the Government announced that it intended to remove the automatic link between S4C’s funding and the RPI.78
93. Alongside the proposed changes to funding the Secretary of State announced that, as part of the BBC’s Television Licence Fee settlement covering the period from 2013–14 to 2016–17, the existing partnership between S4C and the BBC should be developed. Under this arrangement, the Government would continue to provide some funding, but that beginning in 2013–14 the majority of the funding to S4C would be provided by the BBC through the Licence Fee.79
77 Ev 111 78 Public Bodies Bill [Lords Bill 55 (2010–12)] 79 In addition to the cuts announced in the CSR, the BBC previously announced its intention to cut the amount it spends annually on programming for S4C by £4m (17%). The reduction will mean that, by the end of 2013, the budget for the BBC Wales produced and licence fee-funded programming will be £19.5m, down from £23.5m a year.
S4C 25
S4C’s funding settlement is as follows:
S4C spending review settlement (£ million)
total funding from DCMS from BBC
2011–12 90 90 0
2012–13 83 83 0
2013–14 83 6.7 76.3
2014–15 83 7 76
Source: DCMS 94. The future funding of S4C is intricately linked to any future governance arrangements and its ability to act independently. Beyond the Government’s intention to cut S4C’s funding over the course of the spending review period, and its proposal that the BBC will meet the primary cost of the channel thereafter, there is currently little detail about the impact of these cuts on S4C. In addition, the exact level of BBC funding for S4C was set only up to 2014–15 and the BBC’s financial commitment to S4C beyond that date is as yet unclear. Should the negotiations between the BBC and S4C breakdown, then S4C’s known public funding would be only £7 million per annum in 2013–14 and 2014–15. This is a cause of concern.
95. There was a general acceptance among witnesses that, in the context of the Government’s cuts to public expenditure, S4C could not reasonably be spared cuts to its funding. Alun Ffred Jones AM, Minister for Heritage, told us that:
I don’t believe [...] that S4C should be treated like some sacred cow that should not be touched and that it or its finances shouldn't be interfered with in any way.80
96. Despite this, concern was expressed that the effect of funding cuts would inevitably have an effect on the output of S4C. In their written submission to the Committee, the NUJ and Bectu argued:
The cuts could put in jeopardy the future of the channel and lead to a greatly reduced service including limited hours of transmission and moving to more online content with accompanying job losses: S4C has already pledged to cut 40 posts, a 25.6% reduction from the current 156 full-time staff, over the next two years.81
97. However, it was also recognised that S4C’s enhanced relationship with the BBC could result in a number of efficiencies and other benefits. Areas where it was suggested that savings could be made include S4C coordinating its output with Radio Cymru, exploiting the BBC website, greater access to the BBC’s research and development and its potential to sell S4C programming overseas through the Corporation’s commercial arm, BBC Worldwide. Mark Thompson argued that:
80 Q 319 81 Ev 97
26 S4C
We thought the opportunity, potentially, to get better and stronger synergies between S4C and some of the strengths the BBC has—the certainty of the BBC about getting, for example, its news and current affairs programmes in the way the rest of us use the news and current affairs offering, to Welsh-speaking television viewers—is very great.82
98. The Government proposes to significantly reduce public spending over the course of this Parliament. In the light of this, it would be difficult to justify the ring-fencing of S4C’s funding. Any reduction in S4C’s funding should be comparable to other public service broadcasters. We call on the DCMS to ensure that this is the case.
99. While S4C must, like other public sector organisations, share its burden of cuts to its funding, we recognise the risk that this will come at a cost to the quality and volume of S4C’s output. The DCMS, S4C and the BBC must work together to identify potential synergies and to eliminate wasteful duplications so that the impact of cuts to S4C’s funding is minimised.
100. We recommend that the Government confirms the funding of S4C beyond 2014- 15 as soon as possible. Without this certainty, S4C will not reasonably be able to develop its future strategy. Therefore, we believe that it is essential that there is a long term funding formula enacted in primary legislation.
Guaranteed funding for S4C 101. Under the Government’s proposals, in 2013–14 and 2014–15 the BBC will be responsible through the Licence Fee for allocating £76 million per annum to S4C, although there is no guarantee that all of this funding will be earmarked directly to the S4C Authority. TAC, the Welsh independent producers association, argued that this arrangement leaves open the possibility that the funds intended for S4C could be appropriated by the BBC for “any purpose, whether or not it relates to S4C or Welsh language broadcasting”.83
102. One way of ensuring that the portion of the licence fee intended for S4C reaches it directly and fully, would be through the allocation of that proportion of licence fee revenue to S4C before the point it reaches the BBC.84 This policy, sometimes referred to as “top- slicing” was supported by a number of witnesses ranging from Geraint Talfan Davies, the Welsh Assembly Government and the S4C management.
103. According to Ron Jones, Chairman of Tinopolis, there is no legal impediment to the Minister ensuring that the BBC apportions a guaranteed share of licence fee revenue directly to S4C. This, he argued, would be the best way of ensuring there is accountability for the expenditure. According to Mr Jones:
82 Q 342 83 Ev 95 84 Ev 95
S4C 27
Agreeing the level of funding for Welsh language television should be handled in the same way and at the same time as happens with the BBC’s portion of the TV and Radio Licence fee.85
104. Although Rheon Tomos, S4C Vice Chairman, was in favour of this, he doubted that the BBC would accept it because he argued, the concept was “anathema to the BBC”.86 Mark Thompson, Director General of the BBC, was adamant that the S4C should not receive its funding through a “top-slicing” arrangement:
The licence fee is not a generic broadcasting fund. It is paid for by the entire UK population in respect of a set of broadcasting services that they get for which the BBC is characteristically ultimately always held responsible. We believe that a partnership model is the right way of approaching this relationship rather than what we would call a top-slicing model. 87
It is worth noting, however, that the licence fee is a hypothecated tax that the Government can allocate to other uses. As the Department for Culture, Media and Sport stated in 2009:
The Television Licence Fee is not the “BBC” licence fee. In principle the BBC has no exclusive right to the Television Licence Fee. This is a matter of historical practice. This device levy is paid into the Consolidated Fund like any other tax, for the government of the day to determine how it should be used.88
The BBC licence fee is already used for other purposes, such as a Digital Switchover Help Scheme and for funding a minimum of 10 hours a week of BBC-supplied content to S4C. Furthermore, the 2010 Licence Fee agreement between the DCMS and the BBC included the allocation of funds earmarked to finance the roll-out of broadband and some capital costs for new, non-BBC local TV services.
105. We recommend that the DCMS work with the BBC and S4C to determine how S4C’s funding can be guaranteed. We further recommend that S4C receive in full a portion of the Licence Fee which is at least equal to the amount set out by the DCMS in S4C’s funding review settlement.
Independent producers 106. As we noted previously, S4C has contributed to the development of a relatively successful independent television production sector in Wales. The Secretary of State has stated that the BBC must continue S4C’s practice of commissioning programming from the independent sector in Wales. The Minister and the BBC have stated categorically that all of the new BBC funding will continue to be spent on independent producers. Menna Richards, BBC Wales, stated:
85 Ev 77 86 Q 274 87 Q 381 88 Department for Culture, Media and Sport, Sustainable independent and impartial news; in the Nations, locally and in the regions, June 2009, para 18
28 S4C
My view is that in future, if this new arrangement is agreed, the content funding that is available for S4C will go to the independent sector. It isn’t something that is going to be siphoned off to BBC Wales.89
107. The proposal that most of S4C’s funding should in future be provided through the licence fee is a significant development. We welcome the Government’s and the BBC’s commitment that the S4C programme budget will continue to be spent on commissions from independent producers in Wales and call on the Government to ensure that this commitment is included in the documentation outlining the arrangement between S4C and the BBC.
The S4C-BBC partnership 108. In addition to changes in its funding, the Government has made proposals which will significantly change the relationship between S4C and the BBC. Although the Secretary of State called on the BBC and S4C to work out the detail of the agreement between them, he also outlined a number of features that he expected to see in the final model:
• The S4C service must retain its “brand identity and editorial distinctiveness”, as well as its “special relationship with the independent production sector in Wales”.
• There would be a BBC and S4C partnership along similar principles to MG Alba to begin by 2013–14, with S4C coming under a BBC Trust Service Licence or other operating agreement.
• A combined Board of the Authority and Trust would oversee delivery of the Service Licence or operating agreement.
• The S4C service will be operated by a joint management board with a majority of independent directors, appointed by the BBC Trust and the Authority. The management board will operate its own commissioning structure.
109. We were told that the announcement of these potentially radical changes to S4C’s funding and governance, came as a surprise to the S4C Authority and management which had been negotiating with the DCMS in the weeks leading up to the announcement. Arwel Ellis Owen told us that:
... come the day, I am travelling in a car to Swansea along the M4. I turn on Radio 4 and I listen to the breaking news that S4C is to have a 24.4% cut. That was the first I heard, and I know that that was the first that S4C knew about it, despite the fact that we had been having daily, weekly, contact with the civil servants.90
110. A number of other witnesses were critical of the DCMS for proposing these fundamental changes without first undertaking a wider consultation on alternative proposals. The Welsh Language Society argued that the manner in which the DCMS had
89 Q 370 90 Q 229
S4C 29
conducted negotiations with the BBC was an example of the DCMS not taking its responsibilities to S4C sufficiently seriously.91
111. In contrast, the Minister argued that the Department had been discussing with S4C a range of options about its future during the summer of 2010.92 However, Mr Vaizey acknowledged that the final decision to pursue the option of developing the partnership between the BBC and S4C had been taken shortly before the CSR announcement:
The BBC option had risen to the top, as it were, and we were negotiating with the BBC on the future of the licence fee, we felt that it was important to combine those discussions. As I say, we wanted to conclude those negotiations in time for the announcement of the Spending Review. So, although we had been discussing a range of scenarios with S4C, we felt that this was the right solution and we wanted to take it forward.93
112. The Minister also argued that there had been no need for an impact assessment or wider consultation because “although we were reducing the funding for S4C, we were not imposing new regulations or particularly additional bureaucratic pressures”.94 The initial response of S4C was to initiate a judicial review of the Government’s proposals; however, S4C ended this action on 14 December, the same day that it began negotiations with the BBC.95
Management and oversight of S4C 113. The Government’s announcement came during a period when the S4C management and Authority were receiving much public interest. During our inquiry, we took evidence about the performance of the management of S4C as well as the role of the S4C Authority as statutory body responsible for S4C. A number of issues were raised.
Current arrangements 114. The S4C Authority is an independent body, established by statute, with responsibility for the provision of Welsh language television programme services. The Authority is accountable for S4C’s output and the “proper management of S4C”. S4C’s statutory duties are set out in the Communications Act 2003 and the Broadcasting Acts of 1990 and 1996. The key roles of the Authority include:
• overseeing, approving and scrutinising the proper management of S4C; and
• ensuring the provision of S4C’s television services;
115. The S4C Authority is not supposed to participate in any day-to-day management decisions. It is the responsibility of the management of S4C, its Chief Executive, officers
91 Ev 101 92 Q 388 93 Q 390 94 Q 389 95 Q 230
30 S4C
and staff to run S4C on a day-to-day basis. This responsibility includes the choice of content of S4C’s television services.
116. From its establishment in 1982, the Authority and management were one body. In 2006, this arrangement was ended by the introduction of a system known as Arwahanrwydd.96 Under Arwahanrwydd the roles and functions of the Authority and of the management team concerned with the day to day running of the organisation, were formally separated.
Changes in senior personnel 117. During 2010 there were significant changes both in the personnel and the structure of S4C. In July 2010, Ms Iona Jones, the Chief Executive, left S4C in circumstances that have not yet been explained fully in public. Ms Jones’s exit was followed by the departures of the Head of Commissioning and in December 2010, by the resignation (for the second time) of Authority Chairman, John Walter Jones. The channel was therefore operating without a permanent Chairman or Chief Executive during its negotiations with the DCMS and the BBC about its future funding and structure.97 During our inquiry the Vice Chairman of S4C, Rheon Thomas and the Interim Chief Executive, Arwel Ellis Owen were responsible for the stewardship of the organisation.
118. The departure of key personnel in quick succession can be disruptive for any organisation, leading to uncertainty about its future direction. For S4C, the departure of its Chief Executive and Chairman at such an important time was particularly unfortunate. A number of witnesses argued that this uncertainty was compounded by the absence of any official or public explanation by the Board about the reasons for their departures. This criticism was underlined when S4C admitted that its website did not include the minutes of any meetings of the Authority since December 2009.98
119. The circumstances of the departures of Ms Jones as Chief Executive were not publicly known at the time of our inquiry. However, we did question S4C about the exit of the former Chairman, John Walter Jones. S4C accepted that this had been a particularly confusing and unsettling episode for the organisation, with the former Chairman first apparently resigning at a hastily convened meeting of the Authority, and then withdrawing his resignation the next day, before finally leaving the organisation on 7 December 2010.99
120. Under questioning from the Committee, Rheon Tomos denied suggestions that Mr John Walter Jones had been forced to resign by members of the S4C Board. Mr Tomos argued that Mr Jones had finally taken the decision to resign once he had accepted that “he had undermined his position through his behaviour”.100 According to Rheon Tomos, once
96 Meaning, in English, separateness 97 We consider these negotiations further in Chapter 4. 98 Q 213 99 Qq 164–198 100 Q 170
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Mr Jones’ decision had been made “it obviously gave us far greater clarity, moving forward, when he made his final decision”.101
121. Mr Tomos also rejected any suggestion that the departures of three senior personnel were connected:
No, I would disagree; there is no theme. The other circumstances were totally different to the circumstances of the Chair. The circumstances of the Chair were such that it was his personal decision to go. The other circumstances were actions that the authority had taken, which is two different things altogether.102
However, other witnesses disagreed. Professor Ian Hargreaves argued that the events revealed a “deep malaise” at S4C and described the situation at the organisation as “a political and institutional failure”.103
122. Whether or not the departures of senior personnel were connected, these events gave the impression to people within and outside of the organisation that S4C was in turmoil at a time when the future funding and governance arrangements of the organisation were being negotiated with the Government. Elan Closs Stephens, BBC Trustee for Wales and former Chairman of the S4C Authority, described the damage that the episode had caused to the reputation of S4C:
Any broadcaster broadcasts drama, news and gossip and current affairs, but when it becomes a drama or an item of gossip or news and current affairs, that is a bad place to be.104
123. The Interim Chief Executive of S4C, Arwel Ellis Owen confirmed that staff had approached him to express their concern at the way in which the organisation had been run.105 Similar unease was shared by a range of witnesses to our inquiry, all keen supporters of the broadcaster, who expressed a lack of confidence in the S4C Authority. Evidence submitted by the Welsh Language Society criticised the “weaknesses in the current model and management of S4C”.106 Geraint Talfan Davies, former controller of BBC Wales, argued that following these events:
The S4C Authority has lost its authority and credibility. I don’t think it is in any shape to conduct the negotiation with the BBC currently. That has to be sorted out, first of all.107
101 Q 171 102 Q 117 103 Q 14 104 Q 385 105 Qq190–191 106 Ev 103 107 Q14
32 S4C
Arwahanrwydd 124. The S4C Authority argued that the departures of two of its senior directors and Chairman were the consequence of deficiencies in the split management structure. A wide range of witnesses criticised the performance of the S4C Authority and management under the Arwahanrwydd system. The main charge against S4C was that the relationship between the Board and the Authority had become dysfunctional. It was argued that communication between the two was poor and that, as a result of in-fighting among board members, the organisation had become increasingly detached from its viewing audience and their interests. Rheon Tomos told us that the structure, designed to separate the day-to-day management of the organisation from the Authority charged with its oversight, had led to a situation that “was not serving the interests of S4C well and that it was not providing us with sufficient assurances in the conduct of our scrutiny role as members of the authority”.108
125. The S4C Authority further argued that the management had failed to communicate sufficiently with members of the Authority and that had inhibited the Authority’s ability to discharge its non-executive statutory functions, including its ability to provide accountability.109 Rheon Tomos told us that the Authority had therefore concluded:
That we had to change the arrangements fundamentally. The board of directors wanted to carry on with the previous system of Arwahanrwydd. There was, therefore, a total impasse because we did not feel that our scrutiny role was being carried out in an effective way. One of the casualties [...] was that the chief executive’s employment was terminated.110
In September 2010, S4C commissioned Sir Jon Shortridge to review its governance arrangements. Sir Jon presented his conclusions to the S4C Authority in November 2010 and they were finally published in February 2011. Among his conclusions, Sir Jon judged that Arwahanrwydd had not worked effectively.
126. Other witnesses, including Ron Jones, Chair of TAC, however, argued that the shortcomings of Arwahanrwydd were not caused by the system but were due to the failure of individuals on the Board to make the system work. Mr Jones described individuals at S4C as displaying “hubris and insularity” and went on to state:
The S4C Authority has clearly lost credibility for a whole variety of reasons over a period of time. Management issues were allowed to develop to a state which brings us to where we are today, but there was nothing fundamentally wrong with those structures.111
127. We note the conclusions of the Vice Chairman of S4C that the Arwahanrwydd system had undermined the Authority’s capacity to perform its scrutiny role adequately. However,
108 Q 199 109 Q 201 110 Q 202 111 Q 15
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we also note that the success of any system depends on the commitment and good will of individuals. By any measure, that goodwill and commitment was not forthcoming in S4C.
128. During 2010, the S4C Authority Chairman, the Chief Executive and the Head of Commissioning, left their positions in S4C, within six months of each other. These events gave the impression that S4C was more concerned with its internal differences than with its primary responsibility: the sound stewardship of a cherished institution.
129. We conclude that, whatever the deficiencies of Arwahanrwydd, its failure was primarily due to the failure of individuals in S4C to make the arrangement work, rather than any critical fault with its structure. The situation was compounded by the absence of any official or public explanation by the Board about the reasons for their departures. We are concerned by S4C’s admission that its website did not include the minutes of any meetings of the Authority since December 2009.
130. The failings of the Authority to provide effective leadership for S4C during 2010 was particularly regrettable as it came at a time when the funding and governance of the organisation were in doubt. For a time, instead of being known for broadcasting drama, S4C became a drama of its own. S4C must never allow such a sorry situation to occur again.
131. On the evidence we received, it is apparent that the decision to fund S4C via the licence fee from 2013 onwards was made in haste. In a matter of hours a deal was struck between BBC executives and Ministers in London, without sufficient consultation with relevant parties. This is regrettable.
Ensuring the independence of S4C 132. During our inquiry, the negotiations between the BBC and S4C were ongoing and at the time of publication of this Report, the final arrangements of the proposed partnership were unclear. However, witnesses raised a number of specific concerns about the Government’s proposals as far as they were known. Central to these concerns was the need to preserve the importance of preserving the operational and editorial independence of S4C.
133. As noted previously the proposed arrangement envisaged the BBC and S4C jointly agreeing the strategic goals of the service; a combined Board of the S4C Authority and the BBC Trust overseeing delivery of the Service Licence or operating agreement; and S4C being operated by a joint management board with a majority of independent directors appointed by the Trust and the Authority.
134. Mark Thompson, BBC Director General maintained that under these arrangements, the BBC was committed to ensuring the editorial independence of S4C. In addition, Mr Thompson argued that the arrangement would produce benefits for both organisations and to Welsh language broadcasting more widely. Ms Menna Richards, Director of BBC Wales, noted that the BBC already committed 520 hours of programming to S4C and
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asserted that the new partnership arrangements should be seen as an extension of that arrangement.112
135. Although the BBC has a long tradition of Welsh Language and English Language programme production in Wales; it is by definition a UK-wide broadcaster. A number of witnesses had concerns that the BBC would, perhaps unwittingly, subsume S4C into its organisational culture and so ignore the interests of Welsh language broadcasting. Michael Birtwistle, NUJ, argued that:
It is not the BBC’s main role to defend the Welsh language, encourage use of the Welsh language and represent the Welsh culture. That is not what the BBC does. The relationship between S4C and those communities is a very special one and, from my experience in the BBC, having worked both in Welsh and English and for network programmes, unfortunately the Welsh language is considered in the BBC as a poor relation.113
Ian Hargreaves echoed these concerns and argued for the creative and editorial independence of S4C to be guaranteed under any arrangement with the BBC:
There is clearly a risk with the BBC, which is very large, very powerful and has many mansions, that if S4C is turned into a minor department of the BBC in Wales it will not get much talking time or air time around the BBC board table when big decisions are taken.114
The Welsh Language Society argued that:
The decision to move S4C’s budget and part of its management to the BBC also undermines the Channel's independence, and is ultimately a further threat to the funding levels for Welsh language programming and content. We are concerned that we would return to the position before the establishment of S4C, where Welsh language programmes would have to compete for funding with English language programming.115
136. One potential model suggested for S4C in future was that of BBC Alba, the Gaelic language broadcaster.116 Formed from a partnership between the BBC and MG Alba, BBC Alba runs a media service with public service content on radio television and online. The funding for the Broadcaster is drawn from the Licence Fee and some funds from the Scottish Executive. Both the DCMS and the BBC argued that the arrangement whereby the Joint Management Board which establishes the strategic direction of the organisation, comprising two members of both the BBC and MG Alba, worked extremely effectively. This was reinforced to us during our visit to Stornoway in January 2011.
112 Q 344 113 Q 124 114 Q 8 115 Ev 104 116 Ev 90
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137. Professor Hargreaves, who contributed to the creation of MG Alba when he was an executive at Ofcom, disagreed and told us that MG Alba had only a “superficial resemblance” to S4C. During our visit to MG Alba headquarters in January 2011, while we were impressed at the seemingly effective way that the management of the two organisations worked together, we also became aware of the difference in size, scale and history of the two organisations. In our view, these combined to underline the difficulty in drawing parallels between the two organisations. We were however interested in the role played by the Scottish Parliament in the oversight of BBC Alba.
138. We welcome the commitment made by the DCMS and the BBC that S4C’s editorial and operational independence will be maintained under any new partnership arrangement between the organisations. However, we have concerns about how this will work in practice. We call on the Government to spell out exactly how this independence will be guaranteed under the new arrangements.
139. We are concerned that the BBC, a national broadcaster and much larger organisation than S4C, will not necessarily have the particular interests of Welsh language programming as its primary focus. We note the possibility that under any new structure, S4C’s distinctive voice will go unheard. We call on the Government and BBC to guarantee publicly that S4C remain solely a Welsh language broadcaster.
140. We recommend that under any partnership made between the BBC and S4C, careful thought needs to be applied to any role played by the BBC Trust, to ensure that S4C’s editorial and managerial independence is not compromised. We call on the Government to consider the appointment to the S4C Authority of individuals of sufficient independence and stature. Under any future management structure that is put in place, the management team responsible for the day to day operation of the channel, should comprise only S4C personnel.
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5 The future accountability of S4C
141. A notable feature of S4C is the wide range of groups with a legitimate interest in its activities. These include its viewing audience, the DCMS, the Welsh Language Board, independent producers and the National Assembly for Wales. On the whole, these groups care passionately about the Welsh language and S4C’s role in promoting it. Some witnesses argued, however, that S4C was not subject to an adequate level accountability to the people of Wales. In his submission Ron Jones argued that:
S4C has spent its life in a limbo half-way between London and Cardiff, not really accountable to either. WAG was told to mind its own business and DCMS was always going to have difficulties monitoring a body whose services were in a language it did not understand.117
142. A number of witnesses reinforced the argument that the DCMS and the Parliament were “too remote” from S4C and did not fully understand its cultural importance to Wales, and that the Government’s inclusion of S4C in the Public Bodies Bill, currently undergoing scrutiny in the House of Lords, was [given as] an example of the Government in London misjudging the importance of S4C to Wales.
143. According to the Government, the purpose of the Bill as it related to S4C was twofold: first to remove the automatic link of S4C’s budget with the Retail Prices Index; second, to include S4C in Clause 7 of the Bill so that it could, following a Ministerial Order, be subject to abolition, merger or other changes. Colin Nosworthy of the Welsh Language Society was typical of those who argued against S4C’s inclusion in the Bill:
Nobody has explained to us why you would give a Minister the power to abolish S4C in the Public Bodies Bill. Why would you do that?118
We received a great deal of evidence arguing against the inclusion of S4C in Schedule 7 of the Public Bodies Bill.
144. We were pleased that the Government listened to concerns about S4C’s inclusion in Schedule 7 of the Public Bodies Bill and by its subsequent decision to remove it from that part of the Bill.
145. One suggestion, proposed by many of our witnesses, for bringing S4C closer to its audience was that the responsibility for holding S4C to account should be devolved from the DCMS and Parliament to the National Assembly for Wales. According to Ron Jones:
There is a compelling case that the common interests of the Assembly, S4C and the audience suggest that meaningful and effective scrutiny is better achieved at local level.119
117 Ev 76 118 Q 135 119 Ev 76
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This argument was echoed by the leaders of the four main political parties in Wales who wrote to the Prime Minister in October 2010 arguing for “a comprehensive examination of all aspects of the governance and regulatory oversight of S4C”.
146. During our inquiry we pursued the financial and other implications of this proposal. Alun Ffred Jones AM argued that “If there was a transfer of responsibilities, then you have to have a transfer of finance as well to go with it”.120 Should funding be transferred, it would in effect under current arrangements be top-sliced from the DCMS budget, or under future arrangements, top-sliced from the BBC licence fee. We put it to witnesses that license fee payers in England or Scotland might not welcome part of their license fee being used to fund a Welsh language broadcaster. In response witnesses, including the BBC, argued that the Welsh language was a national asset, not just for Wales, and that S4C should therefore be funded nationally.121
147. The Minister argued strongly against devolving responsibility for S4C to the National Assembly for Wales:
I do think it is an important point of principle that broadcasting is a national matter and that all British licence fee payers and taxpayers contribute not just to the national broadcasters but to those in the nations and regions as well.122
However, we also explored with the Minister and other witnesses the feasibility of WAG co-funding S4C. We suggested to the Minister the example of BBC Alba where we were told that the Scottish Executive part funds MG Alba alongside the income it receives from the BBC license fee payer. In return, the Broadcasting Committee of the Scottish Parliament is responsible for scrutinising the work at regular intervals of MG Alba’s executive and board members. During our visit to BBC Alba we were told that the arrangement had to date worked very well.The Minister was open to this suggestion and told us that:
I have asked my officials whether there would be anything in principle that would stop the Welsh Assembly Government from making a contribution to S4C. I gather there wouldn't be any problem with them giving a grant to S4C, if that is what they saw fit to do.123
148. The forthcoming appointments of a new Chairman of the S4C Authority and a permanent Chief Executive provides an opportunity for the broadcaster to put the events of the last year behind it and to establish a renewed future strategy for S4C which should address issues including an enhanced role for the National Assembly in the oversight of S4C. We would welcome the opportunity to question the Government’s preferred candidate for Chairman about his or her plans for S4C soon after the Secretary of State announces his choice.
120 Q 329 121 Q 37 122 Q 448 123 Q 450
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149. We note the arguments for devolving responsibility for S4C from the DCMS to the Welsh Assembly Government. Although we do not accept that now is the appropriate time to take this step, we do accept the case for an enhanced role for WAG and the National Assembly in the funding and scrutiny of S4C. We therefore recommend that the DCMS and WAG should consider an arrangement whereby WAG contributes to the funding of S4C and that the S4C Authority appear annually before the relevant Committee of the National Assembly for scrutiny of its Annual Report and Accounts. Furthermore, any future Broadcasting Bill should address the relationship between DCMS, Welsh Assembly Government and S4C.
150. We recommend that, on completion of the interview process for the new Chairman of S4C, the preferred candidate should attend a hearing of this Committee to explain his or her proposals for the future direction and strategy of S4C.
151. The Welsh Affairs Committee will also continue to monitor closely S4C and the terms of any partnership deal that it concludes with the BBC. We expect to take evidence again from S4C during this Parliament to gauge the success of the new arrangements.
A fundamental review 152. There has been no comprehensive review of S4C by the DCMS , despite a provision in the 2003 Communications Act allowing for review of S4C by the Secretary of State.124
153. In the light of this, numerous witnesses argued that the time was ripe for S4C to undergo a “fundamental” and “wide-ranging” review beyond those conducted before. According to Alun Ffred Jones AM:
Recent developments in relation to the S4C Authority has underlined the need for an urgent independent review of the future governance and funding of S4C, and that this should take place now and not after the crucial talks between S4C, DCMS and the BBC. Such a review would need to consider the scale and nature of the S4C television service and the way that that service will need to evolve in order to keep up with audience demand and expectations.125
This was reinforced in October 2010 by the joint letter from the four party leaders in the National Assembly to the Prime Minister which called for a fundamental review of S4C before any decision was made about its future funding or governance.
154. Elan Closs Stephens, the BBC Trustee for Wales (and former Chairman of the S4C Authority) also called for an independent review not just of the S4C management and governance structures, but for the very purpose and remit of the channel itself. Ms Closs Stephens argued that the review she proposed should answer a number of questions that she posed:
124 Section 339 of the Act states that “the Secretary of State may carry out a review of the performance by the Welsh [S4C] Authority of their duty to secure that the public service remit of S4C and any other television programme service provided by them with the approval of the Secretary of State is fulfilled”. 125 Ev 108
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What do they want in Wales? What do young children want? What does the research show? What is the best way forward? How are we going to use online services? How are we going to use Twitter and all these other things that are possible, including Apps, to bring everybody in? I think that that is positive, and, if there is something I would like to say today, it is that I want us to think that this is an opportunity.126
Any independent review should consult representatives of those organisations and individuals with an interest in S4C including: the Welsh Assembly Government; the UK Government; the Welsh Language Board; independent producers; and representatives of the most important constituency, S4C’s audience.
155. We are disappointed that, despite having the statutory right to do so, the DCMS has not undertaken a review of S4C. This has given weight to the argument of those that claim that the UK Government does not adequately appreciate the importance of S4C to Wales. We recommend that the Secretary of State for Culture, Media and Sport should commission an independent review of S4C at least once every five years.
156. We believe passionately in S4C and recognise its importance to the preservation and promotion of the Welsh language. However, in the light of the events of the last year, we recognise the need to rebuild trust in the governance, management and mission of S4C. As a first step in the process of building trust, we recommend that the DCMS commission a wide-ranging independent review of S4C. This review should consult the wide range of parties with a stake in the broadcaster and should consider fundamental issues such as S4C’s purpose, the appropriate size, scale and scope of the institution and its services, and its future funding and governance arrangements.
126 Q 351
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Conclusions and recommendations
The importance of S4C to Wales 1. We welcome the significant contribution that S4C has made to the Welsh economy since 1982. S4C and the independent television sector, from which it commissions much of its output, contribute approximately £90 million per year to the Welsh economy and are responsible for employing over 2,000 people. This is a story of success for the Welsh economy and should be built on in the future. (Paragraph 25)
2. We note concerns that too much of the economic benefit from S4C is gained by the region in and around Cardiff where S4C headquarters and most independent television producers in Wales are based. While we are not presently persuaded of the case for moving S4C from Cardiff in the current economic climate, we do, however, consider that it merits consideration at a future date. In the meantime, we urge the DCMS and S4C to make every effort to spread S4C’s activities beyond its established bases to all corners of Wales. (Paragraph 26)
3. We welcome the key part that S4C has played in bolstering the everyday use of the Welsh language, which we consider to be a cultural asset not just of Wales but of the entire United Kingdom. Through a wide range of its broadcast output, S4C has brought the Welsh language into many homes where it may not have been heard previously. In addition, S4C has provided the opportunity for Welsh people to learn, through its education and children’s programmes, and hear their language spoken as a normal part of their daily lives. We also recognise, however, that while the cultural benefit provided by S4C is compelling, the channel’s prime purpose is to provide its viewing audience with popular, high quality television programmes which inform, educate and entertain. (Paragraph 32)
Performance of the Channel 4. We note the claims by a number of witnesses that the figures provided by BARB and used by S4C to judge its performance are not reliable, particularly because they take no account of the number of viewers under four years old. We regret the misleading use of these figures by some commentators and note that the BARB figures are regarded by the BBC, S4C and other commentators as the industry “gold standard”. We have not been presented with any compelling evidence to suggest that the figures produced by BARB are unreliable. (Paragraph 40)
5. We recognise that S4C is operating in a competitive and fast-moving digital market where television viewers have a much wider choice of channels than ever before. In the light of this, it is a positive achievement that S4C’s share of the viewing audience during peak times in recent years has held up remarkably well. (Paragraph 46)
6. By presenting figures for those who watch S4C for just three minutes or more a week, S4C’s viewing figures appear more impressive than when using the comparative 15 minute metric reported by the BBC and Channel 4. (Paragraph 60)
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7. While 3 minute reach may be a useful metric to assess the commercial impact of a channel that carries advertising, S4C, as a public service broadcaster, should be assessed on a range of measures, including the number and proportion of those who watch the channel for at least fifteen consecutive minutes a week, a standard figure published by the BBC—including for its smaller, niche audience channels. We recommend that S4C include 15-minute reach measures in its future reporting. (Paragraph 61)
8. Assuming the number of Welsh speakers is approximately 600,000 people, the viewing performance of some S4C broadcasts including the Welsh language fictional drama Pobol y Cwm, and Pawb a’i Farn compare favourably with equivalent BBC productions such as Eastenders and Question Time. (Paragraph 62)
9. It appears that the majority of Welsh speakers do not watch S4C for three consecutive minutes a week. Approximately 155,000 Welsh speakers watch S4C for at least 15 consecutive minutes a week. This is a figure on which S4C itself acknowledges that it must improve. (Paragraph 63)
10. We recognise that S4C could perform better and therefore recognise the case for creating a new S4C: a multi-platform, multi-media broadcaster/publisher, which is answerable to Welsh audiences, and commissions and broadcasts Welsh language content only. (Paragraph 64)
11. The BBC states that the output it provides S4C is highly valued by S4C’s audience, accounting for about one fifth of S4C’s total output yet attracting around two fifths of the channel’s viewing. Our findings confirm this. (Paragraph 68)
12. We recognise the high quality of some of S4C’s output, such as its children’s programming and drama. It is also the case that S4C has reached and continues to reach significant audiences with particular programmes and coverage of events. (Paragraph 74)
13. The DCMS should ensure that greater information about S4C’s audiences and performance should be available to policy makers and the public. Although we welcome S4C’s joint study with the Welsh Language Board on audience perceptions of S4C, we are surprised that it has taken the S4C Authority until now to address this shortcoming. (Paragraph 75)
14. Spending per head on broadcasting output in Wales is the highest of any of the four UK nations, driven particularly by public funding of S4C. While we received no hard evidence that S4C was operated inefficiently, the fact that S4C intends to reduce 40 administrative staff within the next year indicates there have been opportunities to make savings without necessarily affecting the quality of the channel’s broadcast output. (Paragraph 86)
15. We are concerned that S4C has for many years received substantial sums of public money without sufficient internal or external evaluation of its efficiency and the value for money of its service. The DCMS, over a number of years, has failed to provide this assurance. This is unacceptable and we recommend that the DCMS take
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immediate steps to redress the gap in S4C’s financial accountability by subjecting S4C to regular audits by the National Audit Office. (Paragraph 87)
16. We are surprised that the BBC uses licence fee money to purchase private health care. We are also concerned that S4C has over a number of years provided private health care insurance for more than 100 employees. Although in May 2009 this benefit was not offered to new employees, it was not closed to existing staff. This has clearly been an inappropriate use of taxpayers’ money, even more so at a time when the public sector, including S4C, is charged with making sometimes painful efficiency savings. S4C should set an example to other publicly funded broadcasters and end immediately this taxpayer-funded perk for all employees. (Paragraph 88)
17. We conclude that, although there is scope for making efficiencies in its operations, in terms of providing Welsh language broadcasting, S4C provides value for money. (Paragraph 89)
The Government’s proposed changes to S4C 18. The Government proposes to significantly reduce public spending over the course of this Parliament. In the light of this, it would be difficult to justify the ring-fencing of S4C’s funding. Any reduction in S4C’s funding should be comparable to other public service broadcasters. We call on the DCMS to ensure that this is the case. (Paragraph 98)
19. While S4C must, like other public sector organisations, share its burden of cuts to its funding, we recognise the risk that this will come at a cost to the quality and volume of S4C’s output. The DCMS, S4C and the BBC must work together to identify potential synergies and to eliminate wasteful duplications so that the impact of cuts to S4C’s funding is minimised. (Paragraph 99)
20. We recommend that the Government confirms the funding of S4C beyond 2014-15 as soon as possible. Without this certainty, S4C will not reasonably be able to develop its future strategy. Therefore, we believe that it is essential that there is a long term funding formula enacted in primary legislation. (Paragraph 100)
21. We recommend that the DCMS work with the BBC and S4C to determine how S4C’s funding can be guaranteed. We further recommend that S4C receive in full a portion of the Licence Fee which is at least equal to the amount set out by the DCMS in S4C’s funding review settlement. (Paragraph 105)
22. The proposal that most of S4C’s funding should in future be provided through the licence fee is a significant development. We welcome the Government’s and the BBC’s commitment that the S4C programme budget will continue to be spent on commissions from independent producers in Wales and call on the Government to ensure that this commitment is included in the documentation outlining the arrangement between S4C and the BBC. (Paragraph 107)
23. During 2010, the S4C Authority Chairman, the Chief Executive and the Head of Commissioning, left their positions in S4C, within six months of each other. These events gave the impression that S4C was more concerned with its internal differences
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than with its primary responsibility: the sound stewardship of a cherished institution. (Paragraph 128)
24. We conclude that, whatever the deficiencies of Arwahanrwydd, its failure was primarily due to the failure of individuals in S4C to make the arrangement work, rather than any critical fault with its structure. The situation was compounded by the absence of any official or public explanation by the Board about the reasons for their departures. We are concerned by S4C’s admission that its website did not include the minutes of any meetings of the Authority since December 2009. (Paragraph 129)
25. The failings of the Authority to provide effective leadership for S4C during 2010 was particularly regrettable as it came at a time when the funding and governance of the organisation were in doubt. For a time, instead of being known for broadcasting drama, S4C became a drama of its own. S4C must never allow such a sorry situation to occur again. (Paragraph 130)
26. On the evidence we received, it is apparent that the decision to fund S4C via the licence fee from 2013 onwards was made in haste. In a matter of hours a deal was struck between BBC executives and Ministers in London, without sufficient consultation with relevant parties. This is regrettable. (Paragraph 131)
27. We welcome the commitment made by the DCMS and the BBC that S4C’s editorial and operational independence will be maintained under any new partnership arrangement between the organisations. However, we have concerns about how this will work in practice. We call on the Government to spell out exactly how this independence will be guaranteed under the new arrangements. (Paragraph 138)
28. We are concerned that the BBC, a national broadcaster and much larger organisation than S4C, will not necessarily have the particular interests of Welsh language programming as its primary focus. We note the possibility that under any new structure, S4C’s distinctive voice will go unheard. We call on the Government and BBC to guarantee publicly that S4C remain solely a Welsh language broadcaster. (Paragraph 139)
29. We recommend that under any partnership made between the BBC and S4C, careful thought needs to be applied to any role played by the BBC Trust, to ensure that S4C’s editorial and managerial independence is not compromised. We call on the Government to consider the appointment to the S4C Authority of individuals of sufficient independence and stature. Under any future management structure that is put in place, the management team responsible for the day to day operation of the channel, should comprise only S4C personnel. (Paragraph 140)
The future accountability of S4C 30. We were pleased that the Government listened to concerns about S4C’s inclusion in Schedule 7 of the Public Bodies Bill and by its subsequent decision to remove it from that part of the Bill. (Paragraph 144)
31. We note the arguments for devolving responsibility for S4C from the DCMS to the Welsh Assembly Government. Although we do not accept that now is the
44 S4C
appropriate time to take this step, we do accept the case for an enhanced role for WAG and the National Assembly in the funding and scrutiny of S4C. We therefore recommend that the DCMS and WAG should consider an arrangement whereby WAG contributes to the funding of S4C and that the S4C Authority appear annually before the relevant Committee of the National Assembly for scrutiny of its Annual Report and Accounts. Furthermore, any future Broadcasting Bill should address the relationship between DCMS, Welsh Assembly Government and S4C. (Paragraph 149)
32. We recommend that, on completion of the interview process for the new Chairman of S4C, the preferred candidate should attend a hearing of this Committee to explain his or her proposals for the future direction and strategy of S4C. (Paragraph 150)
33. The Welsh Affairs Committee will also continue to monitor closely S4C and the terms of any partnership deal that it concludes with the BBC. We expect to take evidence again from S4C during this Parliament to gauge the success of the new arrangements. (Paragraph 151)
34. We are disappointed that, despite having the statutory right to do so, the DCMS has not undertaken a review of S4C. This has given weight to the argument of those that claim that the UK Government does not adequately appreciate the importance of S4C to Wales. We recommend that the Secretary of State for Culture, Media and Sport should commission an independent review of S4C at least once every five years. (Paragraph 155)
35. We believe passionately in S4C and recognise its importance to the preservation and promotion of the Welsh language. However, in the light of the events of the last year, we recognise the need to rebuild trust in the governance, management and mission of S4C. As a first step in the process of building trust, we recommend that the DCMS commission a wide-ranging independent review of S4C. This review should consult the wide range of parties with a stake in the broadcaster and should consider fundamental issues such as S4C’s purpose, the appropriate size, scale and scope of the institution and its services, and its future funding and governance arrangements. (Paragraph 156)
S4C 45
Formal Minutes
Wednesday 27 April 2011
Members present:
David T.C. Davies, in the Chair
Stuart Andrew Susan Elan Jones Guto Bebb Karen Lumley Jonathan Edwards Mr Mark Williams
Draft Report (S4C), proposed by the Chair, brought up and read.
Ordered, That the draft Report be read a second time, paragraph by paragraph.
Paragraphs 1 to 104 read and agreed to.
Paragraph 105 read.
Motion made, to leave out paragraph 105 and insert the following new paragraph:
“We do not agree with the Government’s proposals to fund S4C via the licence fee. Our view is that the only means of securing meaningful editorial, strategic and operational independence for S4C is to secure an independent and direct funding stream. However, if the Government insists on going down the licence fee route, we believe that the only way of avoiding a competition of resources between Welsh and English language programming and protecting S4C’s independence would be to top-slice the licence fee so that the money would go directly to the Welsh language channel.” —(Jonathan Edwards.)
Question put, That the new paragraph be read a second time.
The Committee divided.
Ayes, 2 Noes, 3
Jonathan Edwards Stuart Andrew Mr Mark Williams Guto Bebb Karen Lumley
Question accordingly negatived.
Paragraph 105 agreed to.
Paragraphs 106 to 131 read and agreed to.
Another paragraph —(Susan Elan Jones.) — brought up and read as follows:
“We do not agree with the Government’s proposals to fund S4C via the licence fee. S4C should be funded directly as this is the only means of securing meaningful editorial, strategic and operational independence for S4C.”
Question put, That the paragraph be read a second time.
46 S4C
The Committee divided:
Ayes, 2 Noes, 3
Jonathan Edwards Stuart Andrew Susan Elan Jones Guto Bebb Karen Lumley
Question accordingly negatived.
Paragraphs 132 to 143 read and agreed to.
Paragraph 144 read.
Amendment proposed, in line 27, at the end to add:
“In order to form a consensus in Wales concerning the way ahead for Welsh language broadcasting, we recommend that the Government removes S4C in its entirety from the Public Bodies Bill and conducts a comprehensive and independent review of the channel. This would respect and respond to the request made by the four main party leaders in Wales to the Prime Minister last November.” — (Jonathan Edwards.)
Question put, That the amendment be made.
The Committee divided:
Ayes, 3 Noes, 3
Jonathan Edwards Stuart Andrew Susan Elan Jones Guto Bebb Mr Mark Williams Karen Lumley
Whereupon the Chair declared himself with the Noes.
Amendment accordingly negatived.
Paragraph 144 agreed to.
Paragraphs 145 to 148 read and agreed to.
Motion made, to leave out paragraph 149 and insert the following new paragraph:
“Any future Broadcasting Bill should devolve responsibility for Broadcasting to the Welsh Government.”— (Jonathan Edwards.)
Question put, that the paragraph be read a second time.
The Committee divided:
Ayes, 2 Noes, 4
Jonathan Edwards Stuart Andrew Mr Mark Williams Guto Bebb Karen Lumley Susan Elan Jones
S4C 47
Question accordingly negatived.
Paragraph 149 agreed to.
Paragraphs 150 to 156 read and agreed to.
Resolved, That the Report be the Fifth Report of the Committee to the House.
Ordered, That the Chair make the Report to the House.
Written evidence was ordered to be reported to the House for publishing on 23 and 30 November and 14 December.
Ordered, That embargoed copies of the Report be made available, in accordance with the provisions of Standing Order No. 134.
[Adjourned till Tuesday 10 May at 10.00 am
48 S4C
Witnesses
Tuesday 23 November 2010 Page
Professor Ian Hargreaves, Geraint Talfan Davies, and Ron Jones, Creative Industry Group Ev 1
Tuesday 30 November 2010
Chris Woolard and Rhodri Williams, Ofcom, and Iestyn Garlick and Gareth Williams, TAC Ev 12
David Donovan, BECTU, Michael Birtwistle, NUJ, and Hywel Williams MP, NUJ Parliamentary Group Ev 20
Meri Huws and Meirion Prys Jones, Welsh Language Board, and Menna Machreth and Colin Nosworthy, Welsh Language Society Ev 25
Tuesday 14 December 2010
Rheon Tomos, Vice Chairman and Arwel Ellis Owen, Interim Chief Executive, S4C Ev 31
Tuesday 11 January 2011
Alun Ffred Jones AM, Minister for Heritage, Welsh Assembly Government Ev 47
Mark Thompson, BBC, Menna Richards, BBC Wales, and Elan Closs Stephens, BBC Trustee for Wales Ev 53
Tuesday 18 January 2011
Mr Edward Vaizey MP, Minister for Culture, Communications and Creative Industries, Department for Culture, Media and Sport Ev 62
List of printed written evidence
Page
1 Ron Jones, Chairman, Welsh Assembly Government’s Creative Industries Panel Ev 74 2 Ofcom Ev 78 3 TAC Ev 92 4 NUJ and BECTU Ev 96 5 NUJ Parliamentary Group Ev 98 6 Welsh Language Board Ev 99 7 Welsh Language Society Ev 101 8 Alun Ffred Jones AM, Minister for Heritage, Welsh Assembly Government Ev 105 9 BBC Trust and the BBC Executive Board Ev 108: Ev 115
S4C 49
10 Department for Culture, Media and Sport Ev 110: Ev 116 11 S4C Ev 113 12 Letter to Arwel Ellis Owen, S4C, from David T.C. Davies MP, Chair, Welsh Affairs Committee Ev 117 13 Letter from Arwel Ellis Owen, S4C, to David T.C. Davies MP, Chair, Welsh Affairs Committee Ev 117
List of additional written evidence
(published in Volume II on the Committee’s website www.parliament.uk/welshcom) Page 14 Urdd Gobaith Cymru Ev w1 15 Hugh Evans Ev w2 16 Dr Simon Brooks, School of Welsh, Cardiff University Ev w2 17 Writers Guild of Great Britain Ev w4 18 Mabon ap Gwynfor Ev w7 19 Professor Thomas P O’Malley, Aberystwyth University Ev w9 20 Angharad Mair, Tinopolis Wales Ev w11 21 Institute of Welsh Affairs Ev w14 22 Plaid Cymru Ev w18 23 PACT Ev w22 24 Mercator Institute for Media, Languages and Culture, Department of Theatre, Film and Television Studies, Aberystwyth University Ev w26 25 Mr S G Jones Ev w29 26 Celebrating Our Welsh Language Ev w29 27 Peter Edwards and Huw Walters Ev w30
50 S4C
List of Reports from the Committee during the current Parliament
The reference number of the Government’s response to each Report is printed in brackets after the HC printing number.
Session 2010–12 First Special Report Welsh prisoners in the prison estate: follow up: Government HC 398 Response to the Committee’s Ninth Report of Session 2009- 10. Second Special Report Wales and Whitehall: Government Response to the HC 399 Committee’s Eleventh Report of Session 2009-10. Third Special Report Cross-border provision of public services for Wales: follow up: HC 419 Government Response to the Committee’s Tenth Report of Session 2009-10. First Report The implications for Wales of the Government’s proposals on HC 495 constitutional reform. Second Report The proposed amendment of Schedule 7 to the Government HC 603 of Wales Act 2006. Third Report The Severn Crossings Toll. HC 506 Fourth Special Report The implications for Wales of the Government’s proposals on HC 729 constitutional reform – Government’s Response to the Committee’s First Report of Session 2010-11. Fourth Report The future of the Newport Passport Office. HC 590
Fifth Special Report The Severn Crossings Toll: Government Response to the HC 837 Committee’s Third Report of Session 2010-11. Sixth Special Report Proposed Legislative Competence Orders relating to Organ HC 896 Donation and Cycle Paths Seventh Special Report The proposed amendment of Schedule 7 to the Government HC 918 of Wales Act 2006: Government Response to the Committee’s Second Report of Session 2010-11
cobber Pack: U PL: COE1 [SO] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Welsh Affairs Committee: Evidence Ev 1
Oral evidence
Taken before the Welsh Affairs Committee on Tuesday 23 November 2010
Members present: David T. C. Davies (Chair)
Stuart Andrew Susan Elan Jones Guto Bebb Karen Lumley Alun Cairns Owen Smith Jonathan Edwards Mr Mark Williams Mrs Siân C. James ______
Examination of Witnesses
Witnesses: Professor Ian Hargreaves, Broadcasting Expert, Geraint Talfan Davies, Broadcasting Expert, and Ron Jones, Chair, Creative Industry Group, gave evidence.
Q1 Chair: Good morning, gentlemen. It is very nice will be the impact of such a change in funding from to see you and thanks for coming up today. Most of £100 million to £83 million? us know each other, but for the record could I ask Geraint Talfan Davies: It is very clear that that everyone to state their names and also any financial reduction in funding is bound to impact on the service. or pecuniary interests that they might have in S4C? I don’t think that you can make that level of Geraint Talfan Davies: I am Geraint Talfan Davies. I adjustment without any impact on what the service is. am Chairman of the Institute of Welsh Affairs. I have Of course, we don’t know, as yet, what savings can no pecuniary interest in S4C, although I did act as be made through any possible discussions of synergies a consultant to S4C during the preparation of their with the BBC. My guess is that there will be a need submission to the DCMS. to reconsider the nature of the service and the number Ron Jones: I am Ron Jones. I am here as Chairman of hours broadcast. My guess, too, is that there would of the Welsh Assembly’s Panel on the Creative possibly be some restriction on the range of Industries, but I am also Executive Chairman of programming. But that doesn’t mean to say that there Tinopolis, which has a significant business interest in could not be an improvement in what remains, as long producing programmes for S4C. as there is a more effective commissioning process. Ian Hargreaves: I am Ian Hargreaves, Professor of Ron Jones: I think the funding crisis, if that is what Digital Economy at Cardiff University. I have not had it is, coincidentally comes at a time when there was anyway a very pressing need for S4C to reconsider and do not have any financial relationship with S4C. the way it delivered its remit. Whatever the new definition of the remit will be, in terms of the range Q2 Chair: Thank you very much. I am going to start of services and the range of programming that it by asking the leading question, if you like. We are all provides, at least we now know within what range of aware that the Government have been making available money that discussion needs to take place. significant cuts across most areas of the public sector. And that’s not a bad thing. I think that there hasn’t Could you tell us why, if at all, you think S4C should been a serious reassessment of S4C’s provision of be exempt from such cuts? Perhaps we can start with services for a considerable number of years. Now we Mr Talfan Davies. can look afresh and, hopefully, we can deliver Geraint Talfan Davies: I am not sure that any publicly a service which is perhaps more appropriate for the funded body can claim exemption from cuts in the modern age than the one that is presently being current circumstances, and I wouldn’t argue that delivered. particular case. There is an argument about what size Ian Hargreaves: I have nothing to add to that. cut a body might take, but I don’t think that one Chair: Can I bring in Siân James and then I will come should seek to argue for exemption. I think what one back to you, if I may? has to secure is an adequate and secure stable level of funding for the years ahead. That is what is essential. Q4 Mrs James: Do you think that there are Ron Jones: I would agree with that in its entirety. opportunities to boost the income through more Ian Hargreaves: There is no reason why S4C should advertising or more successful targeting of not face the same pressures as other publicly funded advertisers? organisations. Geraint Talfan Davies: I think that S4C themselves pointed out to the DCMS that there is some scope Q3 Alun Cairns: The spending review will cut S4C’s for optimising their commercial income, their air-time funding from around £100 million to £83 million in sales. They seem to suggest, or they did suggest in four years’ time. Of course, the font of money, the their submission to the DCMS, that there is a need direction of money, will change largely from being for a better connection between air-time sales and the DCMS to coming from the BBC. What do you think scheduling of the service. By the same token, I think cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Ev 2 Welsh Affairs Committee: Evidence
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones
S4C intends to lease some of its existing bandwidth. media content for Welsh-medium education. And it is You’ve got S4C2, so there is income that could be a natural fit which, without too much change to the obtained there. But I think it is important to be present provision, could provide much more realistic about this. I don’t think that it is going to be educational as well as entertainment value inside possible to get back to the level of commercial income Wales. that was there when S4C programmes were running Chair: Thank you, Mr Jones. I am gently nudging alongside Channel 4 programmes. this along.
Q5 Mrs James: Just carrying on from that to the Q7 Alun Cairns: Can I ask you this, Mr Hargreaves, actual programming itself, what programming and in the light of what all three of you said, that S4C services do you think should be maintained? We know shouldn’t be exempt from any sorts of cuts? There has that S4C is going to have to change, but there is been a lot of political debate around the scale of cuts. obviously a core of things that we need to maintain. Bearing in mind that I said it was £100 million to In your opinion, can we make those savings without about £83 million in four years’ time, together with damaging those core programmes and the core remit? the £27 million that is available for marketing and Geraint Talfan Davies: There are two key elements commercial purposes, as well as the advertising which strike me. There is the service that S4C has income that is available, do you think that it is a pretty launched for children. That is really a core function fair settlement in the context? of S4C because unless we tackle that issue of the Ian Hargreaves: I wouldn’t characterise it as fair or language amongst our youngest children, then there is unfair. I think it is at the heavy end of cuts that have going to be precious little hope. I would have thought, been applied to other organisations and areas of too, the other core issue is the provision of a service spending in the public spending changes that we have during the key peak hours of viewing. Those are the had. I don’t think that you can cut that amount from two essentials. When you look ahead you have to look any organisation without affecting either the volume at how the nature of these linear channels is going to or the quality of what it does, or both. That said, change over the next decade and what the impact will I agree entirely with what Ron Jones and Geraint be over the next few years as we move to more Talfan Davies have said: that this, frankly, is a reality. video-on-demand, a more true convergence, the whole Nobody is contesting this particular point and it is “Project Canvas” idea. This is going to affect the important to move on from that point and to talk about concept of “the channel” as we know it and that is what is a realistic set of prospects facing S4C, and why I would agree with Ron Jones that now is I know that you are going to come to those issues in absolutely the right time to consider all these issues the questioning. in the round. Chair: We are indeed.
Q6 Mrs James: So this might be an opportunity, not Q8 Jonathan Edwards: Bore da. The Government a threat? says that a new partnership model with the BBC is Geraint Talfan Davies: Of course it is an opportunity. the best way of securing the long-term future of the One can argue that it is something that should have channel. Do you agree with that and does the been done rather earlier, but there is no time to partnership model necessarily mean a BBC waste now. Alba-type solution? Ron Jones: Fundamentally, the type of channel that Ian Hargreaves: I think it is important to recognise S4C was created to be no longer fits modern that the BBC has been a partner with S4C in the requirements. It was one of four channels and people creation of the services S4C has provided from the were choosing from a limited number of opportunities very beginning. Today, the BBC provides the news to view. Whatever else has changed about S4C, the service that S4C broadcasts and it produces its environment in which it now operates is changed for flagship entertainment programme. So there has never ever. Welsh speakers are just as promiscuous in terms been a time when there was not a BBC/S4C of their search for entertainment, information and all partnership. The question is: what kind of partnership that sort of stuff as anyone else, so programming now is right for the next stage? I think that is the heart of has to find a much more defined niche than ever it had the matter. The Alba arrangements in Scotland, which before. Therefore, I think S4C is going to be pushed, I had a good deal to do with because I was the Ofcom inexorably, towards providing public service executive responsible for that area of activity in that broadcasting in the true sense of those things that no period, bear only the most superficial resemblance to other broadcaster can provide. I think that opens up the case of S4C. In the case of S4C we have an a whole range of creative opportunities. But, also, operationally and creatively independent organisation I think that in the online environment there is no one whose value arises substantially from that in Wales providing a whole range of online services independence. I think it is very, very important to have in Welsh. It is a natural place for S4C to be and in regard to that independence in the arrangements that fact I think can help it to reconnect with its users at are put in place. There is clearly a risk with the BBC, community level, with community groups, with which is very large, very powerful and has many organisations and so on, in a way that perhaps it has mansions, that if S4C is turned into a minor neglected to do in recent years. I agree with Geraint department of the BBC in Wales it will not get much on the importance of the children’s programming, but talking time or air time around the BBC board table again there is a need to engage that more actively with when big decisions are taken. We know that the our education system. We are short of high-quality BBC’s own strategic rethinking process in the last cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Welsh Affairs Committee: Evidence Ev 3
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones year has been a little bit light on attention to affairs in they could be there on the whole question of Wales. That is inevitable. If you have big transmission and technical play-outs. There are also organisations based in London with a small bit of synergies in terms of audience research which could business which is Welsh-language broadcasting or be sought. I think that those really do need to be Welsh-language media activity, it is at risk of not explored. The other issue, too, is that I do wonder being looked at properly. The heart of this matter is sometimes whether S4C, even in Llanishen, has that the problem S4C now faces is a political problem, become rather isolated and whether it needs more it has political causes and it requires a political contact with the rest of the broadcasting community. solution. As somebody involved with the opera company, I am conscious of some of the benefits of having seven or Q9 Alun Cairns: I certainly don’t think that it being eight resident companies within the Wales Millennium a branch of the BBC in Cardiff is anyone’s will. The Centre. Conversations with people working in similar Secretary of State and the Minister have made it clear but different areas can be very valuable. You do have that that is not what they want to see. Could the to ensure—and this has got to be the trick, I think— collaboration between S4C and the BBC offer operational independence because there are three potential for increased efficiency, reduced duplication essential values to the independence of S4C. One is and help achieve economies of scale to overcome the what you might call the intrinsic value of S4C as reduced funding settlement? a broadcaster and what it does on television. There is, Ron Jones: To some extent, when looking at cost secondly, what you might call the instrumental savings, the partnership with the BBC has to be benefits of S4C, the public value that it can deliver in looked at, first of all, on the creative and then on the educational terms and in economic terms. And then administrative and operational side. My own instinct, there is an institutional value to S4C. It is very I must say, is that S4C has developed over recent important that Wales has a broadcasting organisation years to think of itself as a large and significant that has some genuine autonomy. When you look at organisation. To that extent, the costs associated with what has happened to ITV Wales, being subsumed that are the costs associated with a large and within one ITV company, and when you see the significant organisation. I wouldn’t mind a quick side pressures that exist on BBC Wales as part of a larger bet that S4C could run its operational side much more BBC, having an autonomous organisation is efficiently on a stand-alone basis and more cost important. effectively if it began again to think of itself as a small organisation providing a service. Q12 Alun Cairns: Thank you. I would say that relocation, potentially, at this stage, would only add Q10 Alun Cairns: Are you saying that it is bloated costs and create uncertainty as the budget is being at the moment? squeezed. But I don’t really want to focus on that Ron Jones: I am, yes, and it has been, I think, for point. My final two questions are to all three of you. a number of years. So rather than go for the obvious Do you think that the S4C Authority should co- solution, which is to share some of these facilities operate and negotiate with the BBC Trust in order to with the BBC, I think there is a much more strike that operational independence that we all want imaginative way of doing this and taking back S4C to see as well as editorial independence? Bearing in to what it ought to be, which is an organisation that, mind the likely deal with the BBC and S4C— culturally and operationally, is much closer to its hopefully that we can all agree to—do you think that people. It is, after all, if you look at it in terms of size, it is a foolish move at this stage to seek to appoint a a relatively small organisation. I think some of the chief executive under this structure on a permanent lessons that can be learnt from the private sector here contract, bearing in mind the likely arrangement with would be very well used inside S4C. It never used to the BBC that may well come two years down the be like this. It used to be what I would call road? a “professionally amateur” organisation. It had that Geraint Talfan Davies: I have had a view for some sort of feel of knowing what it was doing but doing it time, but I think the essential precondition of in a very lean way. I think there are merits, as you everything else is to sort out the question of the will see from my evidence also, in taking S4C out of Authority. The S4C Authority has lost its authority its present environment and putting it into and credibility. I don’t think it is in any shape to a Welsh-speaking area where the economic advantage conduct the negotiation with the BBC currently. That you get from having those quality Welsh-language has to be sorted out, first of all. jobs in those areas is further enhanced. So I think we can get several wins by looking at it in a slightly Q13 Alun Cairns: And the chief executive? different fashion. Q14 Chair: You don’t think they can stay— Q11 Alun Cairns: Thank you. Mr Davies, can S4C Geraint Talfan Davies: I would have said that sorting retain its operational independence? out the Authority is a precondition for everything, Geraint Talfan Davies: If I can enlarge on what Ron including the chief executive. Jones was saying just now, essentially, I think there Ron Jones: I agree entirely. are two options. You can either, as Ron suggests, Ian Hargreaves: I agree and would add that I don’t locate S4C elsewhere or you can actually seek think anyway this is a matter that can be settled operational synergies with the BBC within Cardiff as between the BBC Trust and the S4C Authority. This it stands. Those synergies are certainly possible and is a subject of politics at the UK level and of political cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Ev 4 Welsh Affairs Committee: Evidence
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones concern, though not mandate, at the National suppliers and there has been almost a disconnect Assembly of Wales level. I think that it is the absence between S4C and the politicians to whom it ought to of political underpinning of these arrangements which feel accountable, politicians it ought to be able to has produced political and institutional failure in S4C. justify itself to. That comes down, I think, to a sense of hubris and insularity at both authority and Q15 Jonathan Edwards: Can I ask you a question management level which has been very unfortunate. on the funding arrangements? Mr Jones, in your Those of us working inside the industry have been testimony you said that a preferable arrangement aware of this developing over really quite a long would be for S4C’s funding to be top-sliced at the UK period. This is not a recent problem. Government stage rather than once the licence fee has been transmitted to the BBC. Can you explain why Q19 Chair: Who do you blame for that, Mr Jones? you think that is preferable? Do you blame the board or the actual management or Ron Jones: What we have at the moment is both for that? a coincidence, again, of a funding crisis and also a Ron Jones: Both have to carry their part of the can, governance crisis. The funding crisis is being resolved but, fundamentally, the authority is there to provide in the sense that there is some clearer guidance now the underpinnings for management to deliver. So as to at least what the short-term funding I think you can’t get away from the fact that the arrangements are going to be for Welsh-language authority has lost control here. television. In the case of the governance issues, I don’t actually believe that the structures we presently have Q20 Guto Bebb: I find your comments very are fatally flawed. The present arrangements we have, interesting because, obviously, as a Welsh speaker, with some fine tuning and in the hands of fresh I’ve been reading the comments of your co-director in people, could deliver what S4C was originally Welsh publications and nothing you say is reflected in intended to deliver. We have a breakdown of what has been said by Angharad Mair in any public governance here, not a breakdown in the governance comments on the issue of S4C. From reading structure. I think there has been a problem at DCMS Angharad, you would be of the view that S4C was a level in not ensuring that there was adequate very well-managed and very well-loved organisation, investigation. The S4C Authority has clearly lost fully in contact with its audience. credibility for a whole variety of reasons over a period Ron Jones: I am not sure that I read her comments in of time. Management issues were allowed to develop the same way. I think that she perhaps expresses her to a state which brings us to where we are today, but views with more passion than I do. I try to give there was nothing fundamentally wrong with those a clinical, dispassionate view of where we are because structures. That organisation, as a public body, is as I think the service is so important. capable of ensuring value for money, in terms of Geraint Talfan Davies: All organisations suffer if service delivery, as is the BBC. I think this is why the they are not subject to proper scrutiny and I think S4C four party political leaders in Wales were able to come has suffered from a conspiracy of silence for far too to a unanimous view in terms of what they saw as long. There has been a fear, and certainly a fear in the definition of an independent S4C going forward. Cardiff Bay to some extent, of being mature enough People understand that we need more political to take responsibility for the channel. When we look involvement and I can’t stress too heavily what Ian at arrangements going forward, I think you have to has said: political involvement at Westminster and at have the involvement of the Assembly Government in Cardiff Bay level is a prerequisite, I think, to being this, as well as perhaps the DCMS—there may be able to deliver a solution here with or without the some shared arrangements—because we have to grow detailed involvement of the BBC. up and we have to bring S4C out into the fresh air and be prepared to discuss it. Q16 Chair: Thank you very much, Mr Jones. I’m sorry to keep nudging it forward but we are a bit Q21 Guto Bebb: I wouldn’t disagree with many of limited on time. Did you want to add anything, these comments. I’m just looking at the differences Mr Hargreaves? between what has been said publicly in Wales and Ian Hargreaves: No. Thank you. what has been said this morning. In terms of the Chair: Now Guto Bebb on the management. problems with the management of S4C, would you say that there is some evidence that the current board Q17 Guto Bebb: Good morning. Certainly some of has not been holding management to account over the the comments you have already made have touched past few years in the way that they should have been upon the question I am going to ask, but, in your view, doing? how well or badly has S4C been governed and Ian Hargreaves: The way you put the question managed over the past five or six years? implies too simplistic a response. It is not a question Chair: Mr Jones? of the board not holding the management to account. Ron Jones: The evidence is there before our eyes. I think that the internal structure of the boards within S4C needs looking at. There are two boards and an Q18 Guto Bebb: In what way? authority and the machinery that exists at the moment Ron Jones: I think that there has, over a period of is excessively complex. I would go back to further years, been a reduction in the connection between S4C reinforce this point. I have worked in Wales for the and its audience, there has been a reduction in the last 10 or 12 years, and I now live there, and it quality of the relationship between S4C and its surprised me and took me quite a while to understand cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Welsh Affairs Committee: Evidence Ev 5
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones why every politician that I met, whether remit in the early days. The sector in Wales producing a Westminster politician in Wales or an Assembly programmes is extremely fragile, and I think North politician, would quietly explain to me why nobody Wales has more experience of this than anywhere else. wanted to debate S4C. You can’t, in a very small country, have an entirely free market in programme production. There has to be Q22 Chair: What was the reason for that? an element of the broadcaster. I think this is something Ian Hargreaves: The reason for that is the dirty little that the BBC has not been doing terribly well over the secret of S4C having secure inflation-linked funding last quarter of a century either, in terms of ensuring through the DCMS, which wasn’t paying very much that this finite capacity we have for producing attention to what was going on, and was “nice work television programmes, creative content generally, is when you can get it”. managed in such a way as to ensure that it is both credible and sustainable. I do see, in North Wales Q23 Chair: Mr Hargreaves, did you ever have the particularly, that there is a need to provide some direct private conversations that I have had with senior S4C S4C support to ensure that the industry can be brought people over the years who have said that, privately, back to its previous vibrancy. whatever may be hinted at in public, the last thing Chair: Thank you. Can I bring in Owen Smith and they wanted is the Assembly having oversight of then Mark Williams, please? them? Ian Hargreaves: Yes. I think that there has been Q25 Owen Smith: First, may I apologise, gentlemen, a strong but rather silent conspiracy to keep the for being late. I was speaking at a committee down Assembly out of this. There are many different ways the corridor. I have two questions for Geraint Talfan of approaching the future of devolution. I was very Davies. The first is that you were very clear about the struck this morning when I switched on the Today direction of travel that ought to be undertaken in programme to find senior military figures in a fury respect of responsibility for managing S4C and to about a programme on the BBC yesterday evening. whom it ought to be accountable, that is, the I never wake up in Wales and hear a vivid discussion Assembly. What are the implications of that for BBC about what was on S4C yesterday. The subject has Wales? Secondly, one of the things that has been very become too quiet. It cannot be healthy for a media clear in the recent debate is the lack of co-ordination company to be surrounded by such quiet. and co-operation that there has been between BBC Wales and S4C over a very long period—10 years Q24 Guto Bebb: The comments you are making since a properly co-produced programme, and bidding obviously do raise a great deal of concern because, against one another for sports rights. Hasn’t the BBC, again, the strategic direction of S4C over the past few to a certain extent, been complicit in the silence years has been seen as problematic, especially in around S4C? terms of the economic impact of S4C on various parts Geraint Talfan Davies: I think it has been extremely of Wales. We have seen the demise of many television difficult. One of the things you see in the dynamics of companies in the north-west. We have seen the loss of broadcasting, certainly if you are living within the Barcud Derwen, which is obviously not entirely down BBC in Wales, is that you get a pot of money from to S4C, but certainly changes in the way the industry London and one of the trade-offs you have to make is was structured have contributed to that issue. Yet, between what you are going to spend on until this summer, there was very little public debate Welsh-language programmes and what you have to about these decisions which were being made by an spend on English-language programmes. I know, for organisation spending £100 million a year in Wales. example, during the 1990s, when I was Controller of So in terms of the strategic direction, first of all, do BBC Wales, that the spend on English-language you think that the direction taken by S4C over the programmes had declined. The only way we had of past few years was the correct one? Secondly, why do bringing that up to a reasonably healthy level was you think those decisions, being made on adjusting the balance with the Welsh language spend. a commercial basis affecting jobs in Welsh-speaking What you see at the minute, and I think where we communities, were not challenged? Geraint Talfan need to bring pressure from the BBC, is that this has Davies, perhaps? put the BBC Wales management in an impossible Geraint Talfan Davies: I think Ron has rather more position. The BBC licence fee has been increasing direct experience of the commissioning process than during this period, so it should have been possible, if I do. you accord the right degree of priority to the services Ron Jones: I am not going to sit here defending some in Wales, not to have this trade-off between one of the commissioning actions of recent years or indeed language and another. I think we have to ensure, in the walking away, almost, from the responsibility to the funding arrangements going forward and suddenly ensure that the economic impact of their finding another £70-odd million from the licence fee commissioning process is as great as possible. Mr coming into Wales, that that is not used as another Cairns earlier talked about the cost of making reason not to invest in the English-language service. significant changes to S4C at the moment. Fortunately, There is a problem there and that is why I think it is we do actually have the commercial reserves which very, very important that this money is kept quite are available and my view, for what it is worth, is that separate from the rest of the funding of BBC services. we should be using some of that money to bring S4C That has to be very clear. S4C has to be statutorily back to provide some of the social engineering, the based, but I think the funding has to have a political economic engineering, that was so clearly a part of its involvement in the end. cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Ev 6 Welsh Affairs Committee: Evidence
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones
Q26 Owen Smith: I follow. I agree wholeheartedly substantial business interests outside Wales. They, with your point, and I see a very real danger that you therefore, represent a success for the creative could see money being shaved off the funding for industries aspect of the investment in S4C which English-language programmes in Wales, but what are needs to deliver economic added value to Wales as the implications of that for further synergies in terms well as supporting the cultural base of the production of operations and infrastructure for broadcasting industry. So the Welsh independent production sector between S4C and BBC Wales? Won’t that inevitably is a fragile creation, but it is very, very important and lead to a bleeding together of those budgets? its transferable skills into the digital side of media are Geraint Talfan Davies: I don’t think it need be that very, very important for the future. way at all. I don’t think it is impossible to structure things so that you get a certain clarity of costs on both Q28 Mr Williams: I applaud very much what you sides of the fence. But you have to keep those funding have been saying, but has there been a preferential streams clear. The autonomy of S4C has to be clear. policy for larger suppliers as opposed to smaller ones? It has to be an authority that is based in statute. It has We have had figures that S4C used to use 80 to have, I think, a funding settlement that lasts for the independent production companies and it now uses whole of a licence-fee period and is not subject to 32. Many of those are important concentrations in the prioritisation by BBC management. That can be done. north-west and west of Wales. Has there been Whether, in the long run, this raises questions about a preferential policy? the structures of the BBC—I have argued in the past Ian Hargreaves: Yes, there has. It was an explicit that the structures of the BBC need to be brought up policy, and there’s an explicit and clear rationale for to date with the constitutional arrangements in the it, to try to build on the strongest parts. It is a little bit country—is another issue. easy now for people to say, “Oh, that was terrible.” Chair: Thank you, Mr Davies. We had better leave I think that the decisions made under that heading the BBC for another time, I think. Can I bring in were made for intelligent reasons and in good faith, Mark Williams? but no approach has a perfect set of outcomes.
