Summary: Analysis & Evidence
Policy Option 1
Description:
FULL ECONOMIC ASSESSMENT
| Price Base Year 2011 | PV Base Year 2011 | Time Period Years 4 | Net Benefit (Present Value (PV)) (£m) | ||
| Low: Optional | High: Optional | Best Estimate: NEG | |||
| COSTS (£m) | Total Transition | Average Annual | Total Cost | |
|---|---|---|---|---|
| (Constant Price) | Years | (excl. Transition) (Constant Price) | (Present Value) | |
| Low | Optional | Optional | Optional | |
| High | Optional | Optional | Optional | |
| Best Estimate | Negligible | 60 | 220 | |
| Description and scale of key monetised costs by 'main affected groups' | ||||
| S4C's budget is reduced by approximately £110m (c.£105m in constant prices) over the Spending Review period. As S4C currently spends around 75% of their budget on Welsh independent producers, much of this impact is likely to be passed on to this sector, roughly £80m over the Spending Review period. From 2013/14 the majority of S4C's funding will come from the BBC, £152.3m (c.£145m in constant prices) in total. | ||||
| Other key non—monetised costs by 'main affected groups' | ||||
| It is possible that the quantity or quality of Welsh language programs broadcast by S4C could be negatively affected. This woutd result in a cost to wider society. Up to 40 jobs out of about 160 FTE may be lost at S4C over the next 2 years Any broader impacts on jobs and output in the Welsh or UK economy are highly uncertain and will depend on wider economic factors, but this measure is not expected to have a substantial negative impact on either the Welsh or the UK economy. | ||||
| BENEFITS (£m) | Total Transition | Average Annual | Total Benefit | |
| (Constant Price) | Years | (excl. Transition) (Constant Price) | (Present Value) | |
| Low | Optional | Optional | Optional | |
| High | Optional | Optional | Optional | |
| Best Estimate | Negligible | 60 | 220 | |
| Description and scale of key monetised benefits by 'main affected groups' | ||||
| The Exchequer gains in two ways from option 1: a reduction in S4C's total budget, and a transfer of funding responsibility to the BBC. Under this option, SC4 funding will cost the Exchequer £186.7m over the Spending Review period. This is a reduction of approximately £260m (c.£250m in constant prices) compared to the existing funding arrangement. | ||||
| Other key non—monetised benefits by 'main affected groups' | ||||
| The reduced funding for S4C may stimulate efficiency gains, both within S4C and in the Welsh independent Production Sector. This would represent improved value for money in the delivery of a culturally beneficial service. Estabtlishing the revised funding arrangement provides stability of funding for S4C. | ||||
| Key assumptions/sensitivities/risks | Discount rate(%) | 3.5 | ||
| Funding under the do nothing option has been projected forward in line with RPI forecasts, as published by the Office of Budget Responsibility. The funding that S4C would have received under the do nothing option in reality could differ from these projections. For the purposes of the analysis, funding under the do nothing option does not take into account the £2m reduction in expenditure to which S4C have already agreed for 2011—12. | ||||
BUSINESS ASSESSMENT (Option 1)
| Direct impact on business (Equivalent Annual) Em: | In scope of OIOO? | Measure qualifies as | ||
| Costs: —20 | Benefits: Negilible | Net: -20 | No | NA |
