S4C

Written evidence submitted by Plaid Cymru

1. Summary of response:

a. The question of S4C fulfilling its remit is a wider one. Plaid Cymru believes that DCMS has not shown the ability or willingness to effectively scrutinize the channel’s obligations or develop its remit or potential in line with developments in the field of Broadcasting and the Welsh Government’s Economic Renewal Programme.

b. The cultural and economic benefit of the £100m per annum has a positive impact on the Welsh economy. It is arguably the base from which the Welsh creative industry grows and competes globally. The cuts to that money jeopardize not only the jobs in the industry but also the competitiveness and excellence of those companies.

c. The funding of S4C is still based on an 1980s approach to broadcasting with no consideration of the wider demands of a broadcaster such as developing digital, on-line and HD content.

d. Plaid Cymru is very concerned with the proposals regarding bringing S4C under the BBC. Although there is scope for cooperation, there is little sign that the BBC has an interest or willingness to develop quality or quantity or Welsh content. Plaid Cymru is very concerned that the merger will compromise the editorial independence of S4C and jeopardize the already fragile plurality available to the people of Wales.

e. We believe that it is time to devolve powers over the field of Broadcasting to the Welsh Government. We have no faith that DCMS has the interests of the people of Wales or stakeholders at heart in relation to S4C and believe that S4C, its remit and budget should be devolved as soon as possible in order to address the crisis facing the channel.

2. This paper sets out Plaid Cymru’s response to request for submissions and observations by the Welsh Affairs Select Committee regarding its inquiry looking at the Welsh-language broadcaster S4C. The paper will present Plaid Cymru’s views on the points referred to in the call for submissions as well as making several other points. It is important to note however that Plaid Cymru, together with the leaders of all other major parties in the National Assembly, have written a joint letter calling for an independent review of S4C. We believe that many of the points raised and explored by the Welsh Affairs Select Committee in this inquiry could be explored more thoroughly by such a comprehensive review.

3. Before addressing the points raised by the Committee’s inquiry, it is important so set S4C in its context and to make a general statement of its value to the people of Wales.

A popular movement in Wales campaigned for years for the establishment of S4C until Thatcher’s Government finally delivered its manifesto pledge to set up an independent Welsh-medium television channel. It has, since its creation, been the vehicle through which high-quality broadcasting has been commissioned on behalf of and delivered to Welsh speaking audiences. This has been the settled will of the people of Wales regardless of the language they speak. It is of incalculable importance to the further strengthening of the Welsh language as well as to the successes of Wales’ creative industrial sector, and it has an important role to play in ensuring much-needed plurality within Wales’ media.

4. S4C belongs to everyone in Wales whether they speak the Welsh language or not. Its programmes – the sport, the entertainment and its provision for children – play an important role in our shared aspiration to create a truly bilingual Wales where people can hear, listen and speak the language. If we are serious about protecting Welsh as a living language in Wales, then it is our duty – our responsibility – to safeguard an independent, properly funded S4C for future generations.

5. Plaid Cymru does not believe that S4C should be included in the Public Bodies Bill currently going through Parliament.

6. The Public Bodies Bill places too much power and influence at the hands of a single Minister in Westminster. His or her political whim should not decide the fate of an entire channel, essential to the survival and development of a language.

7. S4C is a Public Service Broadcaster and should not be treated in the same manner as a Public Body. S4C should be subject to Parliamentary debate and proper consultation when changes are proposed.

8. The extent to which S4C is fulfilling its remit: We believe this to be an interesting matter that raises wider concerns over the running and management of S4C. The responsibility for setting and reviewing S4C’s remit has been with the Department for Culture Media and Sport (DCMS) since the channel’s genesis. Many have claimed recently that the channel does not fulfil this remit, however any failure of S4C to fulfil its remit must in part reflect the failure of DCMS to scrutinize and adapt the remit effectively over time. It is disappointing that DCMS has not undertaken a comprehensive review of S4C since 2002/3, during which time there have been many developments in the broadcasting world; not least the rapid and massive expanse of the smaller, digital channels that now compete against the traditional channels (BBC1, BBC2, ITV and Channel 4) and indeed claim a 41% annual share of television viewers. Surely, while the BBC is reviewed comprehensively and regularly in order to ensure that the license fee offers value for money, S4C should be subject to similar levels of regular constructive scrutiny.