Q27 Mr Williams: I want to pick up on what Mr Q29 Mr Williams: Very finally, with regard to the Jones was saying in terms of the independent cuts to the S4C funding, what are the implications on production sector, something that was recognised by the independent production companies going to be? a report of this Committee in the last Parliament on Ian Hargreaves: They are going to be negative. globalisation and the great success of the independent Bankruptcies and insolvencies have already been production sector in Wales. You alluded to the balance referred to. There will be more. to be struck between supporting those independent Chair: Can I bring in Jonathan Edwards, please? companies and the commercial realities of those commercial companies. Where is that balance going Q30 Jonathan Edwards: Again, this is to Professor to be struck? We are always given wonderful Hargreaves. Obviously, S4C has been a very questions to ask here, and I’m not sure I always agree important economic driver over the 28 years of its with them, but do independent producers in Wales have a right to survival, courtesy of the taxpayer? It’s existence. Looking at the preferred government model not a question the gist of which I agree with, but— for the future, are there any economic concerns of which we should be aware? Ron Jones: Independent companies don’t have a right to survive. But the Welsh language has a right to Ian Hargreaves: Yes. I think there are significant survive. Welsh-language television production has to economic concerns. The Assembly Government’s new come from a relatively small gene pool, and we are economic development programme has identified talking about a limited number of Welsh speakers that creative industries as one of the half dozen strategic can provide the service. We are talking, therefore, areas of importance for the Welsh economy. One of about a limited number of companies, ultimately, that the legacy strengths that Wales has in creative can provide the service. S4C has to accept—and industries arises from the investment that has been I think it did for many, many years—that it was part made in the independent broadcasting sector. Where of its role to ensure that that provision of service into it is working best it is turning into an independent the future was secure. I accept there is a very fine line multi-media industry, and, frankly, if the bottom is between that and the dependency culture and I would taken out of that, Wales will lose one of its relatively hate to see us having parts of the sector falling into few advantages compared with other nations and that dependency culture, but that is the reality we face. regions of the UK, and indeed other parts of Europe. We cannot have an entirely open and free market on So it is of first-rate economic importance for Wales as Welsh-language television. There aren’t enough well as being of great cultural significance. people to provide it. Ian has done a lot of work in this area. Q31 Karen Lumley: I think I know Mr Davies’ Ian Hargreaves: I don’t think anybody thinks that answer to the question, but I’m quite keen to know they have a right to exist regardless of the will of whether you think that the S4C powers should be the taxpayer. The facts are that there are a number of governed from Whitehall or from the Assembly. If independent production companies in Wales which are you do think that they should be governed from the entirely dependent for their existence on S4C. There Assembly, what mechanisms will need to be put in are other independent companies in Wales—Ron runs place to make sure that we are actually moving the biggest of them—which have got very, very forward? cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Welsh Affairs Committee: Evidence Ev 7
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones
Geraint Talfan Davies: It is absolutely clear, I think, changes and with the influence of the BBC that it on a whole range of broadcasting issues, not just S4C, wants to bring about? that the influence that Wales has been able to bring to Geraint Talfan Davies: No, I don’t think it has got bear on a lot of decisions has not been adequate. anything do with the colour of Government. I think in the case of S4C, under the Communications Act, there was a need for a review of S4C to be Q35 Alun Cairns: No, but it’s a fact over recent carried out by Ofcom, I believe. That has not years, from what you have said, isn’t it? happened. I think there is no doubt there is neither the Geraint Talfan Davies: I am saying that whatever knowledge nor the will within a London-based Government would be in place, a London-based department, quite naturally, with a lot of other things department with a whole host of other issues on its on its plate, to give this institution, which is important plate, with substantial funding across all kinds of for us, the requisite degree of attention. It is only English bodies and so on, is not going to find the time people on the ground in Wales who are going to and will not have the knowledge to deal with the S4C understand the relationship between S4C and the rest issue effectively. So I think you have got to play the of the language policy and the economic policy and Assembly Government into this. There has been a fear so on. So I think the Assembly Government and the of doing that over recent years. A large part of the Assembly have to be involved in deciding these fear would be having to take the cost of S4C within things. In terms of precise mechanisms, I believe there the Barnett formula. Funding it out of the licence fee is a need for a major review, commissioned jointly by actually removes that issue. I think it makes the the DCMS and the Assembly Government, to work devolving of some responsibility much easier, but out the wiring and the plumbing between four I would stress that when you talk about devolving organisations, if you like, the BBC, S4C, DCMS, the responsibilities around broadcasting, it is not an Assembly Government, and of course you even have all-or-nothing issue. Responsibilities for broadcasting, a fifth in Ofcom. I think, will always have to be shared between Cardiff Chair: Thank you. Karen, do you want to come back and London. There is a legitimate place for the DCMS on that at all? because it is crucial to the settlement of the licence fee. Q32 Karen Lumley: Yes. How is it then that both Q36 Chair: Can I allow myself one then, Mr Davies? central Government and the devolved Government have let S4C get into this state? If, on a scale of 1 to 5, 1 denoted the status quo with DCMS calling the shots and 5 denoted complete Ron Jones: I think S4C has been quite happy to live devolution of S4C—and perhaps other broadcasting— in that gap in the middle for some years. The Welsh language itself is, as we all know, fragile. It is to the Welsh Assembly, where would you put yourself showing some signs of strengthening, but ultimately on that scale? I would put those questions to Mr Jones the language remains in a fragile state. It seems to me and Mr Hargreaves as well. inevitable that S4C has a very significant part to play Geraint Talfan Davies: On 1 to 5, I would probably in supporting and helping to develop the Welsh put myself around 4, I think. language. So regardless of what one’s views might be Chair: So4or5? on devolution of broadcasting, the fact that it plays Ron Jones: Yes, I’m in pretty much the same place. I such a key part in Welsh-language planning leads me can’t see a future where it sits comfortably in just the to the conclusion that there has to be an involvement one location. from Cardiff Bay as well as from Westminster, in terms of monitoring its activities and ensuring it Q37 Chair: Then I will ask one more question. If delivers what I think we all need. you start doing that, isn’t there a danger that someone will say, “Fine. If it is going to be funded out of the Q33 Karen Lumley: If you are saying that both licence fee it should be Wales funding itself out of the should be running it together, is that not how perhaps Welsh proportion of the licence fee”? I was doing we have allowed S4C to slip down the middle? some figures last night and—this is very rough—there Ron Jones: I don’t think that need be the case. I think are 1.2 million households in Wales. If, say, a million there are models which would allow much closer of them have got a TV licence it would bring in involvement by Cardiff Bay and Westminster in the something like, I think, £150 million. If S4C is going S4C Authority. It would help if some of the reviews to require between £80 million and £100 million, that that should have been undertaken had been doesn’t leave a lot of money to buy in all the undertaken. I think that it is possible, even with English-language services that people want. Do you existing structures, to get much more transparency see the point I am making? Otherwise we would be into S4C’s activities, and transparency is good. It dependent on English taxpayers and English makes organisations do the things that really matter. licence-fee payers for our output of— Geraint Talfan Davies: All I would say to that, Q34 Alun Cairns: Mr Davies, can I come back on Chairman, is that the Welsh language is one of the your point about the disengagement of the most important cultural artefacts for Britain. It is Westminster Government with S4C over recent years? a huge cultural asset, I think, for the whole of these Is that a judgment on the last administration? Do you islands. It is fundamental to the history of these not think that this Government deserves an islands and I don’t think that its preservation should opportunity to re-engage with its review, with the rest solely on the Welsh public. cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Ev 8 Welsh Affairs Committee: Evidence
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones
Chair: I happen to agree with you, Mr Davies, but situation in the 1990s where you had BBC I am not sure whether English TV licence-payers representation on an S4C Authority. would necessarily share our enthusiasm. Can I bring in Guto Bebb while we ponder this? Q41 Chair: Thank you. Mr Jones and Mr Hargreaves, very quickly: the current structure or Q38 Guto Bebb: I do think that this discussion is something different? quite interesting. Obviously, it is looking at the fact Ron Jones: I think it is a unique opportunity at the that, over the past 10 or 12 years, we have had a moment for us to find structures that everyone is devolved administration, quite often of the same happy with. The fact that the political parties in Wales, political party as the one governing in London, and at party-leader level, have agreed on a way forward yet there have been no moves towards devolving S4C tells me that somewhere out there is a consensus that in any way, shape or form. Do you think the it can be made to work. opportunity exists now to look at it again because of Ian Hargreaves: Just to reinforce that, it is the fact that we are looking, as a Government, at unprecedented. The statement made in that letter of changing the funding formula for S4C? In the same the four party leaders is the political breakthrough that way, do you think, therefore, that the point made by is needed to convince you that a solution is available. the Chairman in relation to the BBC licence fee Chair: Thank you very much. I will have to push on. creates in itself similar problems to the Barnett issues which have been whispered in the background over Q42 Mrs James: Just to comment, what I am hearing the past 10 years as reasons not to devolve S4C? here is that for years the authority and the Geraint Talfan Davies: I’m not sure as to the precise management of S4C have been flying below the radar, question there. Let’s go back to the beginning of S4C. and they have been quite happy in that position, just When it was first created, it was an extraordinarily below the radar. This is not a question of blaming complex arrangement. People thought at the time, governments of whatever political colour, because the “This cannot possibly work.” I think it was Willie language is a very emotive subject. I want S4C to be Whitelaw’s phrase that, “Good chaps can make as important to people who live in Hirwaun who are anything work”, and they did. I am not suggesting non-Welsh speaking as it is to people who live in that, going forward, we should rest on the virtues of Rhosllanerchrhugog in North Wales. It has to be “good chaps”—it would be highly inappropriate—but important. You have spoken about a review. How I think that you can find a way of making this urgent is that review and what would you like that collaboration between S4C and the BBC work in review to be covering? a way that can preserve the independence and can give Ron Jones: In an ideal environment the review would you funding stability through the licence fee. But you have been there before the funding settlement as well have got to work through the detail and, with due because a needs-based analysis would always be the respect, I don’t think even this Committee will be able preference. But, where we are now, we need the to work through detailed arrangements. That is why review urgently because that review ought to inform I think you need an independent review with a lot the decision on structure. I think if we had a change of expertise on it which can tackle this issue in very in leadership in the authority, so that conversations considerable detail. could happen again between DCMS and the authority at a more civilised level, that review would give us Q39 Guto Bebb: Very quickly on that specific point, the right signposts to put in place a structure which in terms of the complexity, do you think that the could last for another 20 years. That is what I think current authority is in a position to deal with the we ought to aim to do rather than just patch things up complexities? for the short term. It is too important for that. Geraint Talfan Davies: No. As I said before, I think— Ian Hargreaves: That was the shortcoming of the deal Chair: Thank you. Right. That is a good answer. at midnight on the licence fee with regard to S4C. It Geraint Talfan Davies:—change is happening there. envisaged a very speedy process knocked together in Chair: We like that. Thank you. a short passage of correspondence. What is needed is a serious review. It does not have to take for ever, but Q40 Owen Smith: Continuing precisely that point, it needs a serious review urgently got on with now I sense you feel that, whilst there is a significant based on the emerging political consensus around this amount of agreement both in the Committee and in in Wales. Then, to be honest, you are home and dry. civil society in Wales that there needs to be reform of Geraint Talfan Davies: I agree. S4C, the way in which it has been proposed to date by the Government, effectively creating a wholly Q43 Owen Smith: I have a very simple question. Is owned but arm’s length subsidiary under the aegis of it a good idea for S4C to be seeking to appoint a chief the BBC, is a recipe for confusion, both in terms of executive right now? the governance structures and indeed the funding Alun Cairns: That one has been asked. structures. Geraint Talfan Davies: I don’t think that the structure, Q44 Owen Smith: What was the answer? as set out in the Secretary of State’s letter to the BBC, Ron Jones: No. is a workable structure. I don’t think it is a desirable Owen Smith: I will read it in the transcript. structure. It looks to me cumbersome and expensive. Chair: Okay. I am going to have to gently and I think you can have a much simpler structure, and, politely get everyone to answer and ask questions personally, I would tend to want to go back to the more quickly, including myself now, or we are not cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Welsh Affairs Committee: Evidence Ev 9
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones going to get through all this. Jonathan Edwards has a countries like that and then dub them into Welsh number of questions. rather than English? Ron Jones: S4C, to be fair to them, did some work Q45 Jonathan Edwards: Just quickly on the remit, on this in the early and mid-1990s when they do you think it is appropriate in the current climate? experimented with such content bought in from Ron Jones: The remit is so widely drawn that I don’t overseas. They found that their experience mirrored think it can ever be argued that it’s not fulfilling its that which had been found by English-language remit. I think a fundamental change is required, as broadcasters doing the same thing, that there was I indicated, with much more focus on what is public something uniquely British about not liking subtitles. service broadcasting in the new environment, new They bought in about a dozen films, I seem to online services and a closer link between education remember, which they experimented on. They gave it and the children’s service. That, for me, is a good shot and the content was good, but Welsh a fundamentally different remit from the present one, speakers, just like English speakers in England, and I am for that. wouldn’t have it. Chair: Thank you. Anyone else on that? No. Q50 Susan Elan Jones: I was very interested to see Q46 Susan Elan Jones: One of the things that has the submission we have here from Urdd Gobaith come out of this is the fact that the context is quite Cymru. One of the points they make in it is that one different from what it was in 1982 when there were of the important factors of S4C is that ensuring that four channels. Now, if you include Sky, you are at television is available in Welsh ensures that the Welsh about 500 channels, so surely one of the key factors language is a “normal language”. I think that speaks is that there are very few programmes that have the into a context where we don’t have that many wholly level of viewing that any major programme did in the Welsh-speaking families and wholly Welsh-speaking early 1980s. If we consider that, what do you feel communities who never move out of Wales any more. about some of these calls for having English-language I realise there is a fair non-Welsh-speaking audience content dubbed programmes? Is this a sort of YouTube who do watch S4C programmes subtitled, and I would home video cheap excuse, or is there any merit in it be grateful if you could comment a bit on that, but whatsoever? You can probably tell from my question also in terms of the diaspora population of Welsh that I don’t really think there is. people who, at some stage in their lives, may live Ian Hargreaves: I see Ron is inviting me to walk into outside Wales and may bring up children outside that particular dragon’s den. There is no doubt at all Wales but with a view to coming back to Wales and, that there is much to be optimistic about around the hopefully, integrating those children into future of S4C in thinking about the place of online Welsh-medium education. media. The capability of online media in community Ron Jones: I think it’s a fabulously complex question building, community engagement and knowing your audience is fabulously relevant for S4C. Does that because even inside Wales linguistic changes have led mean I want to advocate precisely what you are to a position where there are fewer all-Welsh-speaking referring to there? I don’t think I do want to families: you have one generation, one parent, just the advocate that. children. Satisfying that audience with a traditional Ron Jones: There’s a good linguistic reason why I television channel is not easy. I think it is one of the think your prejudice is correct. Typically, most of the great challenges for the next several years. If I had the programmes you would want to subtitle are in answer to it I would give it to you, but I genuinely English. That’s where the great bulk of international think it is one of the most difficult creative challenges programming is, and you can’t, in all seriousness, we have of how we satisfy people in that environment. subtitle an English programme in Wales into Welsh. It It may be that in some years’ time, when everyone is is virtually insulting, I think, to provide that. watching content independently inside families, this becomes easier, but at the moment—and this runs also Q47 Chair: Why is that, Mr Jones? to some of the audience figures we see for S4C—it is Geraint Talfan Davies: I’m sorry, that doesn’t mean a huge issue of how you handle that linguistic to say that you can’t actually— difference. The diaspora, I think, is less of an issue. Funnily enough, we met some of the diaspora outside Q48 Mrs James: It’s been done. who have come here to hear the Committee attending Geraint Talfan Davies:—commission some today. Diaspora tend to find the programmes they programming that can be available in both languages. want because it means something to them. I think that I can think back to the 1990s and there was a very service is very valuable. I have met people all over substantial amount of animation commissioned. That the world who watch S4C from their part of the world. is very easily done, not just in one language but in It is inside Wales that the linguistic differences, several. So there are things that you can do, but simply I think, are the greater challenge. dubbing English language stuff into Welsh is not Chair: Thank you very much, Mr Jones. really an answer. Q51 Stuart Andrew: What would you say are the Q49 Chair: My wife is from Eastern Europe. We realistic audience targets for S4C and to what extent watch films all the time with subtitles and which have do you think it actually meets them? Furthermore, been dubbed. Why wouldn’t that work? Why couldn’t what is the minimum audience reach that you think is we buy in films from Germany or France or other needed to justify S4C’s existence? cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Ev 10 Welsh Affairs Committee: Evidence
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones
Ron Jones: I think the honest answer to that is that completely committed to it and dedicated watchers no one knows. One of the really disturbing things and so on to those who set it aside. But I think there about S4C’s use of this data over several years is that has been a very general agreement that S4C, as an everyone knows the figures are wrong—not that they institution, as a channel, as an assistance to the are too high or too low, just that they are wrong. language, is an asset and that it is not an asset that we I think that as part of the investigation into S4C going should allow to slip away or slip entirely into the forward we need some serious research into what grasp of another organisation. works with which audience and with what numbers. I first complained about inaccurate audience numbers Q54 Chair: I am drawing this to a close. If anyone to S4C back in the early 1990s when I was has any further questions on any aspects, I would complaining that the audience figures being shown for welcome them. Finally, could I ask you whether you some of our programmes were too high. They were think it is right that S4C should be carrying out other irrationally high. If you look back at the BARB activities, some of which have been quite profitable information we get, realistically, that BARB and some of which have not? A quick answer to that information is not designed for this purpose. It doesn’t would be appreciated. give you correct numbers. There are 309 Welsh speakers on the panel. Spread that across the linguistic Ron Jones: No, it should not. It should stay close to differences inside families, across the geography of what its genuine remit is. Wales, and you are going to end up with very Geraint Talfan Davies: I agree that it should stick dangerous numbers. I can give you several examples close to its remit, but the Secretary of State, I think, of programmes we have produced, some where the has said that it should retain its commercial freedom. audience we know is too low and some, frankly, So I wouldn’t necessarily want to see it constrained where it is too high. For example, we have an beyond the freedoms that it has now. afternoon magazine programme, which is not subtitled Ron Jones: I think there is a real issue here. I don’t because it is live, where the figures for the last couple think you can have an organisation that ought to be of years have shown the majority of viewers are committed to providing a Welsh-language service English speaking. You just know intuitively that is not choosing to re-define that core purpose in order to right. With a recent series of programmes we tested gain commercial advantage elsewhere. If it can do the audience figures by having an onscreen both, that’s great. But I suspect, in practice, it can’t. competition for five nights, and if the BARB numbers were right it meant that one in four households Q55 Alun Cairns: Can I put it to you, Mr Jones, that watching our programmes were taking part in the the Welsh-language viewers benefited hugely from the competition. The experience across UK broadcasting gains that have been made from some of these is that around 1% take part. Again, don’t ask me what activities because of enhanced investment thereafter the numbers are and what they ought to be as I have in their programming, maybe in your company and genuinely no idea, but I can tell you they are wrong. others? This is such a key part of finding out the truth. Ron Jones: Possibly, but then again, if you look at the major commercial revenues they have created over Q52 Chair: You wouldn’t agree with one of the the last several years—the commercial reserves they suggestions in S4C’s response to DCMS in which they have arising from the sale of SDN—I don’t think that said that one way to cut money would be to reduce is the sort of operation they ought to go into ever the BARB boost panel then? again. Ron Jones: I suspect that BARB itself is not fit for Geraint Talfan Davies: I think there is a problem purpose for this and I suspect we’ll end up with area. If you take, say, the issue of bandwidth and HD a conclusion which is that we find something that is which has come up—S4C, I think, has acquired some different to BARB to make an assessment of what HD bandwidth—is that a commercial issue or is the works. use of bandwidth for public service broadcasting in Chair: Thank you. Do you have any further Wales a question of the proper distribution of public questions? assets? I think some of these things are not clear cut. Q53 Stuart Andrew: How would you say S4C is perceived by the public, and particularly the quality Q56 Owen Smith: On that precise point, Mr Davies, of the production on the programmes that it shows? do you think that is one of the areas where you could Ron Jones: I couldn’t answer that in very simple develop the synergy between the BBC in Wales and terms. I can tell you that for many of our programmes, S4C? As you say, S4C has HD bandwidth. The BBC which obviously we get a more direct response for, in Wales does not. Is that an area where there could we get a very positive response. People, on the whole, be further collaboration? tend to enjoy them. They regard them as valuable. Geraint Talfan Davies: I think that is certainly the I have no reason to believe that other companies are case. What you are going to see in Wales in terms of in a different position. I just think that the empirical the BBC’s services in the next few years is that BBC1 evidence in demonstration of that is, again, just is going to be broadcasting in high definition without absent. One is relying on intuition and what one any opt-out facility. I think the same will be the case knows of one’s audience, which is not enough really. on BBC2. So there is a major issue, I think, for the Geraint Talfan Davies: Clearly, public perceptions of whole of Welsh broadcasting as to how we actually S4C vary considerably, from those who are use the bandwidth that is available. cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG01 Source: /MILES/PKU/INPUT/007748/007748_o001_Corrected 23 November.xml
Welsh Affairs Committee: Evidence Ev 11
23 November 2010 Ian Hargreaves, Geraint Talfan Davies and Ron Jones
Q57 Guto Bebb: I’m very sorry to do this, but can I figures are the ultimate assessor of whether drag you back to the BARB figures? I accept the point a programme is working or not. that the BARB figures are not reliable. I think the sample is too small and I think there is a big issue to Q60 Chair: There is one elephant in the room, which be discussed there. But is it the case that S4C use we are going to have to be very careful about, and those figures in terms of assessing the success or I will just ask you this in simple terms. Without in otherwise of the programmes that they actually any way going into the reasons, the specifics—and I broadcast? think there is a tribunal coming—do you think that we Ron Jones: They are wedded to them. were entitled to more of an explanation from the board as to why the chief executive left? Q58 Guto Bebb: So that is the case? Ron Jones: S4C is a public organisation. You are Ron Jones: Yes. They are wedded to them. democratically elected. I think it is insulting that you have not been given an adequate response. Q59 Guto Bebb: So there are decisions made about Chair: Thank you very much indeed, gentlemen. If commissioning on the basis of the figures that you have nothing further to add, I thought that was BARB supplies? a most informative and interesting session. Thank you. Ron Jones: Certainly over the last two years that has increased in intensity, where the BARB viewing cobber Pack: U PL: COE1 [SE] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 12 Welsh Affairs Committee: Evidence
Tuesday 30 November 2010
Members present: David T. C. Davies (Chair)
Stuart Andrew Susan Elan Jones Guto Bebb Karen Lumley Alun Cairns Jessica Morden Geraint Davies Owen Smith Jonathan Edwards Mr Mark Williams Mrs Siân C. James ______
Examination of Witnesses
Witnesses: Chris Woolard and Rhodri Williams, Ofcom, and Iestyn Garlick and Gareth Williams, TAC, gave evidence.
Q61 Chair: Bore da a diolch am ddod i’r Pwyllgor essentially to set a number of potential targets or heddiw. Good morning and thank you for coming to quotas in relation to S4C, including the amount of the Committee today. For the record, I wonder if you independent production they take. They, then, are gentlemen would very kindly give us your name and about the regulation of S4C’s output and programmes position. Although we know each other, it is good for in terms of the broadcasting standards they meet. The the record of proceedings. Communications Act basically stops there in terms of Rhodri Williams: Rhodri Williams. I am Ofcom’s Ofcom’s role. The other matters around the Director for Wales. management of S4C and its conduct are essentially for Chris Woolard: I am Chris Woolard. I am a partner at the S4C Authority. From our perspective, the issue Ofcom with overall responsibility for our operations that we are concerned about is whether S4C is in the nations. continuing to maintain its performance in terms of Gareth Williams: I am Gareth Williams. I am a output in relation to those particular quotas and member of the TAC Task Force and I am also Chief targets, and at this moment in time it is. Executive of Rondo Media. Iestyn Garlick: I am Iestyn Garlick. I am Chairman Q64 Chair: So you wouldn’t agree with what Geraint of TAC and I also run an independent company Talfan Davies said on the radio then? You are aware called Antena. of the comments, I presume? Chris Woolard: Yes, we are aware of the comments. Q62 Chair: Thank you very much. I am David Chair: And you wouldn’t agree? Davies, Chairman of the Committee. Thank you very Chris Woolard: I don’t think we would agree with much for coming. As you see, we have translation them, no. facilities so everyone is welcome to speak in English or Welsh as they prefer. Could I start with a quick Q65 Chair: Has Ofcom been approached by DCMS question perhaps to Mr Williams? Given the events of or the Executive of the S4C Board at all? the last few weeks, can you tell us, in your opinion, Chris Woolard: No, we haven’t. whether you think S4C is being well run as an organisation at the moment? Q66 Chair: Thank you for that. Finally, perhaps I Rhodri Williams: Clearly, what has come out in could ask Mr Garlick whether TAC feel that S4C has public is there for all to see. From our position, the been well run recently. decisions affecting the future of S4C’s funding, its Iestyn Garlick: Clearly, there are serious problems at governance arrangements and its management are not, the moment within the Authority on a day-to-day as it stands, issues for Ofcom. These are matters for basis. As a trade organisation dealing with them, we the Department for Culture, Media and Sport. Our role don’t seem to have any major problems. That said, in relation to S4C is clearly set out in the back in May, when we started voicing our concerns Communications Act. There are specific duties that about the way S4C was being run—this was long we have to undertake in relation to S4C; that is what before the Comprehensive Spending Review—we did we do, and that is all. I don’t think it is for us to have concerns, and those concerns are still there. But, comment on management issues. that said, an awful lot has changed, as you, Mr Chairman, are aware, in the last few months and Q63 Chair: Thank you for that, Mr Williams. While weeks, if not days. you are answering these questions, and very Chair: Indeed. It is changing so fast that we can diplomatically, if I may say so—though it is hardly a barely keep track at the moment. ringing endorsement of S4C—Geraint Talfan Davies said on Sunday, I think, that Ofcom have to carry Q67 Mr Williams: I want to turn specifically to some of the blame for what has been going on. What viewing figures, as a start. It has been claimed that the do you actually make of that comment? BARB audience figures for Wales, used by S4C—and, Chris Woolard: I think it’s worth being clear about indeed, Ofcom—are very unreliable. How unreliable our particular regulatory responsibilities. They are do you feel they are, particularly in measuring the cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 13
30 November 2010 Chris Woolard, Rhodri Williams, Iestyn Garlick and Gareth Williams reach and share of Welsh language programmes, and robust and more reliable figures, but someone would the viewing patterns of Welsh speakers generally? have to pay for that. I think the situation that S4C are Chris Woolard: It is worth remembering that BARB in is that, although they might welcome having is basically the industry standard, so every single a larger sample, they are not inclined to spend more broadcaster uses BARB in order to get a sense of their money on that which could be spent on programmes. reach and share of the audience; and we use that too As Gareth said, it is the use that has been made of in terms of our own statistical reporting. It is pretty some of these figures in the press—sometimes by robust, in terms of looking at coverage across the UK. people who don’t understand that, for instance, young In particular, in the case of Wales and Welsh speakers, children are not actually counted as part of the BARB also adds what is known as a boost to its panel—which has led to the difficulty, not the figures research. themselves.
Q68 Mr Williams: How big is that boost? Q71 Mr Williams: You are right, and I think there Chris Woolard: The overall panel for the UK is was a characterisation we used in this Committee in around 5,100 people at any one point in time. In terms the past to look, for instance, at viewing figures of of the boost, it is 400 for the S4C region, so the area the National Assembly. If you compare that with the covered by S4C, and then there is a further specific success of the children’s programming, there is boost of 200 Welsh speakers. potentially an omission at the very least in those figures. Do you think, there has been an unfair Q69 Mr Williams: How well do you feel those align portrayal by S4C of those figures? Have they with independent producers’ knowledge of their described them fully and fairly or have they been audience? selective in their use of those figures? Chris Woolard: Individual programme by Chair: Perhaps you could give a quick answer to programme? that one Mr Williams: It can be, yes. Rhodri Williams: I don’t think they have been unfair. Chris Woolard: On the whole—although I will let I think they highlight their most successful these gentlemen answer for themselves—certainly my programmes, as do BBC One, ITV, Sky, Channel 4, experience from the BBC was that independent and obviously don’t attract attention or don’t advertise producers and the people scheduling channels are the less successful figures. using the same underlying data in terms of BARB itself. Q72 Mr Williams: According to S4C, non-Welsh Gareth Williams: May I come in here? I feel I am in speakers amount to 57% of the channel’s average agreement with what Ron Jones said at this session weekly reach. Do you think that figure is accurate and last week. There are some irregularities and how do you explain the success of S4C in attracting inconsistencies within the viewing figures pattern; and non-Welsh speakers? I think a lot of the negative press, which kicked off Rhodri Williams: I don’t have any reason to think that a lot of the things to do with issues with S4C, was it is not an accurate figure, and certainly it is a long regarding the viewing figures for children’s time since I actually worked in the business, but, when programming and pre-school programmes. Also their I did, I knew that, yes, you do attract lots of people service, Clic, is growing in popularity now. This is who don’t necessarily understand Welsh fluently. a facility to view again. I think those figures aren’t Some of them may be learning or have other people actually measured, are they? in the house who do speak Welsh or make use of the Chris Woolard: No, they are not. subtitling services that are available. So that doesn’t Gareth Williams: So I think these things need to be come as a surprise. considered now if we are determining S4C’s future against a certain individual set of figures. Q73 Guto Bebb: I would like to ask another question to Ofcom to clarify the actual use of this word Q70 Mr Williams: Absolutely, and putting it into the “reach”. During the lobbying that has been taking broader context of policy towards the language, that place behind the scenes here in Westminster, I spoke is an absolutely critical feature. I can testify to four to a very senior member of the coalition Government youngsters in my household who certainly never with a background in television and he said to me that figured in the BARB figures, or anything else for that “reach” are the figures that we use when we want to matter, and yet it has been a huge success for S4C. persuade the advertising industry that we are actually Going back to the BARB figures, has S4C become reaching an audience on their behalf. So could you overly reliant on them? clarify how do Ofcom actually look at “reach”? Do Rhodri Williams: I don’t think it is fair to say that you take that to be an indicative figure or are there S4C have become overly reliant on them in that they question marks around it? are the industry figures. There are no other figures that Chris Woolard: Essentially, all these figures, given compare with them in terms of the volume and size they are based on a survey panel, will always be, to of the sample. I think people would say, “Wouldn’t it some extent, indicative. You will never replicate what be better to have figures that gave you a bigger sample 26 million households are doing at any one point in in Wales?” If you are undertaking market research of time. But they are usually a reasonably accurate any kind in Wales, it is fair to say that quite often reflection of what the audience’s pattern of behaviour questions arise around the sample size. Obviously, if and consumption of particular programmes may or you had a bigger sample, it would give you more may not be. cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 14 Welsh Affairs Committee: Evidence
30 November 2010 Chris Woolard, Rhodri Williams, Iestyn Garlick and Gareth Williams
Q74 Guto Bebb: Therefore, if there has been Wales; they have covered events large and small in a decline from about 23% to about 17% in S4C’s Wales and involved local communities in those events. reach, do you see that as potentially problematic? I think S4C has been very successful at pursuing that Chris Woolard: I think you have to remember what policy of involving the community in its programming else is going on at the same time within those figures. because they are not just viewers then; they are Over that time sequence, you had a shift in the contributors to the service and they then take a level strategy of S4C in the way the channel operates of ownership of it. I think that has been a very from being a mix of Channel 4 programmes in successful part of their remit. English and programming in Welsh to essentially a Iestyn Garlick: I think the audience would agree that Welsh-orientated language service. There are things S4C might be stretching itself trying to fill all these that you ought to look at alongside that 23% to 17% hours for the money available. The audience might be number as well to get a sense of what is going on. prepared to accept fewer hours at a higher quality. One of the measures that is quite useful is to look at their share in peak time, so, in other words, in that Q77 Jessica Morden: What about repeats? Do you peak-time slot, what is going on? Between 2005 and have any view on the level of repeats? 2009 that has remained pretty constant at about 3%. Iestyn Garlick: It is generally accepted that there are If you want to try and compare that to some other way too many repeats, but the problem is that, if you channels, for example, BBC News 24 gets about 1.1% are committed to filling the hours, then I am afraid share in peak. So that is not an unreasonable number. repeats will have to be there, as on every other Gareth Williams: I think it has done really well to channel in the UK. hold its position, its share, in those peak hours. Also, Gareth Williams: There are many ways of viewing the 2009 report that S4C submitted shows a pattern in repeats as well. There’s actual repeats, there’s the top 30 programmes there: 21 of those are for re-versioning and there’s archiving. Of course, S4C sporting events and events such as music concerts. has a wealth of archive material and has started a slot Obviously there is a pattern there that these are being recently, S4C Aur—Gold—which is a chance for enjoyed and appreciated by a non-Welsh speaking viewers to revisit some of these archives; and some of audience as well. I think that is something we need to those are performing remarkably well. So I don’t think bear in mind. “repeats” is as simple as it looks. Iestyn Garlick: The point I wanted to make quickly was that S4C does invest substantial sums in sport, and I would imagine maybe last Saturday afternoon Q78 Jonathan Edwards: (Translation) One quick an awful lot of people would have watched S4C—at point. Regarding connecting with the channel’s least those who didn’t like tennis. viewers, would moving the channel out of Cardiff to the Welsh-speaking areas be an option you would Q75 Guto Bebb: Yes. I would argue, therefore, that welcome? there has been possibly a lack of explanation of these Gareth Williams: (Translation) I believe it makes a figures because, undoubtedly, the viewing figures have lot of sense that S4C is very close to its community. been used to portray S4C as a failing channel. As an S4C does have permanent offices in Caernarfon. I industry, you would contest the perception that the think that S4C could make more use of that office. channel is failing? S4C could make more use of the sessions they have Iestyn Garlick: I think I would contest it. The reach with the audience. They have a very good response is always going to be between 0 and 500,000. It is when they do those. Regarding the location of S4C, never going to be more, unless there are people there are several options, but the important thing, I watching sport. The success that I see on the streets is believe, is that S4C communicates, and communicates people who talk to you, people who discuss television clearly, with everyone that needs the channel, programmes, people who are passionate about S4C. including the viewers. I would contest something that Professor Hargreaves said last week, Mr Chairman, that there was no Q79 Mrs James: (Translation) This is a question for discussion about S4C or S4C’s programmes on the TAC. How important for your members is S4C, or BBC or on Radio Cymru. We have had nothing but how dependent are your members on S4C? S4C for the last few weeks and some of the gentlemen Gareth Williams: (Translation) A number of here have spent an awful lot of time on the radio— companies are dependent on S4C. I don’t believe that maybe even too much time. that, as a statement, should be criticised. A number of Chair: Not necessarily for the right reasons. Thank companies in England are mainly dependent on the you very much. BBC or Channel 4, but I would say that within the last few years the stability that S4C gives those Q76 Jessica Morden: What is your perception about companies in terms of the work that it provides has what viewers think about the quality of S4C’s output? enabled many of them to win very significant Does audience research point to S4C viewers wanting commissions on the networks, including international more or less of certain types of programmes? commissions. You see companies such as Dinamo Gareth Williams: There is firm evidence that the S4C succeeding in the international market. Tinopolis, of audience enjoys feeling that S4C is part of their course, owns companies that produce everything from communities. Several of the more successful recent Question Time to the new Karl Pilkington series. strands have travelled across Wales, but haven’t Telesgôp has had a network commission for BBC 4. stayed in one location. They have travelled across Boomerang produces Freeports on 4. There are a cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 15
30 November 2010 Chris Woolard, Rhodri Williams, Iestyn Garlick and Gareth Williams whole host of examples that I can give you. I would Q84 Alun Cairns: Can I bring you back to your argue that the sector is in quite a healthy situation. paper? Your submission argues a number of specific suggestions about improving S4C’s structure and Q80 Mrs James: (Translation) So you don’t accept approach to programming. It talks about a broader what Ron Jones said last week? commissioning structure enabling new companies to Iestyn Garlick: (Translation) If I can just come in break through. Can you explain a bit further what you very quickly, the point is that there are a number of mean by that, Mr Williams? producers in Wales who have decided to work through Gareth Williams: Yes. I think that the current editorial the medium of Welsh. To whom will they sell those system—if you like, the system that goes from the Welsh language programmes if not to S4C? point where they decide on a commission and on a budget for that commission to the point of delivery Q81 Mrs James: (Translation) That’s a good point. and point of broadcast—should be much simpler. So you don’t actually accept what Ron Jones said last I think that it is quite time-consuming and involves week? He said that you don’t have the right to depend a lot of to-ing and fro-ing between the sector and the as much on the taxpayers. broadcaster. I think it’s only a process; that could be simplified. If anything is a barrier, I think, for smaller Gareth Williams: (Translation) I think the response companies and individual producers coming through, he gave was that we couldn’t take our companies for it is getting into that process and understanding it granted and that they couldn’t expect to be wholly efficiently enough to be able to gain a commission dependent on S4C. from it. I think they absolutely need to look at simplifying that. Q82 Mrs James: (Translation) This question is for all of you. We have to save 10% within the sector. Do Q85 Alun Cairns: Would you contend that, in the you accept that we can do that over the next year? past, before strategic relationships were established, Gareth Williams: (Translation) There is a way in an awful lot of money went to a large number of which the sector can offer savings. Certainly there’s a smaller companies that simply didn’t result in way for S4C themselves to make savings—they said programmes, that didn’t go anywhere, and that that is, that in the report that they provided to DCMS. It’s in this financial climate, completely unacceptable, and easier for a sector to offer savings when they know any talk of going back to that structure simply isn’t that there’s something sustainable beyond just one realistic? year. You have to look at more long-term plans if you Iestyn Garlick: Are you talking about development are looking at savings because you want to offer money? savings while also protecting and maintaining your Alun Cairns: Yes. business, your employees and the product, of course, Iestyn Garlick: There might have been a time when which is part of the company. S4C was spending an awful lot on development Iestyn Garlick: (Translation) The companies have money and something might not have come to been flexible from the outset in making savings, and fruition. But sometimes you have to take a punt on that has happened for a number of years now. I am things, and maybe in some cases you’re right to say it sure that it is possible for us to make further savings, didn’t work. but S4C also has to make its own savings. It is not just up to the sector to make the savings and take Q86 Alun Cairns: But in this financial climate, do the burden. you not think that that is unrealistic? As to the development money, I would have thought that the Q83 Alun Cairns: (Translation) Can I go back to an Auditor General would be pretty interested in how earlier question about the location of S4C? You said, that was spent, because an awful lot of money went Mr Williams, that it perhaps would be beneficial for to a large number of small companies that simply S4C to be based somewhere else, as Ron Jones said didn’t result in any sort of programming. What sort of yesterday, but in the current economic climate, is that value is that for the viewer? realistic financially? It is so costly to move a centre. Iestyn Garlick: I would agree with you entirely in this The second point is: does that create more uncertainty financial climate, but I don’t think it is happening at for the staff—we have to be fair to them—who have the moment and I don’t think it has happened for quite so much uncertainty at the moment? a few years. Gareth Williams: (Translation) I would agree with Chair: Did it happen a lot, Mr Garlick? you, Mr Cairns. I think that spending an awful lot of Iestyn Garlick: There was a lot of money spent on money now on relocation and costs associated with pilots. that is not a wise thing to do in the short term. Chair: Which never saw the light of day? However, certainly S4C should be looking at what Iestyn Garlick: No, they didn’t. Many of them didn’t, kind of relationship it has as a channel with the west but then some did and some are still there. of Wales and north Wales in particular. Gareth Williams: Just to add to that, I would say it is Iestyn Garlick: (Translation) The fundamental point in the best interests of a broadcaster to look at here is that S4C needs to move out physically—not a development strategy of some sort, to be able to necessarily the offices, but the people need to move invest in some areas. Drama, especially, is such out of Llanishen; they need to go to Llanelli, a long-term investment for them that they need to get Aberystwyth and Caernarfon and speak to and be part it right. To go back to your point about the of their audience. development companies, that was, I think, in keeping cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 16 Welsh Affairs Committee: Evidence
30 November 2010 Chris Woolard, Rhodri Williams, Iestyn Garlick and Gareth Williams with a pattern you were seeing across the UK in terms information, research, audience research and so on, of consolidation happening within the industry. So I they should absolutely work more closely together, don’t think they should be too harshly criticised for but it is in the best interests of both to remain that. But certainly we should see, in terms of that independent of each other as well, if you know what development fund, what came out of it. I mean.
Q87 Alun Cairns: Do you think that the S4C Q89 Owen Smith: Do you think that, culturally, Authority has held management to account effectively there is a difference between the two and a tension over the last few years and do you think that the between the two? There are obviously a lot of people current oversight is sufficiently transparent? who work at S4C who worked hitherto at the BBC. Iestyn Garlick: I don’t think, as TAC, that we are These people are now going to have to work together. really in a position to pass comment on the way the Does that give you any views as to how the financial Authority runs itself. We deal with the commissioners arrangements ought to be established so that there is within S4C, and our relationship with those forced collaboration, if you like? commissioners is fine. I know what you are trying to Gareth Williams: There is absolute difference in get me to say, and— terms of cultural values. The BBC is the British Alun Cairns: Can I interrupt you because let’s not Broadcasting Corporation; S4C is a Welsh-language forget that the Head of Commissioning isn’t in post broadcaster. There is a world of difference between any more. So if you deal with commissioners, and it the two. is relevant— Iestyn Garlick: We are quite clear in TAC that we Iestyn Garlick: Geraint Rowlands, to be fair, has been would like to see the money go direct to S4C and not appointed as Head of Commissioning. via the BBC. If that happens, it could well cloud the Alun Cairns: But there was a strange departure of the issue and it could well then affect the independent Head of Commissioning, as well as the Chief sector quite severely. Although we will have to work Executive. Is the Authority running effectively or not? together, S4C, TAC and the BBC—that seems to be Iestyn Garlick: It appears not. the way we are going and we would be happy with Gareth Williams: I think there is a basic that—we would like specific structures in place so that communication problem here, isn’t there? It’s found the issues will not be clouded. itself in a very difficult position. I can sympathise to a point with the Authority’s point of view as well, Q90 Owen Smith: Can I unpack that a bit because which is probably a combination of wanting to take obviously the suspicion will be that the reason that a pragmatic view and involve itself in discussions TAC—and the independent sector that relies on with the relevant bodies and not quite knowing how S4C—is keen to see that separation is that S4C is seen to respond to the announcement of the money coming as a softer touch? from the licence fee. I think it has found it hard to get Iestyn Garlick: By TAC? a consensus on these very, very difficult issues. I think a lot of us in Wales are struggling with getting Owen Smith: By the independent sector in Wales, a consensus on this. Obviously, it has been in a very, which is why they would be quite keen to see S4C in very frail situation because it doesn’t have charge of the budget, which is what the Government a permanent Chief Executive. As you said, the is not proposing. Director of Commissioning left, and we are still Iestyn Garlick: I have never thought of S4C as a soft waiting to see what the clear situation is with the touch and I can guarantee you that, with some of the Chairman of the Authority. It is in a difficult situation very, very feisty and wild meetings that we have, at the moment. There is no doubt about that. arguing about terms of trade, etcetera, etcetera, Chair: Thank you for being probably as candid as I would hardly call them a soft touch. But you are you can be, considering your position. welcome to come along.
Q88 Owen Smith: Obviously one of the things we Q91 Owen Smith: So why is it, in that case, so are interested in, given the proposals from the important that the financial separation be maintained? Government, is how the BBC and S4C might work Iestyn Garlick: Because there will, I suppose, be together. Could I ask the gentlemen from TAC, in a suspicion that the BBC would keep some of the respect of commissioning, what differences you’ve money themselves. There have been assurances that discerned over the years between the way in which that is not going to happen, and one hopes that it will programmes are commissioned by S4C and the BBC not happen, but we would like to see some kind of and whether there has been a culture, if you like, of charter or statute or something concrete in place to competition more than a culture of co-operation, as guarantee that. will now be necessary? Gareth Williams: Let’s just put this into some sort of Gareth Williams: There certainly is a culture of context as well in terms of the BBC and English competition, isn’t there, between S4C and the BBC? language provision in Wales. There’s a 44% reduction They have a unique relationship in being in a supplier over six years in terms of provision, so there is a relationship and in competition with each other. limited amount of opportunity there. I think, as an Moving forward now, I think there are ways of finding independent sector where there are several efficiencies. I can think of two recent events that were opportunities within S4C, we don’t want to see those covered for Radio Cymru and for S4C, and there was diminishing because it will impact adversely on the some sharing of resources. In terms of sharing sector as a whole in Wales. cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 17
30 November 2010 Chris Woolard, Rhodri Williams, Iestyn Garlick and Gareth Williams
Q92 Jonathan Edwards: (Translation) I just want to Q96 Susan Elan Jones: (Translation) Do you think ask you a question about top-slicing, but in terms of it is important to have this independence in statute? the current recommendations about the partnership Mr Cairns has already said that the Minister promised with the BBC, what are the main problems, or to have something in the Chamber. Do you think it is dangers, as you see them as an independent sector? all-important to have that written in an Act? Gareth Williams: (Translation) I identify two things. Gareth Williams: (Translation) Yes, I think it is I think we need to define more clearly what this important because that’s the only way you are going independence is and how the relationship with the to avoid the misinterpretation and then S4C and the BBC works, and also we need to acknowledge that all BBC will know clearly and precisely where they are. correspondence currently between all Ministers, Sir Susan Elan Jones: (Translation) It is important to get Michael Lyons and John Walter Jones at S4C is the interpretation right so that everybody knows what talking about a situation which ends in 2015. S4C is the situation is and then it couldn’t be changed? coming up to celebrating 30 years of its existence. It Iestyn Garlick: (Translation) And so that we can look deserves an existence far beyond 2015. I think that the beyond 2015. answers which are going to work through over the next weeks and months have to tackle that directly and make sure that there is a long-term existence for Q97 Guto Bebb: (Translation) I don’t want to go the channel because it deserves that existence. back over history, but I think, if we look forward and Iestyn Garlick: (Translation) We are clear that the look for a new operational authority for S4C— deal that is on the table is acceptable; it’s a deal that because I think, whatever happens, the Authority and we can all work with, as long as we have the Chair will in due course be leaving—a new independence and editorial rights, and that 100% of Authority will be needed. What concerns me—and the funds come to the sector, as they currently do. this is specifically for TAC—is that Ian Hargreaves last week told us that there was a “conspiracy of silence” round S4C, and you said, “Of course, that’s Q93 Alun Cairns: (Translation) Can I say that the not true—we’ve heard nothing for months but S4C”. Minister has clearly answered that? He repeated it in But as someone who comes from north-west Wales, I the House of Commons yesterday in answer to a think there is an element of truth in that because I question. So I don’t understand the point of all the have been aware that there has been huge concern in protestations and complaints. (The speaker continued the industry about the way S4C was operating. If you in English) There’s a guarantee—operational, editorial Barn Lol and 100% funding of the money going to the read the Welsh media— , , etcetera, you can independent sector. (Translation) What else do you start to see allegations of serious maladministration want? and bad operating practice. I don’t know whether that Gareth Williams: (Translation) We want to see that is true or not, but are there any lessons, do you think, in statute because what’s happening, Mr Cairns, is that as TAC, that can be learned from the past five years there’s an interpretation of those statements which can for any new structure for the future? lead to a misinterpretation, if you like, and I think that Iestyn Garlick: (Translation) Certainly I would say that is perhaps where the complexity comes in. that there is a need for whatever is put in place in future to be a little bit more transparent. There should be more open discussion. There was an element of Q94 Jonathan Edwards: (Translation) I want to ask communication failure with S4C. It was difficult for a question on the basis of what you’ve just said. What companies to criticise, and it is natural for companies does operational independence for the channel mean to you? There’s a consensus about that, but what to criticise the broadcaster, whether that be S4C, ITV exactly does it mean to you? or the BBC. I’d agree that those structures have to be Gareth Williams: (Translation) I would like to see set in place. it mean creative, editorial, financial and operational Gareth Williams: (Translation) I think it is a lesson independence so that it encompasses the independence for politicians, too, because the 2003 Communications of the channel. I think S4C will benefit from having, Act said that there should be a review every five years. say, someone from the BBC on a council or a board— That hasn’t happened. So I think that we could make that has happened before. sure that S4C is accountable for the way it spends public funds through that review process, and the Q95 Chair: (Translation) It is possible to say that Government should do that. S4C is independent at the moment but it is accountable to DCMS. What’s the difference between Q98 Guto Bebb: This is a question to Ofcom, DCMS and the BBC? I would have thought that S4C basically. Obviously, you are aware of some of the would have more independence with the BBC than concerns that have been raised in terms of the from DCMS. relationship between the S4C Authority and the Iestyn Garlick: (Translation) S4C is not in industry in Wales. You are aware that there have been competition, though, with the DCMS. Well, perhaps issues. In terms of best practice moving forward, are you could argue that it is—but not in terms of there particular issues that you would like to highlight producing television programmes. They are in as things that should be taken into consideration when competition with BBC and in essence that’s the putting together a structure for taking S4C forward difference. under the new agreement? cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 18 Welsh Affairs Committee: Evidence
30 November 2010 Chris Woolard, Rhodri Williams, Iestyn Garlick and Gareth Williams
Rhodri Williams: I think there is a discussion to be Q101 Owen Smith: On a separate question, in the had between the DCMS, the S4C Authority, the BBC light of what you were saying about the split between Trust and the community of suppliers of programmes English and Welsh language programming and the to the channel. I think it is for them to come to clear reduction in the volume of English-language a conclusion—an agreement—about how that can best programming about Wales being made in Wales, happen, and for it to be transparent, and for it to be would you have any concerns, if S4C comes under the clear where responsibility lies. But that is a matter for aegis of the BBC, about how that split might evolve them to sort out rather than us. Our remit is very in future, especially after the S4C guaranteed funding clearly set out in the 2003 Communications Act, and dries up and then it is left down to the BBC to advising on structures of that kind is not part of our apportion its budget between Welsh and English- responsibilities. language programmes? Rhodri Williams: We have certainly drawn attention, Q99 Guto Bebb: Did you feel that you had any in that last review of public service broadcasting, to responsibility to highlight the fact that the five-yearly the importance of plurality. That is why it is so review didn’t happen or did not occur? Did you advise important that S4C’s programme budget is actually the DCMS in any way in 2008 as to why nothing spent in its entirety with independent production was done? companies. We have certainly argued consistently Rhodri Williams: No. We have had discussions with across the years that plurality, whether it is in English- DCMS regarding S4C twice since Ofcom has come language programming or in Welsh-language into existence because we have undertaken two programming, is important. It is important in Wales, reviews of public service broadcasting in that period. given the scale of the industry, in that we don’t have In the first one, I think it is fair to say that we thought other suppliers. Sky and lots of the digital channels some issues needed to be addressed, and came up with make no contribution to broadcasting in Wales for some options, one of which, of course, was to give a Welsh audience in particular. We certainly think it the responsibility for Welsh-language broadcasting in is important that that plurality continues to exist. That its entirety to the BBC. At the other end of the means that you have at least two people in future spectrum, there was the option of, in a sense, commissioning Welsh-language content: S4C, with privatising the service, putting it out to contract. In the money it gets commissioning Welsh-language the middle was a new relationship between the programmes from independent producers, and the broadcaster—S4C—and the BBC, and that is what BBC, with its ongoing commitment to Welsh- came about. In our second review of public service language broadcasting making programmes itself and broadcasting, very much at the time of that review— also, on occasion, commissioning independent and members of this Committee will certainly production companies to make programmes in Welsh. remember it—the burning issue in Wales was the one that has been referred to earlier of the decline in spend Q102 Owen Smith: Should Ofcom have some and in output of English-language broadcasting. We further role in looking at whether the split between listened to the views of stakeholders. We held, as we English-language and Welsh-language programming usually do in these circumstances, numerous events in is equitable in Wales, given that nobody really has any Wales to listen to what people had to say. To be fair, oversight over that, and that obviously is going to be nobody was knocking at our door then asking us to critical if the BBC is running S4C effectively? look at this or look at that in terms of Welsh-language broadcasting. What people were saying was that they Chris Woolard: I am sorry if this is a rather cheesy were very worried about the future of English- answer, but, ultimately, obviously, that is a matter for language broadcasting, and particularly about Parliament. We certainly don’t have those powers at plurality: would there be competition for the BBC’s the moment, as you rightly say. I think, historically English-language services in Wales from ITV or some the question has been one taken by a series of other source? As I say, when we undertook that broadcasters, including the BBC, including ITV, in extensive review—it took 12 months, so it wasn’t terms of the amount they are going to invest in a sort of quick-and-dirty job—we took a long time particular types of programming. Historically, again, about it and nobody at that time, including some of we have not tended to intervene in those kinds of the people who now allude to failures to undertake decisions. a review of S4C, knocked at our door to ask us to review S4C at that time. Q103 Karen Lumley: Do you think we should make changes in S4C’s remit in going forward and, if so, Q100 Owen Smith: This is a question for Mr what should they be? Williams. Were you consulted by the Secretary of Rhodri Williams: Again, I don’t think it’s for Ofcom State before the announcement about the cuts to S4C’s to say whether there should be changes. The remit has funding and the changes in the governance? been set out by Parliament and I am sure that you, Rhodri Williams: No, and we wouldn’t expect to be as Members of Parliament, and the Department with either. This is a relationship between the Secretary of responsibility for the matter, would want to hang on State and his Department and S4C, and we have no to that ability to dictate what the remit is. I think it is seat at that table unless invited there by the Secretary important to stress that in our regulatory role in of State. relation to S4C, as with other broadcasters, we are an cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 19
30 November 2010 Chris Woolard, Rhodri Williams, Iestyn Garlick and Gareth Williams independent regulator. In order to maintain that Iestyn Garlick: I think it compares fairly well with position, I think it is essential that that independence companies and product abroad. is kept, and that the waters are not muddied by being directly involved in making what are, in essence, Q107 Chair: What would the average cost-per-hour political decisions about the nature of the remit of of making programmes for the BBC or S4C be? S4C. Iestyn Garlick: It varies. Chair: I’ve a feeling you don’t really want to express Gareth Williams: For BBC Wales and S4C? a view on this. Karen Lumley: He’s a politician. Gareth Williams: I think, as a remit, it could do with Q108 Chair: I know this is a rough question, but it having more focus and let’s not forget about this has been suggested it is far more expensive to make commercial money that S4C has from the sale of programmes for S4C in Welsh than it is for the BBC SDN, £27 million. How S4C is viewed is terrifically in English. Is that right? important and it could be using some of that money Gareth Williams: I would say it depends entirely on to invest more in co-productions, in international the nature of the production. Drama is obviously at the productions, pushing itself out there. It has a very costly end. Self-shot factual documentaries are being strong brand, so I think in its remit it needs to look at made at a very, very, very low cost. I wouldn’t agree ways of getting that brand more involved with that S4C was disproportionately more expensive than interactive aspects and certainly with international BBC Wales. productions. Yes, it has a core remit of broadcasting within Wales and about Welsh things, but it needs to Q109 Chair: look further afield as well. What about the suggestion that people on soap operas such as Pobl y Cwm are earning roughly the same amount as somebody appearing on Q104 Karen Lumley: And should it be catering to an English-speaking audience as well? a soap opera such as EastEnders because of an Gareth Williams: It currently is, isn’t it? English- agreement by Equity that soap operas get paid a speaking viewers are enjoying its output and giving certain amount regardless of how many people watch positive feedback, for example. the programme? That is something that I have been told. Is that correct? Q105 Stuart Andrew: Wales enjoys the highest Iestyn Garlick: I appear in a soap opera called Rownd spend per head across the four UK nations when it a Rownd and I can absolutely guarantee you that comes to broadcast-based outputs. Looking at the I don’t earn anything remotely like that. areas particularly of efficiency and value for money, Chair: The point was made by somebody from TAC how thoroughly has S4C been evaluated and what to me quite recently. have we learnt from those initiatives? Iestyn Garlick: I think the point is that Equity had got Gareth Williams: I would say, as a sector, that we into a situation whereby they were paying an inflated have been coping with efficiencies for the last number figure, but certainly nowhere near what actors get on of years, in terms of “more for less”, if you like, in EastEnders or Coronation Street. It just wouldn’t be terms of providing output. I think we are going to be possible. seeing more of this kind of relationship over the next Gareth Williams: I think, historically, there is some years in terms of output provided in the set costs. grounding for this when S4C, pre-digital especially, Iestyn Garlick: When the whole digital thing was was producing far fewer hours at a fairly substantial about to happen, companies made savings. As an extra cost. It is not true now because its schedule has sort of X factor, we were asked to see what we could opened out and it is commissioning to fill hours do if we had five programmes, “Could you then do a throughout the day. sixth or seventh free of charge?”, etcetera, etcetera. We have done that. Over the last 10 years or so we Q110 Geraint Davies: On this point, I was recently have been making savings and I am sure we will filmed by a person who was interviewing me and had manage to make more savings. a camera for BBC Wales. I understand from other Gareth Williams: Again, I would say this is not sources that often S4C would have a crew of three or a situation unique to S4C. This is something arising with broadcasters across the world. S4C fully funds four people when the BBC would just have one person its core programmes, if you like, but it can take a view with a camera. Is that essentially true and are there then on international co-productions where it is a lot of cost opportunities that the BBC now can share a partial funder, and then that prompts additional with you to get your costs down? sources of revenue to come to the table from other Iestyn Garlick: I beg to differ. I think you would find companies, from other international distributors. it is absolutely the other way round. I have worked I think it will be good for S4C to branch out a little for the BBC many, many times and have been out bit more in those directions. filming. This is not recently; this is in the past, but it would be nothing to have 10 or 15 people. When I Q106 Stuart Andrew: That brings me on to the next moved to work in the independent sector, I was point about how it compares with other public service amazed at how few people went out and how much broadcasters in terms of being efficient and delivering multi-skilling is going on. I am amazed that there are value for money. How would you say it compares independent companies that can afford to do what with those? you suggest. cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 20 Welsh Affairs Committee: Evidence
30 November 2010 Chris Woolard, Rhodri Williams, Iestyn Garlick and Gareth Williams
Q111 Geraint Davies: Secondly, on attracting an Q113 Susan Elan Jones: (Translation) I just want English-language audience, do you think there is to ask a question to Ofcom. (The speaker continued any scope for having multi-lingual programmes? For in English) We have seen that on 14 October the instance, this hearing is in both English and Welsh. Secretary of State for Culture, Media and Sport Iestyn Garlick: There are certainly cases where that announced some fairly big changes, whereby rather would happen, probably in sport. When the Minister a lot of things seemed to be coming under his suggested back in August that programmes should discretion, and that Ofcom would be losing quite be dubbed, or could be dubbed, into Welsh, he was a few things. For instance, it will no longer be considering sport. He was at the Ryder Cup and required to conduct a review of public-service I can see the logic in a commentary in Welsh and broadcasting every five years, or, I believe, to in English, as happens in rugby, and football. review the media ownership rules every three years. Gareth Williams: Could I just add to that very Do you think there will be any threat, to your quickly? There are benefits certainly in having political independence, that will stem from that and a translation service and another narration in English do you think that was a correct thing for the available on sport programmes—absolutely. But, Secretary of State to do? What do you think will also, I would think of a drama like Ar y Tracs, be the outcome? which had Ruth Jones as one of the main characters. Chris Woolard: Whether it is a correct thing for That had a certain amount of English in it alongside the Secretary of State to do is entirely a matter for Welsh and it felt quite natural, I think. him and it is not for us to comment on. Geraint Davies: And if you have an audience where Susan Elan Jones: That’s right, because you are there is a mixture of Welsh— independent, yes? Chair: Hold it. We are running over now. Siân has Chris Woolard: In terms of the changes that are a very, very quick question. proposed potentially under an order, potentially under the Public Bodies Bill, for the most part what Q112 Mrs James: (Translation) Earlier, you said you have got to remember is, for example, in that about 500,000 people was the highest ceiling relation to public service broadcasting reviews, we of viewers that you could attract at any one time. will still conduct a quick annual survey of public Do you think that we are making that point service broadcasting, so we will certainly have an adequately: that we have a very small audience in opportunity there to raise issues. The question Wales compared with the BBC, for example, and specifically in relation to who kicks off the ball, as any programme on any channel that gets that it were, in five years, or whatever period, is now number of viewers will be rare? a matter essentially being posed to the Secretary of Gareth Williams: (Translation) Can I give you a State. When you look at those changes in total, they very quick example of a series we have just made don’t give us particular concerns. In one or two called The Indian Doctor? That went out on BBC cases, some of the changes are removing things that Daytime and attracted 1.6 million viewers, which is we have gone through because the law says we have a high daytime figure. It is now being repeated on to go through them. If you look at, for example, our BBC Wales and getting 117,000 viewers, which is review each year, of networking arrangements for again a very high number. When a Welsh drama on ITV, they create a lot of work for us, they create S4C gets 40,000, 50,000 or 60,000 viewers, that is a lot of work for ITV but usually end up, frankly, a significant proportion. It would be a huge pity to in the same place. lose drama, which denotes ambition for a channel. Chair: Thank you very much indeed, Mr Woolard. Any channel that can’t do an ambitious drama like I am afraid we are running a few minutes over now. the recent Pen Talar would be significantly the I would like to thank you all very much indeed for poorer. your evidence and call the next witnesses.
