S4C and BBC reach agreement over channel's future

The BBC has announced an agreement over the future and funding of Welsh-language broadcaster S4C until 2017.

The agreement will protect the editorial and managerial independence of S4C, while also allowing the BBC Trust to keep it accountable for all licence fee cash spent.

This concludes talks between the S4C, the BBC Trust and the UK government after last year's licence fee settlement, which established that the corporation would take over a significant proportion of its funding from 2013.

BBC Trust Chairman Lord Patten said that the agreement was "good news for the Welsh-speaking audience".

The measures include that the BBC will have a "voice" in setting S4C's objectives, but will not be able to interfere with the broadcaster's day-to-day running.

There will be regular meetings between S4C and BBC Wales to increase co-operation and cut costs, and any savings will remain with S4C. The broadcaster will also get an independent board made up only of S4C executives.

On Monday, it was announced that the Trust had informed S4C that it must find a similar level of savings to BBC Wales when it starts being funded by the BBC Licence Fee.

> S4C revamps schedule ahead of budget cuts

S4C's annual allocation is to drop by £2.2m by 2016/17 as part of the new funding relationship. It also currently receives around ten hours per week of programming from the BBC, including soap opera Pobol y Cwm, which is worth about £23m a year. That is expected to fall to about £20m from 2013/14.

In a statement, the Department for Culture, Media and Sport said that the agreement "will protect the editorial and managerial independence of S4C, while safeguarding appropriate accountability to the BBC Trust for licence fee funding spent by the service".

Lord Patten added: "This is good news for the Welsh-speaking audience. Our agreement safeguards S4C's editorial independence while ensuring effective oversight of licence fee funds. It will also forge a closer working relationship between BBC Wales and S4C, which will see savings reinvested in quality programming that viewers expect."

Huw Jones, the new chairman of the S4C Authority, said that the agreement is a "significant step forward" for the channel, which follows "detailed and protracted talks between the three parties".

He added: "This agreement will safeguard the Welsh language services provided by S4C for the foreseeable future. It will allow S4C to maintain its editorial and managerial independence, while providing accountability to the BBC Trust for income received from the licence fee, and to DCMS for its part of S4C's funding.

"The funding formula which the BBC Trust has offered for 2015-2017, and which the S4C Authority has accepted, while challenging, will provide stability for S4C and the production sector in a difficult financial climate as we identify and deliver efficiencies and build a new partnership with the BBC."