Welsh Affairs Committee

Oral evidence: S4C review, HC 1207

Tuesday 3 July 2018

Ordered by the House of Commons to be published on 3 July 2018.

Watch the meeting (as spoken)

Watch the meeting (in English)

Members present: David T. C. Davies (Chair); Chris Davies; Susan Elan Jones; Ben Lake; Anna McMorrin.

Questions 1-103

Witnesses

I: Euryn Ogwen Williams, author of Building an S4C for the future: An independent review

II: Huw Jones, Chair of S4C Authority, and Owen Evans, Chief Executive, S4C.

III: Margot James MP, Minister for Digital and Creative Industries, Department for Digital, Culture, Media and Sport.

Examination of witness

Witness: Euryn Ogwen Williams.

Q1                Chair: Mr Williams, diolch yn fawr iawn am ddod yma heddiw. Diolch am eich adroddiad, hefyd. Os gaf i ddweud, roedd yn adroddiad diddorol. Dwi wedi cytuno gyda beth sydd ynddo. Gaf i ddechrau â chwestiwn am yr argymhelliadau yn yr adroddiad? Yn eich barn chi, beth yw’r argymhelliad mwyaf pwysig ar gyfer dyfodol S4C? Gyda llaw, mae croeso i chi ateb yn Gymraeg neu yn Saesneg.

(Translation) Mr Williams, thank you very much indeed for coming here today, and thank you for your report, which was interesting. I agreed with what was included in it. Can I begin with a question about the recommendations in the report? In your view, what is the most important recommendation for the future of S4C? By the way, you are more than welcome to answer in Welsh or English.

Euryn Ogwen Williams: Wnai ateb yn yr iaith mae’r cwestiwn yn cael ei ofyn, os ydy hynny’n iawn. Dwi’n credu ei bod hi’n dibynnu beth yw’r cyfnod amser yr ydych chi’n sôn amdano, mewn ffordd. Mae’n debyg mai’r argymhelliad mwyaf pwysig nawr—oherwydd bod angen symud ymlaen ag ef—yw rhyddhau S4C o’r cyfyngiadau darlledu, fel nad oes yna ddim cyfyngiadau tir a daearyddiaeth, na chyfyngiadau ar ba blatfform a phethau felly.

Yn y tymor byr, mae hwnna’n bwysig, ac er bod angen deddfwriaeth ar hwnna, mae’r Llywodraeth wedi derbyn bod angen symud. Ond efallai yn y tymor hir, y peth pwysig yw’r partneriaethau—y syniad yma bod S4C yn gweld ei hun yn rhan allweddol o’r hyn sy’n mynd i ddigwydd i’r iaith Gymraeg.

(Translation) I will answer in the language in which the question is asked, if that’s okay. I think it depends on the period of time you are talking about, in a way. It is likely that the recommendation that is most important now—because there is a need to proceed and move forward—is to release S4C from the broadcasting restrictions so that there are no restrictions of a geographical nature, or in terms of which platform they operate on and so forth.

In the short-term that is important, and even though there is a need for legislation for that to happen, the Government have accepted that there is a need to move. However, perhaps in the long term the important thing is the partnerships—the idea that S4C sees itself as a key part of what will happen with the Welsh language.

Q2                Chair: Rwy’n mynd i ddod at hynny. Yn eich adroddiad, siaradoch chi gyda phlant a myfyrwyr mewn ysgolion a dweud bod y mwyafrif nawr yn gwylio ar iPads a thabledi yn hytrach na’r teledu. Ydych chi’n meddwl bod hynny yn golygu, yn y dyfodol, bod yn rhaid i ni sicrhau bod popeth yn fwy digidol ac ar-lein yn hytrach na darlledu yn y ffordd arferol?

(Translation) I’m going to come on to that. In your report you talked to students and children in schools and said that the majority of them are now viewing content on iPads and tablets rather than on television. Do you think that that means that in the future we will have to make sure that everything is available digitally and online, rather than simply in the traditional way of broadcasting?

Euryn Ogwen Williams: Hollbwysig, rwy’n credu. Mae’n rhaid i gynnwys yn yr iaith Gymraeg fod ym mhob man. Mi fydd yna offer gwahanol yn dod, mi fydd yna lwyfannau gwahanol, mi fydd popeth yn newid ac mae angen i S4C fod yng nghanol y chwildro digidol yma sydd yn digwydd. Pobl sydd yn arwain chwildro digidol, nid technoleg. Unwaith mae pobl wedi penderfynu, “Rydym ni eisiau mynd ar Facebook,” mae popeth yn dilyn. Mae’r dechnoleg ynddo’i hun yn syml—wel, dydy e ddim yn syml, ond beth sydd yn gymhleth yw cael y bobl ar y dechnoleg mae nhw’n ei defnyddio.