Witnesses: David Donovan, BECTU, Michael Birtwistle, NUJ, and Hywel Williams MP, NUJ Parliamentary Group, gave evidence.
Q114 Chair: (Translation) Thank you very much Hywel Williams: (Translation) First, let me explain for attending the Committee. I’ll proceed very that I am here in place of the other people who are quickly. Can I begin, please, with Hywel Williams? members of this particular group, and that I have Thank you very much for coming today as a come at very short notice. I would prefer it if one member of the NUJ Parliamentary Group. (The of my colleagues around the table, who support the speaker continued in English) I would like to ask all-parliamentary group, answered technical you about the submission that was made. It was questions about the subject. actually signed by John McDonnell and Austin Mitchell, but it says here that the formal scrapping Q115 Chair: (Translation) Let us therefore ask Mr of the funding mechanism for S4C has already led Birtwistle to answer that question. (The speaker to the loss of 25% of jobs and that hundreds more continued in English) You must have seen this are likely to be lost in the production sector. Is that submission from the NUJ Parliamentary Group? something that you are aware of, Mr Williams, Michael Birtwistle: Yes. My understanding is that because I am not aware that 25% of jobs have gone that relates specifically to the staff actually working from S4C? for S4C itself. The fear is that there is a threat that cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 21
30 November 2010 David Donovan, Michael Birtwistle and Hywel Williams MP will express itself in terms of 25% of the jobs, of nature of the climate that we have been working the people actually employed— with previously.
Q116 Chair: The submission says they have already Q119 Chair: Do you think it is wise, when gone. The submission says that 25% of the jobs have negotiating with a government department for £100 gone as a result of the change in the funding formula. million—and that is the sort of sum of money—to David Donovan: May I take that question, Chairman? refer to them rather dismissively in press releases as Chair: Certainly. “the London Government”? Clearly they are not the David Donovan: I believe that refers to—in fact I am London Government. They are the British fairly sure it does—the statement by the Authority in Government and they are no more the London the light of the statement by the Secretary of State that Government than the Welsh Assembly is the Cardiff there will be 40 job losses at S4C within the next Government. Are these sorts of rather discourteous two years. comments in a press release wise for an Authority that Chair: It says here that it has already led to the loss is trying to negotiate with a government department of 25%. If it had said 25% of the jobs on the S4C for a lot of money? Authority, I might have understood it. Michael Birtwistle: I don’t know. I don’t take it that David Donovan: It wouldn’t have been enough. way. I take that as shorthand. However, it may appear rude. I am sorry, but in Welsh you refer to “San Steffan”, do you not, and then you refer to “Bae Q117 Chair: Perhaps I can turn to a couple of other Caerdydd”? It’s a shorthand way of speaking about questions. May I ask the union representatives the two Governments. I would think that maybe what whether you really think that S4C is being well run at you have got there is a translation from the Welsh. the moment? Anyone? I wouldn’t take it at— David Donovan: It depends what you mean by “well Chair: I took it as being rather symptomatic. run”, doesn’t it? I think we have to consider S4C in Michael Birtwistle: It seems a very tiny thing to pick the context of the announcement from the Secretary up on, if I may say so. of State for Culture, Media and Sport that propelled it Chair: No, I thought it was symptomatic. I know Mr into a hectic period of extremely close scrutiny. I think Williams would like to speak and then I will allow in terms of programme-making, commissioning and others to come in. the technical output, it is well run. I believe it is Hywel Williams: (Translation) Can I say firstly, as a extremely good value for the DCMS. I believe that member of Plaid Cymru, that I don’t have any S4C is dedicated to the delivery of Welsh-language problem at all with the Government in London being programming at the highest level. I think— called “the London Government”? Having said that, from the outside, it appears to me that there is quite a Q118 Chair: Okay, I accept your point. I am sorry, lot of mess and disorder. But when one looks at the I am not trying to be rude and I know Mr Williams situation, perhaps there is disorder in S4C and the wants to come in. I have one last quick question. Both Authority—I don’t know; I’m outside that. However, of you are senior union representatives, so you one looks at the evidence from the outside. May I understand the importance of negotiation. Do you refer the Committee to the letter that we all, as think that the S4C Authority has handled itself well in honourable Members, received from the Secretary of its negotiations—those that have taken place, anyway, State last week dated 25 November? I have copies of with DCMS? Do you think it is important that the it here if any member of the Committee wishes to see S4C Authority has a good working relationship with it. It talks about ensuring the independence of the the people it negotiates with? service and editorial independence, and securing the Michael Birtwistle: Obviously that would be brand. But it then goes on to list seven matters that extremely important. I don’t think we know the nature are, as yet, undecided and will not be decided, so he of the details of what has been going on behind closed says, until the middle of the year. They are essential doors, and I think we would love to know a little bit things like S4C’s independence, impact on more detail about what has been going on. If we are independent producers, the regulation of the service, to talk about the nature of the S4C Authority, we, as accountability, etcetera, etcetera. All the attention has trade unions, have consistently said over a great been on what has been going on in S4C, but I would number of years that we would like to see, both at like to draw attention to those things as well. S4C and at the BBC, in terms of the Trust, authorities, Chair: (Translation) We’d like a copy of the 1 which are much more open in the way that they document. conduct their business but also in terms of the way that they take evidence and advice. I think what you Q120 Owen Smith: Given your long experience have had over a long period of time, both at the BBC working with the BBC and S4C, what do you feel and S4C, is a situation whereby only one or two about that traditional co-operation, or perhaps lack of members of management have been speaking to the it, between the two bodies in Wales, and what, Authority. Nobody else has been able to give any therefore, are your concerns about how that might opinion about what has been going on. I know, for continue in future, given the proposal that they work very much closer together? example, from my experiences at the BBC, where David Donovan: I think it is extremely difficult for us I was a union official, that we sought on numerous to understand or accept that the proposal that the BBC occasions to give at least our perception of what was going on at the BBC, but that doesn’t happen in the 1 Not printed. cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 22 Welsh Affairs Committee: Evidence
30 November 2010 David Donovan, Michael Birtwistle and Hywel Williams MP become responsible for S4C is appropriate at all. We has to be considered very carefully. But the underlying believe, and we would hope to convince Members of fact is that it has lost touch with its audience, and that Parliament, that that is the wrong option for S4C, its was the critique that BECTU brought forward. When independence and the independence of an expression you lose touch with your audience, when you go for of a modern cultural Wales. In terms of the BBC and wallpaper, when you lose the notion of quality its relationship with S4C, it has been in many senses broadcasting, you will lose your viewers. When you symptomatic of negotiation, as the Chairman was lose the viewers, you may well become a political saying. Negotiations with employers or partners at any football. time go through various stages, and I think there have Chair: And that is a very important point. been occasions when S4C or the BBC have sought, perhaps wittingly or unwittingly, to outdo the other in Q122 Guto Bebb: On the specific issue of the size of those negotiations. In the sense of where we would be S4C—the comments you made about the 25% cuts— in the future, we see the BBC as having a very clear members of the industry said last week that S4C had remit for the United Kingdom, and that S4C has an actually become bloated. Do you believe that a equally clear remit for Welsh-speaking people in commissioning company such as S4C requires the Wales. They are two separate functions in that sense. number of staff that it currently has? Our concern would be that, were the merger to take David Donovan: I don’t believe that it is a bloated place, we would lose a very valid Welsh-language organisation. I disagree. If you compare it with other broadcaster. It would become liable to the cuts that major broadcasters, it is not bloated. I believe that we are having to deal with annually currently with the with, what is it, 155 full-time staff, it stands BBC, let alone the costed cuts of around £500 million comparison with many similar organisations. that these proposals would introduce. Chair: Thank you for that clear answer. Hywel Williams: (Translation) I will briefly respond Q121 Guto Bebb: First of all I would like to to Mr Bebb’s point. The point I was making, perhaps highlight the letter from the DCMS, which obviously not clearly enough, was that the fateful decision about I had a copy of last week. In this situation the the funding cut appeared to be made without Minister, obviously, can’t win because when he says, considering the other points about there being a mess in effect, that there is a need for a three-way on both sides. discussion about the future of S4C, he is accused of not giving answers and creating confusion. If he had Q123 Jonathan Edwards: (Translation) What are dictated the answer, he would be accused of showing the main dangers—you have started to touch on no respect to the industry in Wales. I just want to put them—of the Government’s recommendations, and is that point on record. In terms of the question about there an alternative apart from creating a partnership whether S4C has been well governed (Translation)— with the BBC? and I have already asked this question several times— Michael Birtwistle: (Translation) One of the things it is important, I think, to note that we are talking that is important about S4C, I think, is the way in about the difficulties within the Authority as being which it is perceived in the country. It is perceived as something that has been created as a result of this idea an entirely independent organisation, which represents of cuts. But to be completely fair on that matter, you the Welsh language. In that respect, it is more than have to accept, I think, that true concern has been just a broadcaster. It is a kind of symbol of the Welsh shown over the last few months in Wales, about not language within the nation. This actually is only the problems facing the channel now, but the way jeopardising that symbolism. It is undermining that in which the channel has conducted itself over the picture in people’s minds. If people start to think that last five years. Magazines have published information it is just an extension of the BBC, then you have which has not been challenged. TAC’s former Chief changed the nature of the beast. We have heard this Executive has made some quite serious allegations week, for example, about the problems facing the about the way in which S4C was operating, and the Aman and Tawe communities, where there is talk that same Authority is there now as when these allegations the Welsh language is perhaps disappearing or being were being made. To what extent, then, can you claim undermined as that area’s community language. One that this instability is only because of the cuts? of the things that S4C succeeded in doing—and we David Donovan: I didn’t say that it was only down to agree, as unions, that ultimately we would like S4C the cuts. I believe that, when we come to negotiation, to be devolved, so to speak, more into the Welsh- I saw very little negotiation on the announcement speaking areas—was being a symbol of Welshness. from the Minister and the BBC when it was made. In One of S4C’s roles was trying to reach those the sense of whether it has been well run, we have communities and make programmes particularly for had serious reservations, which are on record, about those communities. I know from my career as a the Authority and the Chief Executive, going back to journalist that one of our jobs in making Welsh- the initial notion of the bundling and getting ready for language programmes was to try to reach these digitalisation. In actual fact, I know it is true to say particular people because there was a realisation that that BECTU sought the resignation of the Chief they didn’t watch enough Welsh-language Executive at that time because we believed that the programmes. strategy for digitalisation was flawed because it was based on the premise of putting wallpaper television Q124 Jonathan Edwards: (Translation) It appears out there as opposed to quality programming. The that there is some kind of consensus on defending the notion of the reach and audience share is delicate. It channel’s operational independence. What does that cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 23
30 November 2010 David Donovan, Michael Birtwistle and Hywel Williams MP mean to you? Then, in terms of top-slicing the funding and that we are in a situation where funding will drop from DCMS, how important is that? from £100 million to £83 million, which, in the Michael Birtwistle: (Translation) As someone who context of this financial climate, I would say is a has worked for a number of years in the BBC, may I pretty good deal, together with keeping the other say that the BBC is a fantastic institution and we are sources of funding that are available? Do you not so lucky to have something of that nature. But it is not accept that this is a positive move in terms of looking the BBC’s main role to defend the Welsh language, forward to how S4C would be funded in the future? encourage use of the Welsh language and represent Hywel Williams: (Translation) I refute the allegation the Welsh culture. That is not what the BBC does. The that we are using this for political purposes. My relationship between S4C and those communities is a concern since the 1970s, when I started working on very special one and, from my experience in the BBC, this campaign, has been to secure a Welsh-language having worked both in Welsh and English and for service of the highest standard for the people of network programmes, unfortunately the Welsh Wales. I would never use that for political purposes. language is considered in the BBC as a poor relation. However, as I said, there are issues that the Secretary That was my experience during the years that I of State has not even yet started discussing. He has worked there. said that he will not settle them till the middle of next Hywel Williams: (Translation) I don’t have to tell this year. Those decisions should have been before he cut Committee that you have to follow the money to see a quarter of S4C’s funding. what happens, and that’s why I think it is very Alun Cairns: (Translation) I am pleased to confirm— important that the money should go directly to S4C I have had several meetings with the Secretary of and that it is not tied up in the internal workings of State—that there is a bright future (the speaker the BBC. continued in English)—operational, editorial independence, 100% of the funding going to the Q125 Guto Bebb: (Translation) Can I just challenge independent sector, and there won’t be full control by you a little about the BBC specifically? I hear a lot of the BBC. I want to ask Mr Donovan this. If you are people claiming that they are seriously concerned faced with a position where, in this financial climate, about the fact that there’s a link with the BBC, and there simply isn’t any money left, as the former Chief the issue of ownership. But I would argue that there Secretary to the Treasury said, and S4C potentially is true ownership within the Welsh language faces the future of maybe a cut of up to 40% on the communities of Radio Cymru, which is provided one hand or funding from the BBC, with the solely by the BBC. So I don’t quite see why there is guarantees of operational and editorial independence, so much concern about the relationship with the BBC. and 100% of the funding going to the independent David Donovan: I disagree, because what 1982 gave sector of the money that is made available by DCMS us for the first time was the ability to work and to and by the BBC, do you think that is not a better observe ourselves in our own language. That was the arrangement, or would you say, “Well, we’ll take critical difference between what was happening with 100% of funding from DCMS under the current ITV and the BBC. That whole issue—the antagonism arrangements but the cut might be up to 40%”? That between the languages at that time—was simply is the reality of the choice we face. because of a lack of S4C. I think, as well, when you David Donovan: We believe that in this current look at S4C or you look at an inhabitant of the modern economic sector it is difficult to argue why any Wales, it is an expression of modern Wales. I can’t institution, business or company should be absolved see anything wrong— from cuts. The critical difference is that where Chair: Thank you, Mr Donovan. I think Mr Cairns Governments make cuts, they have to be cognisant of may have a slightly differently view here. the impact of those cuts on the broadcaster concerned. Chair: I am ever so sorry, we are going to run out of Q126 Alun Cairns: I think we are in danger of time very shortly. having some sort of academic lecture about history, but let’s look to the future. Let’s be practical about Q127 Owen Smith: Mr Donovan, do you credit the what’s in front of us. First, I want to say to Mr notion that there can be proper editorial and, more Williams—after his sharing this letter, which was a importantly, I guess, operational independence for public document anyway, which I’ve certainly S4C if it comes under the aegis of the BBC and its circulated to colleagues, to people in the industry and funds are being controlled through the BBC, whether to viewers—don’t you take confidence from this letter, it is the Trust or management? where the Secretary of State talks about “independent David Donovan: I think the issue of editorial control service” and “editorial independence”? I’m sorry that could be resolved separately and that is the issue we you weren’t in the Chamber yesterday when there was are trying to deal with, with respect, Mr Cairns. The an opportunity to question the Secretary of State, but issue is that we are being asked to buy a pig in a poke I had the opportunity to question him and he said that to a great extent because we don’t know the detail of he wanted operational and editorial independence, what is being proposed. We are being given plus he has also gone on the record saying that 100% reassurances and, with respect, we are being given of the funding would go to the independent sector. Do reassurances because of the reaction in Wales to this you not accept, Mr Williams, that some of the very proposal. I also believe that the difficulty for us statements you are making—and maybe some of your is that in Wales, in the context of, “Are we going to colleagues and some other people, perhaps with other accept cuts at the BBC or in S4C?”, it is like putting vested political interests—are simply scaremongering two ferrets in a sack, isn’t it? We deserve better in cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 24 Welsh Affairs Committee: Evidence
30 November 2010 David Donovan, Michael Birtwistle and Hywel Williams MP
Wales for a modern industry, a modern broadcaster. David Donovan: What S4C has to do is to deliver for I think when it comes to the BBC our overriding Welsh-language viewers. That is its primary role. It concern is that it is already suffering major cuts. has to see that in the context of 600,000 people, and people in the wider diaspora. That is what we require Q128 Mrs James: Just to follow on on that point, of S4C and that is what is being delivered. you have stated in your submissions that S4C has Hywel Williams: (Translation) It is vital that we have helped develop a skilled, modern workforce at a time one domain entirely in Welsh. Perhaps there is a place when traditional industry is in decline, and that several for others either side of that, but I think the core has generations of people have been allowed to stay in to be in Welsh. Wales and develop their careers there. Who has measured this and what have you based those figures Q131 Jonathan Edwards: (Translation) I have on? I am not knocking it. I agree with you, but asked most of the questions I wanted to ask, but in obviously— terms of defending the independence of S4C as a David Donovan: On the figures, there was no body—say, for example, the Government pushes independent sector, or there was only a very, very ahead with the plans as they are and the current small independent sector in 1982. Most people in recommendations—what kind of measures are needed 1982 worked in the ITV network or in the BBC. The then to defend that independence within that context? introduction of S4C gave rise to that independent Michael Birtwistle: (Translation) One of the things I sector—a large number of small companies all vying wanted to say at the beginning was that the reason we with each other for commissions from S4C. That have come here to defend S4C is there have been necessitated a workforce. It meant many people left several reviews recently by Ofcom, by the Welsh ITV or the BBC to fuel that workforce. We know that, Affairs Committee, by sub-committees in Cardiff'— broadly speaking, 2,000 people work in the several efforts—to look predominantly into the independent sector providing that workforce for S4C. English side of things. Before taking a decision about But the critical, important factor about the workforce what would happen in English-medium broadcasting, that has developed around S4C—and many people there needed to be a lot of discussion and that has came back to Wales to work because they had the happened. But the reason we have to come here and ability of working in their own language, the language be so defensive, to answer some of the questions of their choice—is that it created the perception that which have been asked earlier, is because someone there were technicians and production crew in Wales has tried to make a series of decisions without that could actually deliver in comparison with consultation in any way, shape or form, without London. The important issue about that, though, is asking the valid questions in the very first place. The that these skills are now being able to be capitalised English saying is: “Look before you leap”, and a on by BBC Wales, which has become a centre of mistake was made. What we are trying to say now is: excellence for drama. That workforce is broadly the be careful; let us take a little bit of time. Let us think same workforce. about this before we come to a firm decision. Chair: (Translation) We can’t take our time now, I’m Q129 Mrs James: (Translation) Just to finish off my afraid, because of time. questions, do you think that S4C should concentrate mainly on the Welsh language and support the Q132 Mr Williams: You have painted a very positive language, or do you think we should provide a service picture of S4C’s work out in the communities and for non-Welsh speakers—English speakers? I very much empathise with what you have said. Can Michael Birtwistle: (Translation) We, as unions, don’t you very quickly tell us what you see as the principal feel that it is a good idea to confuse or dilute the role failings of the S4C Authority and management and, of S4C. We should ensure that S4C, as we have been critically, the extent to which you conveyed those arguing, produces programmes of a high standard, concerns to the management? As to BECTU, Mr with a very clear idea about its audience. I think, also, Donovan has alluded to some of the concerns he has it would be offensive to the English-medium audience raised in the past. Having expressed those concerns, if they had to take something which is a bit of a what was the response? hybrid. They deserve services in their language that David Donovan: The critique was based on tripling try to reach their communities and their cultures. the output that S4C would provide in the onset to preparation for digitalisation with no increase in Q130 Mrs James: (Translation) To go back to that resources. That was a critical failure of the Chief point, there is a ceiling. We have only so much Executive at that time. We believe that, if you tripled audience or so many viewers in Wales. Do you feel it the output at that time with no increase in the funding, is fair to compare what we broadcast or produce in you were only going to go in one direction and that Wales with the BBC and ITV on a Saturday night, for was, critically, you were going to make cheaper example? We are never going to get those figures. programmes with less high-production values. We Michael Birtwistle: (Translation) No. Trying to conveyed those concerns in those clear and succinct compare on that level is not possible. People have terms to the Chief Executive, to TAC and other pointed out how lucky we are to have the Welsh interested bodies at the time, and the Chief language channel and that special relationship. Yes, to Executive’s response was rather disappointing. He an extent, we are privileged, but the culture has also chose not to believe us. Well, here we are some 10 or suffered over centuries and deserves a bit of a boost 12 years later and I would say that the weight of at the moment. evidence is on the side of BECTU. What did we do cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 25
30 November 2010 David Donovan, Michael Birtwistle and Hywel Williams MP about it? We sought the resignation of the Chief that they will asset strip some of the human resources; Executive at that time. We believed it was appropriate that the ambition of people with a career in S4C will because we saw a great orange light, if not a red light, be re-orientated towards the BBC; and that maybe flashing in front of our members. With the Authority, they will compromise their commitment to the Welsh the Authority chose not to investigate rigorously our language as they move through this bigger animal and claims with the Chief Executive, and I believe that it becomes more mainstream? was a failure. But, more critically, the DCMS chose David Donovan: Yes, absolutely. I have heard the to ignore it as well and that is where the ultimate words “review efficiency” as well. For me, in my job, responsibility lay. that means one thing: job losses, because there is an Mr Williams: And, very quickly, the NUJ, your inevitability about the co-working or the BBC taking concerns? over S4C. But the figures are in front of us already. Michael Birtwistle: I think that, as I said earlier, one We can only see any sort of reassurance about the key element should be that the authorities, both in programming budget. That means all the staff who are terms of S4C and the BBC, should be in a position to currently employed have no room within any budget take advice or at least listen to arguments from other going forward. There is an inevitability about those people apart from a handful of senior executives in staff from S4C. I would suggest they will be TUPE management positions in those organisations. I think transferred into the BBC. There will be duplication that that is a position we have seen as problematic in there, and a built-in dynamic which says, “We have to the BBC, and a position maybe that has been have efficiency.” We will lose jobs. I have one last problematic in S4C. If there is too close a relationship point, sir. The important thing about S4C is that it between the two, then is there sufficient questioning gives the opportunity for Welsh speakers to work in going on of what is happening? If we were to open a modern hi-tech industry, which is well rewarded, in up such bodies, both at a British level and at a Welsh their own language. level, it would be a much healthier state of affairs. Chair: Thank you very much indeed. Mr Donovan, Mr Birtwistle and Hywel Williams. (Translation) Q133 Geraint Davies: I was wondering if you Thank you very much for your attendance. thought there was a danger with the BBC taking over
Witnesses: Meri Huws and Meirion Prys Jones, Welsh Language Board, and Menna Machreth and Colin Nosworthy, Welsh Language Society, gave evidence.
Q134 Chair: (Translation) Thank you very much for Colin Nosworthy: (Translation) Could I, please, finish coming here today. I am sorry that we are a bit late. my point? The relevant issues are the structure and Everybody is very enthusiastic about this subject. Can how the channel is funded, and to talk about I begin with a question to the Welsh Language individuals really is to start a hare in this debate. The Society? (The speaker continued in English) You held important thing is to have a structure that works a protest recently in Cardiff about S4C. Forgive me correctly. for asking a slightly naughty question perhaps, but Alun Cairns: (Translation) Can I interject? You have why not encourage people to protest by switching on to have confidence in the people who are responsible their television a little bit more and getting more for spending the money, surely? people watching S4C? Colin Nosworthy: (Translation) Yes, but I think a lot Menna Machreth: (Translation) We take it for of the discussion going on at the moment is using granted that the people who came to the protest do individuals as an excuse to avoid the really relevant actually switch their televisions on. The channel is issues, i.e. what is going on in the Public Bodies Bill. loved and respected by many people in Wales, and There’s a clear threat. Nobody has explained to us the number of people who turned up to the protest why you would give a Minister the power to abolish showed that. S4C in the Public Bodies Bill. Why would you do Colin Nosworthy: (Translation) I think the main that? A lot of people are saying that S4C should have reason we held the protest was because of the threat a prominent role in the negotiations about the channel, to the channel. There are three clear threats to the but how can you do that and sit down with somebody channel. One is the cuts of over 40%, after who has the power to abolish you entirely? It is very considering inflation; there is also the idea of joint difficult to have that kind of discussion. management by the BBC, and, thirdly, there are the huge powers being given to the Secretary of State Q136 Chair: (Translation) What about the Welsh even to abolish S4C entirely under the Public Bodies Language Board? Do you have confidence in the way Bill. There is a crisis because of those three threats. in which S4C is being managed? Meri Huws: (Translation) I think that what is Q135 Chair: (Translation) Do you think, Mr important at the moment is to look at the output. From Nosworthy, that the S4C Board is correctly managed? the Board’s point of view, we are very comfortable Are you happy with the Board at the moment? in terms of S4C’s output. That has been significantly Colin Nosworthy: (Translation) I think we have to important in terms of linguistic planning over the last look at the relevant issues here. few decades. Clearly, there is a concern at the moment Chair: (Translation) You don’t think that is relevant, about what is going on at an organisational level, but do you? what is so important to us as a Board is the output, cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 26 Welsh Affairs Committee: Evidence
30 November 2010 Meri Huws, Meirion Prys Jones, Menna Machreth and Colin Nosworthy and we need to make sure that the internal S4C is of central importance to them in giving them arrangements mean that that output can continue and a Welsh experience. Young people who go through be strengthened. That’s the aim. their school experience—we’ve heard about Rownd a Rownd already—need something which is modern and Q137 Susan Elan Jones: (Translation) We don’t contemporary for them to view. Then you have the know how many people view S4C on the net using learners, who also turn to S4C and a different type of Clic. I think there is an intention for the Board, the viewing. Then there are natural Welsh speakers, but BBC and S4C to undertake a review on how many they are not uniform. I don’t want to watch sport people who speak or are learning Welsh view S4C in through the medium of Welsh, but I am more than that way and read Welsh language magazines. When happy to watch a cookery programme or a style will that happen? programme in Welsh. There is no uniform audience. Meirion Prys Jones: (Translation) In terms of looking Also, we have heard today about non-Welsh speakers at patterns and data for the Welsh language, the who use the channel as a way in, to have an situation is improving and is developing all the time experience of Wales. It is far easier to understand in terms of the knowledge we hold. That kind of Wales through something visual than just reading information would certainly be of use because we about it in a dry manner. It is a very important need to know how many people use the technical medium, so S4C is more than just a television channel resources that are not just programmes. So that is a for one audience. development. Over the years, we have undertaken research jointly with S4C and also with the BBC and Q139 Chair: (Translation) A representative of with the Arts Council to look at the patterns of BECTU has just told us that there’s too much bad viewing, and how they vary between different age quality stuff on S4C, and they are better off groups. The latest piece of research is developing that concentrating on fewer programmes of high standard. to ascertain the exact use that Welsh speakers make Do you agree? of the media. But it is quite a complex area, so it is Meirion Prys Jones: (Translation) It depends what going to take us some time to look at the data and the definition of “high standard” is. The channel has come to a conclusion. to serve a very broad range of interests. There will be some things of general interest, but you are talking Q138 Susan Elan Jones: (Translation) When we talk about creating programmes that may be for someone about who currently speaks Welsh in Wales and who who wants to watch perhaps Ralïo—the rallying is learning Welsh, and when you think about the programme—or Codi Canu on a Saturday night. structure of families in Wales now, things have Trying to encompass that kind of varying audience changed completely. Last week, I was reading with material that is appropriate for the viewer is quite evidence by Urdd Gobaith Cymru, and what was very difficult when you think about the concept of interesting was that one of the purposes of S4C was standards. That is one of the challenges: how can you to normalise the use of the Welsh language. Of course, answer all those needs within the budget? if you go back to the 1950s—I don’t remember the 1950s, by the way, but I remember my mother talking Q140 Owen Smith: Clearly, I think we believe, on about an Urdd Gobaith Cymru poster, which said this side at least, that the Secretary of State “Welsh is the language of the home. Speak it”. But fundamentally misunderstood the nature of S4C that has changed entirely now. Can you tell us a little historically and culturally when he waded into this bit about who speaks Welsh now and S4C’s role in row. However, is there not a case for some reform of families where some members may be Welsh speakers the nature of S4C? We heard earlier its being and some are not? described as the “guardian of the language”. Is it the Menna Machreth: I think we are working very hard guardian of the language? No. It is a broadcaster and to try to tell people that the Welsh language is a has certain statutory responsibilities in terms of language for everybody in Wales, whether you speak normalising the language. What is its role, do you it or not. That is a very important message: that think? What ought to be its role in the 21st century everybody should feel ownership of the language. in a bilingual Wales—its statutory role to protect and That is why S4C is important because people have nurture the language? How should that be framed and access to the language in a very easy way, whether perhaps reformed? they speak it or not. If their children are being Meri Huws: (Translation) Certainly from the Welsh educated through the medium of Welsh, they want Language Board’s perspective, the essence and core them to see and hear more Welsh. It is very interesting role of S4C is to broadcast through the medium of that there’s an awful lot of support among non-Welsh Welsh, and it is “through the medium of Welsh” that speakers for S4C because they feel that S4C has is important there. It is not just a broadcaster, but a programmes that discuss Wales and its communities. promoter of the Welsh language as an integral part of That is why it is important. the linguistic planning jigsaw in Wales. There is no Meri Huws: (Translation) If I can come in very question about that. Can it be improved? Of course. quickly there, I think we need to look at several Can different responses be made to different audiences here, not just the chapel audience or the challenges such as new technologies, new audiences, hearth audience. If you think of the audiences that new communities, in terms of viewers? Yes, of course. S4C serves, they include children who may be So, reviewing and moving forward are extremely learning Welsh in school, where nobody at home important, and any medium would have to do that, I speaks Welsh—the parents are not Welsh speakers. think, but the core role of the channel is that linguistic cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 27
30 November 2010 Meri Huws, Meirion Prys Jones, Menna Machreth and Colin Nosworthy role in creating viewers, a culture and an industry as Meirion Prys Jones: (Translation) In the provision, well. yes, but it is not the same picture. The status of S4C is completely different to the status of radio. Q141 Owen Smith: The follow-up question, if I may, Colin Nosworthy: (Translation) Can I just come back is, what are your concerns about how that core role to Owen Smith’s point because I think it’s important becomes diluted or diminished if the BBC takes over for us, as the Welsh Language Society, to emphasise effective running of S4C, albeit with the guarantees that we want to see changes to S4C as well. We want we have got of editorial independence? it to develop technologically, we want it to broaden Meri Huws: (Translation) As has already been said its provision and be more like a Welsh-language today—and I will repeat this very clearly—the BBC broadcaster that provides multi-media services. We do is a British institution. We are talking here about S4C, have some ideas about how to develop S4C; we don’t which has a core role in linguistic planning through just want to keep it exactly as it is. the medium of Welsh. I believe that those two things could militate against each other. We have to make Q144 Guto Bebb: (Translation) This is to the Welsh sure that that doesn’t happen. My worry would be Language Board mainly, and I take the comment that diluting and losing that all-important focus on the the BBC is a British institution as a statement of fact, Welsh language. I accept that there are ways around not a political point; I take that for granted. In the that, possibly, but that would be our predominant context of using S4C as a mode of linguistic planning, concern as a Board. I think that we have Simon Brooks’ paper. It is very interesting, and I believe that S4C’s work on Q142 Alun Cairns: (Translation) Can I interject children’s programmes is certainly part of the there and go back to Meri Huws’s comment that the linguistic planning work. But I am concerned that we BBC is a British institution? I accept that, but surely have evidence from YouGov, for example, that shows the DCMS, which funds S4C, is also a British that over 51% of Welsh speakers do not watch S4C at institution? Are you undermining, for example, Radio all. The channel has made a special effort to broadcast Cymru’s Welsh broadcasts, which the BBC currently to the Aman and Tawe valley areas, but, again, this broadcasts? Are you saying that that they are not of week the Board has been stating that the language is good quality or that they don’t reach the target? I disappearing in those areas, despite the fact that S4C would imagine that that has some kind of has made a deliberate attempt to target them. So is significance—showing that the influence of the BBC that evidence that S4C has failed or that more effort can be positive, but we have to get the guarantee is needed? about independence. Meirion Prys Jones: (Translation) In the context of Meri Huws: (Translation) I haven’t said anything linguistic planning and looking at the shift and the about the quality of Radio Cymru’s programmes. I language change which is happening in the Aman and think that that is a completely separate issue. My Tawe valley areas, I would say that the phenomenon is concern here is independence in terms of the ability far beyond S4C. It relates to social and demographic to provide and work to S4C’s core remit, which is to changes that are happening in that area. We could broadcast through the medium of Welsh, and having argue that, without S4C’s concentrating the the funding certainty to do that for more than two or situation—if it hadn’t intervened and acted—it could three years. That’s the concern. be far worse. However, it is a worry.
Q143 Chair: (Translation) Does the Welsh Language Q145 Guto Bebb: (Translation) It concerns me that Society have confidence in BBC Radio Cymru? so much is said about S4C making such a huge Menna Machreth: (Translation) That is a completely contribution to the language—and I’m not denying different matter and we didn’t realise that— that to a large extent—but is there specific evidence? Chair: (Translation) Well, is it really? If the BBC is Meirion Prys Jones: (Translation) We know in terms going to have influence over S4C, if you are happy of linguistic planning that linguistic confidence is one with it at the moment, it undermines the argument of the most important elements in terms of whether against the BBC a little. people speak Welsh. All our research shows that. All Menna Machreth: (Translation) Money has been cut the evidence shows that the status of television in a back recently from Radio Cymru and the same thing minority language is undisputed. All the research has not happened to Radio Wales. That raises echoes that completely, even when perhaps the people questions about how Welsh-language programmes who speak the language don’t always view the would compete against English-medium programmes channel. under the BBC system. Meirion Prys Jones: (Translation) But in terms of Q146 Guto Bebb: (Translation) What you are really looking at the difference between radio and television, saying is, that if 50% of people don’t watch the in the context of promoting language, they are in two channel, that in itself is not important as long as they very different places. Part of the role of S4C is to know that it is there. provide status for the Welsh language. It is part of the Meirion Prys Jones: (Translation) That is certainly bigger picture around the Welsh speaker and one factor. confidence. Chair: (Translation) Forget about S4C for a moment. Q147 Jonathan Edwards: (Translation) If I can Are you happy? Have you confidence in BBC Radio move on, there is a consensus about ensuring Cymru? operational independence for the channel. What does cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 28 Welsh Affairs Committee: Evidence
30 November 2010 Meri Huws, Meirion Prys Jones, Menna Machreth and Colin Nosworthy that mean to you as the Welsh Language Society, and Q151 Geraint Davies: Given that S4C is where do you stand on the argument about top-slicing a consumer-driven product for the Welsh people, don’t the funding from the British Government before it you think it is rather strange that the Government reaches the BBC? didn’t consult—I presume—either the Welsh Menna Machreth: (Translation) The independence of Language Society or the Welsh Language Board on the channel is the most important thing because it has these fundamental changes? to have operational independence and financial Meri Huws: (Translation) As I have just said, as independence to make sure that the interests of the a body established under the Welsh Language Act channel don’t go into the interests of something else. 1993, we were disappointed and surprised that there So one of our major requirements is securing was no discussion with us as a body of experts—not independence for a Welsh-language channel. myself as the Chair of the Board, but there are Colin Nosworthy: (Translation) Also it all boils down linguistic planners in the Board who work on these to money, doesn’t it? That assurance has to be in areas every day. statute and that’s why we are concerned about some of the comments that are being made. You can say an Q152 Geraint Davies: As things move forward, are awful lot of things, but what’s most important, in our there any plans for more consultation and engagement opinion, is what it says in statute. That’s what with you in terms of implementing these plans or none concerns us—that the measure doesn’t actually reflect at all? some of the things that are being said about Meri Huws: (Translation) The Board has asked for independence. a meeting for quite a number of weeks now with the Minister at DCMS, and we are awaiting a reply to Q148 Jonathan Edwards: (Translation) If there that request. were methods of defending the funding after the money reaches the Trust, would you have a problem Q153 Alun Cairns: (Translation) Can I go back to with that or would you rather see the money top-sliced the comments of the Welsh Language Society? I at the government department level? accept that the BBC Trust has no statutory duty Colin Nosworthy: (Translation) We are campaigning towards the Welsh language or towards the to keep the current situation in terms of how it is funded. We don’t want to see the BBC taking a role independence of S4C and everything else. Hopefully, at all in the way in which S4C is funded. there will be discussions between S4C, DCMS and the BBC. Do you think that we can have some kind of consensus or contract, which gives us the Q149 Chair: I will have to do this in English. At the guarantees that we need—operational and editorial moment S4C has to answer to DCMS. In what sense independence, and 100% of the funding going to the is it going to be any different if it has to answer in some way to the BBC? It can be independent and independent sector? Do you think that that is possible? answerable to DCMS and it may soon become Colin Nosworthy: (Translation) Well, no, if you independent and answerable to the BBC, but I would provide a power for a Minister to abolish the channel have thought that the Welsh Language Society might at the same time. actually welcome this because, if I were in the Welsh Alun Cairns: (Translation) But that is a completely Language Society, anyway, I might assume that the separate point. BBC was a little more favourable to the Welsh Colin Nosworthy: (Translation) No, it is not. How can language and knowledgeable of it than DCMS. you be independent at the same time as someone has Colin Nosworthy: (Translation) You are welcome to a financial stick and the power to abolish the channel? join, of course. [Laughter.] One of the main reasons to get the assurance in statute Menna Machreth: (Translation) There has to be a is to secure the future. statute to make sure that the channel operates through the medium of Welsh. There’s nothing in the BBC Q154 Alun Cairns: (Translation) The Welsh Charter that refers to the Welsh language. Language Society argument is moving. First, it was Colin Nosworthy: (Translation) We are campaigning against any kind of cuts, but we are in a very different for devolving the responsibility for S4C, and one of financial climate from five or 10 years ago. The the problems that perhaps currently exists is the lack second point is about independence. The Minister has of accountability. One of the ways to solve that is given independence: operational independence and devolving the service to Wales. editorial independence. The guarantee has been given Chair: (Translation) Thank you very much. I’ll think on that, and now the argument has moved again. I about your very kind offer in a moment. don’t know what that protest in Cardiff was actually calling for. Before the protest took place, there were Q150 Owen Smith: My question is for the Welsh addresses and speeches were made, but the Minister Language Board. Again, it is about consultation and had given those guarantees. So are you not just the perceived lack of consultation. Were you consulted scaremongering about the channel? at all by the Secretary of State before the decision Chair: Scaremongering, Mr Nosworthy? was taken? Menna Machreth: (Translation) No. The letter from Meri Huws: (Translation) No. There was no contact Michael Lyons did not guarantee anything. It didn’t with us as a statutory body—as we are a body guarantee our independence, and what Jeremy Hunt established by a statute of this House to promote the has said is not good enough. Welsh language, that was perhaps surprising. Chair: (Translation) Have you finished your point? cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Welsh Affairs Committee: Evidence Ev 29
30 November 2010 Meri Huws, Meirion Prys Jones, Menna Machreth and Colin Nosworthy
Colin Nosworthy: (Translation) No. You were saying Guto Bebb: (Translation) So the statement in the that the picture has changed. It hasn’t changed. We evidence you submitted then is a little inaccurate. still say, “No to cuts, Yes to a new S4C”—the title of Meirion Prys Jones: (Translation) In terms of our the rally. We are against the cuts in general and that role, we agree a language plan with S4C. That is our remains our position. statutory role. Meri Huws: (Translation) Constitutionally, that is Q155 Alun Cairns: (Translation) One point and one what we are there to do. short question. Michael Lyons’ note and letter is just one side of the discussions. I’m not defending him Q158 Guto Bebb: (Translation) I’ve got a question about his stance, but I understand the stance that he is for both organisations. I will go ask the Welsh starting from. An agreement is needed, and that is his Language Society first. Is it realistic for S4C to be starting point. I would expect him to move towards an managed by the Welsh Assembly? agreement whereby the three agreed. But if you had Menna Machreth: (Translation) Yes, technically S4C the choice between a cut of up to 40%, but with the is accountable to DCMS, but, morally, people in money coming entirely from DCMS, as it does at the Wales believe that it should be accountable to the moment, or funding with a cut of £100 million to £83 Assembly. Certainly, when you see the four party million within three or four years, with the money leaders in Wales writing to the Prime Minister, who coming from the BBC, which would you choose? disregarded that letter and got Jeremy Hunt to reply, I Colin Nosworthy: (Translation) That’s not the choice, think that’s the biggest insult possible to Wales and to is it? It is a fake choice, isn’t it, really? our political situation in Wales. Alun Cairns: (Translation) But that’s the current Guto Bebb: (Translation) On that specific point about financial climate. So, either 40% cuts from DCMS or the letter to the Prime Minister, I thought it was money from the BBC? perhaps a bit of an insult by the four party leaders to Chair: (Translation) Does anybody want to answer send it to him, not the relevant Secretary of State, but this question? You are welcome to. If not, I’ll turn to that’s my opinion. However, if you believe that the Siân James. Assembly is where the future lies—and I’ve heard a lot of offensive comments about the way in which Q156 Mrs James: (Translation) I wanted to ask Ms the Minister has treated S4C—it abolished the Welsh Huws about what you said—that nobody had Development Authority without any consultation and consulted with you and nobody had asked you for we know that the Welsh Language Board is going to your opinion. However, in the evidence that you’ve disappear, which will be a tragedy for linguistic submitted to us as a Committee, you say that what planning. Do you seriously think that the Assembly happens within S4C is not a matter for you—that the really operates in a sacred way compared with the way in which S4C uses its resources is not a matter Government in London? for you. But surely you have an opinion or a role. Menna Machreth: (Translation) The point relates to Surely it is fundamental to everything you do. where the discussion about Welsh-language Meri Huws: (Translation) Constitutionally, that is the broadcasting—and English-language broadcasting— situation, but certainly we, as a Board, have a huge should take place. We think that the BBC should also interest because we see the importance of be federated. broadcasting. I think, in moving forward from the Chair: (Translation) Can I ask the Welsh Language current situation, we would appreciate and welcome Board on that point what you think about the idea? more discussion with S4C as we move forward to look Meri Huws: (Translation) What is important for the at the different challenges. Wales is changing. Wales Welsh Language Board is ensuring sustainable is changing demographically. The world is changing arrangements: more than just three or four years of technologically. That discussion has to be had. If S4C income for the channel to continue its work on is part of the linguistic planning jigsaw, they have to linguistic planning. If there is a discussion about discuss with other partners, not just other moving those arrangements to the Assembly, we can broadcasters. see some acceptable elements to that because it would Mrs James: (Translation) That’s fundamental to sit within the Assembly’s comprehensive language everything. strategy, but that is not the main concern. Chair: (Translation) So you have no strong opinion Q157 Guto Bebb: (Translation) That goes contrary at the moment? to the evidence that you have submitted, which says Meri Huws: (Translation) We have strong opinion that you don’t want to comment on what S4C does that we must ensure that S4C continues to be a viable with its resources because if they were to broadcast broadcaster in Wales. rugby 24 hours a day—and some people in north Wales think that that is what they do anyway—there Q159 Chair: May I then ask the Welsh Language would be an impact on linguistic planning, you would Society this? If you did devolve television and agree. It’s therefore obvious that the Board has an broadcasting to the Welsh Assembly Government, opinion about what S4C does with its resources. would you accept that the money for this would have Meri Huws: (Translation) Yes, I have said that we to come from the licence payers in Wales, or would have an opinion. We would appreciate any opportunity you expect licence fee payers in Birmingham to to share that opinion with S4C so that we can be part contribute towards Welsh-language television in of that discussion about the Welsh language in Wales. English and Welsh? cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG02 Source: /MILES/PKU/INPUT/007748/007748_o002_Corrected 30 November.xml
Ev 30 Welsh Affairs Committee: Evidence
30 November 2010 Meri Huws, Meirion Prys Jones, Menna Machreth and Colin Nosworthy
Menna Machreth: (Translation) If we can refuse to Colin Nosworthy: (Translation) It is possible that that pay taxes that go towards Trident, etcetera, then yes, could happen. We, as a Society, believe that fine. broadcasting should be devolved to Wales in its Chair: I don’t think Trident is going to be part of the entirety. It is possible that what you suggest could equation somehow, but we will have that argument happen, but the Society believes that the whole thing another time. Does anyone else want to come in on should be devolved. this point? Meirion Prys Jones: (Translation) Perhaps this process needs to be seen from the viewers’ point of Q160 Alun Cairns: (Translation) There is a coalition view, rather than that of government. For Welsh in the Assembly at the moment, and some may think speakers, what is going to mean the best provision? that the coalition can look after S4C and show it some We are responding to a situation where the nature and kind of bright future. If there were no coalition in the the type of Welsh speakers is changing considerably. Assembly in future, and one party dominated—who The Welsh language, and its speakers, are nothing like knows what party that may be?—would you be as they were 20 years ago. The report that we have just confident about the future of the channel? published on Aman and Tawe shows that without a Colin Nosworthy: (Translation) The point about shadow of a doubt. We need to see what system is devolution is that I think it would have been suitable for those people. impossible for the Assembly to treat S4C in the way that Jeremy Hunt has. It was a last-minute plan with Q163 Guto Bebb: Just to close, I want to go back no consultation. It was just a last-minute bargain with to the point that the Assembly wouldn’t have made the BBC, and so there was a lack of consultation, decisions in the way in which happened in the past which wouldn’t have happened, I think, under the few months, according to you. That doesn’t reflect the Assembly. fact that the Assembly, for example, without consultation with anybody, has abolished the WDA. Q161 Mrs James: (Translation) We’ve heard from The economic consequences for the areas where the evidence that one way of saving money is by Welsh is a minority language have been extreme. I cutting the number of broadcast hours and having also think that the Assembly has gone contrary to better programmes. But I would see fewer broadcast most people who know about the need for linguistic hours as a step backwards, because very often I put planning in its insistence on getting rid of the Welsh the television on to see something and see something Language Board, so it is not showing that it’s that is being repeated. Do you think that that is the accountable. Why do you think it would be more way forward, because I don’t? accountable to the people of Wales on S4C? Menna Machreth: (Translation) The Society is Menna Machreth: (Translation) There would be calling for a lot of changes in S4C and that’s why we more consultation to begin with. want this independent review to take place, as the Guto Bebb: (Translation) But there was none about parties in Wales have called for. We want to see the the WDA—none at all. It was announced that the channel reaching out to the Web and doing more WDA was going to be abolished by the Minister digital things, bringing the Welsh language into the without any discussion. 21st century and the digital age. I think that is very Colin Nosworthy: (Translation) It is not for us to important. defend that decision. Meri Huws: (Translation) S4C needs to provide the Guto Bebb: (Translation) But you’ve made a claim. broadest menu. There are several audiences there and Colin Nosworthy: (Translation) Can I finish my provision has to be made, but they also need to point? I think that, in the debate leading up to consider different ways of broadcasting via new devolution, there was talk of the “bonfire of the technology and the opportunities to work with quangos”, so it wasn’t as if there was no consultation agencies and bodies in Wales in a far more proactive about getting rid of the quangos. To go back to the way. point about S4C, it is very difficult to avoid the fact that nobody realised there was a plan to have joint Q162 Jonathan Edwards: (Translation) Just very management by the BBC over S4C until the day quickly on the argument about devolution. Geraint before the statement. Talfan Davies made a very interesting point last week Alun Cairns: (Translation) New money for the when he talked about different grades of devolution, channel—that was the purpose. perhaps not devolving the whole lot in terms of Colin Nosworthy: (Translation) Without consulting broadcasting. Can you see a situation in the future anyone. whereby all the broadcasters in Wales may be Chair: (Translation) Thank you, everybody, for your accountable to the Welsh Government and the British attendance here today. Government, not just one? cobber Pack: U PL: COE1 [SO] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
Welsh Affairs Committee: Evidence Ev 31
Tuesday 14 December 2010
Members present: David T. C. Davies (Chair)
Stuart Andrew Susan Elan Jones Guto Bebb Karen Lumley Alun Cairns Jessica Morden Jonathan Edwards Mr Mark Williams Mrs Siân C. James ______
Examination of Witnesses
Witnesses: Rheon Tomos, Vice-Chairman, and Arwel Ellis Owen, Interim Chief Executive, S4C, gave evidence.
Q164 Chair: Mr Owen a Mr Tomos, diolch yn fawr imagine, was a bit of a shock as I had only just woken iawn am ddod heddiw. [Translation: Mr Owen and Mr up to put the radio on. Tomos, thank you very much for coming today.] I don’t have any translation facilities, so this will have Q168 Chair: The next thing that happened was that to be in English. Perhaps you could just introduce he decided he would resign after all. Was he helped to yourselves for the record before we begin. come to that decision by other members of the board? Arwel Ellis Owen: Diolch yn fawr, a diolch am y Rheon Tomos: No. One of the key things that we tried croeso. Fy enw i yw Arwel Ellis Owen, a dwi’n brif- to do in this process was to respect John’s decision. weithredwr dros dro S4C. I am Arwel Ellis Owen and We informed DCMS, as I mentioned earlier, of what I am the interim chief executive of S4C. the circumstances were and we then took a bit of Rheon Tomos: Bore da. Fy enw i yw Rheon Tomos, a a step back. I, personally, and several other members ’dwi’n is-gadeirydd S4C. Good morning, I am Rheon of the authority made ourselves available to John to Tomos, the vice-chairman of S4C. discuss the scenario.
Q165 Chair: May I begin by asking you to clarify Q169 Chair: Did you encourage him to go sooner? some of the confusion about the circumstances of the Rheon Tomos: Certainly not. I tried to speak to him departure of John Walter Jones as chairman? Did he personally about it and he said to me that he did not tell authority members on 23 November that he was want to engage in a discussion with me, that he would going to resign and, if so, when did he say the prefer to make his own mind up and that he would resignation would take effect? advise the staff of S4C and the authority members of Rheon Tomos: I was at the meeting; actually, I was at his decision. the same venue. It was a meeting in two centres and I was at the same venue as John on that evening. John Q170 Chair: As far as you are concerned, he informed us, as an authority, that it was his intention announced he was going to resign immediately, then to resign immediately and, as a result, he left the changed his mind the next day and said he was not, and then changed his mind a week or two later and meeting at that point. As far as the authority was said he was and he received no encouragement either concerned, we decided that we would have to contact for or against those decisions from members of the DCMS in the morning to iron out any issues regarding board. You were not trying to lean on him, to use John’s resignation. Also, as an authority, because we the vernacular. cannot operate in the absence of a chairman for our Rheon Tomos: The individual members of the board, meetings, it is part of our standing orders to appoint having been friendly with John for many years, made a vice-chairman, and I was unanimously voted as themselves available to him to discuss his position vice-chairman on that particular evening. because he had undermined his position as chairman during that process. Q166 Chair: Your understanding at that meeting was that he had resigned immediately? Q171 Chair: That sounds as though you possibly Rheon Tomos: That’s right. were encouraging him to go, if you believed that. Rheon Tomos: I certainly was not party to those Q167 Chair: At what point did it suddenly become discussions. There were personal discussions between clear to you that he had not resigned immediately and him and other individuals who had been friendly with that he was planning to stay on until the spring some him for several years. I cannot tell you exactly when time? and how he decided to resign, but I think it obviously Rheon Tomos: I got up the following morning fully gave us far greater clarity, moving forward, when he expecting to speak to the press regarding the activities made his final decision. of the previous evening, but what I heard on the radio was that the chairman had changed his mind, Q172 Alun Cairns: Can I go back to that meeting apparently, and was informing the press that he was where you said John Walter Jones resigned as continuing as chairman of S4C, which, as you can chairman and then you woke up the following cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
Ev 32 Welsh Affairs Committee: Evidence
14 December 2010 Rheon Tomos and Arwel Ellis Owen morning and heard that he had not. It is probably fair Can you identify those people who were reluctant to to say that there was some misunderstanding. Let us change? accept there was some misunderstanding as to what Rheon Tomos: I have been asked that question by happened, what was said and what was not said. You members of the press. What I have done is referred were immediately appointed—or self-appointed—as them to John’s own comments in his press interviews vice-chairman of the authority. Wasn’t there a meeting when he left. In fact, he was not referring to his held then that day and, if there was some confusion colleagues on the authority. He was referring to others over John Walter Jones being chairman, why was he outside of the authority; it was in their direction that not invited to that meeting? Was he present? Why that comment was aimed and not at the authority. wasn’t he present, if that was the case? I put it to you that he was not invited. Q179 Mrs James: I will obviously want to be asking Rheon Tomos: There was a telephone conference on more questions on that. You have lost the confidence the following day to discuss the situation. of many in the authority. You have lost the confidence of staff in some cases and you have certainly shaken Q173 Alun Cairns: Did that involve the chairman? the confidence of politicians. We are all huge Rheon Tomos: It did not involve the chairman. proponents and supporters of S4C, but we are all I believe members of staff had been trying to get hold baffled as to how we have got here. How do you of him but at that time he did not want to discuss with propose to regain that confidence? other members of the authority what had happened the Rheon Tomos: I do not think there has been an issue previous night. of losing the confidence in the authority. The authority is very united in what it is trying do and has been ever Q174 Alun Cairns: So you held a meeting in his since we took some quite important decisions earlier absence and then appointed yourself as vice-chair. Is this year. Unfortunately, because we were in that right? a scenario where we, as an employer, could not Rheon Tomos: No, no. The appointment of the divulge information regarding actions that we took, vice-chairman had actually happened the previous that has been seen by others as being a sign of evening when John had resigned at the meeting. weakness and a sign that the authority was not acting together. I can assure you and everybody here today Q175 Alun Cairns: So as vice-chair you went ahead that that just was not the case. What we have been and organised a meeting in the absence of the trying to do over the last 12 months is to bring chairman. Is that encouraging to him or—let me cut stability to the system, to try and go in one direction to the chase—is not the reality that you just bullied as an authority, because we have some real big issues him out? that we have to deal with. It is very unfortunate that Rheon Tomos: Well, I would not actually say that. we have been tainted with this reputation, but when I think if you listened to John’s interviews that he I have challenged people and asked them, “On what gave to the press last week, when he decided to go, grounds do you actually make those assumptions?”, he categorically denied whether that had happened. there seems to be very little other than one or two That came from John, not from me. comments which have been thrown back at us. This is a story which has evolved and, as a result, we Q176 Alun Cairns: The record of the authority is have been caught in the middle of it. One of the such that you lose your chief executive—some might things I am hoping—certainly since I have become say bullied out. You lose the head of commissioning— vice-chairman—is to try and be far more forthright in some might say bullied out. And you lose the terms of telling the story as it really is and to say that chairman—some might say bullied out. Isn’t that S4C is a very good-news story, not a bad-news story, a fair assessment of the record of the authority and of and we feel very, very confident for the future. why that led to calls for the authority to resign and leave others in place to run it? Q180 Mrs James: You used words there like Rheon Tomos: I think they are two totally distinct “challenging” and “forthright”. My concern with that circumstances. sort of language is that people do not have the confidence then to express their true views. It is a little Q177 Alun Cairns: But there is a theme here, isn’t confrontational and people think, “Wow, let’s back off there, Mr Tomos? a bit here.” Do you think you could have done more to Rheon Tomos: No, I would disagree; there is no create an atmosphere which was conducive to people theme. The other circumstances were totally different sharing their concerns and expressing their worries to the circumstances of the chair. The circumstances without feeling that they were going to be victimised of the chair were such that it was his personal decision or, as my colleague said earlier, bullied? to go. The other circumstances were actions that the Rheon Tomos: I think the record of the authority authority had taken, which is two different things during the last six months has been one where the altogether. staff of S4C—and Arwel can obviously add his views on that—feel that we are open to discussion. In fact, Q178 Mrs James: In the letter that was issued in the the workload associated with the changes as a result light of the chairman’s second resignation—to clarify, of digital switchover and the changes in the CSR the official resignation, when we received a letter— process has been such that without a pretty united there are several parts where he mentions those who organisation and a staff that was committed to the are reluctant to change. It is a bit of a theme really. cause, we just could not have coped. The staff have cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
Welsh Affairs Committee: Evidence Ev 33
14 December 2010 Rheon Tomos and Arwel Ellis Owen been remarkable. I think that is a sign of having the authority within that period—if you recall what confidence in their authority as opposed to what you I said earlier, it has been a pretty traumatic period for are suggesting—that they do not. Arwel, do you want us as a channel—that we felt that if he was prepared to comment at all on that? to stay on for another six months, which would allow Arwel Ellis Owen: No. If I may, Chair, just refer back us to go through that due process, it would give us to what Mr Cairns said about the head of stability. Given that the management team are 100% commissioning. The head of commissioning behind us asking Arwel to do that, given that the resigned—I think it is very clear—of her own free authority was 100% behind it and given that we feel will. The letter that she sent to us did not indicate any we have some excellent people in the organisation to of the points that Mr Cairns is alleging. carry forward the work of the channel, I do not think it is destabilised at all. We have a clear direction of Q181 Chair: Why did she resign then? travel as to where we want to go. Arwel Ellis Owen: She decided that she wished to take up other opportunities. Q187 Mrs James: You have suspended the competition for the CEO. Do you think there is any Q182 Chair: Has she got a better paid job merit in a pre-appointment scrutiny session with one somewhere else then? of the Committees here in Westminster? It is Arwel Ellis Owen: She is currently on notice and something that I have been involved in with the therefore she is not working anywhere else at present. Justice Committee where, with appointments that have this link with a government department, the Q183 Chair: She has got another job lined up, has chosen person comes and does a session with the she? Committee. Arwel Ellis Owen: I have no idea. Rheon Tomos: The choice will clearly be determined by the direction of the public appointments unit at Q184 Chair: She did not tell you what the DCMS. Although S4C will have an input into the opportunity was that she was taking up then? process, it will ultimately be the decision of the Arwel Ellis Owen: No. As far as we are concerned, Secretary of State. I suggest you point that question at she is entitled to a six-month period. the Secretary of State.
Q185 Chair: Of course, but normally people resign Q188 Chair: Lastly, Mr Tomos, you said that S4C’s for a reason, and a perfectly valid reason would be if authority has the confidence of staff. It was reported one had found another job somewhere else. on, I think, 30 November that staff had written to the Arwel Ellis Owen: I think she referred in her letter to secretary expressing their lack of confidence. Is that the fact that she wanted to go out at the top. She said true? the programmes that are being currently transmitted, Rheon Tomos: My understanding is that a small which she was responsible for commissioning, were number of staff had expressed some concerns. They of such a quality that she would, if she had the choice, had a meeting, I believe, with the secretary and other decide to go out at that point as opposed to any other senior staff and they were satisfied with those future period when the mood might be different, and answers. therefore she offered her resignation and took that. The letter said she offered her resignation. We Q189 Karen Lumley: How many is “small”? What accepted it. is “a small number” in your estimation—actual numbers? Q186 Mrs James: You now do not have a permanent Rheon Tomos: My understanding—I have not seen chairman or chief executive. That is not a very healthy the letter—was that it was two or three members of position for any organisation to be in. Should we be staff. nervous? Should we be worried? Arwel Ellis Owen: I can confirm that three members Rheon Tomos: If we move back a few days to when of staff came to see me. They talked about their John, the chairman, announced that he was going to concerns, because obviously there was a great deal of retire—we all wish him very well for all the very good uncertainty. One was not quite sure where one was work he has done for us as an authority—he himself looking for leadership, given that we had this situation recognised that perhaps it was going to be a good time to re-establish the principles on which we were going where the chair had retired or resigned and then to get a new chief executive in. We recognise that the withdrew that. Obviously, it was a matter of concern roles of the chairman and the chief executive in any for me, as the chief executive, that I had to have a organisation are quite critical and therefore we should very clear line of sight in terms of to whom I was talk to DCMS about appointing a new chairman so responsible. Therefore, I went to see John Walter that that individual could influence in a positive way Jones to discuss that very point. the appointment of a chief executive. We were left, as an authority, in a position where we had to consider Q190 Karen Lumley: Were those three members of whether that was a good idea or not. Our decision was staff senior members of staff who were representing made that much easier because of the fact that Arwel lots of colleagues or were they junior members of has been with us now for four or five months; it seems staff? longer than that, Arwel. He has gained so much Arwel Ellis Owen: No. I think they were three confidence in the management team and members of individuals, to be honest, who came to see me. cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen
Q191 Chair: As individuals, or talking for other Alun Cairns: The second point in relation to the people? inconsistency I want to highlight is that Mr Tomos Arwel Ellis Owen: No. Three individuals came to see told us earlier that the staff were happy and took me to talk about their particular personal views on encouragement from the new arrangements in the this. I have conducted a series of staff meetings, as authority, but then we later find out that staff have you would expect, over this period and I have very been in touch expressing disquiet. I have had staff little doubt in my mind that the staff are totally behind contact me—more than three. Obviously, I am not the management team. They understand the situation going to disclose those, but doesn’t that undermine and it is a matter of great concern, naturally, for them. your responses about the unity that you talked about and the encouragement that you received from the Q192 Mr Williams: Mr Owen has reassured me on staff? that staff dialogue point, because that is essential, not Rheon Tomos: I have been encouraged in the last two least with governance issues and the change in weeks since I have become a vice-chairman by the personnel. It is obviously an incredibly worrying time number of staff whom I had never spoken to before for the staff, but I am glad you have got that dialogue who have come up to me and have personally thanked with them directly. me for the way in which I have conducted myself, on Arwel Ellis Owen: Sure. It is a very worrying time television, on the radio and whatever, and have clearly for everybody involved, not only for the staff but also tried to uphold the good name of the channel. I have for the independent sector. I have held a series of had many members of staff do that and they have said meetings with the independent sector, as a group, and to me personally how much they are looking forward also as individual companies to try and give them to working in this new period. some stability because they are in the entrepreneurial Arwel Ellis Owen: Let us be realistic about this. Out business of producing programmes. They have set up of a staff of 155, it would be amazing if one or two their own companies and they need that sort of were not to express concerns. These are very highly assurance, which I hope—and I am pretty confident skilled, creative individuals and they have their own I can say this—I have given to them. opinion. I have done everything to encourage them to be perfectly open and to talk to me, as their manager, Q193 Alun Cairns: I think that Mr Tomos is being about their concerns. Therefore, I find nothing a little inconsistent with the Committee. He said that extraordinary, or indeed conflicting, with the general he did not encourage John Walter Jones, as chairman, tone of me saying that three individuals have come to to resign, but on CF99 he explicitly went on the see me. You would expect that with normal record encouraging him to go for the sake of the managerial responsibility. channel. Isn’t that the case, Mr Tomos? Rheon Tomos: I think John’s— Q198 Alun Cairns: Let us return to that CF99 programme where Mr Tomos said that the staff were supportive but a meeting was held the following day Q194 Alun Cairns: Yesorno? which showed you that the staff were not supportive. Rheon Tomos: I think John’s actions were causing the That is what the staff tell me. reputation of the channel— Rheon Tomos: I did have a personal conversation with an individual in S4C. I did explain that what Q195 Alun Cairns: Yes, but you told the I was trying to say in the interview was that I felt that Committee— the staff of S4C were 100% behind what the channel Chair: Just a minute. Mr Tomos? was trying to do. Unfortunately, in the heat of the Rheon Tomos: Yes, I think we had the reputation of moment, I used the words “the authority” instead of the channel uppermost in our minds, and to have taken “the channel”. They appreciated that. I did apologise the action that he took, we felt, was undermining to an individual member of staff and they seemed to confidence in the channel. be very happy with that explanation.
Q196 Chair: And you made that public on CF99? Q199 Alun Cairns: My understanding is that it was Rheon Tomos: Well, no. If you look back at the tape, quite a heated meeting and that there was a lot of what I actually asked John to do was to clarify the anger expressed amongst the staff. But I will move on position so that we could move forward one way or to the questions. Mr Tomos, on 29 July, S4C the other and I do not think that that was an announced a fundamental change in the relationship unreasonable thing to do in the circumstances. between the S4C authority and the management, ending the separation of the two bodies that had Q197 Alun Cairns: Certainly we will check the existed since the establishment of S4C as a channel. record, but that is not my recollection of the event. Could you clarify the basis on which that change My recollection is that you appealed for him to go on was made? CF99, following the meetings in the immediate Rheon Tomos: Just to make it clear, the system of preceding days, and you told the Committee earlier “arwahanrwydd”—or separation—was implemented that you had not made any representation, or at the tail end of 2006. It was seen by the former chief encouragement, as the Chairman put it. Is that not an executive as being a way of implementing different inconsistent response? working relationships between the authority and Chair: We can look at the record if there is a dispute a board of directors that would be responsible for about what was actually said on there. running the day-to-day business of the channel. The cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen decision taken at that meeting that you referred to was among the members of the authority was that we to revert to a different system of management because should go ahead with the decision to terminate her it was the view of the authority, after trying extremely employment. hard to make this new system work, that it was not serving the interests of S4C well and that it was not Q205 Alun Cairns: So it was not unanimous. providing us with sufficient assurances in the conduct Mr Owen, what was your involvement in terms of the of our scrutiny role as members of the authority. It departure of the last chief executive? What role did was not a difficult decision to make because we had you have with S4C at that time or prior to the been publicly appointed: it is our role to scrutinise and immediate departure? ensure that things are happening in an effective way Arwel Ellis Owen: None at all. in the channel. If we felt— Q206 Alun Cairns: So there was not a relationship Q200 Chair: How do you scrutinise if you are part between your company and the S4C authority or of the body which you are supposed to be overseeing? S4C—Cambrensis? If you have a unified body, it becomes very hard to Arwel Ellis Owen: None. Cambrensis produced scrutinise, does it not? It would be rather like the programmes for S4C. Welsh Affairs Committee being an arm of the Welsh Office. Q207 Alun Cairns: Isn’t that your company? Rheon Tomos: That presupposes that the body that is Arwel Ellis Owen: Yes, it is—well, I’m not— scrutinising is receiving sufficient and detailed information upon which to carry out its scrutiny role. Q208 Alun Cairns: So you did have a relationship? That was not the case under the arwahanrwydd Arwel Ellis Owen: Sorry. I am not a director of system. Cambrensis. I resigned those responsibilities when I took up the public appointment as chair of the Care Q201 Chair: Then isn’t it the job of the authority to Council for Wales, and that was 12 months before the demand that information and to demand that heads date that you are talking about here. roll if it is not supplied? Rheon Tomos: The authority had tried that on several Q209 Alun Cairns: It has been suggested that you occasions. They had demanded it on several were even in the building when the last chief occasions, but unfortunately it did not happen. It just executive was walked out the door. Is that true? did not happen. Arwel Ellis Owen: I can deny that totally.