9. DCMS has however shown a lack of interest in, and scrutiny of S4C and has failed to prove that it has any interest in ensuring that the channel continues to develop in line with its remit and wider developments in the field. Neither has DCMS shown any willingness to explore or develop the wider cultural or economic benefits of S4C.

10. Conversely, the Welsh Assembly Government (WAG) has great interest in developing S4C due to its centrality to the creative industry. The WAG’s Economic Renewal Programme (ERP) has identified the creative industries as a key field which it hopes to develop as part of a wider economic development programme. For WAG, regular review of the remit and potential of S4C is crucial in developing the economic benefit of S4C. If the WAG had the capability to review and set the remit of S4C, it could ask S4C to apply performance conditions requiring a certain percentage of programmes to be sold in translation outside Wales or require S4C to foster international collaboration. This could be done by restricting the extent to which S4C acts as sole commissioner and encouraging international co-commissioning. There are exciting opportunities to develop the role of S4C as economic catalyst but with debate polarized and stifled and constructive review of the institution unlikely while the remit remains dormant at DCMS, Wales is not getting the most from S4C. The devolution of S4C’s budget, remit and powers to review the institution and appoint its Authority could go a long way to getting much more from S4C.

(The cultural and economic benefit to Wales of the investment of over £100m per annum of public subsidy for S4C is appropriate and sustainable over the long term.

What impact recent and potential future spending cuts will have on S4C and what level of public subsidy for S4C is appropriate and substantial over the longer term?)

11. The potential impact of the spending cuts is of great concern for Plaid Cymru. The cuts not only put the future of Welsh-language broadcasting, the quality of programming and the future of independent creative industries under threat, but are also a direct threat to the Welsh Government’s Economic Renewal Strategy.

12. "Without S4C, Wales may well not have any independent television production companies at all. Almost all the Welsh indies have their roots in making programmes for S4C and they are spread across Wales in a way that has helped to broaden the geographic base of the Welsh creative industries sector. The decision, following the 2003 Communications Act, to allow independent production houses to retain intellectual property rights in their own productions, was designed to encourage indies to develop the kind of muscle that would enable them to trade beyond Wales into the UK television networks and beyond. In recent years, S4C has sought efficiencies of scale by commissioning a smaller number of indies, a move which has also had the desirable effect of encouraging the emergence of larger, stronger companies able to compete on a wider front, as well as to make its own procurement practices more efficient. S4C, through its 2004 Creative Excellence programme, has played a strong leadership role in the development of quality training and skills provision for the television sector in Wales, as well as collaborating with the IP Fund on joint investments in films and television programmes." [1]

13. An assessment of the full economic impact of S4C on the Welsh Economy commissioned by S4C from the Welsh Economy Research Unit of Cardiff University Business School in 2007 estimated that it was responsible for supporting 2,254 jobs (full-time equivalents) through spending in that year of £96.7m, not counting the jobs impact within BBC Wales resulting from the creation of 524 hours of Welsh-language programming at a value of £20.6m. Most of the jobs S4C sustains are in the independent production sector and like most jobs in the public service broadcasting industry, they are characterised by relatively high levels of skill and pay.

14. The numbers reflect much more than the relatively small numbers working for the independent television companies themselves and take into account the employment down the supply chain.

[2]

16. Translating employment effect into value added effect shows that over the five-year period,

S4C activity has supported well over £77 million in the Welsh economy per annum.