(Translation) That is vital. Content in the Welsh language has to be everywhere. Different equipment and different platforms will come forward. Everything will change and S4C needs to be at the heart of the digital revolution that is happening. It is people who lead a digital revolution, not technology. Once people have decided, “We want to go on Facebook,” everything follows. The technology in and of itself is very simple—well, it’s not simple, but what is complicated is getting people on to the technology that they use.

Q3                Chair: Efallai bod yn rhaid i ni ystyried os dylwn ni ddarlledu o gwbl trwy aerials a thrwy’r teledu. Pe buasai pawb yn mynd i wylio eu rhaglenni ar iPads ac ar-lein, oes pwynt o gwbl darlledu yn y ffordd rydym ni’n gwneud ar hyn o bryd? Dydw i ddim yn siwr, achos rwy’n sylweddoli bod yr un peth yn digwydd gyda rhaglenni yn Saesneg hefyd.

(Translation) Perhaps we need to consider whether we should broadcast at all through aerials and the television. If everybody were to view their programmes on iPads and online, would there be any point at all in broadcasting in the way we do currently? I’m not sure, because of course I realise that the same is happening with English-medium programmes as well.

Euryn Ogwen Williams: Dwi’n credu mai pwnc yr adolygiad nesaf fydd hwnna, ond efallai mewn rhyw 10 mlynedd eto.

(Translation) I think that that will be the subject of the next review, but perhaps in another 10 years from now.

Q4                Ben Lake: Diolch yn fawr i chi am ddod yma, Mr Williams. Mae eto’n braf cael siarad Cymraeg yn y lle yma, mae’n rhaid i mi ddweud. Pan oeddech chi’n gwneud yr adolygiad, oedd yna unrhywbeth o ran y ffordd yr oedd S4C yn gweithredu wedi eich taro yn ddiddorol? Dwi’n gwybod eich bod wedi gweithio ar y sianel ers blynyddoedd mawr. Oedd yna unrhywbeth oedd yn ddiddorol yn y ffordd yr oedd y sianel yn gweithredu?

(Translation) Thank you very much for coming here, Mr Williams. It is lovely to be able to speak Welsh here again. When you were undertaking the review, was there anything about the way in which S4C operated that struck you as being interesting? You clearly worked at the channel for many years. Was there anything you found particularly interesting about the way in which the channel operated?

Euryn Ogwen Williams: Dwi’n credu bod y ffordd mae S4C, yn y cyfnod digidol, wedi cysylltu gyda’r gynulleidfa—heb fod â’r hawl i wneud hynny bron—yn wych. Ond, wrth gwrs, mae’n straen ar y system, achos mae’r system yn gorfod cael ei chreu i ddelio gydag analog ond mae’n gorfod darparu mewn digidol. Dwi’n meddwl, yn y blynyddoedd diwethaf, bod S4C wedi llwyddo’n arbennig i wneud hynny.

(Translation) I think the way in which S4C has connected with the audience in the digital era—almost without really being entitled to do so—is fantastic. But, of course, it is a pressure on the system. The system has been created to deal with analogue but has to deliver in digital. In recent years, S4C has succeeded particularly well in doing that.

Q5                Anna McMorrin: Diolch yn fawr. Dwi am siarad yn Saesneg.

(Translation) Thank you. I will speak in English.

You have called in your report for S4C’s remit to change. Why do you believe that that is so important?

Euryn Ogwen Williams: It is always difficult for a public body if it is on the edge of being ultra vires—not that it is. A change of policy in the political world could put S4C in a very difficult situation. It is hindering them in the sense that they have to try it more warily than they would. Actually, reflecting the reality now, as the present Act reflects the reality in 1982, is essential for a public body to be able to relax and get on and do the job.

Q6                Anna McMorrin: How does the legislation have to change to bring it up to date?

Euryn Ogwen Williams: It is primary legislation, which is the problem. All it needs to do is take out the geographical restrictions and the platform restrictions, so that it becomes a distributor and a creator of content, and then it becomes the driving force of that content distribution. It is about reflecting that. When I was preparing the report, we went through it with the constitutional experts here—in the Department. It was their view that it needed a change in primary legislation. Ministers then felt that it was important that it was acted upon in good faith and that legislation would come.

Q7                Anna McMorrin: Would devolving broadcasting not answer that?

Euryn Ogwen Williams: I think the devolution of broadcasting would be even more difficult to sort out than the primary legislation. This issue came up. I found it a bit of a distraction, in a sense, because the things that S4C would have needed to have done would be no different in a devolved situation. It is a question that has to be discussed, but it is a question for political ideology, rather than the practical side of delivering a Welsh-language service and being able to do so immediately.