Q202 Alun Cairns: Are you saying this is the reason Q210 Jonathan Edwards: In light of your that the former chief executive left? explanation in terms of the events that led up to the Rheon Tomos: It is clearly one of the main resignation of the chief executive, do you regret not reasons, yes. Utilising our internal auditors, issuing a clear statement on why the chief executive PricewaterhouseCoopers, we carried out a corporate resigned, because, in the absence of that statement, governance review in early 2010. Their terms of there was a clear void which led to all sorts of reference were to look at ways in which we could rumours which exacerbated the crisis? improve decision making in the body. The conclusions Rheon Tomos: Clearly, we are a public body, we are of the authority were that we had to change the an employer and we have responsibilities to our arrangements fundamentally. The board of directors employees. The guidance that was provided to us by wanted to carry on with the previous system of our solicitors was not to comment in any shape or arwahanrwydd. There was, therefore, a total impasse form about the decision that we took. We have because we did not feel that our scrutiny role was consistently mentioned that with the press now. It is being carried out in an effective way. One of the unfortunate, yes, that that has been the case, but casualties, yes, of that decision was that the chief I think we were being fair to the employee in that case executive’s employment was terminated. as well as an employer. Chair: Thank you for shining some interesting light on that. One final question, Mr Cairns. Q211 Jessica Morden: Coming back to the point about John Walter Jones earlier on, what happened at Q203 Alun Cairns: I do not think I could sum it up the meeting when he resigned and what was his reason in one, with great respect, Chairman, but hopefully I given at that meeting? will have a chance to come back to it. You talked Rheon Tomos: John had had a private meeting with about unanimity and you have just talked about the the Secretary of State at which he had discussed his departure of the chief executive. Was the authority retirement. At that meeting, the authority were made unanimous in the will to sack the chief executive? aware of that decision. We therefore, quite naturally, Rheon Tomos: Clearly the vote that was taken was asked John what his plans were because we did not a majority vote— have a date. We did not know when that was going to be because he had not announced it at that time Q204 Alun Cairns: So it was not unanimous then? because of everything that was going on and the Rheon Tomos: If I could just finish, there were some closing date for the post of chief executive was people at the meeting who, while not disagreeing with coming up. We asked John for some clarity regarding the fundamental decision, were concerned about its it because it could have potentially impacted on the timing given our workload. But the general feeling work of the authority. I think at that time he felt, “Oh, cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen yes, well maybe now is the time to go”, and he made and we will publish our response and that will be his decision there and then. So those were the made available.1 circumstances. Q217 Jessica Morden: Why has it taken so long? Q212 Jessica Morden: Do you really feel that S4C, Rheon Tomos: Because we have had such a heavy as an authority, and the management have acted schedule of other things we have been dealing with, openly and transparently in recent years and in the it has just been one of the things that has fallen by interests of viewers? the wayside. Rheon Tomos: Yes, I do. I was asked last week, “What do you do to talk to the public?” I personally Q218 Stuart Andrew: We have heard evidence that attended a number of open events during the last year. S4C has become too bloated over the years. Do you We have just gone through the process of digital accept those claims? switchover. We had something like five public Arwel Ellis Owen: I find that a very difficult term to meetings where we had between 70 and 100 people understand. I gather it was a suggestion made by one in attendance. We have had meetings with Welsh of your members to Ron Jones and he confirmed that. learners. We have had an open evening on S4C where We have 155 posts responsible for the administration we asked people to express their views about the of S4C. Just for comparison, Channel 4 has 694. We channel. We have constant dialogue with people have overheads of 4.5%. The BBC overheads, just for throughout Wales, with different pressure groups. the sake of comparison, are 12%. I think we need to Within the last year, we have set up a forum to discuss put these figures in context. The numbers have been Welsh language programmes on S4C. So I just do not up to 201. They are currently 155 and you may know, know where this comment is coming from because, in if you have had an opportunity to read our submission the goldfish bowl that is Wales, you are always talking to the DCMS, that we propose to reduce it by a further to somebody about S4C. 40 posts in the next two years. I do not recognise the “bloated” word because that is not what I see around Q213 Jessica Morden: An example would be that me. It is a very lean and mean operation, if I might the minutes of the authority’s meetings have not been say so. on the website for a year; the last ones are December 2009. Do you have any comment about that? Q219 Stuart Andrew: Would you say that if you are Rheon Tomos: I can only apologise for that. There is able to get rid of 40 staff that actually it was bloated? no excuse for that. They should have been on there. Arwel Ellis Owen: No. Because of the changed We will try and make sure they are there as soon as circumstances, we are having to rethink the way that possible. we operate. The fact that we have lost £25 million means that we have to try and find different ways of Q214 Jessica Morden: Another example might be producing the programmes that we have traditionally the website, for instance, in which the funding figure done over the past 30 years very successfully. It is referred to is for the year 2000, so it is 10 years out a channel that is successful. Just some news for you: of date. It still refers to S4C running the analogue 600,000 people tuned into S4C last week. Bear that in service and does not mention the completion of digital mind when you come to talk about the quality of the switchover at all. That is woefully out of date is it not? programmes and the service of the programmes for Rheon Tomos: Yes. We are currently in the process the audience in Wales. of totally revamping the website and that will happen, Arwel, very soon, I think. Q220 Stuart Andrew: Mr Tomos, the authority is responsible for approving and reviewing the salary Q215 Chair: Is nobody paid to update the website on framework and bonus scheme for S4C staff. Do you a daily basis? accept that the authority should have done more Rheon Tomos: Yes, we do have staff that can do that perhaps to restrain some growth in that area? type of thing. For example, after the issues in the Rheon Tomos: Restrain growth in that area? summer, clearly there was going to be a need to Stuart Andrew: You know, the costs of staffing? change quite a lot of what was on the website. We decided that one of the key things we wanted to do to Q221 Chair: Are senior managers overpaid? move forward was to have a very robust system of Rheon Tomos: I do not believe so. I do work across corporate governance. In that respect, we invited Sir a number of public sector organisations and salaries Jon Shortridge to review for us our system of at S4C are not bloated in terms of other comparisons. corporate governance, that is, to compare our I was thinking back, as I was preparing for today, to arrangements against the UK code. what we were doing 12 months ago. I was thinking that our challenges then were digital switchover, the Q216 Jessica Morden: That was supposed to take second and third legs of a brand new strategy for six weeks; it was supposed to be at the end of children and young people’s services in Wales, which September. Given that this is December, when will are regarded as being at the head of children’s service that come out and what are its findings likely to be? development—programme development. We were Can you give us any indication? looking even then at potential reductions in funding and had already taken out £1 million of costs from Rheon Tomos: Sir Jon gave us a presentation about our overheads or were planning to do so. So this is an three weeks ago. On our agenda on Thursday, we are discussing the authority’s response to Sir Jon’s report 1 See Ev 119 cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen organisation that even before the changes of CSR was Q229 Jonathan Edwards: Can you provide any already looking forward. We already knew that, insight on the events leading up to the announcement because we were developing some services, we would by DCMS that the channel, in future, will be funded have to cut back in other areas. I think it is very via the licence fee and the future partnership with the important for people to recognise that. BBC, and how involved was the channel in the decision? Q222 Stuart Andrew: Does the S4C authority pay Arwel Ellis Owen: You may recall that this story starts for private health care for any of its members or staff? way back, something to do with the general election Rheon Tomos: I don’t believe we do, do we? in May. The new Minister for Culture announced very Arwel Ellis Owen: Yes, we do. There is an soon afterwards the termination of the Film Council. employment package. If I may just declare an interest, That was followed by a Guardian report that I don’t have health, I don’t have a car, I don’t have suggested that S4C was to receive a 24% cut in its pension allowance and I don’t have holiday allowance budget. That was way back in July, before any of the as part of my current engagement. But there are senior events that you have been talking about came about. management posts that do have a car allowance; they When I and the previous chair then met the Minister, also have a private health allowance; they also have he told us that we had four weeks to come up with a television and access to a Sky service at home. a new vision. It had to be an exciting, innovative, different vision for S4C and the options he gave us Q223 Stuart Andrew: Given these difficult were very clear. If we failed to produce that document economic times, do you accept that it is difficult for and persuade him, and indeed his civil servants—he the public to understand that you are providing private made the point that “It’s the civil servants who will health care to staff and members with public money? be advising me”—then he would suggest a 12-month Arwel Ellis Owen: You are making a perfectly valid extension during which there would be an point. That was the situation. I am starting different investigation held into the future of S4C. He asked us work streams so as to enable the service to comply also to look at options for 40% and 25%, and he gave with the new economic situation we are in. There will a very clear indication that his mind was to think in be one work stream that will look at efficiency and terms of 40% as opposed to 25%. He asked us to innovation, and the very points that I have made to compile a document—I have it here and I am sure you now are the ones that obviously we will be you have seen it—that gave the Minister and his civil looking at. servants a risk assessment of the effect of various cuts along the lines that he was proposing. We gave it Q224 Stuart Andrew: It is not just the difficult a 10% scenario, a 25% scenario and a 40% scenario. economic times. I would ask, even in buoyant times, We spent a lot of time doing these various models. At should we be spending public money on providing the same time as that I am very much aware that private health care for staff? Members of this House here were also actively Arwel Ellis Owen: That is a perfectly fair point for persuading the Minister. They had his ear, and they you to make. All I am saying is that I have inherited as were trying to be co-operative and supportive of S4C, chief executive a number of personnel whose contract given the difficult situation it was in. We then details allow them these facilities. compiled that. Incidentally, we were in constant contact with civil servants at DCMS. Indeed, we were given one person who was to be our liaison during Q225 Stuart Andrew: In that case, maybe I should this period of drafting this document. She was very ask Mr Tomos, as representing the authority, why was helpful and supportive, and we maintained that that allowed to happen? contact with her. We heard nothing after the Rheon Tomos: I have not got the detail to hand. submission of the document. I kept on going up to Clearly, we can provide more information if that is the meet the civil servant in London asking, “Where are case, Chair. we? Are we on 25%? Are we on 40%? Do you have a feeling for how the wind is blowing?” Then, come Q226 Chair: It is all Bupa, isn’t it, Mr Tomos? the day, I am travelling in a car to Swansea along the Rheon Tomos: Personally, I do not know the details M4. I turn on Radio 4 and I listen to the breaking of the staff. news that S4C is to have a 24.4% cut. That was the first I heard, and I know that that was the first that Q227 Chair: Were the authority not aware that there S4C knew about it, despite the fact that we had been was a health care scheme with Bupa? having daily, weekly, contact with the civil servants. Rheon Tomos: We have a personnel committee and Chair: It’s an important issue, and I agree, but I think I am sure the chairman of personnel would be aware we are going to have to go through these questions a of all these issues, but personally I have not come bit more quickly. across them. Q230 Jonathan Edwards: In terms of the Q228 Chair: I think it was set up with a company announcement, the channel immediately announced called Health Gold Cymru, wasn’t it, Mr Owen? that they were seeking judicial review. Can you Arwel Ellis Owen: I don’t know the details of that, to inform the Committee where you are in terms of be honest. I have not been involved in it. those proceedings? Chair: Maybe I should be on the authority’s or Arwel Ellis Owen: The judicial review is to do with S4C’s board. process and it is pretty obvious that we were not cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen involved with that process when the deal was struck Q236 Chair: Was there any discussion between S4C between the BBC trustees and the Ministry. We were and DCMS before your decision to create a unified not consulted; we were not informed. S4C has board and did DCMS agree to this beforehand? a statutory power and therefore it is perfectly natural, Arwel Ellis Owen: That is before my time, if I might I think, for us to have looked to those statutory powers say so. as a defence mechanism at that particular time. A judicial review was one suggestion put forward and Q237 Chair: Mr Tomos, do you know if there was pursued and the authority accepted that. That judicial any discussion with DCMS about the decision that review will remain in place until the tripartite was taken in July to create a unified board? meetings between the BBC Trust, DCMS and S4C Rheon Tomos: Yes. start. They are scheduled to start this afternoon. The reason that judicial review has been hanging, as it Q238 Chair: Did DCMS agree fully to that decision? were, is because two previous meetings were Rheon Tomos: I have personally spoken to some of cancelled, for some unknown reason. We were not, the senior civil servants in DCMS about the decisions again, consulted about that point. So once, this that we took in July. afternoon, I hear the door close behind me and the meetings start in earnest, that judicial review would Q239 Chair: So from the tense you use, I take it you cease to be operational. discussed it with them after the decision had been taken? Q231 Jonathan Edwards: If a judicial review Rheon Tomos: No, no— proceeds, how confident are you that you would succeed and could you just explain to us what Q240 Chair: You referred to the decision you took. relations are like at the moment between the channel Rheon Tomos: I had discussions with senior civil and the Department? servants before the— Arwel Ellis Owen: Excellent. I am going to these discussions, and I am leading them this afternoon, in Q241 Chair: Before the decision. Were they happy a very confident mood that we can seek an agreement and content for you to do that? that is acceptable to all. It would be very surprising if Rheon Tomos: Clearly, they were concerned because that was not the case because here we have two public these were quite fundamental decisions that were service broadcasters engaging in a discussion to try being taken. When I took the time to explain why we and agree a way forward. There are many of the core had come to the decision, that is that what we were values and principles that we share as public service trying to do was to improve the quality of scrutiny broadcasters and therefore I am very hopeful that we and decision making in the body, they were quite will be able to come to an agreement. content with that answer.
Q232 Alun Cairns: Can I come in in relation to that? Q242 Chair: You are happy that that decision, Clearly no Government can account for any leaks of legally, that you have taken is compatible with the information. 2003 Communications Act? Arwel Ellis Owen: No. Rheon Tomos: Yes. We have taken advice all the way along. Q233 Alun Cairns: In view of the legislation it will need to pass, it seems to me that the Government has Q243 Mr Williams: On a more positive note, made their announcement, albeit leaked, to legislate perhaps we could turn to the performance of S4C. in terms of the funding arrangements and therefore Mr Owen mentioned that last week 600,000 people legislation will follow in due course. So I do not know viewed the channel. Some of the witnesses in this where your judicial review can come from, but it inquiry have suggested that the audience viewing would be interesting to know how much money has figures that S4C use are unreliable. How reliable do been spent thus far that could be going to the industry you feel they are in measuring the reach and share of and on programming on the judicial review. Welsh language programmes and the viewing patterns Arwel Ellis Owen: Of course. There is an allowance of Welsh speakers? There has also been a charge that in-house. We have a legal department and there are perhaps they have been used selectively in presenting costs involved with sustaining that legal department a more positive image than they might otherwise for contract purposes. It has turned its hand to looking suggest. at this as part of its job. Arwel Ellis Owen: S4C signed up to BARB, which is the gold standard. It is the one that is accepted by Q234 Karen Lumley: So there is no extra cost to the every broadcaster in the United Kingdom. Therefore, taxpayer for going down this road? there is no hiding from that one. We will insist on Arwel Ellis Owen: Nothing that I can identify at using those BARB figures. There has been talk present. It may well be that the in-house legal team elsewhere of BBC Alba being a shining example of would have sought advice from counsel, and that audience surveys. They don’t use BARB; they use an would be normal practice. occasional means of measuring their audience. S4C is very committed to this process and maybe I can Q235 Karen Lumley: Very expensive. explain the details of it. Across the United Kingdom Arwel Ellis Owen: But there would be a normal there is a panel of people and there are homes that allocation for such legal discussions during any year. contribute to the BARB returns. In Wales, there are cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen
400 of those homes, as defined by BARB. S4C, the audience for Welsh language programmes are wishing to have a greater understanding of our non-Welsh speakers? audience, pays another £500,000 a year for 200 extra Arwel Ellis Owen: If I may, Chair, this is a very homes to be part of that audience survey. That gives technical area and I think it is important for us to take us added assurance that the figures are reliable. I have time to go through it. There are peak-time figures, been reading some of the testimony given by past there are all-hours and there is weekly reach. When I contributors to your discussion. I have to tell you that hear some people say that the audience of S4C has we totally disagree with those interpretations. I think halved over 12 months, I think it is very important Ron Jones referred to a figure of 309 Welsh speakers that we understand the context. This is not comparing as being part of the BARB package. In fact, it is 962. like with like: 12 months ago S4C was a bilingual So we do get a reliable return from that panel. The channel that used Channel 4 as a sustaining network. results may not please everybody, but I think it really Today, S4C is a Welsh language channel and Channel is important, if S4C is to be a serious public service 4 has gone. Way back in 2004, the last review of S4C, broadcaster, that we play along with the industry gold by Laughton, showed very clearly that when that standard. We may not like its returns and its figures digital switchover happens, the audience will collapse. now and then, but it is at least reliable and it is at least That is true, and, except in peak time, by which we one that is accepted throughout the industry. mean from seven o’clock onwards, the audience for S4C has been consistently the same at on or about Q244 Mr Williams: I am a layman in these matters. 30,000. There is peak-time viewing, and 26% of that How does the audience measurement—the peak-time viewing are non-Welsh speakers. Then you three-minute or the 15-minute reach—relate to what go to a weekly reach, which brings us to the 57%. you have said and which of those—the three-minute Non-Welsh speakers are a significant part of that or the 15-minute reach—does S4C use? There has audience. They are the individuals who come and been a suggestion that the S4C website suggests that watch, most of the time, one or two programmes you are using the three-minute reach. a week, mostly rugby, and then they go off. The Arwel Ellis Owen: That is correct. S4C depends on challenge for me is obviously to try and retain that the three-minute return. The BBC depends on the 57% because I am sure the Committee here would be 15-minute return. Therefore, obviously, there are proud of the fact that 57% non-Welsh speakers watch problems in the way that you interpret these figures. S4C, which is a Welsh language channel. The services Part of the discussions going forward, from my role, that S4C has put in in terms of the red dot, in terms in terms of implementing the document that we gave of commentaries in English and Welsh, in terms of the to the DCMS, is to have a very serious look at BARB. subtitling, is a service that is given so as to try and One, it is very expensive and, two, there are a lot of attract the majority of non-Welsh speakers. arguments as to the results that come out of it. There are some people who claim, for example, that when Q249 Mr Williams: My last question is how do the they conduct competitions within programmes the reach figures vary according to different age groups? response they get to those competitions far exceeds I think that is fundamental. You mentioned, the actual figures that reflect the viewing audiences Mr Tomos, the word “cause”. I seem to get this for that programme. So there are a lot of question at every one of these meetings, but I am inconsistencies. That, I suspect, is inevitable given happy to do that because it is worth placing on some that this is sample based. of our records the appreciation for the work that is done for children’s programming by S4C. Q245 Mr Williams: Do you have the comparative Rheon Tomos: It is a concern to us, as members of information on the 15-minute reach? the authority, that data is not collected for the under- Arwel Ellis Owen: No, I am sorry, we do not have fours because all the evidence suggests that it is that. a very, very popular service. Some of the production companies involved in some of these programmes go Q246 Stuart Andrew: Why don’t you have the around Wales with various buses, and I think the Cyw 15-minute comparison? bus visited London not so long ago. They tell us that Arwel Ellis Owen: I just do not have it here. the appreciation index for that type of service is extremely high. In fact, the appreciation index for our Q247 Stuart Andrew: If you could you submit it to programmes compares for most genres across the us, the Committee would be grateful for that. board better than lots of other broadcasters in the UK, 2 Arwel Ellis Owen: I will happily provide it to you. if not better than most. I am sorry, I misunderstood. Q250 Jessica Morden: That was going to be my Q248 Mr Williams: Mr Tomos, S4C claims that question, as somebody with two pre-schoolers who non-Welsh speakers amount to 57% of the channel’s watch Cyw. Basically, none of those pre-schoolers are average weekly reach. I have to say I do not think that getting measured in any way? is a particular problem. For those of us who are Rheon Tomos: No. BARB do not collect that data. tentative learners, those of us who come from an English background living in Welsh-speaking Wales, Q251 Susan Elan Jones: I am quite concerned at that is something to celebrate. However, how do you something Mr Owen said earlier, which was that he explain, according to those figures, that more than half discovered about the funding cuts to S4C while 2 See Ev 113 and Ev 117–119 driving along the M4. This level of consultation, or cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen lack of consultation, does not surprise us particularly young people. In January next year, there will be when in this very room we heard about how the Welsh a teenagers’ initiative also. Mr Mark Williams talked Language Board was not consulted at all at any stage. about age groups earlier on. Trying to engage with But, in terms of the discussions that he had with the that young audience is a crucial priority for me and Minister, was there any sense that the Government’s the service moving on. That is why the investment plans were actually to do away with the type of has happened. funding that would have happened from the Broadcasting Act 1990 onwards? Was this part of the Q255 Alun Cairns: Can I ask very briefly on that, discussion at all? who is responsible for the success of Cyw and then Arwel Ellis Owen: The source of the funding was for the younger ones? Would that be the former chief never mentioned. It was never an issue. Now we find executive and the former chairman of the authority or ourselves with a licence fee. I will keep on saying it would it be you, Mr Owen? is licence fee funding, because the licence fee is there Arwel Ellis Owen: I think, Mr Cairns, that’s— for use for other broadcasters as well as the BBC. But Rheon Tomos: If I could come in, clearly I have the change of funding and whether or not, for represented the authority for the last four years and I example, there might be an investment or involvement would be in a good place to answer that. The Cyw by the Welsh Assembly Government, were issues that service was developed by a group of internal staff, were not discussed with us. You will find in the which, yes, included the former head of document that we wrote and submitted to DCMS that commissioning, the chief executive and other very we do take on board the possibility that one day talented individuals. It was publicly consulted on. maybe the Welsh Assembly Government might be A strategy document was produced that was widely constitutionally linked with S4C. But that was not circulated and consulted on, as I said. So it is well a serious issue for discussion between us and DCMS, documented. and the BBC, I have to say, was never mentioned once. Q256 Karen Lumley: I want to ask my last question. On your website, the last top 20 programmes, on Q252 Susan Elan Jones: On the viewers of S4C, audience viewing, was on 18 November, which there has been some talk about the actual drop in the indicates it’s perhaps a little out of date, but it shows number of viewers, but what I am intrigued about is that three programmes in that week had more than that if you look at the figures for peak time between 100,000 viewers and only seven had more than 50,000 2005 and 2009, it is the same, but it is the all-hours viewers. Are these figures including the repeats of the where it is reduced. Why do you think that is? week and why do so few programmes have such Arwel Ellis Owen: The all-hours, as I suggested significant numbers? earlier, was an issue raised by Roger Laughton back Arwel Ellis Owen: I will check this, but they should in 2004. not include the repeat figures. If I am wrong, I will write to you.3 The fact is that the top five most Q253 Susan Elan Jones: Okay, so we are not popular programmes are sport or events-orientated, comparing like with like. such as the Royal Welsh Show, the National Arwel Ellis Owen: It’s the 24-hour service as Eisteddfod and football that no other broadcaster compared to the situation we are now in. Before, it covers. These are the popular ones and they have was filled by English and Welsh language shown a 16% increase year on year, which is a very programmes. Now it is filled only by Welsh significant increase, and at the time when everybody, language programmes. I am told, last weekend, was watching either Strictly Come Dancing or The X Factor, S4C offered the Q254 Karen Lumley: Some of the witnesses we Dubai Sevens, Young Farmers’ Eisteddfod, football between Aberystwyth and Bangor, Noson Lawen, the have had here have argued that S4C perhaps should Heineken Cup Final and “Only Men Aloud”. Iam concentrate more on its core programming, the stuff very, very proud of that schedule. It’s unique, it’s you do really well, like the children’s services and different and it’s obviously successful as well. programmes like that. Do you accept that some of S4C’s output is the equivalent of what we have heard described as broadcasting wallpaper? Have you Q257 Guto Bebb: Certainly, coming from a family considered refocusing S4C’s broadcasting on what which supports Bangor City, they would agree about the importance of seeing Bangor’s great start to the you do do best? season. I just want to take you back to the issue of Arwel Ellis Owen: Sure. That is certainly part of our the BARB figures because there has been a degree of plans on one of the work streams going forward confusion in the evidence we have received on the because we have to see how many programmes we BARB figures. You mentioned the figure of 900 can make, what genres, what range of programmes we viewers being represented on the BARB figures. can offer, given the cuts in the funding. People are Arwel Ellis Owen: No. I represented the figure of 964 obviously huge fans of Cyw. I sat at a BAFTA Welsh speakers. reception a week last Sunday night when Cyw was nominated for two BAFTAs. It did not get one but it Q258 Guto Bebb: The number of households is 600, got to the last three, and one of them was the best is it? children’s channel in the United Kingdom. That Arwel Ellis Owen: That is correct. section is a brand new one, as you know, and there has been a strategic decision to invest in children and 3 See Ev 119 cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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Q259 Guto Bebb: It is, therefore, a panel, so there Q262 Mrs James: Is it cheaper to produce could be discrepancies as a result of the fact that the programmes via the BBC? I am thinking about panel is still comparatively small in the context of cost-per-viewer-hour of BBC-supplied programmes, Wales? or are you paying them the standard— Arwel Ellis Owen: The panel of 400, BARB would Rheon Tomos: There are two different things there to accept that UK-wise. That is the sort of set-up they consider. Obviously, the BBC produces 10 hours of have got that everybody else seems to accept. S4C programming for us as part of the licence fee and we has added, at some considerable cost—I mentioned do not pay for those programmes. We do pay for some £500,000—200 extra homes simply to try and get additional programmes from the BBC, although all of a better understanding of the audience. You would be our programmes we commission out to independent fully aware that the whole landscape of Welsh- producers. One of the things that we always do—the speaking homes has changed dramatically since S4C authority does this on an annual basis—is was established in 1982. That is why we have with comparisons for different genres, for the different BBC Wales, with the Welsh Language Board and S4C types of programmes. We compare the costs of commissioned an in-depth study of the Welsh producing an hour’s programme on BBC to an audience to better understand what is going on in independent producer. That is part of our scrutiny role that we carry out. I would argue that the actual these households where maybe you have one Welsh cost-per-hour of producing an average programme on speaker and others where there is a majority who do S4C will compare very, very favourably with any not speak Welsh. We need to engage with those facts other channel in the UK. and figures, and I am making the point that there is Arwel Ellis Owen: The figure is £16,000 per hour. no purpose in ducking these figures. Q263 Chair: So £16,000 per hour is what it costs Q260 Guto Bebb: I accept that entirely. Although the on average. BARB figures give some good figures and some Arwel Ellis Owen: That includes original and repeats. disappointing figures, would you dispute, for example, that the work that Ofcom and YouGov have done— Q264 Mr Williams: The Government are asserting for example, the recent YouGov poll—is just as that the new partnership model is the best way of relevant to the debate? S4C has faced difficult times securing the long-term future of S4C. Mr Tomos, you in terms of the loss of the Channel 4 programming, so painted the picture of the strategic partnership as it the key audience figures in terms of the peak hours is exists and as you hope it will continue being the an important point. But I do get the overwhelming credible alternative, I guess, to what the Government feeling—and this is really just a feeling I am getting— are suggesting. But despite that reticence—or that S4C is not appealing in the same way as it did perhaps stronger than reticence—do the proposed five or 10 years ago, and that is reflected, I think, in arrangements offer any potential benefits or do you the Ofcom figures, which shows the fall in the consider them to be entirely disadvantageous to S4C? percentage of Welsh speakers watching the channel. Rheon Tomos: If I come in first—I am sure Arwel Arwel Ellis Owen: I can but repeat again—there may will have his views as well, as somebody who has be an argument for others—that in peak time that worked for the BBC—we are a public sector audience has held up remarkably well at 30,000, give broadcaster and we regard our independence and our or take.4 editorial and operational independence as being very, very important to us moving forward. That will be Q261 Mrs James: I want to turn to the relationship right at the head of our discussions with the BBC with the BBC. Many of the programmes that you are Trust and DCMS when we venture into these talks. broadcasting—the most popular ones consistently— We are venturing into these talks in a very, very are the ones produced for you by the BBC. Why is positive frame of mind. Let’s get that absolutely clear. that and does that mean that perhaps there is a benefit The first talks are happening at four o’clock this to a closer working relationship between yourself and afternoon. the BBC? They are very popular programmes. Rheon Tomos: I would not say that there is not. We Q265 Mr Williams: I appreciate what you said about have a strategic partnership in place with the BBC independence. Where is the balance drawn between and, yes, some of the programmes that the BBC the increased efficiencies, reduced duplication or just produce for us are favourites and have been general help in the economies of scale and the favourites. I should declare an interest in that my son independence that you have alluded to, because that has acted on Pobl y Cwm, so obviously I am a great is the kind of argument being used to advance this fan myself. But the strategic partnership has been in new model? place for some time. Arwel Ellis Owen: Can I pick up on this? One has to Arwel Ellis Owen: Three years. put the BBC and S4C’s 10 hours and the strategic Rheon Tomos: Three years. We have just signed up partnership that controls those 10 hours to one side, to the strategic partnership for the current three years and then the other discussion is about the new funding and there has always been very effective dialogue arrangements for the money that comes from the between BBC Wales and S4C in discussing the licence fee. As to the 10 hours, the director of the BBC in Wales and I met well before any of these schedules. discussions took place with DCMS and we agreed to 4 See Ev 119 set up three teams that would look at how we might cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen co-operate and how we might look for savings and Rheon Tomos: Can I come in very briefly? We efficiencies to do with the very points I am talking brought in Arwel in a temporary capacity, yes, but about—audience research, for example, transmission we brought him in because of his vast knowledge of and even co-commissioning programmes. The fact is broadcasting and his ability to be able to lead there has not been a programme co-commissioned by strategically. I think we are in a very good place, BBC Wales and S4C for many, many years. I find it particularly with Arwel leading the team. very difficult to understand why that is not happening. Chair: Thank you for answering that, Mr Tomos. So these three work streams have been set up well before these cuts have come into place and they are Q271 Guto Bebb: I welcome your comments about to do with the operation of the 10 hours and other the positive attitude that you are bringing to the table subsequent supplies. I think it is important for us to in terms of your discussions with the BBC. That is bear in mind that we have had experience with the very important and I fully subscribe to your comments BBC on those 10 hours. When the BBC unilaterally that you need operational and editorial independence. decides to reduce the value of those 10 hours by £4.5 What sorts of protections do you believe that you need million, as they have, when they pull programmes like to ensure a new funding relationship deal based upon Mosgito and Yr Wythnos, without any consultation the licence fee? What sort of protections are you with us, you will see that we are very concerned, looking for in terms of ensuring that you do have therefore, about how that culture might be interpreted operational and editorial independence? with the new funding for us. We don’t want that Arwel Ellis Owen: If I was to put it as simply as system to be in operation for the news. possible, it would be that the money needs to come with no strings attached. Q266 Chair: Mr Owen, you would say that you have been independent up until now. Q272 Guto Bebb: Could you clarify that then? Arwel Ellis Owen: Yes. Arwel Ellis Owen: It needs to come in a way that the S4C Authority, or whatever configuration evolves out Q267 Chair: There is no reason why, in theory, if of these discussions, has the opportunity, one, to you have been independent up to now with the DCMS appoint its own chief executive and, two, has the paying your bills, you should not be able to be opportunity to give that chief executive and the independent and continue being independent with the management team the freedom to choose and BBC paying your bills. commission what they want. Those sorts of guidelines Arwel Ellis Owen: It is not the BBC; it is the licence are necessary because, under the 10 hours that the fee, as you know. BBC gives S4C at present, we have no editorial input Chair: All right, the licence fee. at all. Therefore, it is a very useful exercise for us to Arwel Ellis Owen: No, I think it is a very important look back on how that partnership has worked and see distinction because the licence fee is there to support what we can learn from that experience. It has been public service broadcasting. It just so happens that the a very happy and successful one. You mentioned Pobl BBC Trust are the guardians of it at present. I take the y Cwm, which is one and Newyddion is another one, Minister at his word when he writes telling me, as but there are serious issues of plurality here. indeed does the chair of the BBC Trustees, that they will co-operate and try and seek structures that Q273 Guto Bebb: On that specific point, as a guarantee the independence—the operational and Committee, we are hoping to visit BBC Alba. Are editorial independence—of S4C. That is the mode in there any issues in particular that we should be which I am going— looking at in terms of the way in which BBC Alba works? Q268 Chair: Theoretically, there is no reason why it Arwel Ellis Owen: Yes. Have a look-see at the should not happen. After all, you have been management structure of that, where you will find independent up until now, so there is no reason, there is a duplication. There is a BBC representative theoretically, why it should not continue. and there is a Gaelic Media Services representative. Arwel Ellis Owen: We will enter the new discussions There are two teams working in tandem and that is with as much support and positive thinking as a small operation. We do not want to get into that possible. complex management or governance system with Chair: We are very pleased about that. S4C.
Q269 Alun Cairns: Mr Owen and Mr Tomos, are Q274 Jonathan Edwards: On the funding you the best people to conduct these very important mechanisms, the evidence we have had orally from negotiations with the BBC, because they will establish independent providers and the unions is that they the long-term future in terms of funding stream? Are would like to see the licence fee top-sliced at DCMS you the best people to conduct that, bearing in mind level. Is that your preferred model or are you happy you are there only in temporary capacities? to work through the BBC structures? Arwel Ellis Owen: Who would you suggest otherwise, Rheon Tomos: We have to be an accountable public Mr Cairns? body and we have to demonstrate that we deliver Chair: I don’t think we want a discussion on that. value for money. In the future, it will be whether we deliver value for money mostly out of the licence fee Q270 Alun Cairns: There will be a new chair in we get. If we can demonstrate that that is the case in place shortly, won’t there? an effective way, personally I do not see why there cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
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14 December 2010 Rheon Tomos and Arwel Ellis Owen should not be a top-slicing as long as we can Arwel Ellis Owen: It took some proud people to make demonstrate that that is happening. that strategic decision back in 2006 that S4C would Arwel Ellis Owen: This is maybe where my BBC go into HD because that is the future. By now, all the experience comes in. Top-slicing is anathema to the independent producers have invested heavily in HD. BBC. It is just not part of their culture and therefore This service was launched, as you know, in April this we have to find ways. We might call it something else, year. It shows co-operation between S4C and Channel but I can tell you that if I go in this afternoon talking 4 because they share a multiplex: HD in England and about top-slicing the meeting will be over very HD in Wales on Clirlun, which is a simultaneous quickly. We understand the cultures that they are transmission of S4C. It did cost money, and I can give coming from, we know them well and I am very you the details later if that is acceptable to you.5 We hopeful that, between us, we can come up with an would save very little from abandoning it, but I have operational package that respects everybody’s to tell you HD is the future. We would not have had independence in this. the Heineken Cup final on Saturday night if we had not had it because Sky is all HD, and other ideas we Q275 Jonathan Edwards: We know that the have about co-production on an international scale are financial climate is going to be challenging for the totally dependent on it being HD. channel in the coming period. To what extent can you boost your income through advertising? Q278 Mrs James: We have heard evidence from the Arwel Ellis Owen: It is a very interesting point unions involved that they were very concerned when because I am very aware that the public feel that this decision was made in 2006 about moving forward constant repeats are not acceptable. As you know, the into the new age. I am still puzzled. One question independent producers have the rights now, following I keep asking myself is how did such a small, clever company as S4C turn into this problem? The warning the 2003 Communications Act, to buy a licence to signs were there. Taking on the big boys is not the transmit things and we have an agreement so that we name of the game now. You have a brief, which is can enable a repeat in 28 days. The public have made Wales, and a market, which is Wales. I do not it very obvious to me that that is totally unacceptable understand how you can take them on. and therefore we have cut that back to three Arwel Ellis Owen: We believe in the future and HD transmissions per 28 days at present. And still people is the future. If we were not engaged in it we would complain about it. Nevertheless, if we have reduced be a back-street shop. income and we have an increased air-time of 24 hours, as compared to what we had 12 months ago, you can Q279 Karen Lumley: I want to go further on the see that something is going to have to give. The whole funding issue. Some witnesses have told us that issue of repeat programmes is a very emotional issue central government funding linking to RPI has made for the audience. They have told us very clearly that you complacent. Do you agree with that? I notice in they don’t want it. your accounts you have got £58 million in reserve. How did you get that and how do you intend to use it Q276 Jonathan Edwards: What assessments have for the benefit of the people of Wales? you made of your core programmes? If you are going Rheon Tomos: I chair the authority’s audit and risk to cut back on programming, what assessments have committee and I am an accountant so I know a little you made of the programmes you are going to have bit about figures. to keep as your core schedules? Karen Lumley: And me. Arwel Ellis Owen: Mr Cairns raised the point earlier Rheon Tomos: The linking to RPI was negotiated on as to who produced these programmes. Producing some years ago now and its purpose was to provide programmes is like producing an elephant. I am told a certainty of future funding stream for the channel. it takes months and months to do it. So the current Where we were looking at development—as Arwel schedule is certainly that of the programmes intimated, in the TV industry you are planning commissioned by the previous team, if I can put it literally two years ahead—we were always planning that way. We are now trying to make sure that 2011 almost two years ahead and we normally have is in bed, because most of the programmes have been a five-year projection as to what we are doing with all commissioned before these cuts came in, and we have income, including what we do with commercial made that by applying a 10% cut across the service. income, because the commercial income that has been The big hitter has been the backroom: there is a 26% generated quite successfully over a number of years is reduction there, and there has been a 4.5% reduction paid over as a dividend to support public service in programme allowance for the contents of the funding. It cannot happen the other way round. We programmes. So we are trying to defend as much as are not allowed to do it the other way round, but we we possibly can. are allowed to assist broadcasting by doing it that way. Chair: I appreciate that you are trying to answer in Even though we did have the formula funding, detail, but we are very short of time and we would because we were moving to this new digital channel, not want to hold you up for your important meeting which is a Welsh-only channel, we had committed this afternoon. ourselves to a huge quality improvement in the service that the people of Wales were asking from us. We were absolutely dedicated to going down that Q277 Jonathan Edwards: On the HD channel, particular route. The fact that we had that certainty which you launched earlier in the year. How much did that cost and is that a luxury you can afford now? 5 See Ev 119 cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
Ev 44 Welsh Affairs Committee: Evidence
14 December 2010 Rheon Tomos and Arwel Ellis Owen was very useful to us. That has now been totally taken Arwel Ellis Owen: I will try and seek that information away. A 24.4% cut within this settlement means that for you.8 we now have to totally redefine what we do as Rheon Tomos: Where any expenditure has occurred, a channel, and we have already started looking at this. and if there is a need to write off that expenditure, This very week, a team has started looking at the way that is clearly referred to the committee and to the in which we are going to be commissioning in the authority for ratification. future in the channel. Q286 Chair: Mr Owen and Mr Tomos, you have Q280 Chair: Could you answer the point about the been here for an hour and a half and this has been a reserves as well? very interesting session. We were due to finish at 12. Rheon Tomos: On the point about the reserves, I have I would like to go round the room and give members no idea where the figure of £58 million that you an opportunity to ask one or two very, very brief referred to has come from. questions, and perhaps you could supply us with very brief answers. Mr Williams: It is probably one of the last questions Q281 Karen Lumley: It is in your accounts. we have been given that we have not asked yet and Chair: It is page 109, apparently. that is one of you alluded to a closer relationship with Rheon Tomos: We have some investments and we the National Assembly rather than DCMS. What are have some reserves, but some of those reserves are your thoughts on that? already tied up in other areas. The true position, off Arwel Ellis Owen: We take advice from our political the top of my head a little bit, in terms of how much masters on that point. In the document that we we have available at any given time in terms of submitted to DCMS we said we are a Wales-based reserves, would be more likely to be about £21 million broadcaster. We broadcast in Welsh most of the time. or £22 million. Somehow or other we are dealing on a day-to-day Arwel Ellis Owen: If I can just correct the chair here, basis with our Welsh audience. They have expressed it is £27.5 million. That is the book value on the their political preference one way through the Welsh commercial reserves. Assembly Government, but they do not seem to be in any way engaged with this process at present. Some Q282 Karen Lumley: It does say £58 million in your people believe that broadcasting should be devolved, accounts on page 109. and that is for you politicians to decide. Arwel Ellis Owen: I will have a look at that and come back to you.6 Q287 Mr Williams: I do not doubt that DCMS, as we know, is mindful of the cost of broadcasting to the Q283 Chair: How much money has been spent on UK population at large, but I would suggest that pilot projects which have never come to fruition over, DCMS Ministers do not have the level of awareness say, the last two or three years? of the important work that is undertaken, not least the Arwel Ellis Owen: I cannot give you an answer for interrelationship between broadcasting and education that, but it is an inevitable part of this business that and young people that we have talked about in this one does pilots and they do not work. One has to session. I suggest that those decisions would be more invest in the future. I will try and find that figure for pertinently taken in the National Assembly. Arwel Ellis Owen: It is a fact that we do broadcast the you if you are interested.7 Welsh Assembly affairs on S4C. Nobody else does it. Q284 Chair: It has been suggested that sometimes Q288 Karen Lumley: Mr Owen, good luck with the same companies have been asked over and over your negotiations this afternoon. Do you intend to again to do pilots that have never amounted to apply to be the permanent chief executive of S4C? anything and, therefore, have been given rather large Arwel Ellis Owen: I think I will keep that to myself. sums of taxpayers’ money and nothing has been achieved for it. Q289 Stuart Andrew: This inquiry has caught the Arwel Ellis Owen: It is certainly true that there were attention of the media obviously and not just the two development initiatives and a fund of £1 million Welsh media. I noticed that there was an article in was set aside for the development of that, as indeed Private Eye last week in which the comment is that there was £500,000 set later for the development of many of the witnesses that we are seeing have vested animation ideas. Five main companies benefited from interests in S4C succeeding as it is. How can S4C the initial £1 million investment and three other look like it is more transparent and therefore increase companies benefited from the £500,000 investment in confidence among the public and the confidence the development of animation. perhaps of this Committee? Rheon Tomos: It is extremely important that the Q285 Susan Elan Jones: What would be useful for authority—that is the link between the viewing public us in that is having a benchmark—if that information and us—the DCMS and the Assembly all have to have was available—about other broadcasting companies a pretty clear vision as to what we want to do moving and their pilot projects. I think we need to have that forward in terms of broadcasting in Wales. I have only benchmark as well. been vice-chairman for two weeks and in that two weeks, I have had a number of letters from 6 See Ev 114–15 7 See Ev 115 8 See Ev 115 cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
Welsh Affairs Committee: Evidence Ev 45
14 December 2010 Rheon Tomos and Arwel Ellis Owen organisations wishing the channel well, saying, “It is Arwel Ellis Owen: I am meeting them tomorrow. what we want in Wales, to be able to represent us, to I have met them on a weekend conference. I have met make sure that broadcasting is right up there in terms them on a series of occasions, one day prior to their of moving forward in Wales.” But if you look at the coming here to give evidence to you. They are a major document that Arwel alluded to earlier, which was player and a major partner. Therefore, we are very submitted to DCMS, and the discussions that we had mindful of trying to keep them on side as well as we with DCMS, there is recognition in that document as are of the 155 staff we have. I am trying to give those well that we are talking to DCMS on a regular basis. entrepreneurs—because that is what they are and they We have a good working relationship with them. I am work all over Wales—an element of stability in a very going to be talking with somebody there tomorrow difficult period. What I have said to them is that if morning about various other matters. If you look at S4C has had a three or four-year guarantee of income the press in Wales today, they mention what a fantastic up to 2015, and there is a big problem after 2015, then contribution S4C is making to the Welsh language in that sort of guarantee is one that I should also be able Wales. I think the future for S4C broadcasting linking to give to the independent sector because that is the into education and the IP Fund, which is helping basis on which they will work their business and their companies in this key sector of development in Wales, entrepreneurial ideas. is a success story, not a bad story. Q293 Susan Jones: Have you any plans for locally Q290 Alun Cairns: Mr Owen, you said at the based promotion and marketing when specific beginning that when you became acting chief programmes come from a particular area—not executive back in July, you were not interested in that wishing to draw too much attention to Codi Canu and being a permanent post. Something must have Rhosllanerchrugog—but just thinking in terms of changed in the interim, but I will leave that hang. especially learners of Welsh? What troubles me in particular is that, with the Rheon Tomos: Yes. If you look back at the last year greatest respect, you are both there as temporary of programming on S4C, you will see that there has appointments, acting chief executive and vice-chair of been quite a strong focus on community the authority, waiting for a new chairperson to come programming. The viewing figures have been good, in place as well as for a new appointment of a chief but what has happened is it has raised the profile of executive. You are embarking on extremely important the channel also in those areas. In fact, that very point negotiations with the BBC when a new chairman is is something that we will be looking at at a meeting likely to be in place within two months or so, I would of the commercial board this afternoon. envisage. You have also said that you are conducting Arwel Ellis Owen: Some 1.5 million people across a number of reviews. You talked a moment ago about the United Kingdom watched local events on S4C last a review of commissioning. I am troubled that summer. That is them attending fairs and shows that temporary people are conducting extremely important no other broadcaster attends, but there is obviously strategic issues for the long-term future of the channel. a huge market in local, and one current stream we are Can you tell me a little bit about the review of doing is on community broadcasting. commissioning, please? Chair: If you would like to summarise a quick answer Q294 Guto Bebb: In terms of the members of the to that, that would be fine. authority, how many of them operate in an executive Arwel Ellis Owen: It is business as usual, Mr Cairns, capacity at this point in time? and we have to— Rheon Tomos: None.
Q291 Alun Cairns: But didn’t the DCMS ask that Q295 Chair: The review is being carried by Justin you don’t engage in detailed negotiations until there Albert. Is that correct? is a new chairman in place? Rheon Tomos: He is one individual as part of a team Arwel Ellis Owen: No. There has been talk about that is involved in carrying out the review of conducting independent reviews. You may recall that commissioning. the four political leaders in Wales suggested that to DCMS. They did not take it up. Q296 Chair: That is Justin Albert who was involved Alun Cairns: No— in the demise of Horse and Country TV. Is that right? Chair: Order; order. I do not want a conversation. Arwel Ellis Owen: We have decided to have a number Arwel Ellis Owen: The Minister has indicated that he of these work streams that will be led by a senior is of a mind to conduct a review in 2014, I think it is. management figure and we will also buy in expertise We have to conduct a major root-and-branch review from outside. Justin Albert, the person that you of the way that we are running S4C to comply with referred to, set up minority Spanish language services the new budgeting and funding arrangements. That is in America with Discovery. He has wide experience what I am doing. That cannot wait. That has to press of working in local niche broadcasters and we have on. brought him in for 15 days to look at the way that S4C might work in the future. Q292 Jonathan Edwards: What discussions have you had with the independent sector about what is Q297 Chair: Is it correct that he was working closely currently on the table and how are their views with Sir Roger Jones, who is a former member of influencing your negotiating position? Horse and Country TV? cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:56] Job: 007748 Unit: PG03 Source: /MILES/PKU/INPUT/007748/007748_o003_michelle_CORRECTED HC 614-iii WAC 14 December 2010.xml
Ev 46 Welsh Affairs Committee: Evidence
14 December 2010 Rheon Tomos and Arwel Ellis Owen
Arwel Ellis Owen: I have no information on that at Alun Cairns: Can you tell us when this appointment all. process was? Arwel Ellis Owen: Yes. I met him, because I have not Q298 Chair: I believe that Roger Jones was worked with him in the past but I know of his a director, was he not, of Horse and Country TV? reputation. He had a particular expertise in minority Arwel Ellis Owen: You will have to excuse my lack language broadcasting in America with Discovery and of knowledge on that particular company. that is what I have bought into.
Q299 Chair: Do you think it is right that the review Q301 Alun Cairns: It was not advertised. Was it should be carried out, if I am correct, by somebody prompted by Sir Roger Jones, a member of the who has recently been involved in the collapse of one authority, at all? company one of whose directors is also on the S4C Arwel Ellis Owen: Absolutely not. authority? Arwel Ellis Owen: I know Justin Albert from my Q302 Chair: But you were not aware that Sir Roger experience as an independent producer. I know Jones had this connection with Justin Albert? Transatlantic Films, which is a company with which Arwel Ellis Owen: I was not. he is associated. He has done some very good work with Discovery in America, in particular on minority language stations, and that is the area that I was looking at particularly.
Q300 Chair: Do you think it might be an idea to have a look at this article in The Telegraph before that review continues? cobber Pack: U PL: COE1 [SO] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Welsh Affairs Committee: Evidence Ev 47
Tuesday 11 January 2011
Members present: David T.C. Davies (Chair)
Stuart Andrew Mrs Siân C. James Guto Bebb Susan Elan Jones Alun Cairns Karen Lumley Geraint Davies Owen Smith Jonathan Edwards Mr Mark Williams ______
Examination of Witness
Witness: Alun Ffred Jones AM, Minister for Heritage, Welsh Assembly Government, gave evidence.
Q303 Chair: (Translation) May I extend a welcome evidence which has been contributed to the Assembly to Alun Ffred Jones today? Thank you very much for stating “bloated”, “complacent” and “in disarray”? your attendance. Everybody knows who you are, of Alun Ffred Jones: (Translation) I have said that the course, but, for the record, would you please tell us figures have been put to you in relation to the word your name? I am David Davies, the Chair of the “bloated”. I have acknowledged that there have been Committee. difficulties. It’s not my business, I don’t think, to make Alun Ffred Jones: (Translation) I am Alun Ffred comments about the way in which the body has been Jones. I am the Minister for Heritage within the Welsh operating internally. That is a matter for the S4C Assembly Government and I am very pleased to have Authority and, of course, ultimately it’s a matter for the opportunity to present my comments to you on DCMS, which has responsibility for S4C. It is not the very important issues that you are investigating. a matter which is devolved. In terms of general Perhaps I should say, and I noticed this on the record interest of the Government, I don’t know if we’ve of those who have already given evidence, that I don’t made comments in terms of how the S4C policy has have any direct interest within S4C affairs, but, developed over recent years but we have taken a because of a previous link, I do have an interest within major interest, of course, in the field of broadcasting a building which is rented by a company that makes in general. As you will know, we had a group of programmes for S4C. experts in because of our concern about English Chair: (Translation) No problem at all. Thank you language broadcasting in Wales, and S4C was part of for telling us that. that picture. We got Professor Ian Hargreaves to undertake a review of the creative industries, and there Q304 Alun Cairns: Thank you, Chairman. Mr Jones, were issues there about the possible relationship during our inquiry we have heard S4C and its between the Welsh Assembly Government and S4C, management described in various ways, sometimes as and the BBC, into the future. “bloated”, “complacent”, and even “in disarray”. How would you describe S4C? Q306 Alun Cairns: (Translation) Mr Jones, how Alun Ffred Jones: (Translation) With reference to the would you describe your relationship as a Minister word “bloated”, you have heard figures from S4C and the Welsh Assembly Government’s relationship officials regarding the number of people working for with S4C before the previous chief executive left the them. S4C has gone through a very, very difficult Authority and after that? period and there are questions to be asked, certainly Alun Ffred Jones: (Translation) Acknowledging in relation to the way in which S4C has been once again that we don’t have any direct responsibility operating. It is important, on the other hand, for us to for S4C, the practice was that we would meet with the realise that S4C is a very important part of the cultural Chair and the chief executive, usually, twice a year. It landscape in Wales and its contribution in terms of the is the same arrangement that we have with the BBC, language strategy is extremely valuable. In terms of where we meet Menna Richards and other officials. the operation of S4C, I don’t think it is my place to All I would say about that relationship is that it was make comments in relation to my opinion about what professional and quite open, although I would have has happened internally because I don’t have any liked, perhaps, to glean more information from S4C more evidence than anybody else. But because of during that period of time than they were prepared to what has happened and because of the implications share with us. for the future, as a Government, we certainly have an opinion that there should be a far-reaching Q307 Alun Cairns: Do you think that the S4C investigation not only into what has happened but in Authority and management have conducted their terms of what the best structure is for the future. affairs transparently, openly and entirely in the interests of viewers, let us say, since July and the Q305 Alun Cairns: (Translation) Can I go back to period in the years leading up to July? the question? The Welsh Assembly Government has Alun Ffred Jones: (Translation) That is a difficult expressed several opinions in relation to S4C and the question to answer because we know a lot about what way in which the policy has developed. Why, then, has happened since July, although I don’t know any are you not prepared to express an opinion on the more than you about the departure of the chief cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Ev 48 Welsh Affairs Committee: Evidence
11 January 2011 Alun Ffred Jones AM executive. As to the previous years, it is fair to say because that changed the landscape, what was the role that there was not enough of an overview of what was of the Welsh Government in that period leading up to going on in S4C. In terms of whose responsibility that the announcement that S4C in the future would be was, it is a matter for you as a Committee to look at. funded through the BBC? DCMS has responsibility for the way in which S4C Alun Ffred Jones: (Translation) The Welsh operates and, of course, the Authority itself also has Assembly Government didn’t have any role of any responsibility. I would say, from the little I know, that kind. There was no form of discussion and, because the structure adopted by S4C some years ago of of the suddenness of the matter, it appears that I could having this policy of separateness between the board not have expected to have been part of the discussion. and the management team seems to have led to a situation whereby tensions arose. I was not aware Q314 Jonathan Edwards: (Translation) Wasita of changes at the time and I don’t have any internal disappointment to you that there was no contact from knowledge about that, but it appears that that structure the Secretary of State or, because the matter is not didn’t serve the viewers as it should. devolved, it wouldn’t have been something for you to deal with? Q308 Alun Cairns: (Translation) If S4C was Alun Ffred Jones: (Translation) That is a question accountable to the Welsh Assembly Government, for the Secretary of State, really. Traditionally, over would you have been happy with the explanation the years, there has been a relationship between the about the departure of some prominent members of Secretary of State, who has responsibility for S4C, S4C, the former chief executive and the head of and the Welsh Assembly Government on certain commissioning, etcetera? matters and, certainly, officials are in regular contact. Alun Ffred Jones: (Translation) S4C is not devolved. But it was a matter for this Government that has The only experience I have of dealing with bodies responsibility for S4C to make that announcement and that come under the responsibility of the Government I don’t have any further comment to make on it. currently is that certainly, as a Minister, I would have expected to have that information. Q315 Jonathan Edwards: (Translation) In evidence that we have received from other people during this Q309 Alun Cairns: (Translation) You would have investigation, a number of people have talked about expected to have that information? the “conspiracy of silence” regarding S4C and said Alun Ffred Jones: (Translation) As a Minister, that that has been part of the problem that has led to I would have expected to have known more, and I the current situation. Do you think the lack of scrutiny, believe that I would have known more. because the channel is not devolved, has been part of that problem? Q310 Alun Cairns: (Translation) Thank you. Do you Alun Ffred Jones: (Translation) I’m not sure. I think think members of the Authority should be changed “conspiracy of silence” is too easy a term to use. It because there is so much of a mess in their midst at sounds very good, as if there really were a conspiracy the moment? afoot. It’s a bit difficult to believe that everybody in Alun Ffred Jones: (Translation) As I said earlier, the Wales was part of a conspiracy. We have to remember, opinion of the Government in Cardiff is that there of course, that no political party before the last should be a far-reaching investigation into S4C, not election talked about any kind of change or any only into what has happened but also into how S4C proposed change to the system of funding S4C or to will operate in the future, what structures it should its management. So, in a way, the matter was not a have in terms of management and how to reach and burning issue. On the other hand, I believe it is fair to serve the audience best. It is from such an overview say that the level of scrutiny of the performance of that you will then look for a structure, possibly a new the Authority, if you like, or the way in which S4C structure and new membership. I don’t think we operated, hadn’t been sufficient. Whose responsibility should just expect resignations overnight as if that is was that? If you want to, blame the politicians in going to solve the problem. Cardiff. But the responsibility lies here and perhaps a question needs to be asked about how many Q311 Alun Cairns: (Translation) But do you have investigations were undertaken by a Committee of this confidence in the way in which it is currently being House into the operation of S4C over the years. run by the Authority? Certainly people were comfortable because the Alun Ffred Jones: (Translation) The statements that arrangement was a firm one. It gave a secure funding have been made recently are quite acceptable. basis for S4C, and people probably thought that not interfering too much was the best policy. However, I Q312 Chair: (Translation) Lord Dafydd Elis- think there is a responsibility on all of us. Looking Thomas, of course, was very critical of the current back, I think every one of us should have taken either board. Do you agree with the comments he has made? more of an interest or there should have been more Alun Ffred Jones: (Translation) Lord Dafydd Elis- public discussion about what was happening than Thomas made those remarks, comments as personal actually took place. comments. I don’t share his views, no. Q316 Jonathan Edwards: (Translation) If I can turn Q313 Jonathan Edwards: (Translation) Good to the economic strategy of the Welsh Assembly morning. Minister. If I can turn specifically to the Government, the economic regeneration document has announcement by the Secretary of State in October, creative industries at its heart. To what extent, then, cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Welsh Affairs Committee: Evidence Ev 49
11 January 2011 Alun Ffred Jones AM is the Government in Wales concerned that what is have been handled much better? Do you take a view happening to S4C is going to undermine that strategy? on the way in which it has been dealt with by the Alun Ffred Jones: (Translation) The reduction that is current Government here? going to happen in the budget is going to hamper S4C Alun Ffred Jones: I have made a number of greatly. You can’t lose 25% of your budget without comments about that. I certainly believe that S4C that having an impact on what actually happens on deserves a fairer deal, in a sense, and I’m not sure that screen. As a result, it will also have an impact on the including it in that general, all-purpose Bill was the creative industries in general. Certainly it is part of best way to deal with the issue. But we are where we the economic regeneration strategy of the are. In that sense, I am more interested in the future Government. The Ian Hargreaves Report also gives a and securing the long-term financial stability of S4C, very firm direction, stating that, in Wales, we should and also the editorial independence of S4C in any be trying to maximise the impact of the creative future arrangements. industries generally, and we have to include S4C and BBC in that. Hargreaves, in his Report, notes that Q319 Susan Elan Jones: (Translation) Can I there should be a more creative relationship between mention, please, Minister, about the other conspiracy those bodies and the Welsh Assembly Government. of silence? Do you feel it’s a coincidence that we are So I think that that emphasis is one I would greatly discussing the governance of S4C, as important as it support, but losing this funding is going to be very is, at a time when this Government, here in detrimental. That is inevitable. It will also force S4C Westminster, is going to make cuts of 25% to S4C? to look at new ways of working. Do you think that is a coincidence or do you think it Chair: (Translation) I am very aware of time so, if is some kind of spin that we can sometimes put on possible, can I please ask for short questions and things in Westminster, and that it is the fault of the answers? Tory Government here in Westminster? Alun Ffred Jones: (Translation) I’m not sure whether Q317 Owen Smith: You seem to be saying that there I understand your question. wasn’t and isn’t a conspiracy of silence, to use that Susan Elan Jones: (Translation) I understand it. curious phrase, around S4C, but I thought you were Alun FfredJones: (Translation) I’m sure you implying that S4C seems to have fallen down the understand. It’s my fault. cracks between DCMS and WAG in terms of the Susan Elan Jones: (Translation) Is there a scrutiny of it. Do you have any ongoing concerns coincidence? about that and how do you think this new proposal Alun Ffred Jones: (Translation) I’ve said what I have whereby it will fall under the aegis of the BBC might to say about the lack of public discussion. I think that change the scrutiny of the oversight of S4C? was a weakness and all of us should look at that and Alun Ffred Jones: I think we have to remind how to ensure it does not happen in the future. I do ourselves that the responsibility for S4C lies here with believe these cuts are very, very tight. They are severe. the DCMS at Westminster. Therefore, in terms of It is the decision of the Westminster Government here scrutiny, it is mainly a matter for this House, and the Government has to take responsibility for that. I presume. Obviously, because of the importance of I don’t believe, by the way—and I have said this broadcasting in Wales, both in the Welsh language and publicly—that S4C should be treated like some sacred in the English language, there is inevitably a great cow that should not be touched and that it or its deal of interest within the Assembly and within the finances shouldn’t be interfered with in any way. On Government. That is why, as I said, we have the other hand, I think that these cuts, without an conducted two reviews, and committees of the inquiry that looks very carefully at the costs and what Assembly have also conducted a number of inquiries is possible, are very unfortunate. I would have been into broadcasting in Wales. So there isn’t a lack of far happier if there had been an inquiry before taking interest there and in that sense there has not been a decision on the level of cuts. a conspiracy of silence in terms of the Assembly. With Chair: (Translation) Let me turn to a member of the hindsight, I think there should have been greater Conservative Party now. discussion about the policy adopted and, possibly, even programme-making and the general policy Q320 Guto Bebb: (Translation) Good morning. I within S4C should have involved greater public don’t want to be guilty of looking back rather than debate. As to the future, I return to this theme I have looking forward because I think the point you have already indicated. We believe, as a Government, that made about the need to look forward is very positive. there should be a wide-ranging inquiry into S4C That’s important. But just on the basis of the argument which would then perhaps pave the way for future that S4C makes an economic contribution, and of relationships between S4C and the BBC and, of course S4C does make an economic contribution to course, between S4C and the people of Wales. After Wales, isn’t it true to say that that contribution, all, the contract initially was between the people of certainly in north-west Wales where I live and Wales and the Government. represent a constituency, has shrunk a lot over the last six or seven years? Q318 Owen Smith: Do you take a view, therefore, Alun Ffred Jones: (Translation) I don’t have the about the way in which S4C has been handled by the figures but certainly there are fewer companies and Government? Obviously WAG was not consulted. certainly the variety of programmes that are made, S4C is inserted into the Public Bodies Bill and is an compared to, say, 15 years ago, has changed. That anomaly within that Bill. Do you think that this could change in variety means that the critical mass of cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Ev 50 Welsh Affairs Committee: Evidence
11 January 2011 Alun Ffred Jones AM technicians and artists very often may not be available language in the Welsh Assembly, on what point would in the north-west of Wales as it was. So, certainly the you feel S4C’s viewing figures were a threat to its policies that S4C have followed have been detrimental contribution to linguistic planning? Is there a point at to the independent sector in north-west Wales. This which the figures would really be dreadful? I don’t is a very difficult argument because you can’t tell a think that point has been reached, I would like to broadcaster that they have to commission programmes emphasise, but do you think there is a point at which from a particular area or by particular companies. You the contribution of S4C into linguistic planning would could, I suppose, but I don’t think it would be a very really be under threat because of a lack in the wise thing to do. On the other hand, I understand what viewing figures? you are saying. Alun Ffred Jones: (Translation) It appears that that is part of the public debate which needs to be had. It Q321 Guto Bebb: (Translation) I just wanted to is not my place to say at what point that would be. confirm that. In terms of the comments you make That is the challenge to anyone who plans about S4C and the importance of S4C in terms of programmes: to make programmes that people want linguistic planning—and of course one accepts that to see. It is not as easy as it sounds, as I have the work S4C does with children’s programming is of explained partially in my previous response. But there key importance—to what extent do you think the is no doubt that it is so important, if we are set to recent figures that were published by S4C, fair play to create a bilingual country, that we have to have Welsh the channel itself, in the context of the YouGov figures language television. I don’t think we should that showed how few Welsh speakers actually viewed underestimate the value and the contribution of S4C the channel, are accepted by you and to what extent in Wales in terms of bringing non-Welsh speakers and do they suggest that S4C, before these proposed Welsh speakers together because there is a service on changes, did not reach its core audience? S4C that is available for non-Welsh speakers as well. Alun Ffred Jones: (Translation) To come back to That link is extremely valuable and I think that it has your point about the fact that broadcasting or made an important contribution over the last 30 years. broadcasting in Welsh is part of the broad strategy to support the Welsh language, I think it is extremely Q323 Guto Bebb: (Translation) A final question, important. That is why it is essential we safeguard the because I’m very aware that other people want to service to the extent possible and make sure it has a come in. You have referred to the fact that you have viable future. In terms of the audience issue, I am not vast experience in the field of producing television for sure about the figures. There are a number of points S4C. If you were to take out the contribution of BBC that have been made. I’m no expert. I didn’t to S4C programming every week, that means some 30 understand them when I worked in this particular hours of original programming a week for about £100 field. million a year. If that contribution dropped Guto Bebb: (Translation) You’re not the first person significantly, do you think the hours would have to to say that. drop significantly as well, and do you think that S4C Alun Ffred Jones: (Translation) I am unsure about has been providing value for money out of the the accuracy of the figures. The response that you hear investment of £100 million? out there suggests something very different from the Alun Ffred Jones: (Translation) Inevitably, there will way the figures are reported. Certainly S4C operates have to be some cut in hours, I would imagine, but within a very, very competitive environment. Welsh this kind of challenge is also an opportunity to operate speakers are no different to anybody else in the sense in different ways. But, to answer your question, it is that they can speak English. The X Factor or any other hard to believe that this kind of cut is not going to major programme, sports on Sky, for example, attract have an impact on the screen. That would be my people and it is very, very difficult for S4C to attract opinion, but that is just my opinion. as broad an audience as it did in the beginning of the 1980s when it started up. That is the challenge facing Q324 Geraint Davies: Given what you have said and S4C. It is the challenge facing any broadcaster, of your great experience in this area, do you think there course, but particularly S4C because they are trying is a very strong case for the Welsh Assembly to serve everyone and everything. They are trying to Government to have a very clearly defined scrutiny provide a service in current affairs, news, drama, role to help deliver value for money and reach for entertainment, etcetera. When you talk about drama, S4C? for example, even in the days when I worked in the Alun Ffred Jones: That is a matter for DCMS, but field, an hour long period drama would cost around I would certainly answer that in the affirmative. Yes, £1 million on the BBC, but you would make a whole I would think that it would be beneficial to all if there series for £1 million on S4C. The viewer cannot was a clearly defined role for the Welsh Assembly differentiate, and they will not make allowances to Government in any future scrutiny arrangement. That one for not being as good as the other because they is a matter for the Government here in Westminster to haven’t got the money. begin with, but we have indicated that we are willing to participate in any discussions about any future role Q322 Guto Bebb: (Translation) I accept that there is that we may have. some doubt about the figures but I was asking specifically about the YouGov poll that was published. Q325 Geraint Davies: Obviously, people in DCMS, I will leave that for the moment. In terms of your in simple terms, don’t speak Welsh and the Welsh opinion, then, as the Minister representing the Welsh Assembly Government is closer to the viewing cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
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11 January 2011 Alun Ffred Jones AM audience and there are issues about delivering more this field, that to devolve S4C on its own would not out of less. Would you agree that those sorts of be beneficial, though Ieuan Wyn Jones, the Deputy arguments point towards a clearer role for the Welsh First Minister, acting as a member of Plaid Cymru, Assembly Government to help add value and help has advocated that during the summer. If there was S4C succeed? a transfer of responsibilities, then you have to have Alun Ffred Jones: All I can say is we would welcome a transfer of finance as well to go with it. such a role in any discussions. I know that the Deputy First Minister has spoken to Ed Vaizey. Q330 Chair: But would you be suggesting that the finance for Welsh programmes and for Welsh Q326 Geraint Davies: In previous questions it has broadcasting be raised from licence fee payers in been mentioned, and you have mentioned it, that there Wales or would you expect English licence fee payers is a squeeze on the number of hours delivered and the to contribute towards specifically Welsh programmes? BBC have said they will be reducing the overall Alun Ffred Jones: Again, we are caught up here in number of hours they produce. March 2010, of course, the whole issue of the Barnett formula and whether saw the end of having Channel 4 programmes with that is fair to Wales. S4C. Do you think it would be better to have fewer Chair: Not really. hours overall with a pure Welsh channel or more Alun Ffred Jones: Yes, we are. hours with a return, possibly, to Channel 4 or anything Chair: No, because this is specific to licence fees. else which was perhaps mixed in terms of language? Alun Ffred Jones: If this is public service Alun Ffred Jones: With all due respect, I don’t think broadcasting, then it has to do with the Barnett my views on that are of great importance. That is the formula if you were insisting that the Welsh Assembly type of thing a review would look at in detail and Government would pay for everything. But that is not that is why we advocate that a wide-ranging review the way the BBC has been— or inquiry would be beneficial in the long term for the Chair: But, surely, broadcasting is paid for currently future of S4C. from licence fee payers? Alun Ffred Jones: For the BBC, yes. Q327 Geraint Davies: Again I appreciate this is not Chair: Yes. Presumably, if that were to continue to your specific job, but do you have any views on how be the case, then, if we devolved broadcasting, we S4C might attract a wider non-Welsh-speaking would either have to raise the money from licence fee audience or indeed an audience of people who are payers in Wales or continue to expect English licence learning Welsh, just to broaden it out to give a further fee payers to contribute towards the cost of reach? Do you think there is a case to be made for broadcasting in Wales with no accountability over stepping away from the pure Welsh path? how the money was spent. Alun Ffred Jones: All they have to do is produce Alun Ffred Jones: If I may say so, with all due programmes that everybody wants to watch but, respect, that is a very narrow definition of unfortunately, that is more difficult than it sounds. “responsibilities” there, in terms of broadcasting I don’t think I have any useful views on that as responsibilities. That is why, again, I would insist that a Government Minister. I may have personal views. before we go down any road of devolving you would have to have a proper, wide-ranging inquiry to see Q328 Chair: Do feel free, Minister, to share your where responsibility lies and also who is financing the personal views with us. We are interested. Just out of service. The deal with S4C was struck initially in the interest, who do you think should conduct this review? early 80s and then reviewed in the 90s by Alun Ffred Jones: It would be an independent review a Conservative Government, which deemed that that but I would hope, and we have said more than once, was the best formula for providing an adequate that the Welsh Assembly Government is more than service for the Welsh speakers. happy to participate in such a review. Chair: I would love to pursue the point, but it is not fair on other Members. Q329 Chair: There was a question I was thinking of asking later on and I will jump the queue as you have Q331 Owen Smith: I have three questions on the mentioned the issue of devolving broadcasting to the same theme because you seemed to imply a minute Welsh Assembly. I have figures from the BBC ago that there had been some conversations between accounts which basically show that they are spending the Deputy First Minister and Ed Vaizey, the Minister £67 million a year specifically on Welsh programmes, here in DCMS with responsibility. What have those that is, for S4C, BBC Radio Wales and BBC Radio been around? Were you implying that there is Cymru, in addition to the £100 million that DCMS a discussion about WAG having some sort of greater gives to S4C. So, in short, Wales is getting £167 role in terms of scrutiny? million a year specifically for Welsh language Alun Ffred Jones: No. All I was emphasising is that broadcasting and for Radio Wales. How on earth there has been a constructive relationship between could we maintain that level of service if we devolved DCMS and the Welsh Assembly Government in the broadcasting to Wales unless we were to carry on past on various issues. There are ongoing practical insisting that English licence fee payers contributed issues with regard to S4C: for example, the towards the cost of Welsh programmes? appointment of a new chairman, and traditionally the Alun Ffred Jones: The whole issue of devolving Welsh Assembly Government has had a role in that broadcasting is one where the general view in Wales appointment, led, of course, by DCMS, but there has has been, among many people who are interested in been an advisory role and an official from my cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Ev 52 Welsh Affairs Committee: Evidence
11 January 2011 Alun Ffred Jones AM
Department will be part of the appointment process. conducted by the BBC, so little attention was paid to That, I presume, will continue to be the case. So all Wales. So there are general issues around here which I am saying is that there is a constructive relationship. could be damaging to the Welsh language service. That is why I think, whatever structure or formula is Q332 Alun Cairns: Mr Jones, can I press you a little, created, it provides that sort of breathing space for very briefly, on the views of the Welsh Assembly S4C programme-making. Government and/or the views of individual members of the Welsh Assembly Government because you just Q335 Mr Williams: You talked about aspirations for said that Ieuan Wyn Jones said in the summer that the greater role of the Assembly. Isn’t it important, to S4C should be devolved? How do we know and how put the future of S4C into the context of other areas should any individual know whether he is acting in of Assembly Government policy, not least education, his capacity as Deputy First Minister or whether he is and education in areas that I represent and you just sharing his own personal view? Aren’t there really represent in the Welsh-speaking heartland, that we conflicting views coming out from the Welsh have to have this debate in that context as well? Assembly Government? Alun Ffred Jones: Certainly I think there are creative Chair: That is a good question. opportunities here, and you do not have to devolve Alun Ffred Jones: (Translation) Ieuan Wyn Jones broadcasting or even devolve responsibility for S4C made those comments in a speech at the National for that to happen as long as there are clear lines of Eisteddfod. He made it perfectly clear that he was communication and clear understanding with DCMS speaking as the leader of Plaid Cymru and that they about where responsibilities lie. That is what Ian were not comments on behalf of the Government. Hargreaves, in a sense, is suggesting as well in terms of the creative industries—that there is greater Q333 Mr Williams: The Chairman jumped the involvement and greater dialogue between S4C and queue and he pinched my question. the Welsh Assembly Government which does not Chair: Perks of the job. involve actual transfer of powers. Mr Williams: It was on the devolution of broadcasting to the Assembly. Doesn’t the exchange Q336 Owen Smith: May I take you back, Minister, you have just had illustrate the point of how important to the question of finance, because I agree with you it is that we have that wide-ranging review with that it is absolutely critical? One of the things we a strong participation from the Assembly Government raised right at the beginning is that the way in which in line with the letter that the four party leaders in the this was rushed through left open very many Assembly have already written? You alluded at the questions, not least the one you have highlighted, start to the fact that, given the suddenness of the which is what happens to the money post 2015 within announcement from the Westminster Government, the BBC when the BBC is effectively responsible for there wasn’t an opportunity for you as a Minister to apportioning the money. How do you think that needs contribute to that debate. We need that full discussion to be resolved by DCMS and, I presume, by the BBC? on alternative models rather than just the partnership How do they need to set out their stall about how they model between the BBC and S4C that has been will make sure that neither Welsh language presented to us. programming sees a diminution in its funding, nor, as Alun Ffred Jones: I agree. might equally be expected to happen, English language programming about Wales in Wales sees Q334 Mr Williams: Good. Thank you very much. reductions in its funding? That is very helpful. You also mentioned the Alun Ffred Jones: I have already stated that the panel significance you attach—I am sure we all attach—to we brought together looked at the general picture, the retention of editorial independence. Do you accept, despite saying that, that there are benefits from especially in the context of English language the collaboration between the BBC and S4C, and for programming, and we have expressed our concerns that matter other broadcasters, on the one hand, but, about that as well. The fact that we don’t know what also, what kind of guarantees do you feel are the position will be post 2015 makes me very nervous important to preserve that independence for S4C? and I think that issue should be resolved as soon as Alun Ffred Jones: There are two elements. The possible. I still maintain that the best way to achieve financial settlement is vital because you do not want a broad agreement, because there is broad agreement to see the S4C contribution become part of a general in Wales, I think, between the parties about the way annual dogfight within the BBC for resources and it forward, is through a general inquiry or general might very well end up as that unless there is a clear review, which would be able to look at that particular formula and a clear structure which gives it some issue and hopefully bring up a long-lasting formula financial security. In terms of editorial independence, which would serve the people of Wales, be they Welsh it is not because the BBC is bad or that it has any speaking or non-Welsh speaking, for the future. unholy designs on S4C. It is merely the fact that it would be dangerous for Wales to have a broadcasting Q337 Owen Smith: Are you finding any further service which is totally dominated by the BBC in view favour with DCMS officials about that suggestion of the fact that ITV programming has certainly shrunk because, previously, they have just rejected it out of disastrously over the past few years and indeed that hand? there are pressures on BBC Wales’ budgets as well. Alun Ffred Jones: I am unaware that we have made I am seriously concerned that in the general review any progress there. cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
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11 January 2011 Alun Ffred Jones AM
Q338 Karen Lumley: Do you feel that the gained from looking back, and that is why I believe management of S4C have not helped themselves in all a general review would serve to create a new structure this? Do you have the confidence that they can which could then have a long-lasting, beneficial effect actually take this forward? on broadcasting in Wales in the Welsh language and Alun Ffred Jones: I am sorry to repeat myself, but to in the English language. say this has been a very difficult period is an Chair: (Translation) Minister, thank you very much understatement. I don’t think there is much to be for your attendance today.