17. "The independent production sector represents S4C’s largest expenditure category, accounting for over 80 percent of S4C’s total spending in Wales in any one year. Therefore, there is a clear need to understand that S4C’s economic impact extends beyond its direct employment which is relatively small. For example, S4C pays an independent production company to produce an agreed amount of hours of original programming. In order to produce that output the company will then purchase goods and services (e.g. camera operators, lighting equipment etc). All of these factors need to be considered when estimating the economic impact of S4C and a full understanding of the supply chain linkages is needed." [3]

18. S4C is clearly crucial to the broadcasting companies and the creative industry in Wales, not only as a commissioner that supplies them with the stable base from which they can expand and develop but as a developer of skills. The remit, management and budget of S4C are therefore vital components of the Welsh creative industries’ fortunes. It is essential therefore that the budget is adequate to ensure the base income to the Welsh independent sector. A management and authority that seeks to expand the skill-base and provide assistance in raising standards is of great value to the wider industry. Finally, it is crucial that the remit ensures not only that the money is passed on to the independent sector but that best use of it is made. The cutting of funding will clearly impact upon every independent Welsh TV company with their roots in Welsh programming, not only when the cut is passed on to the commissioning of programmes but a cut in the S4C’s development fund, aimed at developing and improving structural competitiveness of the industries – this is arguably a more serious threat than the loss of a few programmes as this impedes the ability of the independent companies to develop and compete in a global market.

19. S4C’s cultural value is enormous. If the Welsh language is to thrive and prosper, it is vital that Welsh can be seen and heard in all areas of Welsh life, especially on television. S4C is the only means of receiving Welsh television programming.

20. S4C is of particular importance to children in this regard and its support for and work with the Urdd provides Welsh children with an unique experience. The Urdd plays a vital role in the cultural, social and educational development of children in Wales as well as the Welsh language and much of its recent success is owed to the support and publicity it receives from S4C. The loss of any of this support will deprive children in Wales of the incredible experience the Urdd gives them.

21. 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. It must be noted that the funding arrangement of S4C dates back to analogue days when there were but four channels on UK television and broadcasting was restricted to analogue television. S4C has, using the funding based on an 1980s model of television broadcaster, been able to develop a digital channel, a development fund to improve the skills of the industry, web-based content and broadcasting as well as its high-definition capabilities. We see this as an impressive achievement on a budget aimed solely at delivering programming for television.

22. The quality of programming is largely a subjective issue, however recent leaks and reports of zero viewing figures have distorted the debate. Again, it is unfortunate that such debate takes place in a largely disinterested and ill-informed London-based media. Such a debate would be far more fruitful within democratic institutions with an interest in improving the channel’s service rather than running it down. A National Assembly committee for example is in an ideal position to bring the opinions of stakeholders, S4C itself and viewers together in order to map a constructive path for the channel; DCMS, whose responsibility this is, has failed miserably to do so in recent years.

23. Plaid Cymru believes that it is the responsibility of DCMS to develop the funding formula in line with developments in the industry as well as the founding principles of S4C. DCMS, through inaction and lack of interest has created a situation where a 1980s budget must stretch to cover the demands of 21st Century, multi-platform broadcasting.

24. 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. We agree that there may be potential for increased efficiency and effectiveness in delivering Welsh-language media services through improved partnership between the BBC and S4C. This partnership has been a feature of S4C’s many successes in the last 30 years. Cooperation over the possible ‘Media Village’ project in Cardiff for example could prove fruitful for both broadcasters as well as the wider creative industry in Wales.

25. We believe however that the influence of Wales (indeed Scotland and NI as well), upon the strategic decisions in the field of Public Service broadcasting has declined in the devolution years. This is reflected in the failure to devolve more of the BBC's programming outside of England. BBC’s commissioning is still woefully un-balanced with only 413 hours (2.5%) out of 16,585 hours of its programming being produced outside of England – the vast majority is produced within the M25. Regional broadcasting has declined in quantity and arguably quality, certainly in its diversity with the vast majority now news related. Also, the 2006 BBC Charter diminished the influence of the nations further.

