Table 4: Summary of Monetised Costs and Benefits (£m constant prices)
| Total | Average Annual | Present Value | ||
|---|---|---|---|---|
| Costs | BBC | 145 | 35 | 125 |
| S4C | 105 | 25 | 95 | |
| Total | 250 | 60 | 220 | |
| Benefits | DCMS | 250 | 60 | 220 |
| Total | 250 | 60 | 220 |
Risks and assumptions
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. In estimating the costs passed on to Welsh independent producers, it is assumed that S4C continue to spend a similar proportion of their budget on this sector after the funding change. This is uncertain and will depend upon decisions made by S4C.
Direct costs and benefits to business calculations (following OIOO methodology)
The impact on S4C is a spending decision and is therefore outside of the scope of One-in One-out (OIOO).
Competition Assessment
A reduction in budget may reduce the ability of S4C to compete with other broadcasters in comparison to the do nothing baseline.
Small Firms Impact Test
Most Welsh independent production companies are relatively small and could be classified as small and medium enterprises (SMEs). Hence an impact on these SMEs will follow once S4C decides to what extent it will reduce spending on commissioning independent productions. There is likely to be a reduction in funding from S4C to these businesses, estimated to be roughly £80m over the Spending Review period. However, independent production companies competing for a reduced budget could stimulate more efficient and innovative solutions, for example potentially resulting in firms entering into more co~production, co-funding and collaborative working.
Social Impact
The reduction in S4C's funding could potentially impact the quantity or quality of commissioned programmes. If this is the case then the positive spillovers and cultural benefits to Wales from S4C's broadcasts would be reduced as a result. However this effect is uncertain and will depend upon the extent to which S4C and production companies are able to make efficiency savings. Whilst S4C will retain its independence, closer working between S4C and the BBC could reduce plurality in the Welsh Television sector.
Statutory Equality impact Tests
We have also considered the potential effects of these proposals on protected groups under the Equality Act 2010 (age, disability, gender reassignment, pregnancy and maternity, race, religion or belief, sex, sexual orientation). Alter initial screening it has been deemed that no significant impact is anticipated.
Other specific impact tests
Other specific impact tests have been considered including Justice, Sustainable Development, Carbon Assessment, Environment and Rural Proofing. After initial screening it has been deemed that no significant impact is anticipated in any case.