Witnesses: Mark Thompson, Director General, BBC, Menna Richards, Director, BBC Wales, and Elan Closs Stephens, BBC Trustee for Wales, gave evidence.
Q339 Chair: May I begin by welcoming Mark Q342 Karen Lumley: You did draw a number of red Thompson, Elan Closs Stephens and Menna lines over what you were prepared to agree to but S4C Richards? We are all known to each other but perhaps was not given a red line. you might state your names for the record and then I Elan Closs Stephens: Could I just say on behalf of will call Karen Lumley to ask the first questions. the Trust that I think the Trust has been very, very Elan Closs Stephens: (Translation) Thank you very careful to accept responsibility for those issues that much, Mr Chairman. Thank you very much for the relate directly to broadcasting. If you are talking about invitation to us to come here today and for the the red line drawn about the over-75s licence fee, that opportunity for everybody who takes an interest in was felt to be an issue for social services and for S4C to have the chance to discuss in this way. It has another kind of definition and wasn’t directly related been very, very beneficial. My heart, of course, is very to broadcasting, whereas in the case of S4C, whether close to S4C because of my background as its former we wanted to arrive at where we have arrived or not, Chair. I very much hope that we will all be able to we have to accept that the BBC already had—for 28 find a unique solution for the channel. Of course, on years—a very substantial partnership with S4C and my right hand side is Mark Thompson, the Director therefore it was felt to be within the range of General of the BBC, and Menna Richards, on my left, broadcasting issues that the BBC would accept. the Director of BBC Wales. Mark Thompson: Can I support that and underline it? This wasn’t the BBC’s idea but we have been Q340 Karen Lumley: Can I ask why the BBC involved in Welsh language television for many agreed to the arrangements with S4C without any decades, even, of course, before the creation of S4C, consultation with them? and we are passionately committed to delivering Elan Closs Stephens: I think I had better ask Mark Welsh language broadcasting in television as well as because he was intimately involved, night and day, radio. We have had a very successful and ultimately I believe, in these discussions. strategic partnership with S4C, but we are not third Mark Thompson: Yes. It is important to say that, parties. We are very concerned, if it is possible, to although I very closely led the negotiations on behalf ensure the future and, one would hope, growing of the BBC, the agreement was made with the support success of S4C. Although the proposal comes from of not only the BBC Executive Board but the BBC the UK Government, and it is clearly dependent on Trust. During the course of the negotiations we did agreement being reached with all the interested absolutely talk to our colleagues inside BBC Wales, parties, we thought the opportunity, potentially, to get to both Menna as Director of BBC Wales but also to better and stronger synergies between S4C and some the then National Trustee for Wales, and there were of the strengths the BBC has—the certainty of the conversations and consultation with quite a few other BBC about getting, for example, its news and current people inside BBC Wales. We took the view that it affairs programmes in the way the rest of us use the was our responsibility to consult properly all our news and current affairs offering, to Welsh-speaking colleagues in Wales to get a good sense from them television viewers—is very great. In a sense, the BBC about both the workability and desirability of such an is standing ready to help and absolutely recognising agreement, but consultation with all other parties that the creative and editorial independence of S4C as absolutely fell to Her Majesty’s Government. It was a channel is also an essential part of the agreement. not for us to start negotiating or consulting anyone Chair: Thank you very much, Mr Thompson. other than our own colleagues at that point. Q343 Owen Smith: I am picking you up on your Q341 Karen Lumley: Could the Secretary of State line, Mr Thompson, about the BBC standing ready to have forced you to fund S4C against your will? help. As someone who has worked for the BBC at Mark Thompson: No. The agreement that was both ends of the M4—and I’m sure you won’t agree reached was one which was freely agreed to by the with this, certainly not publicly—my experience was BBC. The BBC would, under all circumstances, that Wales didn’t always enjoy the attention that it manifestly have faced at some point over the next two perhaps ought to have done and also sometimes felt years a process for setting the future level of the a little overlooked. Given that context, and given what licence fee. That was unavoidable. But the agreement we heard earlier from the Minister about his worries was just that. It is an agreement rather than an about the funding post 2015, can you offer any imposition. comfort as to how you are going to resource that and cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Ev 54 Welsh Affairs Committee: Evidence
11 January 2011 Mark Thompson, Menna Richards and Elan Closs Stephens allay fears that in the BBC’s internal funding rounds “In the event that a new partnership model does not there will be problems? prove viable for any reason, the government will not Mark Thompson: I understand the point. Perhaps take licence fee money itself for this purpose.” Menna will comment on that as well. The first thing is that maybe things have changed for the better since Q345 Alun Cairns: Yes, but the point of the question you left. is: what would be “not viable” to the BBC? And my Owen Smith: That is perfectly possible. I walked into supplementary is: how can negotiations take place at that one. the moment bearing in mind the turmoil that is taking Mark Thompson: If you go down to Cardiff Bay, and place in the Authority? I have been there twice in the last two months, you Elan Closs Stephens: Let me rush in. will see that we are building what is going to be, I Mark Thompson: After you. think, one of the most exciting television drama Elan Closs Stephens: (Translation) It is true that there production centres in Europe, which could be the has been a long period of unhappiness in the past centre of a really exciting development of the creative months. On the other hand, we have to start to put industries going far beyond the BBC. We are currently models on the table because it is very important, enjoying remarkable success inside BBC Wales under I think, in the medium term that there is some kind of Menna Richards’ leadership. It has gone from strength stability, and some reason brought to the situation. So to strength in the last decade and my colleagues in the sooner the better, really, that we start this dialogue, Wales are producing programmes which are being even with the current interim system. I have had two watched and enjoyed by all interests around the world. long telephone calls with the current Chair of the Many people said the BBC would never do it. We are Authority. doing it. So the first thing is that we take it incredibly Alun Cairns: (Translation) The interim Chair, you seriously. We also take very seriously our services for mean? people inside Wales. To answer your question Elan Closs Stephens: (Translation) Yes, the current specifically, I would look at the current strategic interim Chair of the Authority. It is important that this partnership we have with S4C. Its character is that it negotiation should start, but it has to begin, of course, is multi-year, it is agreed upfront and open, it is not with the letter that the Secretary of State sent to Sir just one more part of the annual BBC budget round Michael Lyons, namely, “This is the kind of model and, crucially, it is open to scrutiny. So I would that can be drawn up and this is what would happen expect, once the licensee takes over this larger if all the negotiations were to break down.” But let us segment of the funding of S4C, a rather similar think sensibly about what does happen if these approach: a strategic, open approach, which is multi- negotiations break down. The Authority, for whatever year rather than just part of annual budgets. reason, from 2013 onwards will have lost £94 million. Menna Richards: If I can add to that, it is very They are going to have £7 million from DCMS and important to draw a distinction between what the BBC so there is major work to be done to ensure that the already supplies to S4C under the strategic model with the BBC is going to be successful and is partnership—as you will be aware, the new strategic going to be a very bright model that provides for partnership was announced this morning—and the 520 excellence. hours, which is the statutory obligation that the BBC has towards S4C. That will be separate from whatever Q346 Jonathan Edwards: If I can come back to it is that forms part of the new agreement between the the renewed strategic partnership, my understanding BBC and S4C. Certainly when I became aware that is that there will be a cut in funding of £4.5 million these discussions were happening, to go back to your in between 2010–2011 to 2012–2013. Do you question, I was very clear in my conversations with understand, therefore, as a result of that why people Mark that any future funding that was made available are concerned when the BBC takes over total funding from the BBC to S4C ought to be earmarked for the of the channel in future following the announcement independent sector. It is extremely important to me, you just made yesterday? as somebody who has had a pretty significant role in Menna Richards: Shall I just describe why that is broadcasting in Wales for the last 15 or 20 years, that the case in the current strategic partnership? The first all the work done by all the broadcasters is not strategic partnership, as Mark said, described the undermined or diminished. And that is not money that financial commitment that the BBC was making over is going to come back into BBC Wales. That is money three years. That was protected. It was ring-fenced that will go to the independent sector via S4C. from any kind of efficiency savings that the rest of the Chair: Let me just say that I genuinely appreciate the BBC had to deliver. What that meant in practice was detail that you are giving, but we are going to have to that all parts of BBC Wales, in common with all parts get through quite a lot of questions. of the BBC, had to find quite tough efficiency savings of 4% a year. Our output for S4C was protected. We Q344 Alun Cairns: Can I come back to the theme took the view that we couldn’t continue on that basis that Karen Lumley started about the agreement because of the imbalance it was creating between our between DCMS and the BBC over S4C? Is it not output in the Welsh language and our output in the right, under the terms of agreement to negotiate, that English language. So we found ourselves in a position the BBC have the right to walk away and under what where we were having to say to S4C, “We are now circumstances could you see that happening? making the same kind of provision in terms of savings Mark Thompson: It is specified in the letter from the to the funding for S4C output as we are to everything Secretary of State to the BBC Trust, isn’t it? It says: else in the BBC.” cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
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11 January 2011 Mark Thompson, Menna Richards and Elan Closs Stephens
Q347 Mrs James: I wanted to look at audience compared with the BBC in its entirety and perhaps it expectations and viewing figures. We have heard from might be unfair of us to look at those figures in that some witnesses in the past that the BARB figures are way because there is a smaller market. Does the BBC very unreliable. We were also told that, unlike the 15- always reach 50% of the people who are available to minute reach baseline that was used by the BBC, for view? However, how do you believe that you compare example, the S4C baseline is three minutes, which is with BBC Alba? very flattering, obviously, and that the recent YouGov Menna Richards: (Translation) I don’t know the poll says that we don’t even reach, with S4C, 50% of answer to that question but I can come back to you the Welsh speakers in Wales. So my questions are with those details.1 (Continued in English) I don’t based very much around that. How reliable do you know whether Mark knows the Alba figures but we think the BARB figures are? can certainly come back to you on that. (Translation) Mark Thompson: There is no reason to believe that You are right, of course. There is huge competition the BARB figures are anything other than reliable. It for all television channels and I do think that the work is a big sample. It is boosted. S4C pays for an we are already doing jointly with S4C is going to additional panel and I have to say there is no reason assist both institutions to meet the needs of the to doubt the accuracy of those numbers. audience better, and perhaps there will be closer collaboration with Radio Cymru. We have just Q348 Mrs James: Are you happy that it is measuring launched a project between S4C, BBC Wales and the the viewing patterns of Welsh viewers? Welsh Language Board about what happens to Mark Thompson: The reason the BBC, first of all, patterns of Welsh language use, what happens to the typically uses a 15-minute reach is because, to be number of people who are learning Welsh, identifying honest, we think it is a better guide to reasonable the important elements in the nature of language use value delivered to someone watching a given among young people and how that affects the programme or service. Three minutes is not a very provision on radio and television. There is an awful long time. It can almost be the length of time it takes to go over and get the handset to change to something lot of evidence, which we, as broadcasters, can see, to else. There are circumstances, though, when we look show that we need to work closely together to meet at a three-minute reach, for example, news bulletins, the needs of the audience. which are quite short in duration. Inside the BBC we would regard 15 minutes as the “gold standard” but Q351 Mrs James: (Translation) Competition is there are certain circumstances when we use three obviously getting greater. You do a lot of research. minutes. You have talked about the research that you do: what Menna Richards: Yes. It is also the case that some is of interest to viewers, what they enjoy viewing, the commercial broadcasters might find it more difficult standard that they expect. Do you believe at the to measure 15 minute reach because of the nature of moment that S4C provides value for money? We have commercial breaks. heard an awful lot about cost per hour of broadcasting, Mrs James: So there is no great significance in the etcetera. Perhaps non-Welsh speakers sometimes three-minute measure? think, “Is this efficient or effective?” At what level Menna Richards: And, of course, S4C has would you say that it has no purpose? commercial breaks as well. Elan Closs Stephens: (Translation) I am sure value Mark Thompson: Overall three minutes is more for money is one of the things that has to be flattering, as you say. considered in any partnership. You are talking now about the concerns people have about whether this Q349 Mrs James: What do you think are realistic service is one that suits everyone. Is its appeal broad audience figures for S4C given the recent YouGov enough? Does it draw in as many Welsh speakers as poll that we don’t reach 50% of Welsh-speaking possible, and non-Welsh speakers and learners? I think viewers? that is a concern for everybody in the nation, not just Mark Thompson: I am going to hand over to the the S4C Authority, and I’m sure that they are just as experts in a moment, but will just say something concerned about it. If you are going to hold an inquiry briefly. The way we think about audiences around the of any nature, I would encourage you not to limit it United Kingdom and the way that people are using to the models of how to govern or how to create media, absolutely, if this is what S4C wanted to do. organisations, but to make it about the needs of But, with closer collaboration with Radio Cymru, with audiences. What do they want in Wales? What do the BBC website, greater access to the BBC’s research young children want? What does the research show? and development and its potential to investment from What is the best way forward? How are we going to BBC Worldwide, our commercial arm, I think our use online services? How are we going to use Twitter goal should be to try not just to stabilise but and all these other things that are possible, including potentially to reach out and try and find ways of Apps, to bring everybody in? I think that that is getting S4C to reach a higher proportion of Welsh positive, and, if there is something I would like to speakers. say today, it is that I want us to think that this is an opportunity. It is not just a tragedy. It is an Q350 Mrs James: (Translation) One of the things opportunity, and if we can’t make use of that that has been worrying me is that we are not opportunity then there’s something wrong with us all. comparing apples with apples, if you like. The figures are so much smaller in terms of viewers in Wales as 1 See Ev 115 cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Ev 56 Welsh Affairs Committee: Evidence
11 January 2011 Mark Thompson, Menna Richards and Elan Closs Stephens
Q352 Mrs James: (Translation) A very quick to be a continuing dialogue with audiences if we can question, then. In your opinion, what is the best thing somehow make that part and parcel of the new that S4C has done and perhaps what is the worst thing structure. it has done? Elan Closs Stephens: (Translation) I do not think, Q357 Susan Elan Jones: (Translation) One of the perhaps, we should go down that road. pieces of written evidence that we have received says: “The cuts could put in jeopardy the future of the Q353 Chair: I think you make a good point. S4C channel and lead to a greatly reduced service isn’t like other language channels in that, of course, it including limited hours of transmission and moving to is catering to people who don’t speak the language as more online content with accompanying job losses. fluently as they would like, and I am one of those. S4C has already pledged to cut 40 posts, a 25.6% Why do you think they don’t consider giving more reduction from the current 156 full-time staff, over the help in innovative ways to learners? You have just next two years.” The evidence here is correct, isn’t it? mentioned Applications, which I think is excellent, but what about publishing lists of words that crop up Elan Closs Stephens: (Translation) Thank you for in certain programmes because in most programmes reading that. If I may say so, I don’t often meet you will find that the same words crop up over and someone with the same name as me. I think that major over again? There has been some work like that done savings will be made and perhaps Menna will be able with the news but not with things like Pobol y Cwm to think more about that because in the evidence of where you’ll find that the vocabulary isn’t as wide as the BBC to DCMS, on 6 October,3 there is a long one would think. I don’t know why S4C don’t do list of collaboration on research and delivery, more publishing online to help learners. I certainly transmission, etcetera. I would hope that that can can’t follow Pobol y Cwm in Welsh. safeguard some of the content money. Menna Richards: It does exist on BBC Cymru Arlein. Menna Richards: (Translation) I don’t know who is responsible for that evidence, of course, but what Q354 Chair: Yes. I have the Newyddion book but I I would say, to echo what Elan has said, is that all haven’t seen a similar thing for— broadcasters are facing financial savings. I have just Menna Richards: There is something called Vocab, described what has happened within the BBC and we which I will write to you about separately.2 will be facing further savings, as is known to all of Chair: (Translation) Thank you very much. I look you. Naturally, S4C itself has stated that it has to face forward to it. savings. But the fact is that the BBC and S4C had announced, long before the discussion with DCMS Q355 Owen Smith: Picking up on the point Elan became apparent, that we wanted to collaborate in Closs Stephens made a moment ago about needing to order to make savings on things like technology, consult with audiences in Wales and understand transmission and the possibility of sharing a location before we go through to this period of opportunity, as venue together. All this is proof of the fact that we, as you put it, do you think, therefore, you agree with two broadcasters, are facing, together, the need to the suggestion that there ought to be some substantive make savings, but no single broadcaster is going to be review before we end up with a deal carved up, if you protected from having to make these savings. like, between the BBC and S4C and DCMS, which is where we are heading at the moment? We are not going to have any consultation at present. Q358 Susan Elan Jones: Mr Thompson, S4C has Elan Closs Stephens: My point was, having listened told us that its overheads were 4.5% and that, to the Heritage Minister and listened to some of the I believe, is compared with 12% for the BBC. Would remarks that you were making, that, if you are heading you like to comment on that, please? in this direction as something that might come out of Mark Thompson: Obviously S4C and the BBC are this inquiry, we would lose an opportunity if it was rather different broadcasters. S4C is a commissioner just about structures because we do get hung up, in of programmes rather than a commissioner and maker Wales in particular, on structures and buildings, of programmes. In fact, every time they commission however iconic. an independent production they are also paying a proportion of the overheads of the independent Q356 Owen Smith: I agree. So does the BBC think production company which is actually making the a review is a good idea in order to allow the space to programme. If you looked at the commissioning have that broader discussion? overheads of the BBC, they would be much, much Elan Closs Stephens: I was saying that if there is lower than that headline number of 12%. In the same a review of any sort it has to go beyond that kind of way, if you take Channel 4 as another commissioner discourse into what the audience wants. May I also of broadcasts which it doesn’t make, you would say that to have something one-off, every 10 years or expect Channel 4’s total overheads, because they don’t so, is really not useful? I would urge you to have this have an in-house news division, a production arm, a debate. The BBC has it through its Audience Councils drama department and so forth, to be significantly constantly because things change so rapidly and lower. audiences’ expectations change so very quickly in this world. I think just a one-off is not good. I am sorry, I 3 Note by witness: I refer here to a report by S4C to DCMS am not prevaricating here. I actually think there has on a strategic plan for the future sent on 6 October. http:// www.s4c.co.uk/production/downloads/e_s4c-document-to- 2 See Ev 115–16 dcms.pdf cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
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11 January 2011 Mark Thompson, Menna Richards and Elan Closs Stephens
Q359 Susan Elan Jones: Could I also ask, Mr a non-Government source as a levy and actually had Thompson, what you consider will be the impact of a representation. So it was a very different model from a 25% cut in funding for S4C? The fear a lot of us that which evolved after 2000. have is that, if it is just simply about getting something in the media in the Welsh language, quite Q361 Susan Elan Jones: But very different from the frankly, a number of us could just go and start making model which is being proposed now? amateur YouTube videos in the Welsh language. But Elan Closs Stephens: No. that is not the point of S4C. Susan Elan Jones: Or you wouldn’t say that? Mark Thompson: No. The first thing to say is that the Elan Closs Stephens: I think that the Secretary of level of funding that has been proposed for S4C is State’s model of a sort of joint governing is probably a matter for the UK Government and not for the BBC, nearer to that 1982 model. Whether people are and it is not appropriate for me to comment on the satisfied with that is a matter for debate. rightness or wrongness or anything to do with that. I Susan Elan Jones: But without the funding would like to reinforce what Menna has said, which commitments. is that broadcasters across the UK are facing quite Mark Thompson: Crucially, just as a matter of fact, tough times in terms of funding. It is true in terms of there is no other broadcaster that I am aware of public service broadcasters, it is true of the anywhere in the United Kingdom which has an commercially-funded service broadcasters and it is RPI guarantee on its income. true more widely. There are good examples of Chair: Thank you very much. Very, very briefly, broadcasters, and I will give you one example from Guto. the BBC over the last five years. We have significantly reduced the number of hours we make of original Q362 Guto Bebb: Honestly, very, very briefly. I am factual television for peak time. It grew enormously just interested in the comments you made about the when we were increasing our number of channels. We 4.5% overhead costs of S4C versus 12% of the BBC have now focused that work. It grew from about 1,000 and the point you made that the BBC costs were hours in 2000 to about 2,000 hours in 2005. We have actually different because it is not a commissioning reduced that down to 1,500 hours, taking 500 hours body. or so out. When we talk to audiences, they believe the Mark Thompson: Because it produces as well, it quality of what we are doing has gone up and needs many more staff, buildings, studios and so forth. audiences are more satisfied with the output we are producing in this area, network factual programmes Q363 Guto Bebb: In that context then, in terms of for peak time, than they were when we were Channel 4, would their overhead levels be similar to producing more hours. It is sometimes possible to S4C? spend the money more wisely in a more focused way Mark Thompson: I would have to come back to you. and get a result which delivers more value for If you wanted it, I am sure Channel 4 would provide audiences. I would say, overall, that the BBC has all materials about their overheads. faced considerable savings in the last five years, we have maintained our reach and increased our quality Q364 Chair: We did learn that S4C apparently spent measures. When we ask the public how high quality some money providing senior members of staff with they think the BBC is, almost all those measures have BUPA health care. Is that standard practice within gone up rather than down. The challenge for S4C, as broadcasting? Does it happen within the BBC, for it is for any broadcaster, is: can you take the available example? resources and give the best possible value to your Mark Thompson: It is true of the BBC. It is true of viewers? Channel 4, or it certainly was true of Channel 4 when I was there, and, by the way, it is true across the media Q360 Susan Elan Jones: One of the reasons industry. Whether you think it is right or wrong, it is a number of us have such a concern on this issue is a characteristic part of the reward for senior people in that when S4C finally came about—and I use that the media. word “finally” advisedly—there was a massive Chair: Okay, it is standard. Interesting. consensus from all the parties in Wales at that time, including Lord Wyn Roberts of the Conservatives, and Q365 Geraint Davies: Do the National Audit Office when the 1990 Broadcasting Act came about the audit the BBC these days, because they didn’t a few decision was made to tie it to the retail prices index. years ago? Are they let in to audit you? That has been broken. That is not just a saving or Mark Thompson: The answer is that the BBC Trust a cut. That is a fundamental change. commissions the National Audit Office to do value- Elan Closs Stephens: If I wear another hat as a sort for-money audits inside the BBC and, typically, a of academic in this area, it was not the retail prices BBC Trustee, myself and colleagues, will appear in index at that particular time. I think that came in in front of the Public Accounts Committee in Parliament 1996. It was actually tied to the national advertising to answer questions. revenue and the first model of S4C was the Chairman of Wales IBA, from whom the money came as Q366 Geraint Davies: Moving on, from what you a percentage levy on the ITV companies, coupled with said, as I understand it, your ambition is to extend the the Chairman of Governors then, the BBC’s National reach and quality of S4C, at the same time reducing Governor for Wales, and a representative of Channel the number of production hours from 600 to 520 4. That initial model actually had money coming from a year and reducing the budget by 25%— cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Ev 58 Welsh Affairs Committee: Evidence
11 January 2011 Mark Thompson, Menna Richards and Elan Closs Stephens
Elan Closs Stephens: I’m sorry, I think this is the programming—programming emanating from the partnership. We are talking now about the 520 hours, nations, from England, from Wales and Scotland—is aren’t we? at the heart of the BBC’s output and the idea that you Geraint Davies: Yes. But that’s the ambition, isn’t it, will save money by targeting young children in Wales of the partnership? through giving them something which was not Mark Thompson: I want to say something else produced indigenously would be completely wrong. slightly different. We have an existing and successful Mark Thompson: It’s exactly the opposite. Could we strategic partnership delivering the 520 hours. potentially use the leverage that the BBC has in world Menna Richards: Just the 520 hours. media markets to get fresh sources of investment and Mark Thompson: We think that works well. As you fresh purchases of intellectual property which is know, the BBC’s hours are representative of about created by S4C? We have taken our commercial arm. 20% of the hours. Around 40% of the audiences are Six or seven years ago it was making about £30 ours for S4C and do drive audiences for S4C. I do million profit which the BBC could then take back want to talk about something slightly different which into the licence fee. We have now got that to around is the potential opportunity I can see for S4C as £140 million a year. The turnover of our commercial a broadcaster. But whether S4C wants to—and in the arm is £1.3 billion and we are present on every end I suppose all of the parties want S4C to take the continent in the world with sales teams. That is one opportunity of extending its reach and potentially example of one of the ways in which potentially we using this new partnership with the BBC to do that— could make the investment that exists in S4C go is a matter for S4C. That is an opportunity which is further. there. I don’t have ambitions. To be quite clear, we Chair: That is an exciting proposition. are here and if, at the end of this process, we are called upon to take part in a broader partnership including Q369 Alun Cairns: Many of the areas I want to use of the licence fee, that is the opportunity. Elan cover have been spoken about but I want to talk about talked about the opportunity as well, but it is not an the independent sector. One of the great benefits of the ambition. model from the establishment of S4C right through to the latter days has been a successful independent Q367 Geraint Davies: Just so I am clear, in terms of television production sector in Wales, and we are all the opportunity there is a recognised opportunity from familiar with the statutory requirement of 10 hours a where you sit for S4C to increase its reach and its week by the BBC to S4C. If we all accept the success quality with 25% less money and a reduction in of the independent sector in making exciting and production from the BBC from 600 to 520 hours. How innovative programmes, how many of those would it do that because it sounds like quite programmes that the BBC provides for S4C have been a difficult brief? provided by the independent sector? Elan Closs Stephens: It would be very odd for Menna Richards: Currently the BBC produces almost anybody to sit here and say—I don’t mean this in all, if not entirely, its 520 hours plus in-house. a paternalistic or maternalistic way—that they didn’t Alun Cairns: So none? have ambitions to help out in this situation and to try Menna Richards: Not at the moment, no. to increase the audience as much as possible. We all want a good audience. Q370 Alun Cairns: If we accept the exciting Geraint Davies: How would you do that, then? independent sector and the programmes they produce, Elan Closs Stephens: How it is done will be quite what plans does the BBC have to extend that challenging and Mark has outlined that. excitement to some of the programmes that they Mark Thompson: We have talked about some of the produce? possibilities of closer working between the BBC’s Menna Richards: The BBC’s position on the radio service, Radio Cymru, and S4C and the BBC’s independent sector is that we commission independent Welsh language website. We have talked about greater production companies across a range of output: access to the BBC’s research and development, English language television, Radio Cymru, Radio distribution and commercial arms, the expertise of the Wales, and we work with the independent sector as BBC scientists and engineers, and our operations for far as some of the network production is concerned. selling television around the world. There are lots of A view was taken, and I am sure that this is something practical ways. that was discussed with S4C some time ago, that the BBC would concentrate on in-house production for Q368 Geraint Davies: That would include S4C. However, just going back to the earlier point purchasing foreign—I don’t know—children’s I made, my view is that in future, if this new programmes and translating them at a lower cost and arrangement is agreed, the content funding that is that sort of thing as well. Yes? available for S4C will go to the independent sector. It Mark Thompson: I am thinking, rather, of the isn’t something that is going to be syphoned off to opposite, about whether there are opportunities for BBC Wales. S4C to drive up its own commercial income because of access to the BBC’s commercial arm. Q371 Alun Cairns: This is the point I was getting Elan Closs Stephens: I’m sorry. Let me say, as to, Chairman. That is a requirement by the Secretary a member of the Trust, that in the latest report the of State in the letter. Some of us have been party to Trust has brought out, which is endorsing Mark’s the discussions with the Secretary of State and that putting quality first, having indigenous guarantee has been delivered. But the point I am cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Welsh Affairs Committee: Evidence Ev 59
11 January 2011 Mark Thompson, Menna Richards and Elan Closs Stephens making is to push the BBC further in accepting that back to the foundation of S4C in 1982, it was the spirit and what role could the BBC provide in growing certainty of those 10 hours, the news, the soap and the the independent sector still further with the funding sport, that allowed the channel, fledgling as it was, to that you make available. take its big venture into the world. Menna Richards: Indeed. The BBC already commissions something like 35% of its English Q374 Jonathan Edwards: Thank you, Chair. I language television output from the independent would just add to the question of Mark Williams. To sector and more than 10% from both radio services. what extent does S4C enjoy independence in terms of Of course there are always opportunities to increase the current arrangements in terms of the 10 hours— that. the statutory requirement? Do you veto requests for Mark Thompson: There are also quite powerful programmes, for instance, from S4C? reasons why I believe a mixed model for S4C, and, Elan Closs Stephens: No. more broadly, for television in Wales, makes sense. Menna Richards: No, because it’s a discussion. The BBC has a very strong view that, partly because Chair: That is great. Thank you very much. of the editorial issues, our news and current affairs operation should be fully under our control, owned Q375 Guto Bebb: (Translation) Just on that specific and operated. That is true of news across the BBC point that there’s a discussion, one of the concerns globally, which is why programmes like Newyddion that people have about the relationship with the BBC are in-house BBC offerings. I have talked about the is the fact that the decision to reduce the budget down drama village we are building. There is an advantage to £94 million was actually published and announced. in having a broadcaster with enough firepower in Is this true or was there actually a discussion about terms of a combination of network commissions, like it beforehand? Doctor Who, but also commissions for Wales, Pobol Menna Richards: (Translation) Yes, there was a y Cwm, to create a real centre of gravity for Welsh discussion in advance. I had a long discussion with production with tens and tens of millions of pounds the chief executive of S4C at the time. I then wrote to going through it. There is an absolute recognition that the chief executive outlining the situation. The chief under the new arrangement, exactly as the Secretary executive took that letter to the Authority, as of State says, this segment of the licence money I understand it, and the Authority wrote to the Chair should go to the independent sector. But I would of the BBC. There was correspondence between them defend a significant role for BBC in-house and meetings were held. programme-makers making Welsh language television as well alongside their colleagues making radio on the Q376 Guto Bebb: (Translation) Thank you. In terms web, by the way. of what we have heard from Elan Closs Stephens, you Alun Cairns: Is 100% a bit more than significant? have encouraged me because you have given the most Mark Thompson: Remember, it is not 100% of S4C’s constructive and positive view of what can happen in content. It’s a minority. the future with this relationship with the BBC. When Alun Cairns: No. It is 100% of the programmes that S4C came here to give evidence on 14 December, they the BBC make for S4C. stated that they were going on, then, to meet the BBC Mark Thompson: It is, but I think that’s where we to start negotiations which are, of course, key to the add the most value and if it is independent future of S4C and to broadcasting in Wales. What commissioning S4C can do it directly. I would like to know is how those negotiations are developing, how constructive they are and how Q372 Mr Williams: How much discussion is there confident you feel that there will be a sustainable between S4C and yourselves on that? pattern coming out of those negotiations quite shortly. Menna Richards: A great deal. The terms of the Elan Closs Stephens: (Translation) The first meeting strategic partnership make that very clear. There is was held in December, as the Authority told when a programme plan that is agreed by the BBC and S4C they appeared here. I think it actually happened the annually which is then approved by the Audience afternoon after they came here to the Select Council in Wales, the BBC Trust and the S4C Committee. This week there will be a sharing of Authority. comments between both sides, papers will be shared between both sides, officials will meet, and, I think, Q373 Mr Williams: How robust have discussions on 19 January there will be a further meeting. As you been in the past between yourselves and S4C in terms would expect, what is on the table from the BBC as of the content of those 10 hours? a starting point is the Secretary of State’s letter Menna Richards: The BBC’s provision for S4C is because that is the starting point for us all. We have largely the core output of Newyddion, Pobol y Cwm to discuss the way in which that can work. I am very and rugby, plus some other output around that core pleased you think I am positive because I really would which we have been able to fund as part of this, the like to see this as a starting point for something which first strategic partnership. Those discussions are closes the door on the terribly difficult time that has regular, and in some cases I am sure they are more passed. I am sure the audience is suffering as well and robust than on other occasions. But that is the way it can’t understand what is going on. We need to look should be. That is how editorial discussions should forward now to a period where we not only get the happen. model right but we can share ideas on all kinds of Elan Closs Stephens: I would just like to add, Mark, back-office functions, etcetera, but also about although speaking historically, that when we look programmes, online and radio—the whole provision. cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Ev 60 Welsh Affairs Committee: Evidence
11 January 2011 Mark Thompson, Menna Richards and Elan Closs Stephens
Menna Richards: (Translation) If I can echo what BBC Trust decides to devote to S4C is going to be Elan has said, of course the institutions themselves are a matter of intense scrutiny and debate and will have important but the audience is what is important to to be done in a way which is completely transparent people like me who are responsible for major services and open, upfront and in advance. As you heard me like the BBC. All the evidence shows that BBC Wales say, I believe it will need to be dealt with on a has done its best for audiences in both Welsh and strategic basis and on a multi-year basis so that there English across all its services, including our provision is clarity. Clarity doesn’t always mean that everyone for S4C. I am wholly confident that, if we can work is going to like all the answers that come out but it together constructively and maturely, we can ensure does mean that it will be done in a way which is quite that the audiences of Wales will get an even better different. There is a higher test, as it were, of service in the future. transparency than you need for internal BBC budgets: more certainty, more years of certainty and greater Q377 Guto Bebb: (Translation) Just on that point, openness. then, to what extent do these negotiations respect the fact that a new S4C will develop out of this? Will it Q380 Stuart Andrew: Most of my questions have be independent in terms of commissioning, been asked, and thank you, Owen, for asking that one management and editorially? Is that part of the specifically. But I would like to push you on after negotiation and is that one of the red lines, so to 2015, on the funding for S4C, because, obviously, speak, in these negotiations? there is a great deal of concern about what will happen Elan Closs Stephens: (Translation) Being a channel, in that time, and also the independence of S4C. of course, means that you think strategically about Wouldn’t you think that meaningful independence for your schedule, what commission goes in what hour, S4C would be assured if the funding earmarked was etcetera. We hope that whoever will be running the given direct to the S4C Authority or the successor channel as its chief executive will have the greatest body without BBC involvement? freedom to do a good job because you have to have Mark Thompson: Just to be absolutely clear about it, that freedom. But all freedom comes with certain that is precisely what the Secretary of State’s letter conditions and the challenge for all of us is how to makes clear is not going to happen. We believe—at safeguard the independence of the BBC licence and least the Trust believes and the BBC Executive the independence of the BBC as a body and how to believe very strongly—that the case for a partnership safeguard the operational freedom for commissioning with BBC involvement is certainly the right use of the that S4C has enjoyed. There are tensions. There is no licence fee. I happen to believe it is also the pathway point in my coming before you and saying that it will which is most likely to lead to success for S4C, and be easy to reach an agreement that is satisfactory to I believe, assuming that everyone goes into this in the everybody in the Welsh-speaking nation. I can’t tell right spirit, we will be able to find a way of doing that you that, but I do know that it is our intention to try which offers absolutely strong and appropriate to solve this conundrum the best we possibly can. guarantees of independence to S4C as well. My view is that the licence fee is not a generic broadcasting Q378 Geraint Davies: In a nutshell there is fund. It is paid for by the entire UK population in a concern, obviously, in S4C that they will be respect of a set of broadcasting services that they get “gobbled up” like a minnow in the BBC ocean. Where for which the BBC is characteristically ultimately are the major disagreements in approach and substance between S4C and the BBC at the moment? always held responsible. We believe that a partnership model is the right way of approaching this relationship Mark Thompson: To be honest, it is probably too early to say. We haven’t encountered any yet but we rather than what we would call a top-slicing model are only at the early stages in the conversations. and it is clear that, in the event of an inability to reach an agreement on a partnership model, this entire scheme will be abandoned, the licence fee will be Q379 Owen Smith: Can I take you briefly back to reduced and some other means will have to be found the funding question? We heard you being very positive about your intentions but obviously not being to fund S4C. specific about the numbers. Can you tell us anything more? Would you imagine, for example, that the Q381 Chair: May I ask you something, Mr amount of money that would be made available for Thompson, just to clarify a point? In your annual set Welsh language programming wouldn’t decline by of accounts it would appear that you are giving S4C a greater rate, for example, than the decline in BBC £30 million worth of support in terms of the content budgets? and £6 million worth of support in terms of Mark Thompson: We are still, at a corporate level, distribution. That is £36 million in total. Yet the figure working through the implications of the licence fee that we have been given at all times, certainly for the settlement. This new licence fee settlement doesn’t content anyway, is around £20 million. There is actually begin for the BBC until April 2013, and, to probably a reason for this disparity. be honest, we haven’t even formulated proposals for Menna Richards: Is it £25 million content for the the corporate budget from 2013 onwards let alone had current year? a chance to discuss them with the Trust. So it is too Chair: £25 million, then, but this here says £30 early to say. But what I do want to say is I am million. extraordinarily clear that the issue of exactly how Mark Thompson: We will have a look at why it is much money, if this new arrangement goes ahead, the expressed in the account. cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG04 Source: /MILES/PKU/INPUT/007748/007748_o004_michelle_HC 614-iv 11 Jan CORRECTED.xml
Welsh Affairs Committee: Evidence Ev 61
11 January 2011 Mark Thompson, Menna Richards and Elan Closs Stephens
Chair: Yes. £30 million plus £6 million for infrastructure, transmission and co-location. Those distribution. So it would appear that you are actually discussions are ongoing in parallel with all the other spending £36 million on S4C. Therefore, if that came discussions that have been going on about the down to £25 million, that would be, immediately, an strategic partnership and with the DCMS. £11 million shortfall. There is probably a reason for this but I genuinely don’t know what it is. Q384 Owen Smith: Has that become more difficult, Mark Thompson: If we may, Chairman, we will write given that there will now be a concern, obviously, of back to you on that.4 S4C being subsumed? Chair: Absolutely fine. I see we have one minute left. Menna Richards: No, it hasn’t. Those conversations Luckily I didn’t allocate the last three questions but are continuing. does anyone have quick questions in the last minute or two before we close this session? Q385 Karen Lumley: This is for Elan, really. We all remember how successful a Chairman you were of Q382 Alun Cairns: My question is about operational S4C many years ago. How, if you had still been and editorial independence. Under the current Chairman, would it have been different, do you think? arrangements the Secretary of State cannot veto Chair: That is the one to finish on. Well done. a programme that S4C intend to broadcast if there Elan Closs Stephens: Any broadcaster broadcasts appears to be some controversy around it. Under the drama, news and gossip and current affairs, but when planned arrangements, the various models that are it becomes a drama or an item of gossip or news and under consideration, do you think that the BBC would current affairs, that is a bad place to be. I really think be able to veto a programme that S4C may well that somehow, all together, we must get S4C out of broadcast? this particular place and on to the kind of channel of Mark Thompson: It is fair to say at this stage we have which Wales has been proud and will be proud again. not got anywhere near talking about that precisely. I hope that we can make that happen. First, you will appreciate that the BBC is not UK Karen Lumley: I think they should second you back. Government. We are, ourselves, an independent public broadcaster with complete separation from the Q386 Chair: The Chairman gets the last question. political process. My expectation would absolutely be You presumably saw the article in the Western Mail that editorial and creative independence for S4C last week where a media accountant put forward means that in such a case they would have the a proposal that seemed to be being taken seriously by, freedom to broadcast. The issue goes to the point of for example, the head of TAC that S4C should do governance and legal responsibility through the its post-production in-house. Very, very briefly, any governance system for what is broadcast. thoughts on that? Was it a good idea or a bad idea or Alun Cairns: That is fine. That is helpful. Thank you. worth looking at further? Elan Closs Stephens: I am sure it is worth looking at, Q383 Owen Smith: Notwithstanding that issue about but there have been various models put forward by so editorial independence, what about other synergies many people in the last three or four months that it that might be realised between the BBC and S4C? has almost become a national sport to put forward You have touched on some of them but are there a proposal for S4C. If I may say so, I think the sooner further ones you can see in terms of co-production we enter a period of stability and clarity for the and, in particular, co-location? channel the better, whatever model is adopted. Menna Richards: Yes. We had, jointly with S4C, Mark Thompson: Certainly at the UK level many published a document about our plans for independent producers would say part of the point collaboration before the DCMS announcement was about being an independent producer is that you have made where we said that we wanted to look at the the freedom to choose how to do your post-production possibilities of making efficiencies for both and it shouldn’t be dictated by the broadcaster, so you organisations by potentially sharing technology, need to balance also the rights of producers in this. Chair: Thank you very much indeed. (Translation) 4 See Ev 116 Thank you very much indeed for your attendance. cobber Pack: U PL: COE1 [SE] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
Ev 62 Welsh Affairs Committee: Evidence
Tuesday 18 January 2011
Members present: David T.C. Davies (Chair)
Stuart Andrew Susan Elan Jones Guto Bebb Karen Lumley Alun Cairns Jessica Morden Geraint Davies Owen Smith Jonathan Edwards Mr Mark Williams Mrs Siân C. James ______
Examination of Witness
Witness: Mr Edward Vaizey MP, Minister for Culture, Communications and Creative Industries, Department for Culture, Media and Sport, gave evidence.
Chair: Good morning, Minister. imposing new regulations or particularly additional Mr Vaizey: Good morning, Mr Chairman. bureaucratic pressures.
Q387 Chair: We know each other reasonably well, Q390 Mrs James: S4C sent DCMS a document in but perhaps you could state your name for the record early October in response to the Secretary of State’s and then we will start the proceedings. request for 25% and 40% spending cuts. Their Mr Vaizey: My name is Ed Vaizey MP. I am the document proposed a root and branch review of its Minister for Culture, Communications and Creative operations and S4C also commissioned a report on Industries. its corporate governance in August. Why didn’t the Chair: Thank you very much, and it is nice to see Government wait for the results of those reports on you this morning. May I start with Siân James? changes before implementing such a fundamental and wide-sweeping decision on S4C? Q388 Mrs James: Bore da, Minister. When exactly Mr Vaizey: Because the BBC option had risen to the did DCMS decide that “the S4C model is not top, as it were, and we were negotiating with the BBC on the future of the licence fee, we felt that it was maintainable in its present form” and that “the future important to combine those discussions. As I say, we of the channel lies in partnership with the BBC”? wanted to conclude those negotiations in time for the Mr Vaizey: I couldn’t give you an exact date, announcement of the Spending Review. So, although Mrs James. These were part of ongoing discussions we had been discussing a range of scenarios with S4C, and thoughts about the future of S4C that began we felt that this was the right solution and we wanted shortly after the general election. As you know, we, in to take it forward. DCMS, were effectively faced with a root and branch review of everything we did in the light of the public Q391 Mrs James: No other alternatives were spending pressures with which we had to deal. considered at this point. The decision had been made Obviously, S4C was part of that discussion. As you to take that option. know, we negotiated with the Authority an in-year cut Mr Vaizey: The decision had been made to take that for the first year, and that led on to discussions within option. the Department about the future of S4C because we had taken a view that an index-linked increase in its Q392 Mrs James: Why did DCMS pressurise the funding was not sustainable in the current financial BBC to agree to the new arrangements without any climate—and, indeed, beyond. We wanted to discuss consultation or involvement of S4C in the process? and debate different models. In parallel, we were Mr Vaizey: There was a range of issues that we were talking to the BBC and discussing the future of the discussing with the BBC as part of the licence fee BBC and, as you know, we negotiated a licence fee settlement. I wouldn’t personally characterise it as settlement with the BBC in time for the Spending pressurising the BBC, although I know that perhaps Review. Those sorts of discussions merged into one, some people who have given evidence to you might but it would be fair to say that the final decisions that have put it in that light. There was a range of options a partnership between S4C and the BBC was the best on the table. The licence fee settlement, as you know, way forward were taken in the run-up to the has given the BBC a remit for the BBC World Service, Spending Review. which it didn’t have before, as well as S4C. In return for that—although “in return” is probably the wrong Q389 Mrs James: I am very interested to hear phrase to use, but as part of that—they also have whether an impact assessment was undertaken on a licence fee settlement extending to 2017, giving this proposal. them security of funding. It was a package. I certainly Mr Vaizey: We didn’t undertake an impact have the impression, and had the impression at the assessment. We didn’t feel that an impact assessment time, that the BBC was broadly in agreement with that was necessary because, fundamentally, although we package, and I certainly feel that the Director General were reducing the funding for S4C, we weren’t Mark Thompson and Michael Lyons are not the kind cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
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18 January 2011 Mr Edward Vaizey MP of people who can be pressurised into accepting arrangements for the ongoing discussion and we will something that they feel is unacceptable for the BBC. take legal advice on the best way to implement those They jealously—and “jealously” is said in a recommendations. complimentary way—guard the BBC’s independence. Q397 Owen Smith: I would like to follow up on that Q393 Mrs James: I am having difficulty with this. point. You have said a number of things this morning You talked about the BBC being broadly in already, Minister, that I find quite extraordinary. First agreement, but S4C knew nothing about this until it of all you say it was a pretty simple arrangement with was announced. It learnt of its partnership, basically, which you were dealing. Earlier on you said you after the decision had been announced. Surely this is didn’t think there was any need for any sort of impact not an acceptable way to treat any organisation. assessment. Don’t you feel that this indicates a lack Mr Vaizey: What we have done with the licence fee of understanding of the nature of S4C, in terms of settlement and for S4C is to provide S4C with what it is as a broadcaster within Wales? More certainty over its future. Its funding is secure, and on importantly, it’s a body established by statute that any measure for any broadcaster it is a generous employs very many people. It is an employer and settlement. There are massive opportunities for S4C to a body on which many aspects of the Welsh work in partnership with the BBC. When the Director broadcasting economy are built and it is established General gave evidence to this Committee, he in statute. Therefore, don’t you feel that you should highlighted some of the opportunities that now exist in have conducted an impact assessment and looked at terms of training, working with a major global media legal advice? Could you tell us once again why it was organisation and accessing, for example, the expertise that you felt that neither of those things was of BBC Worldwide in selling programmes abroad. necessary? S4C should be regarding its future partnership with Mr Vaizey: Mr Smith, I hear what you say. I don’t the BBC as a significant opportunity to scale up. particularly think that what I am saying is extraordinary. We are very conscious of S4C’s place Q394 Mrs James: That sounds very grand and very in Wales and in Welsh culture, if I can put it that way. fine and is wonderful from your perspective, but it It was established by a Conservative Government. leaves a lot of people in Wales puzzled about that lack I have had very good and fruitful discussions, not only of consultation and respect. I, for one, am very sad to with members of this Committee but also with former see that. Welsh Secretaries of State now in another place— Mr Vaizey: I am sorry to hear that, Mrs James, and members of both parties—and I absolutely understand I absolutely understand your point of view. Coming the importance, the impact, and the way in which S4C after the election and given the situation with which is cherished in Wales. As I say, and as I have said we were faced, we wanted to take fairly quick and before when we have debated this in Parliament, what rapid discussions. I completely accept that, from some we have done is to provide S4C with a fantastic future people’s perspective, that might not have been the and a fantastic opportunity. We have secured its ideal way of doing things, but, as I say, the outcome ongoing funding, and, I think, very generous funding is going to provide a very bright future for S4C. going forward. It is going to partner with a major global media company which is at the heart of British Q395 Chair: Thanks for that initial opening sally, but broadcasting culture. It is going to be able to access perhaps I could appeal to everyone now for slightly the whole range of different opportunities that shorter questions and answers. partnering with the BBC give it. In some of the Mr Vaizey: I am sorry if I am going on too long, evidence that this Committee has heard, concerns Mr Chairman. have been expressed at the direction that S4C was Chair: Not at all. We appreciate a comprehensive going in the past. I don’t think an impact assessment beginning, but we wouldn’t want to keep you here for is needed. It doesn’t place undue burdens on S4C as hours and hours, Minister. I want to get through the it exists. I know that I am going on and I can tell the next 20 questions. Chairman wants me to shut up, but I will simply say Mr Vaizey: I’ve got all the time in the world, as they very quickly that the evidence that Mark Thompson say. gave to this Committee and to the Culture, Media and Sport Committee showed how passionate the BBC is Q396 Jonathan Edwards: In response to a freedom to secure S4C’s operational, cultural and creative of information request, the Department said that it had independence. not had any legal advice in relation to your proposals. Considering that they are very radical proposals, is it Q398 Owen Smith: You say you have secured their unusual for there not to be any legal advice within the future. What, in truth, the Government have done, of Department and does it not indicate that your course, is to cut 25% of their funding and provide proposals were rushed through? them with two further years of guaranteed funding, Mr Vaizey: Personally, it didn’t occur to me that we and then we will see what it gets from the BBC. Their did need legal advice. It seemed to me a fairly funding will be dependent on the largesse of the BBC straightforward proposal, which is simply to switch in Wales. But I’ll go back to another question that was the funding arrangements from a direct grant from the put to you earlier and that you skated round. Do you Department to, broadly speaking, a licence-fee not feel, given that you have negotiated, as you put it, funding via the BBC. We will work out in detail in with the S4C Authority the initial year cut, that it our discussions with S4C and the BBC the exact would have been appropriate, given the magnitude of cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
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18 January 2011 Mr Edward Vaizey MP the changes to its governance structure that you were Q404 Karen Lumley: How much responsibility do going to impose, that you should have negotiated or you take for their problems? at least discussed those changes with the Authority Mr Vaizey: I am not one to shirk my responsibilities, before you imposed them? but I personally feel that if there are problems in S4C Mr Vaizey: The Authority is now talking with the they are likely to have emerged over a number of BBC and with us about— years. As I say, I have only been in the Department Owen Smith: After the fact. since May. Mr Vaizey:—future ongoing arrangements, so they are very much a partner in this process. We are going to Q405 Chair: Do you think that the combined board be part of those discussions and I am very confident was a good idea? that there will be a very positive outcome from those Mr Vaizey: As I understand it, what happened was discussions. that S4C wanted to mimic the arrangements that were put in place by the last Administration in terms of Q399 Owen Smith: Have you ever watched S4C? separation of the BBC Trust and the BBC, which Mr Vaizey: I haven’t watched S4C. I have watched emerged from the last Administration’s relationship Fireman Sam—a lot. with the BBC, which was sometimes fraught. They tried that, but they realised that the Authority didn’t Q400 Chair: Thank you very much, Minister. By the necessarily have the resources and clout that the BBC way, what was the attitude of S4C in your dealings Trust has. So they reverted to an arrangement that was with them? Did you find members of S4C constructive more akin to the old arrangements with the BBC, in your dealings with them and at your meetings? where the governors were part of the main BBC. Mr Vaizey: I think that we have a very good I don’t have any particularly strong views either way, relationship with S4C at the moment. but I think that the new arrangements going forward, which will combine oversight of S4C by the BBC Q401 Chair: And you found that at previous Trust to ensure the value for money for the licence fee payer, and then a separate board to oversee the meetings that you had with S4C? You didn’t find that workings of the Authority, will probably be an anyone was in any way unconstructive? effective oversight mechanism. Mr Vaizey: I am very easy-going, Mr Chairman. Mrs James: Diplomatic. Q406 Susan Elan Jones: I am sure that my Chair: Very well. Thank you very much. colleagues and I are delighted to hear that you enjoy Fireman Sam, but my question won’t be about that Q402 Karen Lumley: Minister, do you accept that this morning. In your written evidence, the DCMS the DCMS has been disinterested in S4C over many made the point that there is no statutory provision for years and that that has led to the chaos that is Government monitoring of S4C. However, section surrounding them now? 339 of the Communications Act 2003 takes a rather Mr Vaizey: I have only been in the DCMS since May different view—in fact, the opposite one. What it says 2010 so I couldn’t comment on how the DCMS was is that “The Secretary of State may carry out a review before I got there in terms of its relationship with S4C. of the performance by the Welsh Authority of their I certainly have enjoyed building a relationship with duty to secure that each of the following public S4C since the election. I think, as a matter of service remits—(a) that for S4C; (b) that for S4C principle—public policy, if you like—that S4C will Digital….is fulfilled in relation to the services to have a much more constructive relationship with the which it applies.” That is a bit of a difference, isn’t BBC going forward in terms of building itself up as it, Minister? a formidable broadcaster and media enabler in Wales Mr Vaizey: I think it is a difference of interpretation, than perhaps it had with the Department. To put it Ms Elan Jones. Going back to Mrs Lumley’s question bluntly, and it is part of the reason behind our about the oversight by DCMS of S4C and whether thinking, I don’t think a Government Department is or not there had been any failings on the part of the necessarily the right home for a broadcaster of S4C’s Department to oversee S4C, the impression I get is stature. that S4C has complete operational independence from the Department. There is no provision for the Q403 Karen Lumley: Bearing in mind that we, as Department to monitor the Authority or the channel a Government, fund S4C at the moment, did you on a day-to-day basis. The point of the note that my specifically address their shortcomings with them? Department has put in front of you is to make it clear Mr Vaizey: We didn’t. The nature of the way we that the Department didn’t have oversight of S4C on undertook a review of all the bodies with whom we a day-to-day, regular basis. Of course, the have a relationship meant that, because we came to Communications Act gives the Secretary of State the conclusion that S4C would have a brighter future a discretion—it is not a mandatory power—to carry with the BBC, we felt that it was important to put in out a review of the Authority and whether or not it is place that relationship. My officials in DCMS were working in terms of overseeing S4C’s public service enabling those negotiations between the BBC and S4C remit. But it doesn’t give the Secretary of State power in order to tie down the arrangements. Then, as I say, to run S4C, if I can put it in colloquial terms. If there if there are any shortcomings in S4C—and I’m not has been a misunderstanding in terms of the point we saying specifically that there are—those will be ironed were trying to get across in the memorandum, out by its relationship with the BBC going forward. I apologise. cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
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18 January 2011 Mr Edward Vaizey MP
Chair: Susan Elan Jones, do you want to come back Q411 Alun Cairns: Minister, your submission states on that? that “viewing figures for S4C are disappointingly low” and that value for money wasn’t delivered. Can you Q407 Susan Elan Jones: Minister, I find your maybe expand a little bit on what you mean by that? answer quite extraordinary because no one here would Mr Vaizey: I know that this Committee has had suggest that the Government Minister is running the extensive discussions about how viewing figures are day-to-day management of S4C. For instance, DCMS reached. I’ll stand to be corrected on this, Mr Cairns, previously commissioned a review in 2004. If that but I think that there is general understanding that the wasn’t a review, what was it? BARB figures are the gold standard, as the Director Mr Vaizey: I am sorry if I am giving such General described them when he gave evidence to extraordinary answers; I have never been in this your Committee. I know that the BARB figures are position before. My understanding is that that was an tailored to the fact that S4C is a Welsh language independent review commissioned with the Authority broadcaster, but, if you look at the weekly reach and a university. It was not a review under the figures that we have put out in terms of a response to Communications Act because that Act only allows John Mann in Hansard, they fall from about 1.4 a formal review by the Secretary of State after five million in the year 2000 down to just over 500,000 in years of the passing of the Act, and I think that review 2009. When the Authority and S4C gave evidence to took place in 2004. Again, it is a good example of you, they talked about an average viewing figure of how effectively respect was shown to S4C’s about 30,000 in off-peak programming. So there is independence and the review was conducted “with” concern that viewing figures have fallen and that is why I personally am very excited about the S4C as opposed to “to” S4C. I think I have given partnership between the BBC and S4C because there another extraordinary answer, Mr Chairman, judging will be huge opportunities in terms of marketing and by Ms Elan Jones’s reaction. sharing of resources to promote S4C. Chair: You are not the first one to give extraordinary answers in this inquiry, I can assure you. Q412 Alun Cairns: What do you consider to be a realistic target audience for S4C? Q408 Susan Elan Jones: So you were showing Mr Vaizey: I don’t think it would be for me to respect by not— presume to set that. I know that in evidence you have Mr Vaizey: The previous Administration was—Tessa received people have talked about 500,000 being Jowell. a fantastic number for S4C to reach, a kind of peak level that they might reach, but there is concern that Q409 Susan Elan Jones: But the previous viewing figures appear to have dropped. I understand Administration did carry out a review in 2004. You that we live in a digital age and Wales was the first say you were showing respect by not carrying out nation to switch over to digital television, which we a review, but no respect appears to have been shown should all applaud in terms of the digital switchover by not even consulting with the statutory body, the programme put in place by the last Government, Welsh Language Board. Don’t you find it which has worked so effectively well, but most of us extraordinary that your Administration is proposing would take a common-sense view that we would like cuts of 25% and yet there is not a word to a statutory to see S4C’s audience figures increase significantly. body, the Welsh Language Board? I would have thought that that board might have a little more Q413 Jessica Morden: The DCMS submission says knowledge of this than just the plot of Fireman Sam. that the Government considers that the benefits to the Can’t you explain to us why you didn’t consult that Welsh language and culture expected from this level body? of funding are not being achieved. Can you explain Mr Vaizey: I don’t think there is a statutory what you mean by that? requirement to consult the Welsh Language Board on Mr Vaizey: As Mr Smith pointed out, S4C is the funding of S4C. a cherished organisation and is seen by many in Wales, and indeed Welsh people living outside Wales, Q410 Susan Elan Jones: It’s respect, isn’t it? as a flagship organisation that promotes and sustains Mr Vaizey: As I say, you either agree with us or you the Welsh language. The Department is concerned that don’t—and I suspect, Ms Elan Jones, that you don’t— with such low viewing figures it is not making the that we have to make public expenditure savings. In impact on the Welsh language and Welsh culture that terms of showing respect, S4C showed the perhaps it could have. Department great respect by agreeing to an in-year cut, being open in their dealings with us and Q414 Jessica Morden: How have you measured understanding the public pressures we are under. As that? a Minister for Culture, I have had to make cuts to Mr Vaizey: One simply has to take a common-sense many of our national museums and performing arts view that you would want to see an organisation like organisations that are not cuts I particularly want to S4C, which has significant and generous funding, make, but there is a much wider agenda, which is to make a significant impact on Welsh language and get the public finances in order. The fact that all Welsh broadcasting. bodies involved have shown great respect in working with the Department to achieve that for the benefit of Q415 Jessica Morden: For instance, with the the public finances is something we should applaud. pre-school programmes, Cyw, none of the cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
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18 January 2011 Mr Edward Vaizey MP pre-schoolers are measured in the viewing figures at Q422 Chair: Although we’d look forward to it all and yet one of the huge benefits of S4C, I would perhaps under the new partnership. say, is the development of the language particularly Mr Vaizey: But of course in a digital age people can amongst the young. It is a huge success but that’s not watch S4C all over the world, and again what is very measured anywhere. How can you say that that is exciting is that the BBC has already announced that it not valued? is going into partnership with S4C in terms of HD Mr Vaizey: That is a very valid point, Ms Morden. programming and also S4C potentially appearing on the iPlayer as well. Q416 Jessica Morden: Going forward, how would you expect to measure its cultural benefits under the Q423 Mr Williams: Turning to the Public Bodies new arrangements you are setting up? Bill, I might not like it but I can understand that you Mr Vaizey: That is another very valuable point, which use that as a mechanism for breaking the automatic I will make sure is raised in the negotiations between link between funding and the retail prices index. But the BBC and S4C. why, technically, does that Bill also give Ministers the power to abolish S4C? There is a huge amount of Q417 Jessica Morden: Given the reality of a 25% sensitivity about this among certain groups in Wales cut in funding, and obviously S4C will have to reduce that that power resides there? its programming, what would you see it have to cut Mr Vaizey: Thank you, Mr Williams, for asking that or keep? question. I would like to use this opportunity of Mr Vaizey: Those wouldn’t be decisions for me. It is appearing in front of this Committee to reassure you very important to emphasise that we expect S4C to and anyone who is watching this that there are maintain operational and creative independence in absolutely no plans to abolish S4C. As far as terms of its scheduling and the programmes it I understand it, there is a technical reason why S4C commissions. So it will be a decision for S4C. appears in Schedule 7. Any organisation that appears I personally don’t think that the cut will have in any of the other schedules has to be listed in a significant impact. S4C has a huge amount of Schedule 7, and S4C is listed in Schedules 3 and 4, which allow a modification of the constitutional reserves. [Interruption.] I see that, according to arrangements and the funding arrangements of S4C. Ms Elan Jones, I have given another extraordinary That is why it is listed in Schedule 7. That is my answer. It has £27 million in reserves. It already understanding and if I have inadvertently got it wrong receives extensive free programming from the BBC I will write to the Committee to clarify that.1 But it and I think there are opportunities to preserve the is not in Schedule 7 because there is a secret plan to creative originality for which S4C is renowned, abolish S4C. That is absolutely not the case. despite the fact that the funding regime has been constrained. Q424 Mr Williams: The Culture, Media and Sport Committee noted the inclusion of Channel 4 in the Q418 Jessica Morden: Do you think, as Minister same schedule and, by implication, thought there was responsible, that you should have watched it at some good reason to remove it. I think there are going to stage? be amendments—heaven knows when they are going Mr Vaizey: I have appeared on S4C, so I think I have to deal with them—in the other place at some point. gone beyond merely watching the channel. If it is a technical matter, would it not be simpler just to remove S4C from that to reassure the anxiety there Q419 Jessica Morden: What did you appear on? is in Wales? Wouldn’t it just make sense to remove it Mr Vaizey: I think I am now very embedded in the from that altogether? channel. Mr Vaizey: I don’t think we can remove it from Chair: Thank you very much for that. Are there any Schedule 7, given that it appears in Schedules 3 and further questions? 4. The reason why Channel 4 appears in Schedule 7— Mrs James: Did you speak Welsh? and I hope I am not, again, inadvertently going to get Chair: I failed to spot Jonathan Edwards earlier on. this wrong—is to provide the flexibility, in the future, to potentially change arrangements for Channel 4, Q420 Jonathan Edwards: I would like to come back although there are, I would like to stress, no plans to on the figures for the realistic audience, and I am not do so. The Public Bodies Bill, as I understand it, is sure whether you got your figures mixed up when you designed to give the Government flexibility in terms said that a realistic audience would be 500,000. There of changing its arrangements with arm’s-length are only 500,000 Welsh speakers, so that would be bodies, if I can use that term, and that is why those 100% saturation. organisations appear in the Bill. Mr Vaizey: No. What I was saying was that in the evidence I had read from the Select Committee—and Q425 Mr Williams: Do the Communications and I apologise if I have misinterpreted it—I thought I had Broadcasting Acts also need amending in light of their read a passage where it would be unprecedented but provisions on S4C? If changes are needed, what are extraordinary if they reached 500,000 viewers. That they likely to be and when and how are the was given as a kind of ceiling. Government likely to make them? Mr Vaizey: An honest answer to that question, Mr Williams, is that I don’t know. We will look at the Q421 Jonathan Edwards: It would be 100%. Mr Vaizey: A gold medal. 1 See Ev 116–17 cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
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18 January 2011 Mr Edward Vaizey MP arrangements between the BBC and S4C once they is likely to be a new chairman in March and, shortly have been established, which is something we hope to after that, a new chief executive. That is something do by the spring, and then we will look very carefully they may wish to reflect on, but I think it is also at whether there need to be any amendments to any important to get across the point that S4C is an existing Acts. independent organisation and will continue to be an independent organisation, funded by the BBC and in Q426 Alun Cairns: Mr Vaizey, the licence fee partnership with the BBC, and therefore will be settlement gives the BBC two years’ guaranteed entitled to make decisions without being second- funding more than S4C. Why is that? Would it not guessed by the BBC. have been sensible to have tied them both together? Mr Vaizey: The arrangements with S4C are effectively Q429 Alun Cairns: Within the spirit of the to take it to the end of the Spending Review period. relationship between S4C and DCMS and S4C and Our relationship with S4C goes to the end of the the BBC, do you not think that it is invidious for Spending Review period, and it is natural that you significant internal structural decisions to take place, would then want to reach a settlement in terms of the bearing in mind that the fantastic new opportunities Department’s overall budget that would take you to of that relationship with the BBC could well bring the end of the Spending Review period. Jeremy Hunt significant savings internally to benefit the said in his letter to the BBC Trust that we would want programmes in the independent sector and the viewers to see a review carried out of S4C towards the end of that it is seeking to serve? the Spending Review period with a view to taking Mr Vaizey: Mr Cairns, I suspect that the acting forward future arrangements and funding for the chairman and acting chief executive will have heard channel. There is certainly, again, no hidden agenda your words and they will perhaps reflect on whether for the BBC to walk away from its commitment to or not it is appropriate to take long-term decisions, fund S4C beyond 2015; it will continue to be funded given that a new chairman and chief executive will be beyond 2015. But, given that we were working to appointed in March and that the new arrangements a Spending Review period, we could only put in place will be in place in the spring. The point I want to get a fixed spending settlement for S4C up to that period. across, because it is a very important point for me to The licence review is different; it works to a different get across as the Minister, is that S4C will remain time scale. If you are going to tie up a licence fee operationally and creatively independent, and review with the BBC, you have to go to the end of therefore the executive, as it were, is entitled to the licence fee period, which is 2017. make decisions.