26. Regional Broadcasting decline between 2005 and 2009

BBC Wales (at a time when the license fee increased)

Regional Output fell from 824 hours to 696

News & current affairs from 500 to 420 (16% fall)

Other programming from 324 to 276

27. Looking at these trends, as well as the recent cut in BBC funding of Welsh-language programming, it is hard to see any immediate benefits to the Government’s plans for bringing S4C under the BBC. The BBC has not shown much commitment to improving and diversifying its Wales-orientated output in any language in recent years.

28. With the funding coming from the BBC’s budget there will be pressure to bring much of the production and editing in-house, thus further jeopardising the futures of the independent companies.

29. Crucially, the editorial independence of S4C will be compromised. We see the current government plans as a direct threat to the editorial independence of S4C and will damage the already fragile measure of plurality that is on offer to Welsh television viewers.

30. 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.

Plaid Cymru strongly believes that it is time to devolve the responsibility, powers over the remit, and budget of S4C to the Welsh Assembly Government.

31. We believe that there is a lack of interest or willingness to develop the role of the channel by DCMS. There is a lack of understanding of the channel’s cultural and economic importance to Wales within DCMS. These have been exemplified by the unwillingness to constructively develop the role of S4C and the shockingly flippant attitude shown towards laws intended to protect the channel as well as the arbitrary nature of these very deep cuts.

32. We believe also that the ‘behind closed doors’ decision, with no consultation, to move S4C under the BBC shows a disturbing lack of transparency, a disregard to the democratic process as well as a complete lack of respect by the Minister and his department toward Wales and its democratically-elected Government.

33. This recent ‘track record’ shows that the DCMS is incapable of responsibly overseeing S4C.

34. The National Assembly for Wales on the other hand has shown an interest in developing the role of S4C as well as addressing the wider concerns within the field of Broadcasting in Wales. It has commissioned major reviews into the creative industry and the role of public service broadcasting as well as holding cross-party committees on broadcasting, consulting widely with stakeholders. It is the settled opinion of all parties in the National Assembly for Wales that there is much work to be done in the field of Welsh broadcasting to ensure plurality, quality, competition and excellence in the field in Wales. DCMS has however shown no such commitment or willingness, however the key powers still remain at Westminster.

35. Plaid Cymru would also argue that much more than the powers, budget and remit of S4C should be devolved. We believe that it is time that the whole field of Broadcasting in Wales is fully devolved to the democratically elected Government of Wales.

36. We believe that the National Assembly for Wales should have the power to;

a. Set the budget of S4C. We suggest that this should be set in an Assembly Measure similar to Westminster before the Minister began changing law without consultation or democratic legitimacy.

b. Set the remit of S4C.

c. Secure a BBC trust for Wales and make appointments to it as well as the S4C Authority and Ofcom boards.

d. Establish formal procedures to ensure that the opinion of the NAW can be expressed effectively in the field of Broadcasting

e. Allocate FM frequencies in Wales and ensure that Welsh DAB stations are available to all

f. Influence the way in which the ITV license is determined in Wales. Currently, as an ad-on to the England license, it is of little value to ITV that has resulted in a deterioration in quality and quantity of public service programming over recent years. Allocating a license for Wales alone could attract companies with a vested interest in improving the quality of programming in Wales.

37. Plaid Cymru would like to see the field of Broadcasting completely devolved to Wales at once. Devolving S4C alone will place all the focus on the Welsh language broadcaster and take attention away from the responsibilities and potential of the BBC and ITV license. There is a great risk of over-scrutinizing S4C, and neglecting English-language broadcasting in Wales which is in serious decline in both quality and quantity. This would be a missed opportunity to address the difficulties facing the Broadcasting industry with stakeholders, reflecting the will of the people of Wales and in line with the wider economic aspirations of the ERP

38. Plaid Cymru however believes that the situation facing S4C is extraordinary and the channel is faced with a crisis. We do not believe that the DCMS has either the will or understanding to remedy the crisis they have created for the channel. We strongly believe that the NAW is far more suitably placed to address this crisis in an open, democratic and effective way that has the long term interests of the people of Wales, stakeholders and Welsh economy at heart.

15 November 2010