S4C has notified more than 30 Welsh TV production companies about programming cuts forced on it by the government's comprehensive spending review – a move expected to lead to hundreds of job losses over the next few years.
The Welsh-language broadcaster is starting to implement cuts amounting to 24.4% of its £102m budget over the next four years. S4C has warned that it runs a relatively lean business, meaning that any cuts would immediately hit its programming spend. S4C provides about 60% of the Welsh production sector's revenue.
It is understood that independent producers have been asked by S4C to find 10% cuts in the first year from April 2011 and most will seek to achieve this by reducing overheads, with not many shows affected .
Letters have gone out to all S4C's programme suppliers explaining which shows will carry on, continue to be discussed on revised budgets, or cut for its 2011 and 2012 schedule. S4C has no in-house production operation and spends its entire £83.5m programming budget on shows from independent producers.
S4C senior executives yesterday met members of a subcommittee of TAC, the trade body representing Welsh independent producers, to inform them that letters had been sent out informing each supplier of the impact of the cuts on their business.
"It is very simple, we have been asked to deliver the same quantity of programming at more or less 10% less next year," said a senior executive at one production company. "I suspect across most of the sector it is a similar case. They have also held back some commissioning to make sure all companies can deliver these savings. Over three or four years I can't see why those savings are not deliverable."
It is thought that production companies are being asked to look at savings of about 8% in 2012. A question mark hangs over 2013 and 2014 as S4C senior executives are not clear on the how the situation will play out with the BBC.
"It would be a big mistake if the sector was to concentrate on fighting these cuts," said the source. "The real issue is the long-term sustainability after 2013/14 under the BBC."
The letter is understood to be in roughly three parts: the first outlines which programmes have been agreed and are safeguarded for the schedule; the second lists projects "under discussion" but with revised production budgets; and the third confirms what will appear and be prioritised in the 2012 schedule.
S4C has previously said that it uses 32 production companies. A number of Welsh producers are holding staff meetings today to discuss the ramifications of the letters.
"It is time for TAC to take the lead, be proactive and not continually reacting to things," said the TAC chair, Iestyn Garlick. "We have two years before the deal [where the BBC takes over funding] comes in and there is a lot to talk about and we should start the conversation ourselves as it is all a bit vague so far."
In its own submission to Department for Culture, Media and Sport modelling the impact of a 25% cut, S4C said that programming spend would likely fall from £83.5m to around £62m – a £21m cut. From 2012 S4C's budget will total £83m annually. From 2013 more than 90% of this budget will be paid for out of the BBC licence fee.
"There are 32 production companies making programmes for S4C," said the S4C interim chief executive, Arwel Ellis Owen, earlier this week. "S4C is responsible for commissioning up to 60% of the work done by the independent production sector in Wales. If S4C didn't exist that sector would be in dire straits."
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