Q427 Alun Cairns: Minister, I accept the logical Q430 Guto Bebb: Minister, I would like to follow difference between the two, but do you not accept that up on some of the questions that Alun Cairns has just this creates uncertainty for the longer-term future of been asking. I accept entirely the point you make in S4C and would you not recognise that there needs to relation to the fact that the issue of S4C being in be an early announcement on a funding formula or the Schedule 7 is a technicality, and I also accept entirely basis of an agreement for the longer-term future? your assurances that S4C will be funded post 2015. Mr Vaizey: Again, Mr Cairns, I shall use the But I have to put to you the situation of the opportunity in this Committee to say that, as far as independent television production companies in I am concerned, S4C will continue to be funded Wales. The commitment in the agreement for the through the licence fee by the BBC beyond 2015. funding to be spent with the independent sector is most welcome, and certainly the opportunity for Q428 Alun Cairns: My final question relates to the economic development across Wales as a result is current practices of S4C. We have an acting chairman appreciated clearly. But, if you were developing and an acting chief executive, and I understand from a business plan as one of those businesses, I think within S4C that they are taking some significant there would be a degree of nervousness that there was decisions that will impact on the longer-term no written confirmation of the financial security of commitments of agreements and negotiations within S4C post 2015. Can we press you on the issue of S4C. Bearing in mind that you have two senior people whether there can be some written arrangement or in a temporary capacity, do you think that they are in written confirmation of that position between the the right place to do that and would you urge them to Department and the BBC? stop, bearing in mind that they have negotiations with Mr Vaizey: I am happy to reflect on that, Mr Bebb. the BBC coming forward? Again, the approach that we are taking and I am Mr Vaizey: That would be a matter for the acting taking as a Minister, is that this is a partnership chairman and acting chief executive. Again, it is very between the BBC and S4C and I don’t want to dictate important to get the point across that, whatever final the details of their arrangements to them—although, arrangements are put in place between the BBC and as I say, we are brokering those discussions—or how S4C, there will be operational and creative they engage with their stakeholders. But the BBC independence for S4C. The channel is perfectly Trust, and indeed the BBC and S4C, will have heard entitled to make decisions within the funding it what you have had to say and I think that they would receives about how it goes forward. It is a matter for want to take steps to reassure the independent the acting chairman and acting chief executive production community in Wales that S4C will whether they feel it is appropriate for them to be continue to be funded by the BBC and will continue making decisions now in the light of the fact that there to have a very bright future in Wales and beyond. cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
Ev 68 Welsh Affairs Committee: Evidence
18 January 2011 Mr Edward Vaizey MP
Q431 Owen Smith: Can I push you a bit further on of S4C if the funding isn’t independent but is part of that because you have obviously offered a guarantee the broader BBC? that funding for S4C will continue until the end of Mr Vaizey: I will make a number of points there. the Comprehensive Spending Review period but no Going back to my alleged flippant comments, first of guarantees thereafter that they will be at the same all, I think Fireman Sam is a fantastic programme. levels of funding? Guto raised an issue of there being a potential written guarantee, but will you commit that Q435 Geraint Davies: It is not in Welsh. your Department will continue to monitor the Mr Vaizey: It was created by an independent quantum of funding being received by S4C under the production company in Wales and it has been sold new arrangements and look at how that meshes with around the world. the volume of money that is being provided by the BBC in Wales for English language programmes about Wales too, because there are concerns about the Q436 Geraint Davies: It’s in English, though. impact on both areas? Mr Vaizey: I don’t speak Welsh. That’s a fact of life Mr Vaizey: The best way I can answer that question, and I apologise for it. But it is a fact of life that I do Mr Smith, is to say that in a few years’ time we will not speak Welsh. I don’t speak French either. be involved in negotiations with the BBC about its Charter. I can confidently say, I would imagine, that Q437 Geraint Davies: You could still watch S4C, the arrangements that the BBC has with S4C will form though, couldn’t you? part of those discussions and negotiations. It is Mr Vaizey: But I also think, unwittingly, Mr Davies, certainly my perspective and my strong view that S4C you have made my point for me, because if it irks you must continue. It must remain independent and well that an English Minister is, in your word, “flippant” funded. In regard to the BBC and the negotiation in about S4C and clearly doesn’t understand S4C, then terms of the licence fee settlement, that was very why on earth is it your agenda to have me in charge much our point of view, and I intend that to continue. of S4C? I find that completely bizarre. Surely it is much better for S4C to have a relationship with Q432 Geraint Davies: Mr Vaizey, do you think that a major global broadcaster. The second point I would your unilateral announcement of an arranged marriage like to pick up, which is a compliment to you, Mr between the BBC and S4C without the bride’s consent Davies, other members of this Committee, other bodes for a happy marriage? Welsh MPs and Members of the Assembly, is that, if Mr Vaizey: Yes. you think S4C is a minnow compared with the BBC, I would take a look around you at the kind of people Q433 Geraint Davies: When asked, “Have you seen who support S4C and bat for S4C. If S4C gets into S4C?”, you said, “No, but I have seen Fireman Sam”. trouble with the BBC, I think S4C will be able to call Do you think that sort of flippant response bodes well on a huge amount of support in Wales and beyond to for you as a broker of discussions between S4C and fight its corner. the BBC, which will inevitably be fraught given that you have this arranged marriage? Q438 Geraint Davies: In the light of what you just Mr Vaizey: The only thing that has undermined our said, do you think that the Welsh Assembly negotiations has been the slightly partisan and Government should have some scrutiny role, because, political view taken by certain Members of Parliament after all, some of them speak Welsh? I am not talking and other people involved in Welsh politics. Most about the operational or funding role here, but just people who don’t want to seek political advantage a scrutiny role on behalf of viewers from the local from what has happened take a step back and realise populations on S4C. that S4C has a huge future with the BBC. The BBC, Mr Vaizey: I think the Welsh Assembly Government of course, has been broadcasting Welsh language should take an interest in what S4C is doing and, if programmes for far longer than S4C has been in existence and I think they are excited and thrilled at there are concerns, as have been expressed in front of the prospect. I also think that the evidence this Select this Committee, about the direction of S4C, then Committee has heard shows it was quite clear that I would urge you and your colleagues to work with there were concerns about S4C. We should applaud your Welsh Assembly Government colleagues and say the fact that the coalition has taken steps to secure to them that you think that they should take a closer S4C’s future and we should condemn those who seek interest in what S4C is up to. to gain political advantage from it. Q439 Geraint Davies: But are you happy to embrace Q434 Geraint Davies: Would you accept, though, them in discussions about S4C from a scrutiny point without making it political—this is a serious of view? business—that, in relative size, S4C is of course Mr Vaizey: We certainly are, and I have spoken to a minnow versus a whale, as in the case of the BBC? the Deputy First Minister on a number of occasions On the issue specifically of funding independence, do about S4C. you accept that a manager within that organisation Chair: Thank you very much. Are there any further will have his or her eyes towards a BBC career and questions, Mr Davies? Good. We don’t want any therefore there will be a tendency not to be robust in insults to Fireman Sam, which I watch with my defending the operational and editorial independence children regularly; thank you. cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
Welsh Affairs Committee: Evidence Ev 69
18 January 2011 Mr Edward Vaizey MP
Q440 Jonathan Edwards: We have already touched you accept that programmes produced in Welsh don’t on the operational and editorial independence of the have a very large audience outside Wales because, like channel, but what exactly does that mean to you? you, many people outside Wales can’t speak Welsh Mr Vaizey: It means that, basically, the funding will and, therefore, when the accountants are comparing come via the licence fee. The BBC Trust will have an their commercial leverage—one programme versus overview in the sense of guarding the interests of the another—this will inadvertently discriminate against licence fee payer in terms of value for money, and it Welsh productions and this is a fear about not having will have a minority presence on the board of S4C, not independent funding for S4C? a majority presence. Therefore, S4C will be entitled Mr Vaizey: No. to follow its own editorial, operational and creative decisions in terms of who it hires, who it fires, what Q445 Geraint Davies: You don’t accept that. You programmes it commissions, how it schedules them think that people abroad will buy Welsh programmes and so on and so forth. that they will view and they can’t understand them, even though you don’t? Q441 Jonathan Edwards: From what I understand Mr Vaizey: That wasn’t your question. Your question from what the BBC said last week, they said it would was that because Welsh programming is more be challenging to marry the principle that the BBC expensive, that would put S4C at a disadvantage. controls how the licence fee is spent—obviously they are the guardian of the licence fee—and genuine Q446 Geraint Davies: There isn’t a market for independence for S4C. How do you marry those Welsh programmes outside Wales. conflicting comments? Mr Vaizey: There’s a market for formats created by Mr Vaizey: I don’t know whether the word independent Welsh production companies and I think “challenge” was some kind of euphemism for “It will it’s the job of this Committee and other Welsh be a complicated discussion”, but I don’t think one colleagues to champion the Welsh independent should shy away from that. As I say, the BBC Trust television sector and point out that their formats could has to ensure that licence fee payers’ money is spent be sold around the world. sensibly—that is, not wasted and not wasted on frivolity—so it will have an overview of how that Q447 Geraint Davies: In English. money is spent, but I don’t see why that should Mr Vaizey: Strictly Come Dancing isn’t broadcast in compromise the creative independence of S4C. English in the 70 or 80 jurisdictions in which the BBC has successfully sold the format. Q442 Jonathan Edwards: The crux of all this, of course, is the funding. We know that the BBC are Q448 Chair: Thank you very much. If I may, I will consulting internally about 20% efficiency gains up to allow myself another one and hopefully not steal 2017. Therefore, wouldn’t it be a more meaningful somebody else’s questions, as I did before. If we independence for S4C if funding was earmarked devolve broadcasting to Wales, which is one directly from the licence fee to the S4C Authority and suggestion, do you see any way of doing that whilst not via the BBC? maintaining money which has come from English Mr Vaizey: I think that would breach a fundamental licence fee payers towards Welsh broadcasting? Or principle and would, in effect, be top-slicing. I agree would you accept my personal view that, if we did with the chairman of the BBC Trust in that I don’t devolve broadcasting to Wales, S4C and the other support top-slicing. Welsh language and Welsh outlets would have to fund themselves from the licence fees paid for in Wales, Q443 Alun Cairns: Minister, can I come back to the which would lead to a cut in funding? operational and editorial independence? I put this Mr Vaizey: It is not a question I have turned to. question to the Director General of the BBC last week [Interruption.] I don’t quite know what your adviser and I would like your response to it. At the moment, whispered to you there, Mr Davies, but it obviously the Secretary of State doesn’t have the right to veto had an effect on you. Broadcasting is not a devolved the broadcast of a programme, although he has the matter and it is not the intention of this Government right to maybe publicly censure S4C should they to devolve broadcasting to the nations; so it is not broadcast a programme against his or her will. I asked a discussion I have had. I do think it is an important whether the BBC should have that right to veto the point of principle that broadcasting is a national broadcast of a programme or whether S4C should, in matter and that all British licence fee payers and their new form, be given the absolute right to taxpayers contribute not just to the national broadcast it if they think it is the right thing to do. broadcasters but to those in the nations and regions Mark Thompson had not thought about it very much, as well. but his instinct was that S4C should be able to broadcast it even if that was against the wishes of the Q449 Chair: Thank you very much indeed for that, BBC. Do you stand and support that? Minister. I shall apologise to Mr Bebb afterwards. Mr Vaizey: Yes. Mr Vaizey: It was meant to be Mr Bebb’s question, Chair: Thank you very much for that answer. We was it, Mr Davies? appreciate those ones. Karen Lumley: He’s taken all of them.
Q444 Geraint Davies: Just a very quick one about Q450 Guto Bebb: You have stated again that you the economies of scale of S4C and the BBC. Would don’t believe that S4C or broadcasting should be cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
Ev 70 Welsh Affairs Committee: Evidence
18 January 2011 Mr Edward Vaizey MP devolved. Would your view be different if the senior management in public organisations BUPA National Assembly were willing to part-fund S4C? healthcare? Secondly, have there been any discussions between Mrs James: The BBC does it. the Department and the Assembly in relation to Geraint Davies: The BBC does it, Chair, and you potentially co-funding the channel? know that. Mr Vaizey: There haven’t been discussions about Chair: I am asking the Minister. co-funding. I know that the Scottish Government Mr Vaizey: This is quite a raucous Committee. This contributes to BBC Alba and I have asked my officials is the third Select Committee that I have appeared in whether there would be anything in principle that front of. would stop the Welsh Assembly Government from Chair: What do you think, Minister, if I may ask you making a contribution to S4C. I gather there wouldn’t that? Do you think they should? be any problem with them giving a grant to S4C, if Mr Vaizey: If I can dodge the question, what I would that is what they saw fit to do, but, as I say, say is that I think it is an important point of principle constitutionally and legally, broadcasting should that Ministers respect the independence of the remain a national responsibility. broadcasters, because obviously it is a cherished principle that even publicly funded broadcasters Q451 Guto Bebb: On that point, and these specific remain independent of politics and politicians. One of points that broadcasting should be a national the things we have tried to do, and what we want to responsibility, there are some individuals who claim that taking part of the licence fee to provide specific do and we are working with the BBC Trust to do, is funding for Welsh language programmes is unfair on to make the BBC more transparent because licence non-Welsh-speaking licence fee payers in England, fee payers are entitled to know how the organisation Scotland and so forth. As a Department, how would they fund spends its money. Also, it is important to you respond to that criticism? understand in relation to commercial competitors, Mr Vaizey: There are all sorts of things that the such as The Guardian, which often complains to me taxpayer funds that don’t necessarily benefit every about the dominance of the BBC, that they know what taxpayer in the country, and we do it because we are they are up against in terms of how the BBC is the United Kingdom. We recognise that we all have spending its money in financing the website, which a responsibility to each other and we are therefore causes The Guardian so much difficulty. This happy—and I am happy as an English non-Welsh- Committee, which has very great influence in this speaking licence fee payer—that some of our licence matter, might want to impress on S4C the need for fee will go to S4C. In fact, I am delighted. complete transparency in terms of how it spends the Chair: Thank you very much indeed. Thank you for money that comes to it currently from the Department those comprehensive follow-ups to that initial and will come to it from the licence fee. question. Q455 Jessica Morden: DCMS have put out the Q452 Stuart Andrew: I am another victim of the advert for the new Chair. What qualities are you Chairman’s question-stealing. In these difficult looking for in the new Chair? financial times, Minister, there is rightly a need for us Mr Vaizey: We are looking for the new Chair to be a to ensure value for money across the board. During very strong leader for the channel, to go out and this inquiry, it did come to light that S4C has been engage with stakeholders and highlight the success using some of its public funding to provide private and importance of the channel, to bring the channel healthcare for its staff. Were you in your Department together after what has been a very difficult time for aware of this and do you think that that is an it in terms of its chief executive leaving and some of appropriate use of public funds? the criticism that it has faced, and also to manage Mr Vaizey: I was not personally aware of that, and a strong relationship with the BBC. obviously it is for the Authority and the channel to decide the appropriate terms and conditions for its Q456 Jessica Morden: Who is going to be on the staff. interview panel? How will it be made up? Mr Vaizey: We are going to have a senior DCMS Q453 Chair: Minister, if I may press you, is it standard practice for publicly funded broadcasting official, an official from the Welsh Assembly companies to hand out BUPA to its employees using Government, an independent assessor who comes taxpayers’ money? from a panel of independent assessors, and a senior Mr Vaizey: I am not aware whether it is or is not. former broadcaster based in Wales. I can certainly find out for the benefit of this Chair: Thank you very much indeed. I am not sure Committee whether it is standard practice, or I could whether Guto Bebb wants to come back, but while he ask the BBC and Channel 4 whether or not they thinks about that, Owen Smith would like to come in provide private healthcare for their employees. and then Jonathan Edwards. Geraint Davies: They have already confirmed that they do, Chair. We know it is standard practice. Q457 Owen Smith: Minister, you said a minute ago that you are a very relaxed person, and I think you Q454 Chair: As the Minister of a government have demonstrated that today with the smooth way committed to reducing waste, do you think that it is you have been ducking and weaving the questions. appropriate that our money is being used to give Mr Vaizey: You are my role model, Mr Smith. cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
Welsh Affairs Committee: Evidence Ev 71
18 January 2011 Mr Edward Vaizey MP
Q458 Owen Smith: Thank you very much. It is good Q462 Jonathan Edwards: Quickly, on the to know that I am leading by example. Don’t you appointment of the Chair and the new successor accept that there is some degree of culpability that you Authority, is there a direct timetable for that? You and the Department have for the undoubted crisis that mentioned March. Do you expect those key posts to there has been in S4C recently because of the way in be filled by March and the new Authority to be set up? which, without any discussion, the cuts to its budget Mr Vaizey: Yes. The interviews are taking place at the were handed down and because of the way in which beginning of March. I think the applications close on the radical proposals for the changes in its governance 11 February and then there will be interviews on 3 were also handed down from on high by the March. So I would expect an appointment relatively Government? Don’t you accept that you have some shortly after that. responsibility for this? Mr Vaizey: No. Q463 Jonathan Edwards: Just quickly, in terms of that appointment, what discussions have there been Q459 Owen Smith: None whatsoever? with the Welsh Government on this? I understand there has been one direct conversation at ministerial Mr Vaizey: Obviously, people who don’t agree with level. the decisions we have taken will say it was taken in Mr Vaizey: In terms of who we should appoint or in the wrong way and that we are guilty of that, and terms of the process? people who do agree with our decision will do what I think is the right thing, which is to get on with it and Q464 Jonathan Edwards: The process. You’d think establish a bright future for S4C. In the wider picture they’d have a vested interest in it, although it is not of things, it would look very odd if S4C’s funding had devolved. been guaranteed and was continuing to increase in the Mr Vaizey: Yes, they have an official on the light of all the other pressures on the public finances. interview board.
Q460 Owen Smith: You mentioned also that your Q465 Alun Cairns: Minister, can I pursue the earlier Department have been responsible—and we can all line of questioning from Mr Smith? For those who see that—for cutting budgets for other bodies in the are opposed to funding from the BBC, what was the arts and in cultural fields across the UK. Is it not the alternative, bearing in mind the state of public funds? norm, when making those sorts of cuts, that you at What sort of cut would S4C have potentially faced if least engage in advance of them with those bodies and there wasn’t any funding from the BBC going maybe talk to the chairman or the chief executive of towards S4C? the body—give them an inkling of the sort of cuts, Mr Vaizey: It would have faced a similar cut. The and, if you are going to make big changes, talk to overall settlement for the funding has been agreed them? I find it extraordinary that you think it is normal with the BBC but was agreed within the parameters of not to engage with them at all. what we were looking at in terms of reducing public Mr Vaizey: We engaged with them in terms of the expenditure across the board. It would have faced mid-year cut and it was obviously clear that there a similar reduction. were going to be further reductions going forward, but we couldn’t engage with them on the exact nature of Q466 Geraint Davies: On funding arrangements, if I the reductions, just as we couldn’t engage with any may, the arrangement is that funding will go through of our arm’s-length bodies on the exact nature of the the BBC from 2013–14, and in 2014–15 the BBC will reductions because we didn’t know what they would pay £76 million. What is to stop the BBC from be until we had achieved a settlement from the reducing funding from, say, £76 million to £50 million Treasury. You make my point very well, which is that in the following year? Am I not right to say that they I don’t think S4C has been singled out. I could be have a complete capability to just slash S4C after we digging a hole for myself here, but we have an overall have let them off the reins? settlement. We had to negotiate that with the Treasury Mr Vaizey: It would be very unlikely that the BBC and we had a broad idea of where we could make would want to do that, but I think members of the Committee would support the BBC Trust in wanting savings and the kind of level of reductions we would to ensure value for money for the licence fee payers. have to impose. But the idea that S4C was oblivious One of the interesting discussions one always has to the fact that we would have to reduce the funding, about funding is what the right level of funding is. It I think, is fanciful. Given that it has £27 million in seems to me that if it is at a certain level then reserves, and it is going to have £70 million, £80 everything is right with the world, and if it is any million or £90 million going forward, I think it is in lower everything is a complete disaster. We need to a very, very good and strong financial position. look at the outputs. We need to look at whether S4C is still continuing to provide fantastic Welsh Q461 Chair: Thank you. The allotted hour draws programming for Welsh people living in Wales and near, but there are a number of people who want to beyond. I think that is what the BBC will want to get in with what I hope will be very short questions. secure. As you started by telling us you had all the time in the world, perhaps you will allow us a few more minutes. Q467 Geraint Davies: Don’t you think there is Mr Vaizey: Of course. a case that after 2014–15 there should at least be some Chair: Very quick questions and answers then, please. sort of floor beneath which the BBC couldn’t cut, for cobber Pack: U PL: COE1 [E] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
Ev 72 Welsh Affairs Committee: Evidence
18 January 2011 Mr Edward Vaizey MP the reassurance of production people, for Welsh Q474 Guto Bebb: Again, it is revisiting the same culture, the whole thing? I appreciate we should be issue, I am afraid, but your intentions as a Department outcome-driven and I agree with that, but shouldn’t towards S4C are quite clear and, in my view, quite there be some sort of floor? Certain people I am positive. Another concern I have, in addition to the speaking to in S4C are saying there are no guarantees; fact that there is no certainty post 2015, although I do the BBC could say, “We’ll cut this. We’ll just put the accept the argument that there is good will on all money into websites.” Isn’t there a way that you can sides, is that, as part of the agreement with the BBC, get some sort of reassurance about funding levels, be there is a commitment for the money to be made it at a very low level even after 2014–15? available for the independent television sector in Mr Vaizey: I think you have taken a pessimistic view Wales. A slight concern is the use of the independent of the BBC’s attitude to S4C and the evidence that the sector by the BBC currently, and in due course the Select Committee heard from Mark Thompson should question I would ask is whether that commitment to reassure both this Committee and the people of Wales the independent sector is going to be ongoing. Is it that the BBC is very committed to the future of S4C. going to be part of the discussions between DCMS and the BBC? The fact that the BBC is investing so Q468 Geraint Davies: So where are the much in their capacity in Cardiff is a slight concern disagreements? to some of the independent sector in the long run. Chair: Order, order. Mr Vaizey: The answer is yes, Mr Bebb; they are Mr Vaizey: I think the Chairman is coming in now. committed. Chair: We’ve got to get through a few more. Q475 Chair: Minister, is there any deadline to the Q469 Mrs James: I want to revisit a few questions. Who has been advising you during this period, partnership arrangement that has to be sorted out with Minister? I am quite concerned, not hugely concerned the BBC? Is there a time by which if it is not sorted but quite concerned, about some of your responses— out then this is all going to fall apart? for example, about the 500,000 viewers. There Mr Vaizey: There is no formal deadline. Obviously, are 500,000 Welsh speakers in Wales; so that is the arrangements have to be in place for the new your potential pool of viewers. Also, it is an funding arrangements which begin in April 2013. So award-winning channel. we have, broadly speaking, two and a half years to Mr Vaizey: I know. It has won BAFTAs. negotiate, but I should say that we hope to conclude in this half of the year. Q470 Mrs James: Not only that. It’s been up for Oscars, etcetera, so it is a first-class organisation. Q476 Chair: We have heard evidence from some, Have you had specifically Welsh advice? which I would summarise by saying that people have Mr Vaizey: Mrs James, with great respect, I don’t suggested that there is rather a lot of output of not want you to get hung up on my “500,000 viewers” very high quality and that has been one of the answer because, as I say, I have read—as you can see problems. The Secretary talked about dubbing and it from the highlighter pen— seems to have caused a bit of controversy. Have you looked at encouraging S4C to buy in films from Q471 Mrs James: I believe you. non-English-speaking countries—some very good Mr Vaizey:—every word of evidence that has been films are produced in places like Germany and put here, and if I misinterpreted something that I read France—and putting in Welsh subtitles? I personally and gave an answer that was inadvertently seen to don’t see that as being such a bad idea. It is standard give the impression that I was being badly advised, practice in many European countries, including that mistake, as authors often say— Germany and France. Mr Vaizey: I know that you had an extensive Q472 Mrs James: I am asking about specific Welsh discussion on this subject when you took evidence. advice, a Welsh-based person giving you a Welsh I would expect the Committee’s report to reflect your overview of things. views. Mr Vaizey: I speak to lots of Welsh people. Q477 Susan Elan Jones: Q473 Mrs James: There is no specific adviser. Minister, I know I can rely Mr Vaizey: I have had informal discussions, for on you not to give an extraordinary answer to this one. example, with former Labour Secretaries of State now In your conversations with various people, did you in the other place, as well as Lord Crickhowell and have a conversation with Nick Bourne, the leader of others, who have given me the benefit of their wisdom the Welsh Conservatives? I believe he was very firm and advice. Your colleagues on this Select Committee, in his view that there should be an independent review particularly Mr Bebb, Mr Cairns and others, have into S4C, and I believe that was shared by the other talked to me at length about S4C. I don’t have three party leaders. Do you agree with him or not? a formal Welsh adviser. I should also say that Welsh Mr Vaizey: I have not discussed it personally with Mr Ministers have taken a close interest and talked to me Bourne, and I have seen the letter that the four party informally about it. leaders wrote to the Prime Minister. I don’t think there Mrs James: It’s the subtle nuances I was more should be an independent review. As I say, we are interested in. committed to a review as the spending period comes Chair: Thank you very much, Minister. to an end. cobber Pack: U PL: COE1 [O] Processed: [06-05-2011 11:57] Job: 007748 Unit: PG05 Source: /MILES/PKU/INPUT/007748/007748_o005_michelle_WAC 614-v 18 Jan 11 CORRECTED.xml
Welsh Affairs Committee: Evidence Ev 73
18 January 2011 Mr Edward Vaizey MP
Q478 Geraint Davies: Presumably, you are involved might all put in for that. Thank you very much for now in the tripartite discussions. What are the areas your comprehensive answers. We have a discussion of disagreement and difficulty over approach and amongst Committee members about another matter in substance? a few minutes, so I’m afraid I’m going to have to ask Mr Vaizey: I am not personally involved in them. It is for the room to be cleared. Thank you for giving such officials and officials from the Trust at the BBC and comprehensive evidence and I also thank all those the Welsh from the S4C and the Welsh Authority. members of the public who turned up. Mr Vaizey: Chairman, may I say thank you, how Q479 Geraint Davies: Finally, on the Chair’s much I have enjoyed appearing in front of this question, do you think a sort of Welsh version of Committee and how important the Committee’s report Strictly Come Dancing with Bruce Forsyth dubbed will be? Rest in no doubt that your thoughts and into Welsh would be popular in Wales? I think it conclusions will be taken very seriously by DCMS would be highly amusing. and I hope also by all other stakeholders who have Mr Vaizey: You are talking yourself into a job, an interest. Mr Davies, as creative controller of S4C. Chair: We look forward to that. Thank you very Chair: Not so fast, Minister. Jeremy Hunt is very much indeed. good at the lambada and I can do a bit of salsa, so we Ev 74 Welsh Affairs Committee: Evidence
Written evidence
Written evidence submitted by Ron Jones, Chairman of the Welsh Assembly Government’s Creative Industries Panel DECLARATION OF INTEREST AND ADDITIONAL INFORMATION I am Executive Chairman of Tinopolis Limited, one of the UK’s largest television production groups. The group is headquartered in Llanelli with production centres also in London, Glasgow and Cardiff. S4C and the BBC are significant customers of the Company. The Welsh Assembly Government’s Creative Industries Panel was established in the last few weeks. Therefore, the Panel has not had an opportunity to discuss the future of S4C and the views set out in this document are my own. The views are consistent with advice I have already shared with the relevant WAG Ministers and other politicians at Welsh and UK levels.
1. Summary 1.1 There is an urgent need to build a political consensus in Wales and Westminster to safeguard Welsh language television services. The consensus needs to be fair and practicable. It needs to be widely accepted and, as importantly, ensure there is no conflict at political or social level. 1.2 An independent review of S4C, its governance, remit and funding requirements is urgently needed. This should deal with the short-term governance and management problems as well as addressing the long-term needs of the service. 1.3 A simple and straightforward approach to reform is best and such a solution is available. After all, the requirements are straightforward. Firstly, Welsh language television needs a funding mechanism that is appropriate and secure. Secondly, S4C itself needs reform to ensure that a better service is provided and delivered efficiently. 1.4 An independent S4C with control editorially and operationally is essential. The BBC has always been a key partner in delivering Welsh language television. However, the present proposals for an S4C with the BBC in effective control would damage accountability, tend to increase costs and further reduce the plurality of media in Wales. 1.5 To re-engage with its audience and to increase its economic added value S4C needs a strategy to develop its production and administration in those parts of Wales where Welsh remains a community language.
2. Review and Reform of S4C 2.1 S4C’s current public service remit is the provision of a broad range of high quality and diverse programming in a service that is primarily in Welsh. It fulfils this remit but there is so much more it could do in terms of better serving its audiences, increasing its audience numbers and in providing added value to the Welsh economy. 2.2 S4C needs to change, not simply to placate critics but because it should be changing and developing all the time in line with the changing needs and expectations of its potential audience. It is there to provide Welsh- speakers with the services they want and need in a media market where commercial revenues are insufficient to do the job. These services have to be re-assessed continually as new requirements replace the old. However, there is evidence that over a long period the S4C Authority has not been sufficiently responsive in renewing the channel’s remit and relevance and there has been no challenge to its provision from its political stewards in DCMS. The result is that S4C now faces many challenges, all of which have to be resolved if the necessary services are to be provided. 2.3 The extent of today’s problems is such that an independent and comprehensive review of S4C is required. This review should involve all stakeholders including S4C itself, DCMS, the Welsh Assembly Government, the BBC, the production sector and your Committee. Some of the problems we see today can be put right readily. Others will take time. All will require secure funding and structures that are sustainable and deliver value and quality. There is a need to establish a new Public Service Statement detailing what S4C is for and stating its purpose. Secondly, S4C needs a Public Value Statement indicating the criteria to be adopted in commissioning content and met when offering services. 2.4 Significant and wide-ranging as these problems are, they are capable of being dealt with effectively and within the statutory structure presently in place. There is nothing wrong with the structure that an honest review, transparency and fresh guardianship cannot put right. S4C was created in a noble cause and the early vision and success can be rebuilt. 2.5 If the Minister’s present proposals are implemented, the unique needs of Welsh language services will be overwhelmed by a BBC with so many conflicting priorities. The BBC in its recent strategic review failed to mention the needs of the devolved nations. Welsh-speakers are entitled to question what hope there would be for a Welsh language service in that environment. Also, the role S4C plays in supporting and developing Welsh Affairs Committee: Evidence Ev 75
the Welsh language is so important as to need greater scrutiny and accountability than would be possible within the BBC’s governance structures. The need for S4C to work alongside other Welsh Assembly Government strategies for the language and the economy make it necessary to build into the future governance of S4C mechanisms that ensure this is achieved. The Minister’s present proposals suggest a governance structure that gives the BBC certain rights and duties in respect of S4C. If these are to work effectively the BBC’s own governance structures in Wales would need significant overhaul to ensure that elected politicians in Wales are able to provide the appropriate level of scrutiny. 2.6 The necessary reforms are best left in the hands of an independent S4C.
3. Popularity and Relevance 3.1 Despite census statistics indicating that the language is in a period of recovery there have been changes in the pattern of language use that make S4C’s position much more difficult. There has been a real underlying fall in the number of first-language Welsh-speakers and this has been accompanied by two key developments. Firstly, social mobility and changes in the nation’s demographics have led to there being fewer families where Welsh is the first language of both parents. The communities where twenty years ago Welsh was the primary community language have become more linguistically diverse. This has been made even more complex by the increase in the number of Welsh-speakers in the South-East as a result of the success of Welsh medium education and the migration of significant numbers of Welsh-speakers to the Cardiff area. 3.2 These demographic changes require a more sophisticated approach than that adopted by S4C in measuring audiences. Over many years there has been a tendency to misuse viewer statistics to prove success and these same statistics are now demonstrating failure. Market share, reach and numbers of viewers have all been used when they appeared helpful but in reality the statistics were never fit for purpose. Samples are small and are unable to accommodate the linguistic complexities in Wales. BARB is not designed to provide accuracy at the levels of audience available to S4C and it is blameless in this. Its statistics for all small digital channels have the same problem. Interestingly, and presumably because of these problems, the BARB data is not used for and by BBC Alba. 3.3 The fall in the audience was also a predictable end-product of the digital switch-over and the growth of multi-channel. In its early years S4C delivered a wide range of programmes across all genres and in the limited broadcast landscape of those days the channel was successful. However, the Welsh language audiences are just as promiscuous as any other and they will no longer watch programmes just because they are in Welsh. Audiences now, for all channels, are loyal to their interests not to channels. Insufficient attention was given to designing content for S4C to meet this new landscape. The BBC in Wales has encountered similar difficulties with its programmes in Wales, including those for S4C and for BBC2W prior to its closure. 3.4 This is an editorial issue that can be resolved but it does require a new approach. 3.5 Welsh television has suffered in recent years because of broadcasters’ failure to define what the public service television needs of Wales are and to address them. ITV’s financially driven cuts are well documented. The BBC, during a time of fast increasing licence fee revenue, has cut back on its English-language television programmes for Wales in both hours and spending. Prior to the present difficulties BBC Wales had announced a unilateral and significant cut in the money it proposed to spend on its Welsh-language programmes for S4C. None of the broadcasters have taken sufficiently seriously their responsibilities to Wales and to Welsh viewers. Even in their latest strategy document the BBC has not defined the public service requirements for its services in Wales. A comprehensive review is urgently required so that all broadcasters are held accountable for their role in providing the necessary range and depth of programmes. 3.6 The BBC should be required to answer for its own failings. In the case of S4C they too have failed to analyse what the real public service needs are today. 3.7 Market failure is evident for all Welsh-language content but money is always going to be limited. The channel needs to open out for consultation its view of those services it should be providing. A new definition of public service requirements is needed for Welsh language content and a review to determine what these might be is needed. It is already clear that there are a number of services that are essential and only S4C can provide them. 3.7.1 For some programme areas there is a real public and democratic need and demand. These include news and news related programmes, current affairs politics, live programming, sport and events as well as the cultural content that is uniquely Welsh or Welsh-language. 3.7.2 The Welsh language is badly served for on-line services. As is the case with stronger languages elsewhere in the world the domination of English as the internet language is evident. The BBC has shown little enthusiasm to fill this void in Wales. Notably, their Welsh on-line provision in the Welsh language is inferior to their provision in English. S4C is the obvious provider. Market failure is again permanent and there is a genuine need. Carefully orchestrated it is even possible that S4C could provide the momentum for many of these services to be commercial. Even so, the seed-corn can only come from S4C. 3.7.3 A strategic error was made by S4C in deciding to divorce its plans for a children’s service from the formal education sector. The growth and success of Welsh-medium education in Wales has been Ev 76 Welsh Affairs Committee: Evidence
amongst the most influential factors in supporting the language in hundreds of years. A more empathetic approach to commissioning would benefit the education sector as well as help attract youngsters and their parents to S4C.
4. Political Accountability
4.1 S4C has spent its life in a limbo half-way between London and Cardiff, not really accountable to either. WAG was told to mind its own business and DCMS was always going to have difficulties monitoring a body whose services were in a language it did not understand. Whether broadcasting should be a devolved issue is an entirely political judgment. However, there is a compelling case that the common interests of the Assembly, S4C and the audience suggest that meaningful and effective scrutiny is better achieved at local level. In the case of Welsh-language broadcasting there are constitutional complications that need to be addressed urgently.
4.2 The Public Bodies Bill raises the possibility of the relevant Minister modifying S4C’s funding arrangements but also gives him the power to reorganise S4C’s constitutional arrangements and transfer S4C’s functions. Indeed, he could in future give himself the power to abolish S4C or force its merger with another body. This is surely inappropriate.
4.3 The Bill also requires that the UK Minister must get the consent of the Welsh Assembly Government before using his powers to the extent that what he wants to do is within the law-making powers of the National Assembly for Wales. The Government of Wales Act includes “Promoting or facilitating the use of the Welsh language” amongst the matters upon which it may make law. Welsh-language broadcasting clearly relates to promoting or facilitating the use of the Welsh language. The Assembly’s powers do include making laws about Welsh-language broadcasting, short of the imposition of duties. This probably includes funding and governance. Whatever the finer legal issues this merely underlines the need to have in place robust agreement between London and Cardiff on the funding and constitution of S4C. Sir Jeremy Beecham’s report Making the connections—Delivering Beyond Boundaries talks about the need to ensure that WAG plays its part in non- devolved services. S4C seems a prime candidate for this approach.
4.4 In purely practical terms it is difficult to see the rationale for a continuation of the present arrangements. Clear lines for democratic accountability need to be put in place. The future of the Welsh language is inevitably fragile and the use of broadcasting as a part of the strategy for its support and development needs to be open to public consultation, reviewed by elected politicians and transparent to all.
4.5 The proposed change in the partnership with the BBC would remove all practical and political accountability. In his letter to the S4C authority on 10 November 2010, Sir Michael Lyons refers to the licence fee funding of S4C and states the view that “The BBC Trust is the guardian of the licence fee and as a result will need to have oversight of how this money is being spent”. There is little legal substance in his point since the licence fee is in the gift of the Minister, not the BBC, but the placing of the BBC as an intermediate and controlling body would risk weakening political accountability for Welsh language television. Although the letter stresses the BBC’s commitment to a “creatively independent” S4C Sir Michael’s other points make it clear that the BBC sees the new arrangements as an opportunity to take control. Legally, S4C is an independent broadcaster set up by statute just like the BBC. It has certain statutory obligations that can only be discharged if it remains independent not just creatively but editorially and operationally.
4.6 The involvement of the BBC in these issues does open up an area of inquiry that I invite the Committee to consider. This is outside the scope of the Committee’s present inquiry so I will only refer to it briefly. It is widely accepted that Wales suffers a worrying lack of plurality in media. This extends to media outlets, ownership and control as well as an imbalance between media generated in Wales and provided from elsewhere in the UK. Since devolution, the lack of coverage of our politics has become a danger to our democracy. Coverage of the Assembly and of Welsh affairs in Parliament has increasingly diminished in range and depth. ITV’s financially driven cuts are well understood and the announcement that local news is to be given a higher priority is welcome. S4C news is provided by the BBC. Our newspapers continue to weaken leaving the BBC as the primary provider of political coverage. This is an unhealthy trend.
4.7 However, at a time when other media outlets are weakened by economic changes the BBC has reduced its commitment to Wales as a matter of choice. Over the last years, despite the BBC’s receiving favourable licence fee settlements well ahead of inflation, it has chosen to reduce its spending on English programmes for Wales quite significantly. It has also announced its decision to reduce its funding on Welsh language television by 17% next year. Although the BBC has now received a new licence fee settlement that is much more favourable than other public bodies we should expect that further cuts will be called for in the programming the BBC provides to Wales in both languages.
4.8 The BBC’s own governance arrangements do not permit Welsh elected politicians to hold it to account for its spending and service in Wales. In the fragile media landscape of Wales we cannot afford further arbitrary cuts. I invite the Committee to consider whether significant reform of the governance of the BBC in Wales and S4C is now urgently required so that appropriate political oversight is enabled. Welsh Affairs Committee: Evidence Ev 77
5. S4C Governance and Management 5.1 S4C needs to be a small lean organisation close to the people it serves. It is not a major global player. It should not think of itself as an institution first and service second. Over many years these necessities were forgotten. Programming strategy was replaced by gut-reactions to the latest viewing figures. Major and costly developments such as Clirlun, the children’s channel, the attempted move into English-language news and investments in technology companies were ill-considered. 5.2 Management became increasingly detached from Welsh-speakers and their interests. There has been insufficient understanding of the changes in viewer taste. Programmes became more traditional as they tried to defend their older, known audience. There was an aversion to new media. There was a refusal to co-ordinate their output for children with the needs of the curriculum. 5.3 Sir John Shortridge is today undertaking a much-needed review of governance at S4C. The governance and management culture had developed to the point where they had become inappropriate for a public body. Over many years the authority has failed to discharge its duties to define the service, to devise a strategy to serve viewers and support the language that management could then deliver. The decision in recent years to formalise the authority’s separation from many aspects of S4C’s operations was a major misjudgement. The Authority has failed to keep in touch with elected politicians or to maintain their respect. One consequence has been that even those minded to support the language and Welsh language television now find it difficult to support S4C. The present Authority do not have the support needed to take S4C forward and should be replaced on the completion of a full and independent review. The Authority has started the process of finding a new Chief Executive. This process should be left to a new Authority.
6. Funding, Costs and Economic Impact 6.1 The Minister is correct to identify the TV and Radio Licence as the appropriate funding mechanism for S4C. The licence fee is the way successive governments have chosen to fund public service broadcasting and no better option has been found. The money raised by the licence fee has colloquially been thought of as the BBC licence fee and there is in the BBC Trust’s 10 November 2010 letter to S4C virtually an assertion that this is so. Legally this is not the case and the TV and Radio Licence revenue is already in the Minister’s gift. It is within his existing powers to decide on the monies to be raised and how they should be distributed. 6.2 There is no legal impediment to the Minister paying an agreed share of licence fee revenue directly to S4C and this is the best way of ensuring there is accountability for the expenditure. Agreeing the level of funding for Welsh language television should be handled in the same way and at the same time as happens with the BBC’s portion of the TV and Radio Licence fee. 6.3 An independent review would establish what level of funding was needed to provide the services required. The cuts over the next two years have been announced but the review is essential to ensure that from 2013 the service is properly funded and that this process is not left to an internal and unaccountable BBC decision. 6.4 DCMS has suggested that there may be savings in costs if S4C gets closer to the BBC and shares certain back-office functions. This appears to me to be wildly optimistic. The BBC is not generally thought of as a paragon of financial efficiency and lean management. It is potentially much more cost-effective to run an organisation as small as S4C using the best principles of the private sector. Even allowing for the necessary additional costs that come from being a public body major cuts are available throughout the organisation. The key is shifting the corporate mindset from the institution to the service being provided. 6.5 The 2010 report, the Economic Impact of S4C 2007–2010 indicated a gross added value to the Welsh economy of £85 Million. Even with the lower levels of funding that are going to be available in future the channel has an important economic role. As importantly much of S4C’s expenditure is in economically deprived parts of Wales. However, I believe the expenditure could provide much more economic and social value if it tried. Too much of Welsh television production is unnecessarily located in Cardiff when much of Welsh and English language programming could be located elsewhere. 6.6 In the case of Welsh programming there is an unarguable case that more should be located in Welsh- speaking areas where quality jobs are at such a premium. The relative fragility of the production sector over the next few years is going to require S4C to use its commissions to engineer the development of the sector. They need to build geographical balance, encourage new entrants to the market, help develop producers of new media content as well as put the structures in place to work with other Welsh language organisations. 6.7 S4C itself should be relocated to North or West Wales. Culturally the organisation would benefit from being closer to its core audience. The area chosen would see a massive economic boost and, as importantly, an economic boost in Welsh. 6.8 The cost of these projects can be met by using the funds available in its commercial reserves. Properly done this could set up S4C and its supply chain for years to come. November 2010 Ev 78 Welsh Affairs Committee: Evidence
Written evidence submitted by Ofcom
Introduction and Executive Summary 1.1 Ofcom is the independent regulator and competition authority for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services. We welcome this opportunity to submit evidence to the Welsh Affairs Committee’s inquiry into S4C and its governing body, the Welsh Authority. 1.2 S4C’s services are provided under statute by the Welsh Authority. However, the Communications Act 2003 requires us to independently regulate certain aspects of the Authority’s public services.1 The most significant as far as the Committee’s inquiry is concerned are those where the Authority has to comply with requirements and quotas to be agreed with us (or, in the absence of agreement, to be set by us). Our evidence therefore focuses on the extent to which S4C is fulfilling its remit in these respects. 1.3 S4C (analogue) and S4C Digidol (digital) are public service channels provided by the Welsh Authority, with individual remits set out in the Communications Act,2 although the S4C analogue service was closed down at the end of March 2010 when the digital switchover (DSO) process was completed in Wales.3 The Authority also provides S4C-2, a commercial service that we license. 1.4 The Communications Act requires the Welsh Authority (along with the other public service broadcasters) to produce an annual statement of programme policy and to consider any guidance that we issue. The Authority must ensure its services comply with the Ofcom Broadcasting Code and other codes that we issue. From 2004, when we started to regulate S4C, significant issues of Code compliance for the service have been very rare. In 2009, we did not adjudicate on any programmes that S4C broadcast. 1.5 As required by the Communications Act, we have agreed quotas with the Welsh Authority in the following areas: — television access services—subtitling, signing and audio description; — independent productions—programmes supplied by independent producers; — news and current affairs programmes; and — original productions—commissioned in-house or from independent producers. 1.6 In the period from 2004, the Welsh Authority’s services have successfully complied with and have generally exceeded these quotas. 1.7 The Communications Act also places a duty on us to assess the designated public service broadcasters, taken together, in terms of the delivery of the public service purposes set out in the Act. Against a series of purposes and characteristics that we developed as part of our first Public Service Broadcasting (PSB) Review, we have developed an evidence base to assess the delivery of PSB. From 2006, we have also measured audience impact. 1.8 In 2009, S4C’s share of all viewing (ie not just of Welsh-language programming) was 2.2%, with a share of peak-time viewing at just over 3%. This compares to shares of 6.1% for BBC2, 4.4% for Channel 4 and 4.5% for Five. BBC1 and ITV1 each has a share in excess of 15%. 1.9 Regular viewers of S4C Welsh associate its programming most strongly with the PSB purposes of informing understanding of the world and reflecting UK cultural identity. Regular viewers also tend to say that they trust the channel and see it as providing high quality programmes. 1.10 Total spending per head on broadcast-based output in Wales totalled £59.87 in 2009, up from £57.49 12 months earlier. This was the highest spend per head across the four UK nations, driven particularly by the programming budget of S4C, which accounted for £26.20 of the total. The year-on-year increase was brought about in part by higher spending on Welsh-language programming and by output produced for UK-wide audiences. 1.11 Our first PSB Review, completed in June 2005, set out the view that the BBC and S4C should develop a new relationship driven by three core principles of transparency, financial commitment and editorial control. The Review recommended a new partnership to meet developing audience needs and look to the future (three years and more) The Review concluded that the incorporation of S4C within the BBC would involve “a significant negative impact on plurality in Wales and hamper S4C’s ability to meet its audience’s needs in the most effective way.”
1.12 Subsequently, during autumn 2006, S4C and the BBC concluded a “Strategic Partnership” aimed at addressing these issues, and that included a funding commitment from the BBC for its statutory supply to S4C. 1 www.opsi.gov.uk/acts/acts2003/pdf/ukpga_20030021_en.pdf. 2 See Schedule 12, paragraph 3(2) and (3). 3 The S4C analogue service ceased transmission at midnight on 30 March 2010, and DSO was completed in Wales the following day. S4C Digital is now the Welsh Authority’s main public television service. Welsh Affairs Committee: Evidence Ev 79
1.13 By the time of our second PSB Review in spring 2008, we took the view that the relationship between the BBC and S4C was working far more effectively. The main focus of the second Review was therefore the future provision of English-language programming in Wales rather than Welsh-language programming.
1.14 On 14 October 2010, the Government stated that it regarded S4C’s present funding arrangements to be unsustainable.4 The recently introduced Public Bodies Bill is therefore intended to give effect to an amendment of the current provision by which S4C is funded at the level of its grant from the Department for Culture, Media and Sport (DCMS) in 1997, increased annually in line with the retail price index. Subsequently, as part of its Spending Review, the Government intends to fund much of the service via the television licence fee from 2013–14.
1.15 Changes to S4C’s future governance are likely to have significant implications for us and our regulatory role in relation to the Welsh Authority and the broadcaster, although these are not clear at this stage. We will continue to provide data and other information relating to the future delivery of PSB including the services provided by the Authority and S4C.
Regulating S4C: Our Role
2.1 S4C’s services are provided by the S4C Authority, known as the Welsh Fourth Channel Authority or the Welsh Authority in legislation. We have some specific regulatory functions relating to the Authority as set out in the Communications Act.5
2.2 Both S4C (analogue) and S4C Digidol are public service channels provided by the Welsh Authority, with individual remits set out in the Communications Act. In addition, the Authority also provides S4C-2, which used to broadcast coverage of National Assembly plenary and committee hearings when in session from its creation in 1999. However, this service, which was provided through agreement with the Authority by the BBC, was discontinued in summer 2009. S4C-2 is still also used to provide coverage of festivals and events in Wales during the summer months but as a commercial channel that we license rather than a public service channel. The Authority took the decision to launch the channel in 1999 to make use of digital capacity gifted to it by order under the Broadcasting Act 1996.6
Statements of Programme Policy
2.3 Section 266 of the Communications Act requires the commercial public service broadcasters to produce annual statements of programme policy having regard to guidance that we give. Similarly, the July 2006 Agreement between the BBC and the Secretary of State for Culture, Media and Sport requires the BBC Trust and the BBC Executive Board to produce an annual statement of programme policy.
2.4 The Welsh Authority must also produce an annual statement of programme policy, and the Authority must consider any guidance that we issue. However, there is no provision for us to review any “significant changes” to the Authority’s statements as has been the case with the Channel 3 services including ITV Wales.7
2.5 The Government has indicated that it intends to use the Public Bodies Bill, when enacted, to abolish the requirement for the commercial public service broadcasters to produce statements of programme policy. The Government is still considering whether the requirement will be retained in the case of the Welsh Authority’s public services.
The Broadcasting Code
2.6 The Broadcasting Act and the Communications Act require us to draw up a code for television and radio covering standards in programmes, sponsorship, fairness and privacy. Known as the Broadcasting Code, it applies to all television and radio services broadcast in the UK with certain exceptions in the case of the BBC and S4C. The BBC’s public services are exempted from sections five (impartiality and accuracy), six, (elections and referenda), nine (sponsorship) and 10 (commercial references) of the Code. S4C is not exempt from these sections. Observance of the Code is a licence requirement in the case of those we license (including S4C-2), a statutory requirement in the case of the Welsh Authority’s public services and a condition of the BBC Agreement for its services.) The requirement for impartiality and accuracy in news therefore applies to the BBC’s Welsh-language programmes broadcast on S4C, including the 7.30 p.m. weekday news programme Newyddion and current affairs series such as Taro Naw. We have in the past adjudicated (although not upheld) cases of impartiality relating to current affairs programmes produced by the BBC that were broadcast on S4C. Since 2004, when we started to regulate S4C, significant issues of Code compliance for the service have been very rare. In 2009, we did not adjudicate on any programmes broadcast by S4C. 4 www.culture.gov.uk/news/media_releases/7485.aspx. 5 See, for example, section 203 and Schedule 12. 6 www.legislation.gov.uk/ukpga/1996/55/introduction/enacted. 7 See Schedule 12, paragraph 4 of the Communications Act. Ev 80 Welsh Affairs Committee: Evidence
Compliance with Other Codes 2.7 The S4C service has to comply with a number of other codes that we produce: — the code on the scheduling of television advertising (COSTA), which came into effect on 1 September 2008 and contains rules on how much advertising and teleshopping may be scheduled in programmes;8 — the code on television access services, which sets out how much subtitling, signing and audio description relevant licensees must provide;9 — the code of practice on electronic programme guides, which requires EPGs to provide features and information enabling them to be used by people with disabilities affecting their sight or hearing, or both, so far as practicable;10 — the code on sports and other listed and designated events, which gives guidance on certain matters relating to the televising of sports and other events of UK national interest that have been listed by the Secretary of State for Culture, Media and Sport.11 In the case of the BBC and S4C, we must report Code breaches to the Secretary of State; and — the cross-promotion code.12 2.8 The Communications Act requires the Welsh Authority to draw up a code of practice relating to the terms for commissioning content from independent producers.13 It must take account of guidance that we issue in this area and comply with any directions that we give.14 2.9 S4C must also comply with the Broadcasting Committee of Advertising Practice’s (BCAP) UK Code of Broadcast Advertising, for areas of which we retain regulatory responsibility.15
Compliance with Regulatory Obligations 2.10 We must secure the availability throughout the UK of a wide range of television and radio services that, taken as a whole, are both of high quality and calculated to appeal to a variety of tastes and interests.16 Television broadcasters have to comply with a number of regulations originating from UK or European Union (EU) legislation and, with the exception of the BBC and S4C’s public services, must also comply with the terms of their licences to broadcast, which we issue. The degree of regulatory intervention that we are required to make depends on the type of broadcaster. The commercial public service broadcasters—ITV1, Channel 4 and Five—operate under much tighter regulations than cable, satellite and other commercial terrestrial broadcasters. The BBC is regulated by both us and the BBC Trust and S4C by both us and the Welsh Authority. 2.11 The Audiovisual Media Services (AVMS) Directive sets an overarching regulatory framework for broadcasters based within the EU as well as targets for broadcasting programmes produced in the EU (including the UK) and for independent EU programmes.17 The Directive applies to all qualifying television services in the UK and extends to video on demand (VOD) services. In the UK, regulation of VOD is undertaken by a new regulator, ATVOD, although we retain a backstop role. However, other forms of on-line audio-visual material such as user-generated content and games remain outside the Directive’s scope. 2.12 The Welsh Authority has consulted on and agreed a number of quotas with us and set additional targets for the S4C Digidol service (and formerly the analogue S4C service). We have agreed quotas with the Authority in the following areas: — television access services—subtitling, signing and audio description; — independent productions—programmes supplied by independent producers; — news and current affairs programmes; and — original productions—commissioned in house or from independent producers.
Television access services 2.13 Quotas for television access services (relating to services for viewers with hearing or visual impairments) apply to all PSB channels and to all other television services that achieve an average share over a 12 month period of 0.05% or more (subject to passing an affordability threshold and not facing insurmountable technical difficulties, such as the audio description of music and news programmes, where 8 http://stakeholders.ofcom.org.uk/binaries/broadcast/other-codes/tacode.pdf. 9 http://stakeholders.ofcom.org.uk/binaries/broadcast/other-codes/ctas.pdf. 10 http://stakeholders.ofcom.org.uk/binaries/broadcast/other-codes/epgcode.pdf. 11 http://stakeholders.ofcom.org.uk/binaries/broadcast/other-codes/ofcom_code_on_sport.pdf. 12 http://stakeholders.ofcom.org.uk/binaries/549196/pdf/545159/545162/xpromo.pdf. 13 www.s4c.co.uk/production/downloads/guidelines/COD_YMARFER_S4C_EBRILL_260410_ENG.pdf. 14 See Schedule 12 paragraph 10. 15 www.bcap.org.uk/The-Codes/BCAP-Code.aspx. 16 See section 3(2)(c) of the Communications Act. 17 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:332:0027:0045:EN:PDF. Welsh Affairs Committee: Evidence Ev 81
there is little space within the sound track or dialogue to provide the facility). In 2009, the S4C services all exceeded our quotas, as shown in table 1.18 Table 1 S4C QUOTAS FOR TELEVISION ACCESS SERVICES Target Achieved
Subtitling 75% 90.60% Signing 4% 4.19% Audio description 10% 11.96%
Independent productions 2.14 All public service broadcasters must commission at least 25% of qualifying programmes (essentially first-run original productions excluding news) from independent producers. However, as S4C is a commissioner broadcaster (ie it does not produce its own programmes), it easily exceeds this quota, and in 2009 89% of S4C’s output consisted of broadcasting time allocated to independent productions.
News and current affairs 2.15 Quotas are agreed at different levels for the volume of UK and international news programmes to be broadcast across the whole day and in peak. S4C’s all day quota is 200 hours p.a., and in 2009 it broadcast 265 hours. Its peak time quota is 150 hours p.a., and in 2009 it achieved 181 hours. The quota for current affairs in peak is 30 hours p.a., and in 2009 S4C broadcast 76 hours and 32 minutes, while the all hours quota is 60 hours p.a., with S4C broadcasting 82 hours and 30 minutes.
Original productions 2.16 Original productions can be produced in-house or commissioned from independent producers. The quotas are set at different levels for each public service broadcaster and designed to ensure that the majority of broadcasting time on PSB channels comprises programmes primarily from UK production sources rather than bought in from elsewhere. In 2009, 100% of S4C’s peak time output consisted of original programmes (quota: 90%), and the all hours figure was 99% (quota: 80%)19. The volume of first run originated Welsh- language programmes on S4C reached 2,095 hours in 2009. Of this, 25% were general factual programmes, 19% children’s programmes and 15% news and current affairs. Sport comprised 14%, music and arts 11% and drama programmes 8%. Figure 1 shows the annual hours of first run originated Welsh-language output on S4C over the period 2005–09.
Figure 1 ANNUAL HOURS OF FIRST RUN ORIGINATED WELSH-LANGUAGE OUTPUT ON S4C Hours 1,981 1,878 1,882 1,984 2,095 Hours of originated Welsh language output (including BBC statutory hours)
2,000 General Factual 523 560 487 Drama 495 497 177 Entertainment 190 201 127 187 186 129 Sport 121 113 115 291 Religion 1,000 276 283 295 328 28 32 Education 26 20 400 26 380 186 208 225 Children 244 225 217 199 232 Music and Arts 129 113 125 109 120 Current Affairs 203 199 174 171 191 0 News 2005 2006 2007 2008 2009
Source: S4C (2009) Note: Includes BBC statutory hours –these hours are not broken down into acquisitions, commissions or repeats, therefore a nominal number of the hours in this chart may consist of repeated material.
18 See page 39 at www.s4c.co.uk/abouts4c/annualreport/acrobats/adroddiad-blynyddol-s4c-annual-report-2009.pdf. 19 See page 49 at www.s4c.co.uk/abouts4c/annualreport/acrobats/adroddiad-blynyddol-s4c-annual-report-2009.pdf. Ev 82 Welsh Affairs Committee: Evidence
Repeats 2.17 There are no quotas to restrain the volume of repeats on any UK television channel (although the quota of programmes screened by ITV in the nations and regions has to be made up of first run originations and not repeats). Repeats made up the majority (62%) of Welsh-language programming in 2009. In the case of S4C, the repeat level reflects the broadcaster’s policy of ensuring multiple opportunities to view peak time Welsh- language programming, maximising the investment made in these programmes. 2.18 The 2004 Independent Review of S4C by Roger Laughton noted the incidence of repeats in the S4C programme service:20 During 1999, the first full year of the digital service, S4C transmitted on average 81 hours of Welsh language programmes a week, including BBC hours. By 2003, the hours transmitted had risen to 85, but the proportion of repeats increased, from 32% in 1998 to 49% in 2003. Nothing intrinsically wrong with this. Giving viewers more chances to see programmes as channels multiply is the right strategy as long as you have the capacity to keep on making new programmes. 2.19 Figure 2 shows the type of Welsh-language output on S4C over the period 2005–09.
Figure 2 TYPE OF WELSH-LANGUAGE OUTPUT ON S4C Hours 4,472 4,512 4,643 5,326 5,696 Hours of output per year
6,000 13 21 5,000 1,432 First run Commissioned - 153 102 71 1,355 58 BBC 4,000 1,236 83 1,288 1,189 First run Commissioned – 125 126 3,000 115 indie 3,521 First run 3,237 2,000 2,585 Acquisitions 2,372 2,509 Repeats 1,000
544 587 625 630 672 0 2005 2006 2007 2008 2009
Source: S4C (2009) Notes: The BBC statutory hours are not broken down into acquisitions, commissions or repeats
SECTION 3 The 2009 Annual Report on Public Service Broadcasting: S4C Monitoring the delivery of public service broadcasting 3.1 We have a duty to assess the designated public service broadcasters, taken together, in terms of the delivery of the public service purposes set out in the Communications Act. The designated public service broadcasters are the BBC, ITV1, Channel 4, Five, S4C and, formerly, Teletext. The Act requires us to monitor the effectiveness of public service broadcasters in delivering the range of PSB purposes set out in section 264: — the provision of relevant television services which secure that programmes dealing with a wide range of subject-matters are made available for viewing; — the provision of relevant television services in a manner which (having regard to the days on which they are shown and the times of day at which they are shown) is likely to meet the needs and satisfy the interests of as many different audiences as practicable; — the provision of relevant television services which (taken together and having regard to the same matters) are properly balanced, so far as their nature and subject-matters are concerned, for meeting the needs and satisfying the interests of the available audiences; and — the provision of relevant television services which (taken together) maintain high general standards with respect to the programmes included in them, and, in particular with respect to: — the contents of the programmes; 20 www.s4c.co.uk/abouts4c/authority/pdf/e_adolygiad_laughton.pdf. Welsh Affairs Committee: Evidence Ev 83
— the quality of the programme making; and — the professional skill and editorial integrity applied in the making of the programmes.
3.2 Based on this, we developed a range of purposes and characteristics to provide a detailed description of PSB in our first Review. The first PSB Review also stated that, in delivering our duties, we should develop a new approach to assessing the effectiveness of the public service broadcasters, taken together, in delivering PSB. This assessment would include an audience tracking survey to evaluate audience opinions as well as broadcaster spend, output and viewing data. The aim was to provide a common basis for understanding the delivery of PSB and resulted in the publication of the PSB annual reports.
3.3 Since then, new legislation in the form of the Digital Economy Act 2010 has been passed.21 As a result, and in addition to the requirements outlined above, our PSB reporting duties have been extended to include public service content online and on VOD. We also have new powers to monitor and enforce Channel 4’s media content duties, to report on whether the public teletext service licence remains commercially sustainable and to assess the public value of continuing the service. However, as our 2009 annual report on PSB preceded the Act, it focused largely on PSB delivery through television services rather than public service content more broadly.
3.4 The four PSB purposes developed in our first Review are: — 1—informing our understanding of the world; — 2—stimulating knowledge and learning; — 3—reflecting UK cultural identity; and — 4—representing diversity and alternative viewpoints.
3.5 The PSB characteristics are: — high quality, well-funded and well-produced programmes; — original, new UK content rather than repeats or acquisitions; — innovative, breaking new ideas or reinventing existing approaches rather than copying old ones; — challenging, making viewers think; — engaging, remaining accessible and attractive to viewers; and — widely available, where a large majority of citizens are given the chance to view content that is publicly funded.
3.6 Although the PSB channels are expected together to fulfil the purposes and characteristics within the PSB system, it is also acknowledged that each PSB channel has a different remit, access to different funding sources and a different institutional approach. In this context, S4C has an acknowledged role in relation to broadcasting in the Welsh language.
3.7 We have developed an evidence base for assessing PSB delivery based on output hours, viewing figures and audience impact. Output data is provided to us by the broadcasters each year as part of their PSB returns. Viewing figure data are provided by the Broadcasters’ Audience Research Board (BARB), a UK-wide panel of 5,100 homes providing television viewing measurement data for the industry. From 2006, we have measured audience impact through our PSB Tracker Survey, based on data collected during January, April, July and October (to examine whether particular programming or times of the year have an impact on perceptions) from telephone interviews carried out by GfK NOP. The survey asks regular viewers of each PSB channel their opinions on the delivery of the PSB purposes and characteristics. We are also provided with data from the BBC-GfK Pulse Survey, based on an on-line UK representative panel of 15,000 viewers. In 2006, 1,874 interviews were conducted per quarter (1,070 in England and 268 in each of Northern Ireland, Scotland and Wales. In 2007, 2008 and 2009, 1,750 interviews were conducted per quarter (990 in England and 250 in each of Northern Ireland, Scotland and Wales). The average interview length in 2009 was 23.25 minutes.
3.8 The Welsh sample was boosted each quarter with an additional 50 interviews among viewers of Welsh- language programming on S4C to enable reporting on the channel. Respondents were offered the option of a Welsh-language interview if preferred.
S4C: viewing data
3.9 In 2009, S4C Welsh-language programmes were watched for an average of 21.1 hours per year by all individuals in Wales. This was an increase on the average hours watched in 2005 (19.8 hours) but lower than the average hours watched in 2008 (21.4 hours). The weekly reach of Welsh-language programming on S4C was 17% in 2009, the lowest share achieved in the last five years. Figure 3 shows viewing of Welsh-language output on S4C over the period 2005–09. 21 www.legislation.gov.uk/ukpga/2010/24/pdfs/ukpga_20100024_en.pdf. Ev 84 Welsh Affairs Committee: Evidence
Figure 3
VIEWING OF WELSH-LANGUAGE OUTPUT ON S4C
Hours viewed of Welsh language programming Weekly reach of Welsh language programming
Average hours a year Weekly reach (%) 35
30
25
20
15 23% 24% 10 19.8 20.4 21.4 21.1 20% 20% 19.3 17%
5
0 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
Source: S4C/BARB. S4C Region. All Individuals
3.10 In 2009, S4C’s share of all viewing (ie not just of Welsh-language programming) was 2.2% (down from 3.7% in 2005), although its share of peak-time viewing (which, by definition, is focused on Welsh- language programming) has held up over the same period at just over 3%. These figures should also be considered in the context of DSO, which began in Wales during August 2009. By this point, penetration of digital television in Wales had already reached 89%, and while the S4C analogue service carried rescheduled Channel 4 English-language programmes outside peak hours, the S4C Digidol service was broadcasting exclusively in Welsh, with the digital service simulcasting the analogue peak time Welsh-language programmes. Annex 122 contains more information about DSO in Wales.
3.11 Table 2 shows S4C all hours and peak time share over the period 2005–09.
Table 2
S4C ALL HOURS AND PEAK TIME SHARE Share All hours Peak time (1830–2130)
2005 3.7% 3.1% 2006 3.6% 3.4% 2007 3.0% 3.2% 2008 2.7% 3.3% 2009 2.2% 3.1%
3.12 Figure 4 shows the all hours, all viewers share of S4C against the other public service broadcasters and commercial channels available in Wales over the period from July 2006 to August 2010. It should be noted that only BBC One and ITV1 have shares greater than 15% in Wales, and even those have been gradually falling in recent years. Share for each of the other public service broadcasters is below 10%, with BBC 2 at 6.1%, Channel 4 at 4.4% and Five at 4.5%. Figure 4 also shows the aggregated share for the commercial channels viewed in multichannel homes, which has been increasing significantly over the last few years to around 50%. However, it should be noted that the shares for individual channels during 2009–10 has remained low: BBC News 1.1%, Sky Sports 1 1%, G.O.L.D. 0.9%, Discovery 0.1%, and Eurosport 0.1%. S4C’s overall share at 2.2% and peak time share 3.1% should therefore be considered in this context. 22 Not printed. Welsh Affairs Committee: Evidence Ev 85
Figure 4
S4C VIEWING SHARE: ALL VIEWERS (4+), ALL HOURS, WALES 55%
50% BBC1 45% BBC2 40%
35% ITV1 30% CH4 25%
20% S4C 15% Five 10%
5% Other Multichannels 0% July 06 July 07 July 08 July 09 July 10 May 07 May 08 May 09 May 10 March 07 March 08 March 09 March 10 January 07 January 08 January 09 January 10 November 06 November 07 November 08 November 09 September 06 September 07 September 08 September 09
Figure 5
PROPORTION OF VIEWING OF GENRES ON S4C Proportion of viewing (%)
100% Children's 7% 8% 7% 9% 7% Sport 17% 16% 80% 20% 20% 20% Entertainment Films 8% 7% 8% 9% 11% Drama:Soaps 60% 15% 14% Drama:Series/Single 15% 14% 11% 8% 6% Hobbies/Leisure 5% 3% 4% 6% 3% 3% 5% 4% 8% Documentaries 40% 8% 7% 3% 2% 10% 9% 2% Education 3% 2% 11% 10% 10% Religious 20% 11% 11% Arts/music 13% 14% 15% 8% 9% Current Affairs 7% 7% 8% 9% 8% 0% News/Weather 2005 2006 2007 2008 2009
Source: S4C/BARB/Infosys (BARB). S4C Region, All Individuals
3.13 Figure 5 shows the proportion of viewing of genres on S4C over the period 2005–09. The most-watched were drama (including soaps, series and single dramas) at 22%, sport at 20% and current affairs at 15%.
Audience impact
3.14 In order to provide relevant information about audience views relating to S4C programming in Welsh, the PSB Tracker was boosted in Wales from January 2006. Opinions have been based on regular viewers of Welsh-language programming on either the analogue or the digital channel rather than regular viewers of S4C as a whole. The PSB Tracker results reported below are therefore based on the Welsh boost rather than the UK-wide research. Ev 86 Welsh Affairs Committee: Evidence
3.15 The PSB Tracker has asked viewers of Welsh-language programming on S4C how they rate S4C on achieving the PSB purposes and characteristics and how they rate the PSB channels together on the same measures. It should be remembered that the PSB channels together—rather than any one channel—are required to deliver the range of purposes and characteristics. However, the remit of S4C and its role in a devolved nation mean that opinions relating to purpose 1 (informing our understanding of the world) and purpose 3 (reflecting UK cultural identity) are particularly relevant.
Key themes
3.16 For regular viewers of S4C Welsh-language programming in 2009, the strongest PSB associations with the channel continued to be connected to purposes 1 and 3. For example: — purpose 1—its news programmes for people in Wales provide a wide range of good quality news about Wales (68%); — purpose 1—its news programmes are trustworthy (68%); — purpose 3—aside from news, it provides a range of good-quality programmes about my nation, made for people in my nation (78%); — purpose 3—it portrays Wales well to the rest of the UK (68%);23 and — purpose 3—it covers big national events well, like sports, music events or major news stories (67%).
3.17 Regular viewers of Welsh-language programmes on S4C also tended to say that they trusted the channel (77%) and that they saw the channel as providing high quality programmes (71%).
3.18 Figure 6 shows Welsh-language viewer opinions of S4C’s delivery of PSB purposes 1 and 2 in 2009.
Figure 6
WELSH-LANGUAGE VIEWER OPINIONS OF S4C’S DELIVERY OF PSB PURPOSES 1 AND 2, 2009 Purpose 1 PSB channels: 10/9/8/7 S4C: 10/9/8/7
Its programmes help me understand what’s going on in 83% the world today 54%
80% Its news prograrmmesare trustworthy 68%
Its news programmes for people in Wales provide a 60% wide range of good quality news about Wales 68% (not asked for Q3-4 2007) Purpose 2
It shows interesting programmes about history, sciences 66% or the arts 46%
As a result of watching its programmes I’ve become 70% more interested in particular subjects 56% (42% 2007)
2007 2008 Shows direction of significant differences year-on-year (‘10/9/8/7’ compared 2007/2008 to 2009, 99% level) Extent to which the characteristic applies to the channel(s), where 10 means ‘applies completely’ and 1 means ‘does not apply at all’ Base = Self-reported regular viewers of S4C (203); All channels combined (203) (amalgamated data: January 09, April 09, July 09, October 09) Source: PSB Tracker, GfK NOP
3.19 Figure 7 shows Welsh-language viewer opinions of S4C’s delivery of PSB purposes 3 and 4 in 2009. 23 S4C Digital is available across the UK on digital satellite systems, so while this statement may not seem particularly applicable to the S4C channel, responses nonetheless show that viewers of its Welsh-language programmes feel this is achieved by the channel. It may also be the case that respondents simply focused their response on the first part of the statement. Welsh Affairs Committee: Evidence Ev 87
Figure 7
WELSH-LANGUAGE VIEWER OPINIONS OF S4C’S DELIVERY OF PSB PURPOSES 3 AND 4, 2009 Purpose 3 PSB channels: 10/9/8/7 S4C: 10/9/8/7
Aside from news, provides range of good quality programmes about 56% (not asked for Q1-2 2007) region/nation, made for people in region/nation 78%
It covers big national events well, like sports, music events or major 83% news stories 67%
Its entertainment and factual programmes show people from different 71% parts of the UK 45%
44% It portrays Wales well to the rest of the UK 68%
61% It shows high quality soaps or dramas made in the UK 53%
Purpose 4 70% Its programmes show different kinds of cultures within the UK Different wording 35% In 2007. Not sig tested Its programmes offer a range of opinions on subjects and issues 76% 55% 2007 2008 Shows direction of significant differences year-on-year (‘10/9/8/7’ compared 2007/2008 to 2009, 99% level)
3.20 Figure 8 shows Welsh-language viewer opinions of S4C’s delivery of the PSB characteristics in 2009.
Figure 8
WELSH-LANGUAGE VIEWER OPINIONS OF S4C’S DELIVERY OF THE PSB CHARACTERISTICS, 2009 Characteristics PSB channels: 10/9/8/7 S4C: 10/9/8/7
70% TRUST - I trust this channel* 77%
79% QUALITY - It shows well-made, high quality programmes 71% (58% 2007)
68% ENGAGING - It shows programmes I want to watch 57%
56% ORIGINAL -It shows enough new programmes, made in the UK 44%
ENGAGING - Its programmes reflect the interests and concerns 66% of people like me 56%
INNOVATIVE - It shows programmes with new ideas and 58% different approaches 41% 65% CHALLENGING - It shows programmes that make me stop and think 45% 2007 2008 Shows direction of significant differences year-on-year (‘10/9/8/7’ compared 2007/2008 to 2009, 99% level)
Extent to which the characteristic applies to the channel(s) , where 10 means ‘applies completely’ and 1 means ‘does not apply at all’ Base = Self-reported regular viewers of S4C (203); All channels combined (203) (amalgamated data: January 09, April 09, July 09, October 09). Source: PSB Tracker, GfK NOP
3.21 Figure 9 shows spend per head on UK-originated content by public service broadcasters on television and radio in 2010.
3.22 Figure 9 shows the pattern of expenditure in Wales on broadcasting output in 2010. It adjusts for population size by expressing spend on a per-head basis. The chart sets out four types of expenditure: — the value of networked television spending in Wales—programmes that are produced in Wales (eg Doctor Who) and broadcast to all UK viewers; — BBC spending on radio services for listeners in Wales (eg Radio Wales); Ev 88 Welsh Affairs Committee: Evidence
— spend by the BBC and ITV1 Wales on television programmes specifically for viewers in Wales (eg Wales Tonight); and — Welsh-language television programmes commissioned by S4C. 3.23 Spending per head on broadcast-based output in Wales totalled £59.87 in 2009, up from £57.49 a year earlier. This represented the highest spend per head across the four UK nations, driven particularly by the programming budget of S4C, which accounted for £26.20 of the total. The year-on-year increase was brought about in part by higher spending on Welsh-language programming and in part by output that was produced for UK-wide audiences.
Figure 9 SPEND PER HEAD ON UK-ORIGINATED CONTENT BROADCAST BY PUBLIC SERVICE BROADCASTERS ON TELEVISION AND RADIO, 2010 Spend per head (£)
70 BBC Nations/Local radio £59.87 60 £11.21 50 Welsh, Irish and Gaelic £38.74 £38.34 television programming 40 £3.85 £2.82 £33.20 £26.20 £32.49 £1.60 £2.96 £4.14 30 £7.82 £11.12 BBC/ITV1/STV/UTV £3.31 spend on TV content for 20 £1.67 the nations £32.56 £9.57 £9.16 £29.15 £14.12 10 BBC/ITV1/STV/UTV £12.50 £13.30 £5.58 network TV spend 0 UK England Scotland Wales N Ireland
Source: Operators, Annual Reports and Ofcom calculations
SECTION 4 Our Reviews of Public Service Broadcasting 4.1 Section 264 of the Communications Act requires us to review at least every five years the extent to which the public service broadcasters have fulfilled PSB purposes in the UK with a view to maintaining and strengthening the quality of its provision. 4.2 We conducted our first PSB Review in three phases during 2004–05. The third phase was published on 8 February 2005,24 followed by a final statement on programming for the nations and regions, published on 9 June 2005.25 Our second PSB Review began two years earlier than required by statute with the first phase published on 10 April 2008,26 followed by the second phase on 25 September the same year.27 A final statement was published on 21 January 2009.28 4.3 Our first Review concluded that there was continued demand for PSB but that the existing model of ensuring it was provided by commercially funded channels would not survive the transition to a wholly multichannel world unchanged. The Review concluded that there was a continued requirement for programming that reflected the distinct identities, cultures, histories and interests of Northern Ireland, Scotland and Wales. It was noted that this requirement was not likely to be met by UK-wide programming alone, nor by reducing minimum requirements on ITV1 in the nations in line with our decisions for the English regions. 4.4 Following the first Review, the UK’s media landscape evolved rapidly and continues to do so: — viewer adoption of digital technology grew significantly; — multichannel television reduced audience sizes for all broadcasters; — share for children’s programmes continued to fall significantly, with children turning to other platforms such as the internet; and 24 http://stakeholders.ofcom.org.uk/binaries/consultations/psb3/psb3.pdf. 25 http://stakeholders.ofcom.org.uk/consultations/psb3/statement/. 26 http://stakeholders.ofcom.org.uk/binaries/consultations/psb2_1/summary/consultation.pdf. 27 http://stakeholders.ofcom.org.uk/binaries/consultations/psb2_phase2/summary/psb2_phase2.pdf. 28 http://stakeholders.ofcom.org.uk/binaries/consultations/psb2_phase2/statement/psb2statement.pdf. Welsh Affairs Committee: Evidence Ev 89
— there was a corresponding fall in television advertising expenditure as advertisers looked elsewhere to make an impact with their target consumers. The commercial analogue channels saw net advertising revenue fall from £2,559 million in 2002 to £2,427 million in 2006. 4.5 We announced in May 2007 that we would bring forward our second PSB Review based on this and other evidence, including our Channel 4 financial review, which highlighted the considerable uncertainties for that channel and, indeed, for commercial public service broadcasters more generally.29 4.6 We conducted other work during 2007 in the run up to the second Review, including a study on the future of news, with a report published on 4 July 2007,30 and a report, published on 3 October 2007, on children’s television that noted the significant increase of children’s output on S4C and its commitment to broadcast a minimum of 140 hours of original programming for children per year.31
The first PSB Review: S4C and the BBC 4.7 During 2004–05, we set out the view that the BBC and S4C should develop a new relationship driven by three core principles: transparency, financial commitment and editorial control. The Independent Review of S4C had also previously recommended that the arrangements between the two broadcasters should be revised. 4.8 The Broadcasting Act 1980 required the BBC to provide Welsh-language programmes, free of charge, to meet “the reasonable requirements” of the Welsh Authority. This was modified by the Broadcasting Act 1990 to not less than 10 hours of programmes per week.32 This provision has always been the subject of intrinsic tensions. S4C argued that the real value of the BBC’s statutory 10 hour/week programme contribution had fallen over recent years and that it was hampered by the lack of strategic or editorial control over the programmes provided by BBC Wales. 4.9 Our statement concluding the first PSB Review summarised the views of respondents to the consultation, who all agreed that the short term priority at that time was the review and modernisation of S4C’s relationship with the BBC and the BBC Trust. We also set out our recommendations for a new partnership between the two broadcasters to meet developing audience needs. Beyond this short term issue (over two to three years) and looking to the future, we proposed two other organisational options: incorporation of S4C into BBC Wales and the creation of a Welsh Public Service Publisher (PSP) for Wales with S4C at its heart. 4.10 No consultation responses favoured the incorporation of S4C within the BBC at that time, and we concluded that this option would involve a significant negative impact on plurality in Wales that would hamper S4C’s ability to meet its audience’s needs in the most effective way. However, we suggested that greater consideration should be given to a funding model for S4C based on contestability. In response, the Welsh Authority suggested ways in which further elements of contestability could be built into its own model, including a tendering process for development funding and consideration of five-year licensing agreements for S4C services. We suggested that this could develop into a fully contested PSP model in the longer term. 4.11 During autumn 2006, S4C and the BBC reached an agreement, described as a “Strategic Partnership,” that addressed these issues. The new agreement included a funding commitment from the BBC for its statutory supply to S4C: £22.9 million in 2007, £24 million in 2008 and £25.1 million in 2009. The partnership also included provision for the BBC Trust and the Welsh Authority to agree programme commitments and core obligations in line with the BBC’s public purposes and Charter obligations. At the outset of the annual planning cycle, the BBC agreed to consult S4C management about S4C’s likely requirements in relation to S4C’s published programme strategy.
The second PSB Review: securing plurality 4.12 By the time of the second PSB Review, which began in spring 2008, we took the view that the relationship between the BBC and S4C was working far more effectively and the main focus of the second Review should be the future provision of English- rather than Welsh-language programming in Wales. Changes in the UK communications landscape and the consequential commercial pressures raised fundamental questions about the scale, nature and viability of the PSB obligations carried by ITV, Channel 4 and Five. The longstanding principle of competition between the BBC and the commercial public service broadcasters in the provision of PSB was being questioned, and the debate about plurality had a particularly intense focus in Wales, where there were concerns about maintaining ITV’s English-language news service and its other programmes for Wales. 4.13 Our statement concluding the second Review reported that the transition to the digital era was undermining the model for PSB provision that had existed historically outside the BBC. We argued that, unless the pressures on the commercially funded public service broadcasters were addressed, audiences would come 29 http://stakeholders.ofcom.org.uk/binaries/broadcast/reviews-investigations/psb-review/statement.pdf. 30 http://stakeholders.ofcom.org.uk/binaries/research/tv-research/newnews.pdf. 31 http://stakeholders.ofcom.org.uk/binaries/consultations/kidstv/summary/kidstv.pdf. Although not expressly stated in the report, data collected from the broadcasters showed that S4C was the second largest producer of original children’s programmes across the UK, after the BBC. 32 See section 58(1) at www.legislation.gov.uk/ukpga/1990/42/introduction/enacted, subsequently amended by section 28 of the Broadcasting Act 1996. Ev 90 Welsh Affairs Committee: Evidence
to rely exclusively on the BBC for many areas of public service content, including, for example, news provision for Wales. Our research showed that audiences continued to value highly a choice of provision in such key areas. We proposed that direct public funding would be needed to support non-BBC PSB programming in the future, and many respondents to the second Review’s consultations supported this view. The Welsh Assembly Government’s Broadcasting Advisory Group proposed the creation of a Wales Media Commission to be supported by around £50 million of annual public funding, and the National Assembly Broadcasting Sub- Committee in its response also recommended the creation of a fund for the creation of public service content for Wales. In addition, our Advisory Committee for Wales recommended the creation of a similar body to that proposed by the Welsh Assembly Government based on competitive funding of around £40m. 4.14 As part of this debate, the Welsh Authority submitted a proposal in which S4C might appoint both a provider for its Welsh-language news (which was and still is currently provided by the BBC) and a provider for an English-language news service for Wales. Subsequently, DCMS announced three areas—in Scotland, the northeast of England and Wales—where pilot schemes for independently funded news consortia (IFNCs) would be established. However, following the May 2010 general election, the new government decided not to pursue the IFNC model, instead setting out a commitment to secure the creation of new local TV stations across the UK, with a current target of between 10 and 20 such stations licensed by 2015.
Public Bodies Bill and future legislation 4.15 The recently introduced Public Bodies Bill is intended to effect a number of changes to our duties and powers, to be introduced by Order following Royal Assent.33 The relevant changes relating to the regulation of the Authority and S4C are: — to amend the duty for us to review public service broadcasting every five years so that a review will only be conducted at the discretion of the Secretary of State. The Secretary of State will also determine the scope of the review; and — to remove the requirement for public service broadcasters to provide annual statements of programme policy. 4.16 The Government has also stated its intention to use the Public Bodies Bill to make changes to the future funding of S4C, which amounted to £101.369 million in 2009: The Broadcasting Act 1990 (as amended) includes a provision that S4C will be funded at the level it was in 1997, then increased annually by the amount of the Retail Price Index. The government considers that this is unsustainable in the current financial climate and intends to change it so that the Secretary of State will determine the level of funding.34 4.17 In the longer term, the Government intends to “change the media regulatory regime by reforming Ofcom and deregulating the broadcasting sector” through a new Communications Bill that would complete the legislative process by April 2015.35
Spending Review 2010 4.18 On 20 October 2010, the same day that the Government announced the outcome of its Spending Review, the Secretary of State for Culture, Media and Sport, Jeremy Hunt, wrote to Sir Michael Lyons, Chairman of the BBC Trust, confirming the Government’s decision that the level of the television licence fee would remain frozen at £145.50 until the end of March 2017. He also set out a “new partnership and funding model for S4C.” — The Government remained committed to a strong and independent Welsh-language TV service but had concluded that the S4C model was not sustainable in its present form. — The S4C service must retain its brand identity and editorial distinctiveness as well as its special relationship with the independent production sector in Wales. — Public funding for the service must be maintained at agreed levels over the period covered by the Spending Review. — Having decided to reduce its own funding for S4C as part of the Spending Review, the Government held that a new partnership model with the BBC was the best way of securing the long-term future of the service. — Under the partnership, funding for S4C in future would come from three sources—the licence fee, a continued but reduced subvention from the Government and commercial income. — There would be a BBC and S4C partnership along similar principles to BBC Alba to begin by 2013–14, with S4C coming under a BBC Trust service licence or other operating agreement that would be jointly agreed with the Welsh Authority and set out the strategic goals and broad editorial requirements of the service. — A combined board of the Authority and the Trust would oversee delivery of the service licence or operating agreement. 33 See note 5 at www.culture.gov.uk/news/media_releases/7485.aspx. 34 See note 4 at www.culture.gov.uk/news/media_releases/7485.aspx. 35 See www.culture.gov.uk/images/publications/DCMS-Business-Plan_2010–15.pdf. Welsh Affairs Committee: Evidence Ev 91
— The S4C service would be operated by a joint management board with a majority of independent directors, appointed by the Trust and the Authority. The management board would operate its own commissioning structure. — Further discussion would be required about the exact form of the partnership, and the Government would play its part in those discussions. — The service would not be a BBC branded service. — The total content commissioning budget would be for independent producers (outside of the BBC’s ongoing statutory commitments). — In 2011–12 and 2012–13, the Government would continue to fund the service. — In 2013–14 and 2014–15, the BBC would contribute £76.3 million and £76 million respectively in cash in addition to its statutory commitments, while the Government would fund at £6.7 million in 2013–14 and £7 million in 2014–15. — There would be a further review of S4C’s strategy and finances, to conclude in good time before the end of the period covered by the Spending Review. — The exact level of BBC funding was not set beyond 2014–15. While future funding would reflect continuing synergies and efficiencies, it would remain consistent with the commitment to a strong and independent Welsh-language television service, with future services informed by the outcome of the proposed review. — In the event that a new partnership model did not prove viable for any reason, the Government would not take licence fee money itself for this purpose. But in this situation, the Trust would propose a one-off reduction in the level of the licence fee that would be equivalent to the contribution that the BBC would otherwise have made to S4C.
4.19 In response the Welsh Authority announced its intention to launch a judicial review of the Government’s decision. Its Chairman, John Walter Jones, claimed that: The effect of the financial cuts agreed between Jeremy Hunt and the BBC will have a disastrous effect for viewers across Wales, and this at a time when the BBC has already cut spending on both English and Welsh language programming in Wales.36
4.20 In the meantime, S4C has announced that 40 posts will be cut over the next two years. The channel has also notified more than 30 Welsh independent production companies that funding for programmes up to 2012 will be reduced. S4C provides about 60% of the Welsh production sector’s revenue, and independent producers have been asked by S4C to find 10% cuts in the first year from April 2011.
4.21 The Welsh Authority had already commissioned a review of its governance arrangements, which is being conducted by Sir Jon Shortridge, former Permanent Secretary at the Welsh Office
4.22 If there were to be changes to S4C’s future governance, there will be implications for us and our regulatory role in relation to the broadcaster. These are not currently clear. However, we will continue to provide statistical data and other information relating to the future delivery of PSB across the UK and in Wales, including the services provided by the Welsh Authority and S4C.
ABBREVIATIONS AVMS Audio Visual Media Services BARB Broadcasters’ Audience Research Board BCAP Broadcasting Committee of Advertising Practice COSTA Code on the Scheduling of Television Advertising DCMS Department for Culture, Media and Sport DSO Digital switchover DTT Digital terrestrial television EU European Union HD High definition IFNC Independently funded news consortium PSB Public service broadcasting PSP Public Service Publisher VOD Video on demand November 2010
36 www.bbc.co.uk/news/uk-wales-11581346. Ev 92 Welsh Affairs Committee: Evidence
Written evidence submitted by TAC Summary — Since its inception S4C has been a cornerstone of the Welsh language and economy. — Its position as a publisher-broadcaster has given rise to a thriving Welsh independent production sector, which has matured into a creative industry able to create high quality content which is successful both domestically and internationally. — This is an important moment to review the structure of S4C, following both the Government’s Comprehensive Spending Review and also some concerns over S4C’s overall effectiveness. — S4C must look to work in greater co-operation with independent producers to ensure long term stability and sustainability and also play a more central role in facilitating co-productions and partnerships. — Although the Government has offered a funding formula which has the potential to provide a sustainable future for S4C, statutory safeguards are essential to: — Preserve the level of S4C’s funding going forward beyond 2015. — Protect S4C’s editorial and managerial independence from the Government and the BBC. — Ensure that S4C continues to spend 100% of its content budget solely with independent creative producers. — Ensure the BBC is not able to access any funding earmarked for S4C from the Licence Fee.
About TAC 1. Formed in 1984, Teledwyr Annibynnol Cymru / Welsh Independent Producers (TAC), represents around 30 active independent TV production companies primarily involved in the production of programmes and content for the Welsh based broadcasters and other providers of audio visual services, either as production companies, or in a support capacity. Their combined turnover is in excess of £100 million.
The Welsh Independent Creative Sector 2. The importance of the creative sector to the overall Welsh economy is high—as stated in Ian Hargreaves’ Report for the Welsh Assembly in 2009 “the importance of the creative industries sector at a time when Wales’ economic performance continues to suffer from relative over-dependence on sectors that deliver relatively low levels of added value”.37 3. The sector is an increasingly mature one, with a lively mix of new and established companies. Welsh independents have increasingly taken it upon themselves to develop co-productions and relationships with broadcasters and distributors outside Wales. These currently include: — Cwmni Da has secured deals with two major UK distribution companies “The Photo”, a programme format developed for S4C as “Lle Aeth Pawb”, has a worldwide distribution deal and is currently being marketed in the United States. — Calon’s award-winning animation series “Hana’s Helpline/Holi Hana”, commissioned by S4C and Five, has now run for several series and has been sold to 25 countries as well as being widely licensed to produce children’s toys and clothing; books; DVDs; and a comic. — “The Saints and Sinners”, a series on the history of the papacy produced by Opus, has been distributed in over 60 territories. — “Rivers of Life”, produced by Cardiff company Green Bay, is a successful S4C/France 5 co- produced six-part series documenting the lives of those who live by some of the World’s largest rivers. 4. As well as being responsible for channeling S4C’s investment into the local economy, crucially the independent sector is present across a geographically wide area of Wales, including the sector’s major players: — Tinopolis: “Wedi3aWedi” seven daily strands produced in Llanelli. — Telesgop: Agricultural and rural affairs programmes produced in Swansea. — Cwmni Da: “Pethe”, cultural and arts programme strands produced in Caernarfon. — Rondo Media: “Rownd a Rownd”, youth drama series produced in Angelsey. — Boomerang: “Stwnsh” and “Cyw” children’s strands produced primarily in Cardiff. 5. The Committee will be aware of the need for the retention of entrepreneurial talent in all areas of Wales, as this represents those areas’ best opportunity of being able to revitalise themselves and offer local people gainful employment and support the wider local economy. 6. These producers are close to their communities and therefore their local audience—this enables them to reflect accurately and tellingly the lives, issues, concerns and humour of those communities, thus fulfilling well S4C’s purpose of commissioning a range and diversity of programming to reflect and portray Welsh culture. 37 Hargreaves, Ian. The Heart of Digital Wales: a review of creative industries for the Welsh Assembly Government. 2009, p1 Welsh Affairs Committee: Evidence Ev 93
7. The existence of creative entrepreneurs across Wales also brings other benefits to the community. Those working in the creative sector are disproportionately involved in community projects, everything from being school governors to running film-making workshops for young people. This is very much the “Big Society” in action, and represents an important additional benefit of having a thriving production sector across Wales.
Training 8. TAC has a memorandum of understanding, alongside S4C, Ofcom, Skillset and Pact which outlines a co- regulatory framework for delivering training. TAC contributes financially to the training framework but individual companies have also invested in significant in-house training, and the mix of companies in Wales enables this training to take place in a dynamic supportive environment.
S4C—TheStorySoFar 9. Established in 1982, S4C has been a cornerstone of the Welsh language and economy. It has given rise to a Welsh independent production industry that has gone on to produce a significant amount of content for UK- wide broadcasters and internationally. It has long been accepted that plurality is important to the public service broadcasting ecology. S4C contributes greatly to this plurality, both in terms of itself being an editorially and managerially independent organisation, separate from other broadcasters, and also through the many different voices, ideas and perspectives it brings to audiences by commissioning from a range of independent suppliers. 10. Talent: As well as developing a significant base of professional and popular Welsh language on-screen talent, S4C has also given rise to a swathe of talent that has achieved fame throughout the UK and beyond. Presenters such as the One Show’s Alex Jones and Blue Peter’s Gethin Jones, through to Hollywood stars Matthew Rhys, Rhys Ifans and Ioan Gruffudd—all started their careers on S4C. Off-screen, production talent trained and nurtured by Welsh independent companies, mainly commissioned by S4C, has created the environment for new opportunities for Wales to be a centre of TV production. 11. Events: Key sporting events are broadcast and achieve very strong audience figures along with other prominent cultural and agricultural events such as the Urdd Eisteddfod, the National Eisteddfod, the Royal Welsh Agricultural Show and the Llangollen International Eisteddfod. 12. Music: S4C plays a strong part in giving airtime to all aspects of Welsh music, from folk to classical, from traditional to contemporary and to new Welsh music, with the result that for the best part of two decades Welsh acts have become a regular fixture of the overall UK and international music scene. 13. Children’s: S4C also has a strong track record in children’s programming, winning and being nominated for several BAFTA UK awards. At a time when some other broadcasters are withdrawing either partly or wholly from children’s content, the role played by S4C is becoming increasingly important. In 2009 S4C commissioned a full 331 hours of children’s programming.38
S4C and the Welsh Language 14. S4C was primarily established for cultural reasons, and Welsh viewers continue to back the existence of a Welsh language channel, with the majority of respondents to a recent poll saying there was a need for it.39 Given the proliferation of English language channels available through both analogue and particularly digital platforms, TAC supports the continuation of S4C as a purely Welsh language channel. This viewpoint was echoed by the Welsh Assembly Government’s Broadcasting sub-committee, which concluded that: “We would underline the argument that the S4C service is in effect a Welsh language counter-balance to all the television on offer to viewers in Wales, from all sources, noting that the number of English language channels now available has increased from four in 1982, when S4C was established, to more than five hundred now available on Sky. No one outside Wales produces programmes in Welsh, whereas there are very many sources, in the UK and across the world, of English language programmes.”40
S4C’s Performance—Audiences and Reach 15. Criticism of S4C’s viewing figures is well-publicised but often misinformed. The recent switch to being digital-only, meaning S4C is now Welsh-only and doesn’t carry some Channel 4 programmes, has inevitably had an impact. Despite this, recent S4C research shows that “performance of the peak hours—(S4C’s) Welsh language service in the main—has been remarkably stable over a period of eight years, despite the huge changes in the broadcasting environment (and) more people are tuning in to S4C’s Welsh language hours this year than during the same period in 2009”.41 Even then the Barb figures do not tell the whole story, for example pre-school audiences, well-served by S4C’s children’s services, are not counted. The online service Clic is also growing in popularity, with an impact on the core channel’s audience figures. 38 S4C Annual report 2009, p93 39 You Gov Survey, November 2010 40 Broadcasting Sub-Committee. Communication and Content—The Media Challenge for Wales: Report for the Minister for Heritage. BSC(3)-02–08 : Paper 2: 10 December 2008, p44 41 Carys Evans Head of Research, S4C. These are the facts about S4C, but why let them spoil a good headline? Western Mail 4 Nov, 2010 Ev 94 Welsh Affairs Committee: Evidence
16. It is also important to take into account the reach of S4C’s commissioning across Wales, and the fact that a series can build an audience not recognised in statistical terms, for example “Y Porthmon”, (The Drover), produced by Telesgop, which documented a drover’s journey across Wales. Central to the series strategy was a series of live events staged and organised by communities along the route. 17. Nevertheless, there is always more work to be done to retain and increase audiences, and we will discuss below how, working in partnership with the independent sector, S4C can take steps to ensure the best and most innovative ideas and talent are being utilised. The aim will be to provide a platform to boost figures both among Welsh and non-Welsh language speakers.
S4C’s Investment in the Economy 18. Taking steps to ensure a thriving Welsh language production sector is entirely in keeping with the cultural goals of S4C—its function necessarily combines cultural and business objectives. S4C, mainly through working with the independent production sector, is able to “provide important high paid and high skilled employment opportunities in Wales”, according to a recent report on S4C and the Welsh economy.42 The report states that: “the impact of S4C on the Welsh economy is estimated as £85 million in 2009, rising to over £88 million in 2010. In addition to these quantifiable economic impact effects, as S4C spends most of its income on the Independent Sector in Wales, the broadcaster has a significant impact on the vitality of this sector”.43 S4C’s ambition should be to achieve a greater impact on the Welsh economy by utilising the total of the funds available to it to attract further inward investment. This will of course be a necessity if we are not to see a dramatic fall in such impact as the cuts announced in the Comprehensive Spending Review take effect.
S4C Budget 19. Overall, S4C has the audience base, and the production talent available, to be successful for the foreseeable future. Since the General Election, TAC has consistently argued that S4C, whilst playing a vital role, is in urgent need of review, with the aim of restructuring the organisation to ensure it is best placed to maximise the funds available to it. The reduced funding for S4C as announced in the Comprehensive Spending Review makes this review even more pressing. The aim must be to make S4C more efficient whilst minimising the effects of any cuts on the “front line” of creative content production in Wales. 20. In terms of efficiency, Welsh producers have consistently sought to offer maximum value for money, and the cost-per hour of independent production for S4C actually fell between 2008 and 2009.44 Welsh indies are currently discussing savings of 10% in 2011 and are engaged in talks with S4C regards level of work, but S4C is not as far as we are aware looking beyond 2011 and how savings can be driven over a longer term. We see the need to work in close partnership with S4C to devise a workable strategy that will give S4C and the independent sector much needed stability. 21. TAC notes the case made by the Minister for Culture, Communications and Creative Industries, when he stated in a debate in the House on October 20th that S4C has a settlement which can provide a sustainable future. 22. Ensuring this sustainable future is not just an aspiration but a set commitment depends on assurances being put in place to guarantee the future of Welsh language broadcasting in the long term. The current timetable laid out by DCMS only runs to 2014–15, beyond which the Minister has conceded that “no decisions have been made about the funding levels for S4C”.45 It is obviously of concern to have S4C writing, (as it has recently to independent producers) warning of future cuts to programme budgets and the amount of hours commissioned in future schedules. 23. Only a guarantee of continued long-term investment will allow S4C to effectively plan a strategy for maintaining and strengthening Welsh language broadcasting going forward. It is also crucial that the Welsh independent production industry is able to plan and invest appropriately, in order to be in a position to contribute the best ideas and talent over the years ahead. 24. A commitment to guaranteed investment should include a clear stipulation that the funds from the License Fee are in addition to the BBC’s contribution to Welsh language programming, recently reduced from £24.5 million to £19.5 million.
A Formal Review of S4C 25. TAC believes that the lack of regular formal review has led S4C to become unnecessarily insular, and has been subject to insufficient scrutiny to ensure that it continues to operate at the maximum of efficiency and effectiveness. 26. A TAC Task Force, incorporating a range of the industry’s leading players, has been established to draw up TAC’s own vision of how the broadcaster should be restructured, in anticipation of what we hope will be a formal, independent and transparent review of S4C in the coming months. 42 Butler, A; Bryan, Dr J; Roberts, Dr A. Economic Impact of S4C 2007–2010 Final Report. DTZ, Cardiff, Sep 2010, p3 43 ibid, p4 44 S4C Annual report 2009, p91 45 Hon Ed Vaizey MP, in answer to Written Question from Guto Bebb MP. Hansard, 4 Nov 2010: Column 911W Welsh Affairs Committee: Evidence Ev 95
27. Specific issues in need of review include: (a) Restructuring within S4C: The Welsh language media industry needs informed and experienced decision makers in key posts. A broader commissioning structure is needed, with less micro- management of production. This would enable broadcasters and producers/content providers to work together equally to create a better long term “joined up” media strategy for the Welsh language and culture, while also insuring far better value for money for the audience. (b) Fair and open competition. In an increasingly fractured media environment, the broadcaster needs to trust creative and entrepreneurial talent to develop the market. S4C’s commissioning model needs to encourage sufficient competition whilst at the same time encouraging successful companies to invest in the future and use their scale to develop their business further across the UK and internationally. Enabling new companies to break through can partly be achieved through mechanisms such as partnering new companies with established ones, ensuring that this is done on equitable terms. S4C could also look to targeted commissioning opportunities with funding aimed at encouraging new programme makers. A fresh look needs to be taken at the uses of tenders versus proposal-based commissioning, to ensure that the balance is right. (c) Ambition. S4C’s role in promoting the Welsh language and culture has previously extended to working with independent producers to help them export programmes and formats. In recent years this role has not been carried out with enough clarity and sense of purpose, and any review needs to put in place a renewed commitment and clear strategy, devised and delivered in close partnership with the producers themselves. The S4C brand, still of significant value in the international market, must be fully utilised in gaining access to co-production deals. S4C should also give consideration to setting up an IP fund. In the past commissioners were brokers—pairing up broadcasters and producers, this is now the domain of the indies. A more strategic approach, funded perhaps in partnership with the sector, would be welcome. (d) Relationship with the independent sector. TAC, as the representative of the Welsh independent creative production sector, has regular discussions with S4C, and was instrumental in establishing the detail of the Terms of Trade, following the establishment of the Code of Practice within the 2003 Communications Act. However, there needs to be a greater sense of partnership by S4C going forward, for example in terms of how it approaches its commissioning strategy in a way that is sympathetic with the dynamic and shape of the independent sector which produces its content. S4C needs to show at all levels a clear understanding and commitment that it must move forward in full partnership with the creative sector.
S4C Independence and the Licence Fee 28. The Government has set out a funding formula for S4C that will see the large majority of S4C’s funding changing from being a direct grant from Government to being supplied from the Licence Fee. 29. S4C has a current partnership with the BBC in the sense that it receives some £24 million worth of programmes from BBC Wales, but it should be noted that S4C has little control over the content of these programmes. This is a situation that in itself needs rectifying, but it also highlights the concerns that independent producers have regarding any future involvement of the BBC in the use of Licence Fee funds earmarked for S4C. 30. Provided concrete safeguards are put in place to guarantee S4C’s independence, status as a publisher- broadcaster and level of budget, TAC accepts the principle of using the Licence Fee to part-fund S4C. But such funding must be provided in a way that ensures there is no possibility of those funds being appropriated by the BBC for any purpose, whether or not it relates to S4C or Welsh language broadcasting. 31. Logically this would best be ensured by “top-slicing” the Licence Fee upstream, prior to the point at which those funds pass to the BBC, with S4C receiving its share directly. 32. TAC’s understanding is that this would preclude the need for any involvement from the BBC Trust, and therefore presents the simplest, clearest solution to ensuring S4C’s independence from outside influence.
BBC Trust 33. In the event that “top-slicing” and/or separation from the BBC Trust were to prove impossible for practical reasons, careful thought needs to be applied to any role played by the BBC Trust, to ensure that S4C’s independence is not compromised. The Secretary of State for Culture, Olympics, Media & Sport has said that he will ensure editorial and commercial independence, but has not so far committed to S4C’s independence as an organisation. In theory therefore S4C could end up being in full control of only the £7 million that comes directly from the DCMS. 34. TAC recognises the move by BBC Trust Chairman Sir Michael Lyons to allay concerns over the new funding arrangements, but these assurances have stopped short of providing the kinds of clear cast-iron commitments that will ensure S4C’s integrity is maintained. For example, Sir Michael has stated that “S4C Ev 96 Welsh Affairs Committee: Evidence
should retain its strong relationship with the independent production sector in Wales”,46 but TAC is adamant that a clear statement must be made ensuring that 100% of the content funded under the new arrangement will be for commissioning content from the independent sector. 35. The same principle applies to Sir Michael’s assurances, given in the same letter, that the Trust wishes to see the continued editorial independence of S4C. 36. If the money is channeled via the BBC, TAC rejects the BBC Alba comparison as an example of how the arrangement might work. The BBC Alba model would not work for S4C. 37. It should also be stated clearly within the BBC Charter that the BBC management has no jurisdiction over any aspect of the licence fee funding diverted to S4C.
Guaranteeing a Future for S4C 38. TAC asks the Welsh Affairs Committee to consider the case for the introduction of concrete safeguards to ensure that beyond the CSR settlement, there is a long-term future for an independent and sustainable S4C: — A guaranteed minimum level of funding from the Government and BBC Licence Fee, the latter of which funding should be made available to S4C via “top-slicing” and being supplied direct to S4C. — An ironbound commitment that 100% of the planned Licence Fee contribution is spent with independent producers in Wales. — A guarantee of continued editorial and managerial independence for S4C. — S4C must going forward be subject to regular, transparent, formal strategic review, to allow continuing clarity of purpose and the stability needed to encourage investment. 39. To ensure genuine and long-lasting stability for Welsh language broadcasting and the Welsh creative economy, all of the above should be written into the current Public Bodies Bill and/or forthcoming Communications Act. 40. To this end, TAC asks that consideration is given by the Committee that a way to achieve the above would be to introduce a binding agreement, akin to the BBC Charter, for S4C, outlining its structure and purposes, which would be subject to regular systematic review, according to a pre-agreed process and timetable. This would allow regular periods of review between which would be time for both S4C and its independent production partners to plan effectively and deliver the best content services to the people of Wales and beyond.
Relationship with the Welsh Assembly 41. The Committee asked respondents to give consideration to whether the finance and accountability of S4C should become a devolved matter. This has historically given rise to the question of whether that level of funding could be maintained by the Assembly in the face of other pressure on public funds. The landscape has to some extent shifted with the move over the next few years to transfer most of the source of funding of S4C to the Licence Fee. TAC would at this point simply reinforce the point that at present the key issue is for this funding transition to be handled in a way that preserves in statute the future of S4C’s independence, funding, and status as a publisher-broadcaster. It may subsequently be the case that the debate can be had about the respective merits of Welsh Assembly and DCMS oversight. One immediate thought would be that any future involvement of the Welsh Assembly Government should be in a way that joins up broadcasting and creative industries in Wales, and at the appropriate time TAC would willingly play a part in any discussions on how this might work. November 2010
Written evidence submitted by NUJ and BECTU Summary — The NUJ and Bectu are both seriously concerned by the Government’s plans to cut funding to S4C which we believe could put in jeopardy the future of the channel or at the very least lead to a greatly reduced service. — The NUJ and Bectu oppose the cuts to the funding of S4C. We believe S4C is a major element in Welsh broadcasting and cultural life. Welsh speakers need a TV service not just one channel. — The formal scrapping of the funding mechanism for S4C has already led to the loss of posts and more jobs are likely to be lost in the production sector in Wales if significant cuts are imposed on S4C. — The current plans have the potential to lead to greater alienation and may deepen an already worrying democratic deficit. — If public service broadcasting is to remain relevant, it must closely address the needs of the communities, regions and nations it serves, providing an autonomous cultural voice. 46 Letter from Sir Michael Lyons, BBC Trust, to John Walter Jones, S4C, 10 November 2010, p2 Welsh Affairs Committee: Evidence Ev 97
— Adequate funding should be maintained at least at the current level, with the direct government grant element continuing to be index linked to RPI. — The NUJ and Bectu are urging the Committee to oppose the cuts to S4C.
Introduction 1. The National Union of Journalists (NUJ) represents 38,000 members working in all sectors of the media. Our membership includes staff and freelancers—writers, reporters, editors, sub-editors, illustrators and photographers. 2. Bectu is the trade union for creative, technical and administrative workers in the audiovisual and live entertainment sectors. In Wales it has 1,400 workers in membership including those employed as staff at S4C. 3. The NUJ and Bectu are pleased to be able to contribute to the Welsh Affairs Committee inquiry into the Welsh language broadcaster S4C. We are happy to provide oral evidence or further information to the committee. 4. The NUJ and Bectu are seriously concerned by the Government’s plans to cut funding to S4C which we believe could put in jeopardy the future of the channel or at the very least lead to a greatly reduced service. 5. The latest proposals resulting from the Comprehensive Spending Review seem ready to disregard various inquiries initiated by Westminster, Cardiff Bay and Ofcom—with their innumerable pages and sessions of evidence—that supported S4C. What is now proposed threatens to overturn the Welsh broadcasting landscape as a whole without consultation or deliberation. 6. The NUJ and Bectu oppose the cuts to the funding of S4C. We believe S4C is a key element in Welsh broadcasting and cultural life. 7. The formal scrapping of the funding mechanism for S4C has already led to the loss of jobs and more jobs are likely to be lost in the production sector in Wales if significant cuts are imposed. 8. S4C as an independent public body has significantly contributed towards raising the profile of Wales and the Welsh language nationally and internationally. 9. S4C’s programming has often received international praise. 10. S4C generates self-confidence and pride for Welsh speakers and is an inestimable benefit for school children and Welsh language learners. 11. Economically S4C has helped develop a skilled modern workforce at a time when traditional Welsh industries were in serious decline. The services have allowed several generations of Welsh people to remain in their own country and contribute to their society through the medium of their own language. 12. A recent Consumer Focus Wales survey reveals that that 80% of people surveyed agreed or strongly agreed that services should be available in Welsh, the current proposal to cut funding to S4C by 17% goes against the public view. 13. The new Welsh Language Act, which will strengthen the Welsh cultural identity through the adoption of Welsh as an official language of the nation, enjoys All-Party support. 14. The proposal to cut funding to S4C will undermine these objectives. The plans have the potential to lead to greater alienation of Welsh communities deepening an already worrying democratic deficit. 15. If public service broadcasting is to remain relevant, it must closely address the needs of the communities, regions and nations it serves, providing an autonomous cultural voice where either: — government recognises that doing so would be of benefit; and — where consumers demonstrate a desire for such services. 16. Both are clearly the case. Moreover, there is significant evidence to suggest that residents of the Welsh nation are demanding more, not less Welsh language programming. 17. We believe the arguments against the proposed cuts are overwhelming and there is a clear case for an expansion in Welsh language provision. 18. Adequate funding should be maintained at least at the current level, with the direct government grant element continuing to be index linked to RPI. 19. The cuts could put in jeopardy the future of the channel and lead to a greatly reduced service including limited hours of transmission and moving to more online content with accompanying job losses: S4C has already pledged to cut 40 posts, a 25.6% reduction from the current 156 full-time staff, over the next two years. 20. The creation of S4C solved the conflicts between Welsh and English programming on Welsh airwaves. Ev 98 Welsh Affairs Committee: Evidence
21. In terms of provision, recent years have seen a decline in English language broadcasting in Wales. ITV Wales is a very pale incarnation of its former self. BBC Wales has also seen a similar retreat from its role as a Welsh broadcaster and has become transfixed by network programming.
22. The historic relationship between S4C and the BBC has not been a happy one—and on occasions their behaviour towards each other when faced with cooperation to produce Welsh language television has been lamentable.
23. Recent declines in viewers were anticipated with digital switchover and responsive strategies were developed to deal with these issues.
24. The NUJ and Bectu believe the current S4C spending allocation would massively undermine and disrupt the Welsh media landscape. The three broadcaster structure would effectively be replaced by the BBC as the sole provider. The corporation’s position would be unassailable across television, radio and online services resulting in a weakening of pluralism.
25. BBC Alba cannot be compared to S4C in terms of the service it offers.
26. The NUJ and Bectu would like to propose the following recommendations: — Challenge the Comprehensive Spending Review settlement for S4C. — Ask the Government to support S4C as a Welsh language broadcaster and maintain content pluralism in Welsh language news and current affairs. — Support investment in services and staff—and not through new building programmes. — Call for continued government investment, in co-operation with the trade unions and industry to maintain and support a skilled workforce in the Welsh media. — Support S4C’s independence in relation to financial and editorial strategies. — Support devolved media production in Wales and oppose budget cuts in television, radio and online Welsh language production at S4C and BBC Wales. — Help to strengthen the independence, effectiveness and transparency of the S4C authority and BBC Trust. — Help foster improved relations between the two Welsh public broadcasters. — Review the English language media in Wales and support the development of mechanisms to enable scrutiny of the Welsh media (print and broadcasting) by elected Welsh representatives, other stakeholders and the public. — Provide an assurance that the voice of the broadcasting unions and trade unions as a whole will be recognised as the representatives of the industry’s workforce and wider society. November 2010
Written evidence submitted by NUJ Parliamentary Group
The NUJ Parliamentary Group has been established since 2005 and consists of 32 MPs and Peers on a cross- party basis, and is one of the most respected trade union groups in Parliament with regular meetings with Government Ministers.
The Parliamentary Group is seriously concerned by the Government’s plans to cut funding to S4C which we believe could put in jeopardy the future of the channel or at the very least lead to a greatly reduced service. The Group opposes the cuts to the funding of S4C as we believe S4C is a major element in Welsh broadcasting and cultural life.
We understand that the formal scrapping of the funding mechanism for S4C has already led to the loss of 25% of jobs and hundreds of jobs are likely to be lost in the production sector in Wales if significant cuts are imposed on S4C. In addition to this we believe that the current plans have the potential to lead to greater alienation, particularly of more rural communities, deepening an already worrying democratic deficit.
The Group is of the opinion that if public service broadcasting is to remain relevant, it must closely address the needs of the communities, regions and nations it serves, providing an autonomous cultural voice. As such the NUJ Parliamentary Group is opposed to the cuts to S4C. November 2010 Welsh Affairs Committee: Evidence Ev 99
Written evidence submitted by the Welsh Language Board Summary — Our overriding view is that the recent changes proposed in administering the future funding of S4C could have a detrimental effect on both the use and the status of the Welsh language. — Welsh speakers need a comprehensive, high quality television service in their own language. — S4C forms a central part of the efforts being made to revive the Welsh language. — The existence of S4C as an independent Welsh language channel is a highly significant factor in increasing and maintaining the status of Welsh. — Welsh language culture needs to extend beyond the school gates if young people are to use the Welsh language naturally and confidently with each other. — S4C as a unique public service broadcaster serving a minority language community provides a service that no business could provide. — The setting of the budget of an institution of such value to the future vitality of the Welsh language community, should, in our view, be an informed decision. — To maintain plurality in the media in Wales, to minimise the risk of losing that which has been built since 1982, and to ensure that the Welsh language continues to grow, S4C’s financial and editorial independence should be preserved.
1. Background 1.1 The Welsh Language Board welcomes this opportunity to give evidence to the Welsh Affairs Committee inquiry on S4C. The Board was established as a statutory body to promote and facilitate the use of Welsh under the Welsh Language Act 1993. As such, the Board has a legitimate interest in any matter relating to the Welsh language. Our overriding view is that the recent changes proposed in administering the future funding of S4C could have a detrimental effect, on both the use and the status of Welsh in Wales. Some pertinent observations on the current position of the Welsh language follow; the importance of an independent Welsh- language television service is considered in this context. 1.2 Welsh is now believed to be among the more resilient minority languages in Europe. Professor Colin Baker of Bangor University has called it “one of the very few minority languages that is expected to buck the universal trend of minority language decline and extinction”.47 That optimism about the future of the Welsh language is shared by the Board. Its status has grown considerably over the past 30 years. It is a more visible language, in all domains, and is once more spoken in all parts of Wales. Welsh speakers can now feel, more than at any point in the twentieth century, that their identities are recognised. However, optimism must not lead to complacency; much more needs to be done. In saving, restoring and retaining Welsh as a vibrant, living language, governments and the people of Wales face a huge task. Even with the positive measures taken thus far, there are crucial issues that must be addressed: in particular, the levels of language transmission in bilingual families is still low, and some speakers experience a considerable lack of confidence and/or lack of opportunity to use the language. 1.3 Government policy objectives in terms of supporting a Welsh language revival depend to a large extent on enhancing the language’s status and increasing its use in all spheres. Paramount in all this is the Welsh- medium education system, which is primarily responsible for the recent increases in the number and percentages of people who speak Welsh. This parent-led development has seen much success, with a significant proportion of non-Welsh speaking parents now sending their children to Welsh-medium schools to be immersed in the Welsh language and to emerge as bilingual citizens. However, education alone will not be enough; those who acquire the language in school need to have every opportunity to use their bilingual skills outside the classroom, and also in later life. For all children and young people, Welsh language culture needs to extend beyond the school gates, so that young people’s confidence and eagerness to use the Welsh language with each other is boosted. Suitable television provision of a high quality can make an invaluable contribution in this regard. 1.4 The importance to a minority language community of media in its own language has long been recognised. Ned Thomas has explained that “a language is a group of people speaking to each other, and...in modern conditions much of that communication occurs through the media, so that a language denied access to media is discriminated against, accorded inferior status, and is unlikely to survive”.48 And Elin Haf Gruffydd Jones of the Mercator Media Centre has helpfully identified five primary functions of television— communicative, cultural, economic, status and linguistic—which, she says, “form the basis of the arguments why this medium is essential for the well-being of any minority language community”.49 The five functions identified are of course very much interrelated, and this is especially true in the case of S4C and the Welsh language. 47 Baker, Bilingualism: beyond basic principles (2003) 48 Hor Yezh & Klask, Breizh ha Pobloù Europa / Bretagne et Peuples d’Europe / Brittany and Peoples of Europe (1999) 49 Cormack & Hourigan (ed.), Minority Language Media (2007) Ev 100 Welsh Affairs Committee: Evidence
1.5 Many initiatives have contributed to the substantially increased official status which the Welsh language now enjoys, and which the Welsh Assembly Government is seeking to confirm in the proposed Welsh Language Measure currently being considered in the National Assembly for Wales. Most regard the establishment of S4C in 1982 as a highly significant factor in increasing the status of Welsh. We say more about this in 2.2 below. 1.6 We now turn to the specific issues on which the Welsh Affairs Committee has asked us to comment.
2. The extent to which S4C is fulfilling its remit 2.1 S4C’s remit, as noted in the Communications Act 2003, is that of “providing television programme services of high quality [for] members of the public in Wales”. There can be no doubt that S4C has been successful in fulfilling this objective, often overwhelmingly so. As the only television channel that broadcasts any content in Welsh, S4C has of course a near-impossible task of pleasing everyone who wishes to watch television in Welsh, whatever their age or language skill, whether their interest lies in comedy, drama, sport, children’s programming, reality television, and so on. It also has to meet the challenge of retaining an audience that now has hundreds of English-medium channels from which to choose. 2.2 S4C could be said to be achieving more than would be expected, especially in terms of provision for children, with important services such as Cyw for pre-school children and Stwnsh for school-age children. As a proportion of its whole provision, S4C provides much more programming for children than the BBC, ITV or Channel 4. That is in recognition of the importance of Welsh language programming for young children in terms of language acquisition, and is supported by the Board as an integral contribution to increasing the number of young Welsh speakers. 2.3 S4C is more than a television channel that provides high quality programming. Professor Colin Williams of Cardiff University described its inauguration as “the greatest boost to the popular... use of Welsh”.50 The Channel’s inception had a dramatic effect on the status of the Welsh language, and contributed greatly to a positive evolving of attitudes towards the language amongst Welsh speakers and non-Welsh speakers alike. More than anything, it gave to Welsh speakers a service in their own language that was as accessible and natural as any other, as one of the then four terrestrial television channels, available to all television viewers in Wales. This has given to Welsh speakers confidence in their own existence as a living community, a confidence which is recognised as essential to the survival of any minority language. There is no doubt that those minority language communities which are properly supported by a television service are faring much better than those which are not.
3. The impact recent and potential future spending cuts will have on S4C and the level of public subsidy for S4C is appropriate and sustainable over the longer term 3.1 As already mentioned, S4C, in being the only Welsh language television channel, has a colossal task in aiming to provide programming in Welsh of the same quality as that which is offered on other channels, and of the same variety. Welsh speakers are not one category of people; they have among them as much variation as any other language community. S4C is in competition with the combined wealth of all the English-medium channels and indeed all the new media that are available to viewers and consumers in Wales. It cannot, of course, fully compete, but providing a service that is in any way comparable requires a substantial level of public subsidy, and a talent of people with the creative freedom to produce the best possible programmes with the funding available to them. 3.2 S4C has stated that any substantial cut to its budget will have a detrimental effect on its programming. The setting of the budget of an institution of such value to the future vitality of a language community, should, in our view, be an informed decision. The Board does not believe that the cuts currently proposed for S4C have been made on such a basis. 3.3 The UK has a tradition of public service broadcasting that is admired throughout the world. S4C is particularly important within that group of public service broadcasters in providing television to a language community that needs the service in order to continue to exist. Dr Mike Cormack of Stirling University explains that “for expensive media, such as television, film and daily newspapers, there simply is no commercial basis within small language communities”.51 The importance of S4C as a public service broadcaster is therefore compounded by the language issue; it is truly unique since it provides a service that no business could or would provide.
4. The cultural and economic benefit to Wales from the investment of over £100 million per annum of public funds into S4C 4.1 As already discussed, the cultural contribution made by the funding invested in S4C is immense; it forms a fundamental part of the efforts being made to revive the Welsh language. There is a general and political consensus in Wales about the importance of supporting the Welsh language as an intrinsic part of our cultural heritage. 50 Extra & Gorter (ed.), The other languages of Europe (2001) 51 Developing Minority Language Media Studies, http://www.aber.ac.uk/mercator/images/CormackText.pdf Welsh Affairs Committee: Evidence Ev 101
4.2 It is known that the private sector in Wales needs to grow. By commissioning programmes by independent producers, S4C creates jobs in the private sector. Importantly, this has a positive effect in enabling Welsh speakers to work in their own language. The type of creativity fostered by S4C also enables businesses to grow; some have started in Wales and grown to work in other parts of the world. Programmes too can be sold to other companies throughout the world creating additional revenue. S4C announced recently that its contribution to the economy of Wales is £90 million.52 We see no reason to dissent from the view that this estimate is of the right order.
5. Whether S4C is maximising the use of its financial and other resources to achieve value for money, to optimise the quality of its output, and to reach as wide an audience as possible 5.1 The way in which S4C uses its resources is not a matter on which the Board can usefully comment.
6. Collaboration and independence 6.1 The overriding issue, in our view, is to preserve S4C’s financial and editorial independence. S4C’s most important function, we would argue, is the invaluable contribution it is making to the future of the Welsh language. That is not a crucial function for the BBC, and the promotion of the Welsh language is quite understandably not a primary consideration for its work. In order to safeguard the future of Welsh language media and the Welsh language itself, we believe S4C should remain separate from the BBC. 6.2 In recent years, there have been warnings that a lack of plurality in the media in Wales, with the risk of leading to a democratic deficit in a devolved Wales. This lack of plurality has been highlighted as a concern in English language media provision most acutely, with Welsh language audiences benefiting from the existence of a potentially more independent voice in S4C. There will of course be room for collaboration between broadcasters in Wales, but an S4C placed within the BBC would mean the loss of the little plurality that currently exists in the media in Wales. 6.3 When questioned recently about the Government announcement on S4C, Huw Jones, a member of the Welsh Language Board and Chief Executive of S4C between 1994 and 2005, told a current affairs programme: “The operational independence of S4C has been important. I will give you one example. When there were talks of changing the airwaves, when “digital” originally came in, there were various ways the bandwidth could have been distributed, there was a choice in terms of what capacity to give S4C. It was S4C itself, fighting its own cause, who debated that issue on an equal basis with the BBC, with Sky, with Channel 4, and with Government. I have serious concerns that this operational independence would be lost, and that the service will suffer as a result”.53
7. Whether the finance and accountability of S4C, currently the responsibility of the Department of Culture Media and Sport, should remain in Whitehall or become a devolved matter 7.1 Without doubt, the services which S4C provide are primarily targeted at the people of Wales. The Authority itself is unique, and unique, moreover, in a Welsh context. The body of expertise relating to Welsh language broadcasting rests in Wales. It follows therefore that there is a strong case that S4C should be democratically accountable in the first place to the people of Wales. November 2010
Written evidence submitted by the Welsh Language Society 1. Introduction 1.1 S4C was established as a result of a long and popular campaign, and through political consensus. The fight to establish the Channel was long and costly: Cymdeithas yr Iaith and its supporters made the case in the first instance for a separate channel for Welsh language programmes, and then created a general consensus in Wales in support of its establishment. A number of our members were jailed for varying lengths of time, from a few days to two or three years; it was a costly campaign for many. The funding formula for S4C was placed in statute with that historical context in mind; it was done in order to ensure as far as possible that the way in which it is funded would not become subject to political interference. 1.2 Cymdeithas yr Iaith has published a booklet, S4C: Pwy dalodd amdani? [“Who paid for S4C?”] that traces the history of the popular campaign to establish the Channel in the first place. It can be read online: http://cymdeithas.org/pdf/s4c-pwy-dalodd-amdani.pdf 1.3 S4C is a unique investment in the Welsh language, and is a cornerstone of Welsh language culture, playing a crucial role in the promotion of the Welsh language. According to the United Nations, the Welsh language continues to be a vulnerable language (UNESCO Atlas of the World’s Languages in Danger 2009). Special steps are therefore needed to protect it for the future. The United Kingdom has also signed up to the European Charter for Regional or Minority Languages which notes under Article 11 that media provision 52 S4C brings £90 million to Welsh economy, finds new Research, http://www.bbc.co.uk/news/uk-wales-11696905 53 Transcribed [and translated] from a broadcast on BBC Radio Cymru, 25/10/2010 Ev 102 Welsh Affairs Committee: Evidence
should be made available in regional languages and that the independence and autonomy of the media should be respected. 1.4 There are now thousands of channels on our screens, and we need the security of seeing and hearing the Welsh language on S4C. One of the main reasons for the campaign in the 1970s was to ensure that the Welsh language extended to new media and so that it was not seen as an old-fashioned language. S4C has played a large part in the change of mindset that has been seen in Wales, and has given people a new confidence in the future of the Welsh language. Welsh-medium education is on the increase in Wales, and this needs the support of S4C with its programming for children from day one, starting with Cyw for the younger children and most recently replacing Planed Plant for older children with an enhanced service, Stwnsh. 1.5 We are concerned that the reduction in S4C’s budget will affect programme quality. A fair amount of funding is required in order to maintain and develop the variety of programming that is available: drama such as Pen Talar and Teulu, live events such as the Eisteddfod and the Royal Welsh Show, and sport. Without adequate funding, the channel cannot compete with other mainstream channels in terms of quality and creativity. In cutting S4C’s funding, the Government is not only affecting the service; but also striking a blow against the Welsh language, that will be in a more fragile state without a properly funded television service. 1.6 In a number of ways, the current UK Government’s plans undermine the cross-party efforts made to give the Welsh language its proper place in the media. In the media in general, the Welsh language faces challenges, with the dramatic deterioration in Welsh language provision on commercial radio stations such as Heart FM and Radio Ceredigion. 1.7 We consider the cuts being made to S4C as a discrimination against a minority language group. We condemn the cuts in general, but the London Government must understand that the cuts to S4C will have a direct effect on the Welsh language. S4C is a rare example of an economic investment made through the Welsh language. This has promoted the Welsh language in the areas where S4C invested. We believe the cuts will affect the Welsh language and have a knock-on damaging effect in Welsh language communities. 1.8 The other plans of the UK Government will affect the Welsh language, since the survival of the language depends on the communities where the language is spoken; the policy of encouraging people to move away from their communities to look for work will increase the migration of young people out of their communities, and will mean the Welsh language in those areas will suffer. It is vitally important therefore to protect this Welsh-language economic investment. 1.9 The presence of the Welsh language in the media is of vital importance to everyone in Wales. Cymdeithas yr Iaith believes that everyone in Wales, whether they speak Welsh or not, should have rights to the language. Not only rights to use it and to learn it, but also to hear it and see it. The presence of the Welsh language on television, radio, the web and every other possible medium, is therefore fundamental to our vision as an organisation. This vision is not limited to Cymdeithas yr Iaith. One of the main aims of the Welsh Language Commissioner, being established by the Government of Wales, will include the principle that people living in Wales should be able to live their lives through the medium of Welsh if they wish to do so. This aim reflects the ambition in Iaith Pawb [A National Action Plan for a Bilingual Wales, 2003] that everyone throughout Wales should be able to use the Welsh language in their social lives, in their leisure time and in their business activities.
2. No to Cuts 2.1 Cymdeithas yr Iaith is against the Government cuts in general: it is unjust that minorities, the poor, and people on the edge of society should pay for the mistakes of the financial sector and the governments that assisted them. Although it was a lack of regulation of the free market that caused the recession, the UK Government is, contrary to common sense, responding to the crisis by cutting back on protection for the weakest in society in the face of capitalist forces. 2.2 As the Culture Minister of the Catalan Government said whilst giving evidence to the National Assembly for Wales recently: “…linguistic liberalism, like economic liberalism, is not neutral…when two languages coexist in one land, protective public action is required with respect to the weaker one. Otherwise, it will be fated, first of all, to marginalisation and, in the long term, to extinction.” 2.3 One of the reasons for the establishment of S4C in the first place was market failure. Before our only Welsh language channel came into being, Welsh language programming had to compete with English language programming for funding and for airtime. One of the many problems with the UK Government-BBC’s join plan is that it will recreate that old competition between Welsh language programming and English language programming. This will create a tension between the two languages, going against the message of bilingualism on an equal footing which has developed over recent years. It would, therefore, be a big step backwards. 2.4 The Government’s plan to cut the Channel’s budget by 24.4%, or 42.5% in real terms (source: BECTU) is a cut that could, according to S4C, endanger the existence of the channel. In addition to those cuts, however, the Government intends to give the BBC partial responsibility for funding and managing the Channel. Welsh Affairs Committee: Evidence Ev 103
2.5 Some argue that S4C’s independence could be guaranteed within a jointly managed system within the BBC. We disagree. It is clear to us that the UK Government-BBC plan has several weaknesses, not least due to the position of English-medium broadcasting in Wales. For years, the Welsh output of the BBC has been cut, with fewer programmes reflecting life in Wales on television. If we cannot depend on the BBC to protect Wales-related programmes in English, why would they protect Welsh language programmes? Broadcasting in Wales is already in crisis; the proposed plans will kill any hope of plurality in the media in Wales.
2.6 The channel was established after the 1979 election, a commitment having been made in the manifestos of all four main parties in Wales. There was no mention in the manifesto of any party, before the 2010 election, of any plans to drastically cut the budget of the channel, to establish joint management under the BBC Trust, or an act of parliament that would allow the Secretary of State to abolish the Channel completely.
3. A New S4C
3.1 We recognise that there are weaknesses in the current model and management of S4C. We are therefore calling for a new S4C to be established, a devolved, multi-media broadcaster/publisher for Wales.
3.2 We are calling for a new S4C based on the following principles: — FINANCIAL SECURITY—A television channel cannot be run without having the certainty of adequate funding. The current agreement gives S4C certainty about its funding up until 2015. We believe that a funding formula is needed for S4C that will give it long term stability to do its work confidently. — INDEPENDENCE—The independence of Welsh language public media services is essential in order to ensure democratic and media plurality. The S4C Authority and S4C must be independent of the BBC and others, editorially, operationally and creatively. — DEVOLUTION—It is paramount, in order to ensure that the expertise and ability to make the right decisions about the future of broadcasting is in Wales, that media functions are devolved to the National Assembly for Wales. — A FEDERAL BBC—It is essential that devolution also happens within the BBC. A federalised BBC would be the best choice, in order to ensure fairness and balance. — QUALITY—Welsh language media of the same quality as English language media is essential to the continued existence of the Welsh language. — DIGITAL—The creation of a varied media ecosystem in Welsh is essential to the future of the Welsh language. A substantial investment in digital media is crucial in order to ensure that the Welsh language is used in all spheres. — COLLABORATION—Collaboration between media institutions and beyond is important in order to enable our media to be as strong as possible. However, this should be collaboration that does not endanger the independence of the Welsh language provider. — DEVOLUTION OF THE CHANNEL THROUGHOUT WALES—We believe that S4C’s current headquarters in Llanisien in Cardiff is unsuitable for the media in Wales and that different parts of the process of running a Welsh language public media service should be devolved to different areas.
3.3 We are of the view that a thorough review of the commissioning structure, the strategy and role of the S4C Authority is needed, including alternative models for the S4C Authority and the administration of expenditure on Welsh language media. We recognise that there has been a lack of accountability between S4C and its audience during the last few years, but this will not be rectified through a partnership with the BBC.
3.4 We are eager to see S4C extending its remit to include digital media, so that is becomes a media publisher rather than being limited to being a television channel only. We believe that the Welsh language needs to be promoted as a medium in these areas, as noted in the last report by the Council of Europe’s Committee of Experts on the European Charter for Regional or Minority Languages when it considered Welsh language media provision. Consideration should be given to changing the relationship of the Authority / Channel to one that could give the S4C Authority the flexibility to extend its remit to include digital media.
3.5 A significant percentage of the S4C Authority’s funding formula should be earmarked for investment in digital media in order to build the audience of the future, ensuring that linear television remains strong. A director of digital content should be appointed to develop this.
3.6 We believe that consideration should be given to sharing S4C’s responsibilities between three bases across Wales, administering departments in various locations rather than spreading jobs too thinly. It would be useful if the central administration of S4C was closer to the independent companies that are commissioned to create programmes for them. Ev 104 Welsh Affairs Committee: Evidence
The UK Government’s latest plans 4. The Public Bodies Bill 4.1 We agree with a number of comments made recently in the House of Lords regarding the Public Bodies Bill, and we agree with the amendments put forward by Roger Roberts, that would exclude S4C from the Measure. 4.2 The Measure attempts to treat S4C in the same way as any another Government department. Treating Welsh language broadcasting in that way is a major legal, financial and historical error. 4.3 It is inappropriate to attempt to push plans to reform S4C through the Public Bodies Bill; it ignores the way the channel was established. 4.4 Firstly, a Secretary of State should not be able to decide, via secondary legislation, on the structure, the budget and the whole existence of a channel established through statute for extremely important social and cultural reasons. 4.5 We agree with the conclusions of the House of Lords Constitutional Committee, that strongly criticised the concept of abolishing organisations through secondary legislation. 4.6 Secondly, we believe the idea that government on its own can decide the budget of a public television channel on an annual basis sets a very dangerous precedent. Such a decision would raise serious questions about the broadcaster’s political independence. 4.7 Thirdly, we fail to understand why the Government has decided to amend the budget of the channel, create a partnership between S4C and the BBC, and at the same time, include the channel in Schedule 7 of the Public Bodies Bill. This would allow the Secretary of State to charge a fee for S4C’s services, privatise the service, or even abolish it completely. 4.8 Would it not be better to consider the future and independence of S4C in the next broadcasting act within the next few years? Since so many matters need to be considered, such as the independence of the channel as well as wider considerations such as the effect on the Welsh language and plurality in the media in Wales, it would be wiser to consider the future of S4C within a timetable that allows people in Wales to give input into the future of the channel, rather than its future being steered by rash decisions by Government Ministers and BBC Chiefs.
5. Joint Management by the BBC 5.1 The decision to move S4C’s budget and part of its management to the BBC also undermines the Channel’s independence, and is ultimately a further threat to the funding levels for Welsh language programming and content. We are concerned that we would return to the position before the establishment of S4C, where Welsh language programmes would have to compete for funding with English language programming. We are also concerned that S4C would not have the independence to make the best decisions for the Welsh language channel. There would also be clashes of interest, especially where S4C is producing Welsh language content that could be similar to English language content. S4C is competing with the BBC for audiences and talent in some cases—who would have the last word in such cases if S4C did not have the independence to make decisions without the approval of the BBC? It would be wholly unacceptable for S4C’s executive board to be a combination of the S4C Authority and the BBC. The BBC would not on any account accept Government representatives on the BBC Trust, so it is unfair to ask S4C to be controlled in such a way by the BBC. 5.2 The lack of independence guaranteed by the Government’s plans is clear from Michael Lyons’ letter to the S4C Authority. The letter says “The BBC Trust is the guardian of the licence fee and as a result will need to have oversight of how this money is being spent”. In other words, the BBC at a British level would decide how much money would be spent, how it would be spent, and who would spend money on Welsh language programming. 5.3 We agree with the comments made by Elystan Morgan (9 November 2010: Column 140–1, Hansard): “A legislative framework was set up that guaranteed funds for [S4C] that would be adequate for it to carry out its commission. Indeed, its independence was guaranteed by statute. The viability of that channel is now challenged and jeopardised by the fact that that financial guarantee disappears. The independence is jeopardised by the fact that it is contemplated that it should be merged with the BBC as a very junior, meagre partner. Its independence cannot possibly be real in those circumstances; indeed, the major decisions may well be taken by the broadcasting trust in London. I do not believe that I overstate for a moment the anxieties that are felt in Wales concerning that loss of independence. ... The continued viability and independence of S4C is crucial to the very existence of the Welsh language. The Welsh language is spoken by some 580,000 persons, including three or four of us in this House. It is one of the oldest living languages in Europe—it stems back to its Indo-European origins about 1,500 years ago. It was a living language 1,000 years ago, when French was only a patois of Latin. In those circumstances, I ask the House to consider that it is part of its trust in relation to the Welsh language to regard the situation of S4C as being wholly unique. Parliament has the sovereignty to amend all the legislative structures but, in Welsh Affairs Committee: Evidence Ev 105
so doing, it would be reneging on the solemn compact that was made between a very honourable gentleman and the people of Wales 28 years ago.” 5.4 To ensure the best possible future, and the fairest future, for the Welsh language channel, we call upon the Government to ensure the following: — Complete management independence and editorial independence for S4C without any interference by the BBC or the Government; and — An independent funding formula for the Welsh language Channel, based on inflation.
6. Closing Remarks 6.1 The Welsh language channel is treasured by people in Wales, because it is a medium that brings the Welsh language alive to those who speak Welsh, to those who do not, to Welsh learners, to babies, children, young people and older people in all parts of Wales. The Welsh language belongs to everyone in Wales, whether they speak the language or not. S4C’s purpose is to provide Welsh language programming. That is why it was established after years of protest and campaigning, the only channel to be created as a result of such a mass campaign. 6.2 In Wales, we live our lives through the medium of two languages. A television service in Welsh and in English is needed to reflect that. Securing English language television based in Wales for Wales does not depend on sacrificing the Welsh language channel, as some have argued. It is the duty of Members of Parliament representing Wales to ensure a fair broadcasting settlement for everyone living in Wales. 6.3 It is essential that S4C has an adequate funding formula, and that it can remain separate from the BBC. The Conservative and Liberal Democrat Government are demonstrating a lack of respect towards the people of Wales, in the field of broadcasting specifically, and has undermined devolution. Plurality in the media is necessary, and Wales deserves a proper English language and a proper Welsh language media speaking to the whole of Wales. Cymdeithas yr Iaith Gymraeg November 2010
APPENDIX Cymdeithas yr Iaith Gymraeg, S4C: Pwy Dalodd Amdani? [Who paid for S4C?] (First impression: 1985, Second impression: 2010): http://cymdeithas.org/pdf/s4c-pwy-dalodd-amdani.pdf
Written evidence submitted by Alun Ffred Jones AM, Minister for Heritage, Welsh Assembly Government The purpose of this letter is to respond on behalf of the Welsh Government to the Welsh Affairs Committee’s call for written evidence regarding your enquiry into the position of S4C.
Introduction The Welsh Government takes a very close interest in broadcasting matters. We believe that Welsh citizens should be able to enjoy a comprehensive television service in both English and Welsh. We have expressed our very serious concerns about recent announcements regarding S4C’s funding and governance. We therefore welcome your Committee’s decision to conduct an enquiry into this matter and we are pleased to be able to take this opportunity to present written evidence for the Committee’s consideration. Although broadcasting is a non-devolved matter we have emphasised the importance of involving us fully in the development of revised proposals for S4C moving forward.
Importance of S4C to the Welsh language S4C’s television programmes are at the heart of our public life. From their very earliest days they have demonstrated that the public broadcasting mission to inform, educate and entertain is as relevant and important for Welsh speaking viewers as it is to those viewing in English. In approaching 30 years of operation, S4C has played a leading role in promoting and safeguarding the Welsh language by bringing it into people's homes every day. This model has been followed in Scotland and Ireland as a way of promoting their own Celtic languages. S4C has a key role to play in ensuring that the Welsh language continues to thrive. In this regard, its role is more than just a broadcaster. S4C helps to establish Welsh as a modern language—and as part of everyday life in Wales. It enlivens the language—and its services for children and young people make an important contribution to the task of increasing their use of Welsh. Through its factual, historical and cultural programmes, Ev 106 Welsh Affairs Committee: Evidence
S4C enriches Welsh society. It has—and will continue to have—an important part to play in delivering the vision set out in the Welsh Assembly Government's strategy for the language.
S4C Contribution to the Welsh economy S4C’s commissioning policy has greatly contributed to the growth in the independent media sector in Wales, in both English and Welsh. Wales now has a number of highly successful independent production companies that are creating content for many channels and networks, but S4C has been central to their initial development. Our creative industries are a Welsh success story and make a vital contribution to our economy. That is why we have recognised the sector as one that will continue to receive our support in our new plan to lead Wales to economic recovery—“Economic Renewal: a new direction”. The importance of S4C to our creative economy is supported by evidence. An independent report published in November 2010 indicate that S4C's effect on the Welsh economy is worth almost £90 million this year.The research by DTZ and the Wales Economic Research Unit at Cardiff University was commissioned by the S4C Authority. The report also notes that S4C is vitally important to independent television production in Wales with S4C being responsible for sustaining over 2,100 jobs in the independent sector and other fields. In addition, in relation to training over the last two years S4C and the independent production companies have invested almost £900,000 in training schemes in partnership with Skillset and the Welsh Assembly Government In 2009 Professor Ian Hargreaves was appointed by the Welsh Assembly Government to carry out an independent review of the creative industries in Wales and make recommendations on how government could more effectively support the sector. The review was published in March 2010. The Welsh Assembly Government has been implementing the recommendations of this report which aims to make sure public funds can be best used to generate jobs and wealth from the creative sector. S4C is central to this vision and we want to continue to work closely with S4C to make sure the sector keeps on growing. http://wales.gov.uk/docs/det/publications/100324creativeindustriesrpten.pdf On 5 July the Deputy First Minister launched “Economic Renewal: a new direction” which sets out the Assembly Government's policy direction to tackle the current economic challenges and meet future opportunities. This policy direction sets out a new role for Government, one which is clearer about the rationale for action and ensures that our resources are focused on priorities with the widest impact. Economic Renewal: a new direction identified Creative Industries as one of six key sectors where Wales has opportunities for growth. To maximise the opportunities offered by the sector, the Assembly Government has established an expert panel of industry professionals and, as part of the realignment of the department's structure to deliver Economic Renewal: a new direction, appointed a dedicated Creative Industries team.
Funding and Governance Arrangements As part of the Comprehensive Spending Review announcement on 20 October 2010, the UK Government announced that S4C funding will in the future become partly the responsibility of the BBC. In addition, they announced a 24.4% cut to S4C’s funding over the four years of the Spending Review period. Since that announcement the Welsh Assembly Government has expressed its serious concerns to the UK Government about the scale of the financial cuts being proposed by the UK Government and their impact on services across Wales. The Welsh Assembly Government recognises that S4C cannot be insulated from the pressures facing all parts of the public sector but we are very concerned about the scale of the financial cuts being proposed by the UK Government and their very real impact on services across Wales and on the wider creative economy. It is hard to see how this level of cut can be implemented without seriously affecting the scale and range of the programme service. The Welsh Assembly Government will continue to argue the principle that Welsh language broadcasting should not be treated any less favourably than the other aspects of public service broadcasting. We will also continue to emphasise that the principles upon which S4C was established under successive Broadcasting Acts should not be abandoned—that this contract with the people of Wales should not be broken. Despite the importance of S4C to the Welsh economy and to safeguarding the Welsh language, the Welsh Assembly Government was not consulted in any way before the UK Government’s announcement on 20 October in relation to the wide ranging changes to the future funding and governance of S4C. In light of the Secretary of State’s announcement we believe that there should now be a much wider debate about how best to safeguard S4C moving forward. We are encouraged by the Secretary of State’s declaration regarding the independence of S4C. In our view S4C’s editorial independence is absolutely vital. The proposals from the DCMS that S4C funding should in future become the responsibility of the BBC are of far reaching importance for Wales, the Welsh language and the creative industries sector. The Welsh Assembly Government has consistently offered strong support for the BBC and its crucial role in Wales. However, there are real dangers involved in a single organisation with only very limited accountability machinery within Wales being asked to take on responsibility for such an enormous slice of our cultural life. As a Government we have consistently emphasised the need for plurality in the broadcasting sector in Wales. The future of ITV Wales remains uncertain and loading additional responsibility on the BBC in Wales as a consequence of funding S4C Welsh Affairs Committee: Evidence Ev 107
would not be healthy for democracy. It would in our view be a retrograde step to place the BBC in a still more dominant position in relation to commissioning programmes in a small country such as Wales.
The Welsh Assembly Government has regularly referred to the importance of plurality in English language television in Wales as a key aspect of meeting the needs of viewers in Wales. In recognition of the key role played by public service broadcasting in Wales, the Welsh Assembly Government established an expert broadcasting advisory group during 2008. The group was established to develop a response to the recommendations made in phase 2 of Ofcom’s review on Public Service Broadcasting and following on from the announcement of job losses at ITV Wales.The group published its conclusions in the report The Media Challenge for Wales (2009). http://wales.gov.uk/docs/drah/publications/20090730communicationandcontent.pdf
We believe that the Advisory Group’s report provided a compelling rationale for maintaining and strengthening public service broadcasting in Wales.
The View from Wales
One indication of the concern generated by the Secretary of State’s agreement with the BBC was the decision by the leaders of the four political parties in the Assembly to write to the Prime Minister on 29 October 2010 calling for an independent review to be commissioned jointly by the UK Government and the Welsh Assembly Government (at Document 1).54 The call to the party leaders echoed a very similar suggestion made in the review of the Creative Industries undertaken by Professor Ian Hargreaves (http://wales.gov.uk/docs/det/publications/100324creativeindustriesrpten.pdf).
The issue of devolving powers over S4C to the Welsh Assembly Government has been raised by many during the last few months. However, we can confirm that there has not been any offer to devolve S4C from the UK Government. When the Welsh Assembly Government raised this issue with DCMS as something which could be discussed there was no further offer from DCMS. The review would be an opportunity to explore all aspects of the Welsh language television service and to inform future governance arrangements.
The Welsh Government hosted a broadcasting forum in Cardiff on 3 November with a view to ensuring that as many stakeholders as possible should have an opportunity to feed into the discussion surrounding S4C’s future. Therefore, we arranged a Broadcasting Forum in the Assembly in Cardiff on 3 November. The forum featured representatives of the broadcasters, the independent television sector, union leaders as well as a range of Welsh language cultural organisations. The messages emerging from the Forum reflected the points made in the party leaders’ letter. There was an appreciation that the UK Government announcement leaves some important questions to be addressed and resolved if we are to achieve a solution for S4C which is sustainable in the longer term and which also ensures its continued independence.
The main concern expressed at the forum was to stress the overwhelming importance of maintaining S4C’s independence. This reflects similar concerns expressed by Welsh Ministers. S4C’s editorial and operational independence have been at the heart of its creative success ever since the channel was established. Whilst the benefits of a closer partnership with the BBC are appreciated it was stressed that this should not require the channel to be primarily accountable to the BBC Trust. Whilst S4C will need to be accountable for any funding received from the licence fee the primary responsibility should continue to be via an independent S4C Authority.
There was also a very strong desire to provide long term clarity on funding beyond the period of this current settlement. A publisher broadcaster like S4C needs this continuity if it is to respond to the creative challenge associated with broadcasting in the Welsh language. There was also an encouraging willingness on the part of the independent production community to contribute towards this creative challenge in partnership with the channel.
The clear view was also expressed that there should be an appropriate level of Welsh stakeholder representation in any discussions which now take place regarding structures and governance arrangements. In addition to S4C and other parties, it was felt that the Welsh independent sector should be represented in the ongoing discussions about S4C’s future. The party leaders’ letter also emphasised the importance of Welsh involvement in this process as it unfolds. As a Government we are anxious to contribute to all of the discussions now underway which relate to S4C. We believe that this close involvement would go a long way towards reassuring the concerns that have been expressed about the Secretary of State’s announcement.
The Welsh Government strongly supports the views which emerged at the forum and has communicated these to DCMS Ministers. We also believe that it is important to avoid a situation where the future of S4C is decided without a full public airing of the issues surrounding the current television service and the possible means of addressing these. The future of S4C and its budget should be debated openly and transparent among the people of Wales. 54 Not published on the Committee’s website. Ev 108 Welsh Affairs Committee: Evidence
Next Steps Recent developments in relation to the S4C Authority has underlined the need for an urgent independent review of the future governance and funding of S4C, and that this should take place now and not after the crucial talks between S4C, DCMS and the BBC. Such a review would need to consider the scale and nature of the S4C television service and the way that that service will need to evolve in order to keep up with audience demand and expectations. We also believe that it would be crucial for the review to consider the sort of governance arrangements that will be required in future. It will be essential that this includes an appropriate level of direct accountability to the people of Wales and the National Assembly for Wales. The Welsh Government is anxious to play an active role to support the development of any new structures. We believe that this is a crucial component in ensuring that the interests of Welsh citizens are reflected fully in the process of mapping a new future for S4C. The channel has played a crucial role in support of the Welsh language and the Welsh economy for nearly 30 years. We are anxious to ensure that it can continue to play an equally important role in future. 29 November 2010
Written evidence submitted by the BBC Trust and the BBC Executive Board This evidence to the Welsh Affairs Select Committee is provided jointly by the BBC Trust and the BBC Executive Board. The BBC Trust is the governing body of the Corporation with responsibility for setting the strategy for the BBC and representing the interests of licence fee payers. The evidence from the Trust deals with the strategic relationship between the two broadcasters. The BBC’s Executive Board is responsible for the operational management of the Corporation. The evidence from the Executive, provided by BBC Wales, outlines the programming provided by the BBC to S4C.
BBC Trust Evidence 1. BBC and S4C Strategic Partnership 1.1 Under the 1990 Broadcasting Act, the BBC is required to supply at least 10 hours of television programming each week (equivalent to 520 hours per year), funded by the licence fee, to the Welsh language channel S4C. In 2006 this statutory supply was codified—in financial terms as well as hours—in a three-year Strategic Partnership between the BBC Trust and S4C Authority. 1.2 The first strategic partnership is currently being renewed, and the BBC hopes to complete this process by the end of 2010. The renewed partnership would be for two financial years, until March 2013. 1.3 Renewing this partnership is important to the BBC as the two broadcasters begin a journey towards greater collaboration. 1.4 In addition to the formal partnership the Trust has encouraged the BBC Executive to explore additional collaboration between the two broadcasters, particularly in sharing ‘back office’ and support functions. The S4C Authority outlined their own support for shared functions in their recent submission to DCMS (6 October 2010) and management teams from both broadcasters continue to explore the possibilities in this area.
2. Spending Review announcement 2.1 The Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, has made clear that, having decided to reduce the UK Government’s funding for S4C as part of the Comprehensive Spending Review, a new partnership model with the BBC was the best way of securing the long term future of the service. This proposition was put to the BBC in the context of discussions on a new licence fee settlement. The BBC is now committed to taking forward this policy. 2.2 A new arrangement will see the BBC build upon our existing commitment to the provision of a broad range of Welsh language services. It will provide the BBC with a new, additional, responsibility for funding a large part of a high quality S4C service. 2.3 The BBC has no ambitions to take over S4C. The Corporation is committed to a creatively independent S4C, which attracts revenue from a range of sources, including the licence fee. This income will be alongside a reduced grant from DCMS, of £6.7m in 2013–14 and £7 million in 2014–15. The BBC Trust shares the determination of S4C, and the independent production sector in Wales, that S4C should retain its strong relationship with that sector. 2.4 The settlement between the UK Government and the BBC stipulates that in 2013–14 and 2014–15 the BBC will contribute £76.3 million and £76 million respectively in cash to S4C. This will be in addition to the continuation of the statutory supply of programming to the organisation. Welsh Affairs Committee: Evidence Ev 109
2.5 The settlement also stipulates that there will be a further review of S4C’s strategy and finances, which will conclude before the end of 2014–15. The BBC does not yet have a position on how that review should be undertaken. 2.6 The BBC Trust is the guardian of the licence fee and as a result will need to have oversight of how the licence fee that is allocated to S4C is being spent. New governance arrangements for S4C will be required in order for the Trust to have appropriate oversight of this. The licence fee settlement between the UK Government and the BBC sets out in broad terms how this might be achieved. 2.7 The BBC would like to move quickly to agree the form that these governance arrangements will take. The BBC Trust is committed to working with the S4C Authority and DCMS to find appropriate governance models and to work through the issues that will arise from this change.
BBC Executive evidence 3. Context 3.1 The BBC has been producing Welsh language television programming for over 50 years, and this output has played a key role in supporting the S4C service since the channel’s launch in 1982. It is a central component of the BBC’s mission in Wales, and makes a strategic contribution to the fulfilment of the BBC’s public purposes in Wales. 3.2 In 2009–10, BBC Wales supplied over 600 hours of programming to the channel. This content forms a key part of our commitment to Welsh language licence fee payers, which encompasses services across television, radio and interactive platforms. 3.3 The BBC’s services for Welsh language speakers include BBC Radio Cymru, Wales’s only Welsh language radio station. This comprehensive speech and music service broadcasts for 20 hours each day and remains the most popular radio station amongst Welsh speakers, ahead of BBC Radio 1 and 2. The BBC’s online offering in the Welsh language has also developed considerably over the course of the last decade, reflecting the growing importance of interactive platforms.
4. Current BBC programme supply for S4C 4.1 The BBC’s programming contribution to S4C is highly valued by S4C’s audiences. It accounts for about a fifth of S4C’s total output yet attracts almost 40% of the channel’s viewing. 4.2 The BBC’s programme supply to S4C is built around three core pillars—journalism, daily drama and sport. 4.3 News has been at the heart of the BBC’s offering to S4C audiences from the outset. In 2009, this news provision was further extended to create a comprehensive Newyddion service broadcasting 6 times each weekday. It is a highly valued and distinctive service—blending Welsh, UK and world news for Welsh language speakers. In addition, the Ffeil news programme delivers a bulletin which is aimed at children every day of the week. 4.4 Beyond daily news, the politics programme CF99 offers analysis of Welsh politics and a forum for political debate. Pawb a’i Farn travels the length and breadth of Wales to give people the opportunity to quiz Wales’s politicians about the burning issues of the day. The current affairs strand Taro Naw adds considerable depth to Welsh language journalism. 4.5 The daily popular drama Pobol y Cwm is the mainstay of S4C’s evening schedule and remains one of S4C’s most popular programmes. Production of the programme will move in 2011 to BBC Wales’s new drama production centre in Cardiff Bay, and this will enable the programme to migrate to a full-scale HD operation. 4.6 The BBC also provides comprehensive coverage of the National Eisteddfod for S4C viewers. In 2010, more than 100 hours of output were broadcast from Ebbw Vale. 4.7 In addition, the BBC provides expert coverage of live rugby on S4C, including the Six Nations and Autumn internationals, weekly Magners League matches and the Welsh Principality Premiership. Live rugby attracts a wide audience—Welsh and non-Welsh speakers alike—to the channel. Since 2008, English language red-button commentary has been available for domestic matches. 4.8 Looking to the future, BBC Wales will, of course, continue to provide a range of programmes that deliver outstanding public value to S4C. In doing so, however, we will face challenging efficiency savings— in common with the rest of the BBC—and we expect the overall number of hours produced by BBC Wales for S4C to fall closer to the statutory level by 2012–13.
5. Collaboration 5.1 The BBC and S4C management teams announced in September that both broadcasters would undertake a major joint research project to assess long term trends in the usage of Welsh language media. The research Ev 110 Welsh Affairs Committee: Evidence
will play a major role in helping to ensure that the services of both broadcasters remain relevant with Welsh language audiences for years to come. 5.2 In parallel with this work, and in light of the financial pressures faced by both S4C and BBC Wales, both organisations have recently engaged in discussions to explore new ways of working that might assist in confronting the challenges ahead. This initiative predates the recent Spending Review and Licence Fee announcements. 5.3 The BBC and S4C management teams intend to work together to explore the scope for collaboration across a wide range of areas including marketing, research, distribution and technology under the renewed strategic partnership to March 2013. They will also undertake an assessment of longer term options that should help to inform the new partnership proposed by the Government in the Licence Fee settlement, including the strategic benefits of co-locating both organisations at a single media centre. Co-location could help deliver significant operational savings for both broadcasters as it would allow technology and transmission systems to be shared.
Conclusion In these challenging times the BBC Trust and Executive hope to work positively with the S4C Authority and its management team to ensure distinctive quality programming in the Welsh language that is valued by its audience. November 2010
Written evidence submitted by the Department for Culture, Media and Sport Background 1. S4C is a public service broadcaster, established under the Broadcasting Act 1980, following pressure from Welsh language supporters for a Welsh TV service. Until then, the only programmes broadcast in Welsh were regional opt-outs on the mainstream channels in off-peak hours. S4C launched as a bilingual service in November 1982, with most of the English-language content being Channel 4 programmes. 2. The channel broadcasts a variety of programmes, including live national events, sport, music, news, drama, entertainment, children’s programmes, culture, rural and lifestyle. S4C has a statutory obligation to provide television programme services of high quality for reception wholly or mainly by members of the public in Wales; and to ensure that a substantial proportion of the programmes broadcast on S4C are in Welsh. It is a commissioning broadcaster, rather than a programme producer, and the majority of S4C’s programmes are produced by independent television companies. The BBC has a statutory duty to provide not less than 10 hours a week of programming in Welsh, free of charge. 3. The Welsh Authority (which is also known as Sianel Pedwar Cymru, or S4C) is accountable as an independent broadcasting authority responsible for the S4C channel's strategic policy and overseeing the management of the channel. It also acts as a regulator on certain matters in broadly the same way that the BBC Trust regulates some aspects of the BBC’s services. The Authority's Chair and members are appointed by the Secretary of State. The Authority is not involved in the channel’s day-to-day decision making and is not involved in commissioning or editorial decisions. These functions are undertaken by the S4C Executive, which is led by its Chief Executive Officer who is appointed by the Authority.
S4C funding 4. At present, under the terms of the Broadcasting Act 1990, annual increases in S4C’s grant-in-aid funding from Government are linked to annual increases in the Retail Prices Index (RPI). The annual increase in S4C’s grant is set at the level of the annual increase in RPI in the November prior to the relevant calendar year. In addition to Government funding, and the provision of programming by the BBC, S4C also generates commercial revenues. 5. In the calendar year 2010, S4C was entitled to grant-in-aid of £101.647 million. In May 2010, the Secretary of State agreed with S4C that there should be an in-year reduction in funding in 2010–11 of £2m. 6. The Government intends to reform the funding mechanism for S4C through the Public Bodies Bill by removing the automatic link with the Retail Prices Index. Provisions to achieve this are included in the Public Bodies Bill, which is currently before Parliament. 7. On 20 October 2010, the Government announced in the Comprehensive Spending Review that S4C’s funding is to be cut by 24.4% over the four years to 2014–15, subject to the passage of the Public Bodies Bill. In a related development, it was agreed as part of the Television Licence Fee settlement covering the period from 2013–14 to 2016–17 that S4C and the BBC should enter into a partnership for the provision of S4C. S4C will be an independent Welsh language television service and will not be BBC branded. Although the Government will continue to provide some funding, from 2013–14 the majority of the funding to S4C will be Welsh Affairs Committee: Evidence Ev 111
provided by the BBC. This means that from 2013–14, the cost of S4C will be met from a combination of continued Exchequer funding, advertising revenue and the licence fee. 8. The levels of funding set under the spending review are as follows. Year Total funding (£m) From DCMS (£m) From BBC(£m)
2011–12 90 90 0 2012–13 83 83 0 2013–14 83 6.7 76.3 2014–15 83 7 76
9. The funding settlement ensures that S4C's funding is secure for the next four years and will enable S4C to structure itself for the modern broadcasting environment. It also allows S4C to retain its commercial freedom. 10. The partnership with the BBC Trust will be based on a joint management board with a majority of independent directors appointed by the Welsh Authority and the BBC Trust. This should ensure that S4C remains a unique service and retains its editorial distinctiveness. 11. There is to be a review of S4C’s strategy and finances to conclude in good time before the end of the spending review period. 12. Further details can be found in the Secretary of State’s spending review allocation letter of 20 October to the Welsh Authority: (http://www.culture.gov.uk/images/publications/Jones_S4C.pdf) and the Secretary of State’s letter of 21 October to the Chair of the BBC Trust setting out the details of the Television Licence Fee settlement beginning in March 2013: (http://www.culture.gov.uk/images/publications/Lyons_BBC.pdf) 13. The evidence is set out by reference to the specific matters which the Committee is proposing to examine.
The extent to which S4C is fulfilling its remit 14. Given S4C’s independent status, the Government does not undertake any formal routine monitoring of whether S4C is fulfilling its statutory remit. There is no statutory provision for Government monitoring and it is a long established principle within the public service broadcasting framework that broadcasters are editorially and operationally independent of Government. Responsibility for monitoring S4C’s performance and ensuring it meets its remit falls to the Welsh Authority. 15. The Secretary of State has, however, expressed concern about the value-for-money of the current level of Government funding, when compared against the viewing figures for the channel. At a funding level of almost £100 million per annum, S4C’s viewing figures are disappointingly low. The Government considers that the benefits to the Welsh language and culture expected from this level of funding are not being achieved. It is on this basis that Government concluded in the Spending Review that the S4C model is not sustainable in its present form and that the future of the channel lies in the partnership with the BBC proposed in the Television Licence Fee settlement recently agreed.
What impact recent and potential future spending cuts will have on S4C and what level of public subsidy for S4C is appropriate and sustainable over the longer term 16. Future funding levels for S4C, subject to the passage of the Public Bodies Bill, are set out in the Secretary of State’s letter of 20 October to the Chair of the Welsh Authority (link in paragraph 12 above). 17. As well as the funding S4C will receive from the Government and the BBC over the next four years, the channel will receive around £20m per year worth of programming from the BBC, will be in receipt of commercial income and has reserves upon which to draw. These are significant sums of money and the Government is confident S4C can use them wisely to deliver high quality programming. 18. No decisions have yet been made on funding levels after 2014–15. Whilst future funding will reflect synergies and efficiencies arising from the partnership with the BBC Trust, it will remain consistent with the Government’s commitment to a strong and independent Welsh language TV service, with future services informed by the outcome of the proposed review of S4C’s strategy and finances.
The cultural and economic benefit to Wales from the investment of over £100 million per annum of public funds into S4C 19. Although no recent quantitative study has been undertaken, the Government has received strong representations from a wide range of interested parties highlighting the benefits of the channel. The Secretary of State for Wales has provided a valuable contribution to the debate from her unique perspective, following discussions with S4C. 20. The Government carefully considered all comments received in assessing the future of Welsh language broadcasting and S4C and in making its decisions on the future funding of the service in the Comprehensive Ev 112 Welsh Affairs Committee: Evidence
Spending Review. The Government is aware of the leen interest shown in the ongoing debate about the future of the service and has noted the points made by the leaders of the four main political parties in the Welsh Assembly Government in their letter of 29 October to the Prime Minister. 21. The Government fully recognises the contribution S4C makes to the cultural and economic life of Wales. As well as sustaining and promoting the Welsh language, the channel provides a focal point for the celebration of Welsh national events. It is for these reasons that the Government has secured the future of S4C. 22. The Government was interested to note the findings of the report on the economic impact of the channel, commissioned by the Welsh Authority and published on 4 November. The report concluded that: — S4C’s effect on the Welsh economy is worth almost £90 million this year; — S4C is vitally important to independent television production in Wales with the Channel being responsible for sustaining over 2,100 jobs in the independent production sector and other fields; and — over the last two years S4C and the independent production companies have invested almost £900,000 in training schemes in partnership with Skillset and the Welsh Assembly Government. 23. The report also concluded that, in addition to these quantifiable economic impact effects, the broadcaster has a significant impact on the vitality of the independent production sector in Wales. S4C’s operational policies and its decisions determine the extent to which the Welsh sector is able to respond to wider market opportunities. This is of particular interest, as the Government is very keen that S4C should preserve its relationship with the independent production sector in Wales. This is reflected in the principles for the partnership between S4C and the BBC set out in the Secretary of State’s letter to the Chair of the BBC Trust setting out the details of the settlement. 24. The report found that by investing in improved, more efficient networks, S4C suppliers benefit from enhanced market access as the network enables them to supply S4C, other production companies and other broadcasters with higher quality output in HD. This acts to remove barriers to trade and wider market access. 25. The report considered that S4C is directly driving a skills improvement in the sector. Keeping abreast of technological developments and raising the standards of output means that S4C suppliers develop skills and invest in areas demanded by the market, with the outcome that the Welsh creative industry has access to wider markets.
Whether S4C is maximising the use of its financial and other resources to achieve value for money, to optimise the quality of its output, and to reach as wide an audience as possible 26. The Government does not undertake any formal routine monitoring of these matters. To ensure that S4C maintains its editorial and operational independence from Government, the Welsh Authority is responsible for these issues. 27. The Government has noted the recognition awarded to the quality of S4C’s programming, for example, the 14 awards won by S4C at the Bafta Cymru ceremony in May. The Secretary of State has, however, expressed concern about the value-for-money of the current level of Government funding, when compared against the viewing figures for the channel.
The potential for further collaboration between S4C, the BBC and independent broadcasters in Wales in order to reduce duplication and to achieve economies of scale 28. The Government wants to ensure that S4C offers the best possible Welsh language service to its audience but has concluded that the S4C model is not sustainable in its present form. As set out above, the best way to secure S4C’s long-term future while delivering a better service is through partnership with the BBC. Such a partnership will, over time, bring considerable benefits for S4C and its audience. The partnership arrangements will enable S4C to draw upon the benefits of shared expertise and experience in order to provide a service which demonstrates value for money in return for its public funding. 29. The Government has begun separate preliminary discussions with S4C and the BBC Trust on developing the detail of the partnership. We are aware that the BBC Trust and Welsh Authority have also had an initial meeting. Tripartite meetings are being arranged to consider such matters as how S4C’s independence will be safeguarded in practical terms, the potential impact on independent producers, the governance structure model, accountability, stewardship of licence fee revenue within the partnership framework, the future role of the Welsh Authority and how the BBC Agreement needs to be amended. Given the level of interest in the partnership and the benefits to interested parties in having these points resolved at an early stage, the Department is seeking to develop the arrangements as soon as practicably possible. In practice, this means the Department is seeking to have the main points agreed, in principle at least, by the middle of 2011. It is recognised that full implementation may be dependent on external factors such as the Parliamentary timetable. 30. The expectation is that future funding of S4C will reflect synergies and efficiencies and support the Government commitment to a strong and independent Welsh language TV series. Welsh Affairs Committee: Evidence Ev 113
31. The Department is pleased to note the BBC Trust’s commitment, in a published letter of 10 November from the Chair of the BBC Trust to the Chair of the Welsh Authority, to a creatively independent S4C that retains its strong relationship with the independent production sector in Wales. 32. Furthermore, it is helpful that the Chair of the BBC Trust has made it clear the BBC has no intentions to take over S4C; and that the Trust is committed to working together with S4C to make the policy work.
Whether the finance and accountability of S4C, currently the responsibility of the Department of Culture Media and Sport, should remain in Whitehall or become a devolved matter 33. The Government has no plans to devolve responsibility for S4C as the benefits of sponsorship by the UK Government would be lost. Having broadcasting as a reserved matter, and retaining S4C within that framework, is the most effective way of maintaining national standards and securing broadcasters’ independence. November 2010
Written evidence submitted by S4C 1. Introduction 1.1 Rheon Tomos, the Vice Chairman of the S4C Authority and Arwel Ellis Owen, S4C’s Chief Executive, gave evidence to the Welsh Affairs Select Committee inquiry into S4C on 14 December 2010. This note offers some additional information and clarification for members following that committee hearing. Since the hearing in December there have been several important developments as S4C faces a reduced budget and closer co- operation with the BBC. 1.2 Positive discussions with the BBC and the DCMS over a new governance structure for S4C are continuing. Any new governance structure will offer oversight to the BBC Trust for the contribution to S4C from the licence fee. However, it must also respect the operational as well as the editorial independence of S4C to best serve Welsh viewers. 1.3 The DCMS has advertised the post of Chair of the S4C Authority and hopes to complete the recruitment process by the end of March. The appointment of a permanent Chief Executive will take place after that. 1.4 Viewing figures in the first weeks of 2011 have been very encouraging. Almost one million viewers tuned in during the week ending 23 January. 653,000 different individuals in Wales and 304,000 outside Wales, a total of 957,000 viewers, watched S4C during that week.
2. S4C Viewing Figures—Factual Background 2.1 It is not correct to state, as some commentators have, that S4C’s audience has halved in the past four years. In terms of Welsh language hours which is the correct measure55, in 2010 S4C attracted a weekly reach figure of 616,000 viewers across the UK—this is an increase of 65,000 on the 2009 figure of 551,000. 2.2 The figures during peak hours (18.30–21.30) are remarkably stable. Over the past nine years they have been between 27,000 and 32,000 (an average of 30,000) despite the switchover to digital TV. 2.3 Appreciation Indices (a standard industry measure) show great appreciation of S4C programmes among Welsh speakers and non Welsh speakers alike—more so than other major PSB’s in Wales. 2.4 BARB data shows that 1.4 million people across the UK tuned into S4C’s coverage of events in 2010, an increase of 44% on 2009. 2.5 S4C’s best five programmes in 2010 attracted 26% more than in 2009. The highest rated programme (Bristol City v Cardiff City in the FA Cup) gained a reach of 459,000. 2.6 People are increasingly using S4C’s “Clic” online catch-up viewing service. There were more than 1.6 million viewing sessions across 2010, an increase of 44% on 2009.
3. Welsh Learners 3.1 S4C places great importance on targeting Welsh learners. The S4C web site is totally bilingual and includes a comprehensive online service for Welsh learners www.s4c.co.uk/dysgwyr 3.2 The S4C Learners’ site offers support tools for Welsh learners. It provides background information on programmes and includes language exercises in the form of puzzles and programme clips. 55 That is, the Welsh language programmes commissioned by S4C, as opposed to re-scheduled Channel 4 programmes on S4C’s analogue service prior to the completion of digital switchover in Wales. Ev 114 Welsh Affairs Committee: Evidence
3.3 The site has been designed at 4 levels of linguistic ability from “Just Starting” to “Intermediate” and offers a choice of north and south Wales dialects. The service includes: — Activities linking video and text. — Scripts in easy Welsh and English. — Profiles of actors and characters. — Background on Welsh history and culture. — A forum for learning and support. 3.4 Apart from the web services, English subtitles are available on S4C on over 80% of the total hours, with 10 hours of original programmes each week subtitled in Welsh.
4. Commercial Reserves 4.1 Reference was made during the hearing to a figure of £58 million of “reserves” and clarification was sought as to these monies. 4.2 The figure of £58 million (£55.67 million in 2009 and £57.69 million in 2008) is the figure for the total reserves for S4C as noted in the Consolidated Balance Sheet in the 2009 Statement of Accounts. This figure is not the amount of commercial reserves generated and held by S4C. 4.3 The accounts for 2009 show Public Fund reserves of £31.782 million and General Fund (ie commercial) reserves of £25.908 million—Total £57.690 million. The comparable figures for 2009 are Public Fund reserves of £27.399 million and General Fund reserves of £28.269 million—Total £55.668 million. 4.4 The Consolidated Balance Sheet provides a “snapshot” of S4C’s financial position at 31 December in any given year. This “snapshot” includes numerous items such as amounts for programmes that have already been commissioned for broadcast in the next year, and also cash retained to pay commitments falling due at the beginning of the next year and before the receipt of the next payment of the statutory grant. 4.5 The Consolidated Balance Sheet shows both S4C’s Public Fund and the General Fund. The Public Fund holds the grant in aid received from DCMS and must only be used to fulfil S4C’s remit as defined in statute. The General Fund holds the commercial revenues generated from advertising and programme sales and any investment income. Transfers are made from this fund to enhance the Public Fund. The transfers are one way— no transfers can be made from the Public Fund to the General Fund. 4.6 The Public Fund Reserves are not commercial reserves. They are the normal reserves of running a business that needs to finance fixed assets, stock and working capital. This is not a cash reserve. 4.7 The Public Fund Reserves in 2009 are represented by: Item Description £m
Fixed Assets Fixed assets include the S4C premises, 7.244 broadcast and office equipment Programme stock Stock is programmes which have already 16.829 been paid for but which will not be broadcast until the following year. Debtors These are amounts owed to S4C 7.126 Cash at bank 4.426 Creditors These are amounts owed by S4C to −8.326 suppliers Pension asset 0.100 Total 27.399
4.8 S4C has always generated commercial revenues from its commercial activities to supplement the Public Fund. The commercial group declares a dividend to the Public Fund each year. The commercial group also provides further support for S4C’s activities by, for example, funding the English language audio track on sport programmes and launching the proposed new digital and co-production funds. 4.9 The General Fund Reserves (ie commercial reserves) in 2009 are represented by: Item £m
Fixed Asset Investments 6.000 Current Asset Investments 26.653 Cash at bank 1.954 Creditors -6.338 Total 28,269
4.10 The £26.653 million is the remainder of the proceeds of the sale of S4C’s stake in SDN Limited, which is currently held in an investment fund. Welsh Affairs Committee: Evidence Ev 115
4.11 The £6 million fixed asset investment is the book value of the equity investment in Move Networks Inc. (an internet protocol television company which acquired the Abercynon based Inuk Networks Ltd. in which S4C was a shareholder.) Move recently completed an asset sale to Echostar. Move is a private company whose shares are not traded on any stock exchange. 4.12 S4C’s intention, as outlined in its submission to the DCMS (“A Process of Renewal”) is to use a proportion of the reserves held in the investment fund to establish digital and co-production funds which will help develop the creative industries in Wales.
5. Pilot Programmes and Development 5.1 The Committee asked for further information relating to how much money S4C spends on pilot programmes, how much of this is written off and how this compares with other broadcasters. In 2008 and 2009, S4C commissioned two pilots. One project progressed to a commission, with the “pilot” element of the cost forming part of the final transmission cost. The other project was funded by the production company itself as an investment. 5.2 S4C also invests in developing new and innovative programme ideas and offers contracts to production companies for “development”. This funding is offered to the sector under open and competitive invitations to tender, the details of which are archived on the S4C website. 5.3 During 2008 and 2009, 0.33% (a third of one per cent) of the content budget was spent on development which did not progress to commissioned contracts. (The development contracts were awarded to eleven different production companies.) This represents 0.27% against the total turnover for S4C in that period. Comparisons with other broadcasters are difficult as they do not routinely publish such information.
6. Staff Benefits 6.1 The Committee asked whether S4C provided private health care to staff. Private health insurance has been offered to members of staff and 118 members have taken up this offer. This benefit was withdrawn in May 2009 and no new members of staff have been offered contributions to private health insurance since that date. Other public service broadcasters also offer benefits including private health care to their staff.
7. S4C Website 7.1 The Committee was told that bulletins of the meetings of the S4C Authority for 2010 were not available on the S4C website. This has now been rectified, and the bulletins for 2010 have been uploaded and are available at s4c.co.uk January 2011
Supplementary written evidence submitted by the BBC At the evidence session of the 11 January, the BBC panel agreed to provide additional information to the Committee on a few areas of questioning. Based on the numbering of the uncorrected transcript, these were: — Q350 BBC ALBA audience figures. — Q354 details of BBC Vocab (for Welsh learners). — Q381—clarification on S4C spend. I am pleased to respond as follows: — Q350 BBC ALBA audience figures. Figures for 10/11 are not yet available, however the 2009–10 figures for 3' and 15' reach are as follows. The average reach to March 2010 was 176,000 (15' reach) and 219,000 (3' reach). The channel does not calculate audience share. Awareness of the service was at 63% (all figures supplied by TNS System 3). Figures available to date this year suggest that audience levels have been maintained and are likely to increase by financial year end. Figures for the next year are likely to be different as it is anticipated that ALBA will be available on DTT by then: figures should consequently reflect the increased audience exposure this will afford. — Q354 details of BBC Vocab (for Welsh learners) Vocab is a web application devised by BBC Cymru Wales that enables users of its Welsh language website bbc.co.uk/cymru to see English translations of words on the web pages. The service is primarily targeted at learners and is currently available from Welsh to English and also from Gaelic to English on the BBC’s Gaelic sites. The Vocab service is available on the BBC’s Welsh language pages, and can be switched on if needed by pressing the Vocab button. Key Welsh words are highlighted and when the user hovers the cursor over words an English translation will appear of that word. Ev 116 Welsh Affairs Committee: Evidence
The service has been developed in partnership with the Welsh Language Board, and was launched in 2004. The system is still in the pilot phase, but is available to external organisations. The Welsh Language Board is encouraging every organisation it funds to add the Vocab service to their site. The service is easily available to other organisations who merely need to register the desire to use the service with the BBC, via the Vocab website. They can then link the programme directly to their site.
The 24 Mentrau Iaith (Welsh language organisations) will soon be able to add the service to their websites, as will any Papur Bro (Welsh language local newspapers) that has a website. Other organisations that have expressed an interest include Merched y Wawr, Golwg 360 and the Welsh Assembly Government.
Examples of how Vocab is used by the BBC and others can be found here: http://www.bbc.co.uk/cymru/ http://www.byig-wlb.org.uk/cymraeg/dysgu/Pages/index.aspx (button on the left) http://www.urdd.org/adran.php?tud=361&uwch=18 (button at base of page) http://www.bbc.co.uk/alba/ — Q381—clarification on S4C spend
During the session, the Chair of the Committee requested further information about the apparent discrepancy between the figures published in the BBC’s Annual Report relating to the BBC’s investment in S4C (£36 million) compared to figures of approximately £20 million referred to elsewhere.
The figure of £20 million is a reference to the figure included in news items in October (eg http:// www.walesonline.co.uk/news/wales-news/2010/10/09/bbc-wales-to-cut-back-on-programmes-made-for-s4c- 91466–27434875/) which outlined the BBC’s intention to reduce spend on Welsh language programmes for S4C to “approximately £19.5 million in 2012–13.” This figure was subsequently confirmed in the BBC Trust’s Strategic Partnership Agreement with the S4C Authority earlier this month.
There are two main reasons why this figure differs from the figure published in the BBC Annual Report and Accounts. Firstly, the figures referred to in the Strategic Partnership refer to direct content-related spend which falls within BBC Wales’ control, ie the amount spent on production and associated support costs. Secondly, as is common with other large organisations, when preparing the BBC’s Annual Report, it is normal accounting practice to reallocate centrally paid overheads—such as rates, rent and other centrally covered costs—across all divisions and departments of the BBC.
The main content-related spend on Welsh language programmes for S4C is currently £23.5 million, which will reduce to £19.4 million in 2012–13. Menna Richards Director, BBC Wales January 2011
Supplementary written evidence submitted by Ed Vaizey MP, Minister for Culture, Communications and Creative Industries, Department for Culture, Media and Sport
I am afraid that my oral evidence to the Welsh Affairs Committee on 18 January included an incorrect explanation of the technical reason why S4C is listed in Schedule 7 of the Public Bodies Bill; and an incorrect statement that S4C is included in Schedule 3, for which I apologise. In the evidence session, I offered to write to the Committee to clarify the position in the event that I had misunderstood the reasons why S4C was in Schedule 7 and I would like to take this opportunity to set the record straight.
In line with planned reforms, S4C is included in schedule 4 of the Public Bodies Bill as this provides for the power to modify S4C’s funding arrangements. As the Government has previously made clear, we are seeking to break the automatic link between S4C’s funding and the Retail Prices Index.
S4C is also included in Schedule 7 as Schedule 7 lists all public bodies which were subject to the public bodies review and which would require legislation to effect any possible changes in the future. For example, this could include a scenario where further reform to S4C is needed to provide for the new partnership arrangements with the BBC Trust. There are some public bodies that appear in earlier schedules of the Bill but do not appear in Schedule 7. For example, those bodies listed in Schedule 1 are not in Schedule 7, on the basis that they are to be abolished and no further reporting will be required.
S4C is not included in any other schedule of the Bill.
This correct explanation was set out in my answer to a Written Answer to a Parliamentary Question on 24 January, Official Report, column 14W (http://www.publications.parliament.uk/pa/cm201011/cmhansrd/ cm110124/text/110124w0001.htm). Welsh Affairs Committee: Evidence Ev 117
I must stress that the Government has no intention of abolishing S4C, as I made clear to the Committee in the evidence session. February 2011
Letter to Arwel Ellis Owen, Interim Chief Executive, S4C from David T.C. Davies MP, Chair, Welsh Affairs Committee As you will recall, following the evidence session on 14 December, you undertook to provide follow-up information in a number of areas. In the light of your response of 26 January, I am writing to thank you for the information you provided and to request further information in the areas listed below. 1. In the evidence session, you undertook to provide comparative 15-minute reach data (Q244–Q247). The “reach figures” you subsequently provided show how many individuals spent at least three consecutive minutes watching the channel in the course of a week. It would be appreciated if you were to provide in addition 15- minute reach figures. 2. In addition, the Committee would appreciate the figures for both 3-minute and 15-minute weekly reach, and for viewing in Wales and across the UK (separately) for: — the weekly reach for S4C since digital switchover (31 March 2010) (when output became 100% Welsh language); — the weekly reach for S4C since digital switchover excluding BBC-supplied programmes; — the weekly reach for S4C since digital switchover excluding (live and repeated) sporting events; — the weekly reach for S4C since digital switchover excluding both BBC-supplied programmes and sporting events; and — it would also be useful to have a breakdown of the reach figures above by Welsh speakers and non-Welsh speakers, if available. 3. In the evidence session you undertook (Q256) to let us know whether the figures for S4C’s top 20 programmes include repeats or if they represent the figures for the highest individual episode of any programme viewed. Similarly (Q260) and in paragraph 2.2 of your memorandum, you state that the figures during peak hours (between 27,000 and 32,000) are “remarkably” stable. Is this based on data for the average figure per programme in peak time or the average number watching in any 3-minute or 15-minute period during peak time? 4. Your memorandum states there is “great appreciation of S4C programmes among Welsh and non Welsh speakers alike—more so than other major PSBs in Wales” (para 2.3). What data do you use to back-up this statement? 5. In para 2.6 of your memorandum you state that there were more than 1.6 million “viewing sessions” in 2010 for S4C’s “Clic” online catch-up viewing service, an increase on 44%. We would appreciate the following additional information: what comprises a session, the average time spent viewing catch-up programmes online, and the number of unique users? 6. In the evidence session (Q216) you stated that Sir Jon Shortridge had given a presentation on his report to S4C three weeks earlier (ie in November) and that the Authority’s response was an agenda item for their meeting two days after the oral evidence session, “and we will publish our response and that will be made available”. Has your response been published? 7. Finally, the Committee would appreciate the figure for the cost of S4C’s high definition TV channel (Q277). February 2011
Response from Arwel Ellis Owen, Interim Chief Executive, S4C to the letter from David T.C. Davies MP, Chair, Welsh Affairs Committee Thank you for your letter dated 10 February requesting further information from S4C following our appearance before the committee in December. I have pleasure in enclosing additional information in response to the questions raised in your letter.
1. Weekly Reach S4C reports its viewing figures using BARB’s 3 minute reach data. This is the industry standard, used by most broadcasters save for the BBC. This measurement is used by channels that include advertising as it gives a better metric by which to assess the commercial impact and value of a channel. Ev 118 Welsh Affairs Committee: Evidence
Here are the figures for S4C when different reach conditions are applied since digital switchover, when output became 100% Welsh language (Week 14 2010 to Week 4 2011): Weekly Monthly
3 min reach 587,000 1.414 million (Consecutive) 15 min reach 362,000 807,000 (Consecutive) Source: BARB
2. Weekly Reach—3 and 15 Minute
The weekly reach for S4C since digital switchover, when output became 100% Welsh language (Week 14 2010 to Week 4 2011): Welsh Non-Welsh Speakers Speakers Outside of Wales in Wales in Wales Wales
3-min Reach 455,000 199,000 256,000 142,000 15-min Reach 306,000 155,000 151,000 55,000
Since 1982 the partnership with the BBC has been an extremely important part of the S4C service. It has delivered high value peak hours programming which have traditionally gained high audiences.
The majority of programmes supplied by the BBC to S4C under the statutory requirement and the strategic partnership consist of the nightly soap opera Pobol y Cwm, news, sport and certain important events (eg the National Eisteddfod). These genres of programmes are traditionally the staples of most comprehensive television channels. They are largely broadcast during peak hours, where most broadcasters achieve their highest audiences.
The weekly reach for S4C since digital switchover excluding BBC supplied programmes*: Welsh Non-Welsh Speakers Speakers Outside of Wales in Wales in Wales Wales
3-min Reach 331,000 169,000 162,000 98,000 15-min Reach 185,000 117,000 68,000 31,000 * BBC supplied programmes include programming paid for by S4C. S4C contributes more than £3 million to the BBC each year for the provision of the weekly omnibus and summer episodes of Pobol y Cwm.
The weekly reach for S4C since digital switchover excluding (live & repeated) sporting events: Welsh Non-Welsh Speakers Speakers Outside of Wales in Wales in Wales Wales
3-min Reach 310,000 174,000 136,000 74,000 15-min Reach 189,000 127,000 62,000 23,000
It is worth noting that sporting events are very popular additions to mainstream broadcasters’ schedules the world over. Other minority language broadcasters such as BBC Alba, Maori TV in New Zealand and NITV in Australia have all secured broadcast rights to major sporting competitions. Maori TV will for example be the lead free to air broadcaster for Rugby World Cup in 2011, BBC Alba shows live Scottish Premier League games and NITV rugby league. Sport delivers large and diverse audiences who may not otherwise watch television through the medium of a lesser used language.
News, Sport and soap opera are key elements of most mainstream PSB channels. Removing viewing of those programmes gives a false impression of the overall performance of a channel.
S4C, like other public service broadcasters has a statutory duty to provide a broad range of high quality and diverse programming. This means we must provide programmes which have high public service values, but which may not necessarily deliver the highest possible audience. For example an important part of S4C’s service is “Cyw”, programming for pre school children. Viewing by under four year olds is not measured by BARB. Welsh Affairs Committee: Evidence Ev 119
The weekly reach for S4C since digital switchover excluding both BBC-supplied programmes* and sporting events: Welsh Non-Welsh Speakers Speakers Outside of Wales in Wales in Wales Wales
3-min Reach 260,000 155,000 105,000 61,000 15-min Reach 146,000 109,000 37,000 18,000 * This includes BBC programming paid for by S4C.
3. Top 20 Programmes The top 20 programmes (reach-based) mentioned in our evidence include figures for narrative repeats (ie repeats within seven days of the original transmission). They are also the highest individual (aggregated) episode for that series or competition (in the case of rugby or football). Only the highest figures per day count for “Pobol y Cwm” or other such daily programmes. The highest sports match from each competition, and only the highest episode from each series, are taken into account. If this discounting of many high rating programmes were not to be used, the top 20 programmes listed would have even higher audiences. Regarding the average 000’s figure during peak hours, the figure given is an average of the 000’s watching during each single minute on average during peak hours. This is the standard BARB measure. It is important to note that this is not the same as reach. For example, in 2010, we attracted 28,000 average viewers in peak in Wales, but the average weekly reach in peak in 2010 in Wales was 309,000.
4. Audience Appreciation For a public service broadcaster, measures besides crude audience figures are a valuable and acknowledged measure of performance. Public service broadcasters collect audience appreciation (AI) scores. Gauging audience opinion is a statutory duty on S4C. Our appreciation data comes from Kantar Media, who use industry standard methods to calculate these scores. These are scores out of 100 indicating enjoyment and appreciation. Data for 2010 for S4C and other channels in Wales is shown below: JANUARY–DECEMBER 2010 AI’s All Welsh Non-Welsh Viewers Speakers Speakers
S4C Welsh Language Progs 80 80 79 Other Channels 78 78 77 Source: Kantar Media (Other Channels = ITV1, BBC1, BBC2)
5. Online Viewing Sessions The definition of a viewing session is the number of successful viewing sessions that have come to an end. The average time spent viewing catch-up programmes online was 8 minutes and 30 seconds per programme in 2010. Including live viewing there were more than 1.6 million viewing sessions in 2010, an increase of 44% on 2009. Our number of unique users to our websites each month in 2010 was 91,000 on average.
6. Corporate Governance Review The review of S4C’s corporate governance carried out by Sir Jon Shortridge was published on 11 February 2011. All members of the Select Committee have received copies of his report, the S4C Authority’s response and the action plan put in place to ensure a robust and appropriate system of corporate governance for S4C.
7. High Definition Channel The cost of the establishment and running of S4C’s high definition service, Clirlun, was the subject of a Freedom of Information request received by S4C in June 2010. Our response was that the costs involved included payments to third parties which were commercial and in confidence. We believe that releasing such information would break the agreement we have with the multiplex operator for carriage of the service and could compromise the commercial interests of S4C and the multiplex operator and its ability to negotiate similar contracts in the future. February 2011
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