Q8                Anna McMorrin: Are you saying that you did not see the difficulties of having a broadcaster based in Wales that is legislated for in England?

Euryn Ogwen Williams: No. I think it was quite important for me—I come from a certain age of broadcasting. A lot of S4C’s power is because it is part of a UK ecosystem. What you get out of that ecosystem is a lot bigger. If you take yourself away from that, you lose an awful lot. It would need a very careful study to see what is lost and what is gained. I did not see that it was a fruitful area. It was not in the terms of reference, anyway. I genuinely did not think it was a fruitful area, because I wonder what devolution would do. In a sense, it is regulated at the moment by Ofcom, which is part of the UK broadcasting system. Currently, 80% to 90% of its income is funded from the ecosystem. So all of those things would have to be considered and responded to. I felt that at the present moment S4C really wanted to do something about its digital imprint and working with others on the Welsh language policy.

Q9                Anna McMorrin: On its digital imprint, you recommended establishing an “in-house digital hub” and a “Welsh language digital cluster”. What do you believe should be done to establish those things?

Euryn Ogwen Williams: I think S4C were probably on the way to doing that, and certainly what I wanted to do was to make certain that they felt there was support. The question on that was whether it should be in-house or whether it should be something that came out of the independent sector, which was delivering the long-form programmes. I felt there was an opportunity to create this small, in-house hub, which would then bring in new talent, but bring it in immediately. I think it helps that Yr Egin investment has been made. That is an ideal place for that hub to grow, because it will bring new people in. There are other financial possibilities as well, once the hub is set up. Digital changes all the time and that element has to be embedded in S4C, not something that it responds to.

Q10            Anna McMorrin: Absolutely, but a lot of this is down to funding and you recommended that no new funding should come as part of that in-house digital hub. How would S4C grow without that additional funding?

Euryn Ogwen Williams: It’s part of being S4C—it always has been. To concentrate on that challenge, there is a substantial amount of public money in already. There is a nice little commercial arm that should be used in order to help it, and you are going into an area where there is an awful lot of opportunity to bring in additional funding. There are contestable funds that are available for doing this.

Q11            Anna McMorrin: As a public service broadcaster, when you compare it with the funds of the BBC, it bears absolutely no comparison. You are talking about relatively little extra funding for a national broadcaster.

Euryn Ogwen Williams: I couldn’t go into that area because it wasn’t in the terms of reference, but had I been able to I would have felt that it was more important to have other aspects, like stability on the financial side, rather than additional funding. I think there are other, more important elements.

Q12            Ben Lake: Yn gryno iawn, pe bai gyda chi’r cyfle o bron â bod pwll enfawr o arian, a fyddech chi wedi cynnig rhywbeth gwahanol neu a fyddai’r adolygiad wedi adrodd yn ôl mewn ffordd wahanol? Neu oeddech chi’n gorfod gweithredu ac adrodd yn ôl o fewn y cyfyngiadau sydd ohoni yn y cyd-destun ehangach?

(Translation) Very briefly on that, if you were to have the opportunity of an almost huge pool of money, would you have proposed something different or would the review have reported back in a different way? Or did you have to operate and report back within the limitations that exist in the broader context?

Euryn Ogwen Williams: Doeddwn i ddim yn teimlo y byddai’n gyfrifol iawn i fynd y tu allan i’r cylch gorchwyl oedd wedi cael ei nodi. Ond hyd yn oed wedyn, rydych chi angen cynllun cyn cael arian cyhoeddus i roi i fewn iddo. Mae’n rhaid i chi wybod yn union beth ydych chi eisiau a faint ydych chi eisiau i’w wneud e. Mae yna ffynonellau gwahanol rydych chi’n mynd i fynd ar eu hôl. Roeddwn i’n trial creu sefyllfa lle’r oedd S4C yn gallu datblygu’r cynllun yna a wedyn dilyn hwnna i fyny a chreu y peth digidol newydd yma yn yr iaith Gymraeg fyddai’n gallu gyrru ymlaen yn hyderus, ond yn gwybod yn union bod sicrwydd cyllid o nawr tan 2028.

(Translation) I didn’t feel that it would be very responsible to go outside the remit of the review that had been set out. Even then, you need a plan before you get public money to put into it. You need to know exactly what you want and how much you need to do it. There are different sources that you are going to go after. I was trying to create a situation whereby S4C could develop that plan and then follow it through and create the digital hub in the Welsh language that would be able to be driven forward confidently, in the knowledge that there was stability of finance and funding from now until 2028.

Q13            Ben Lake: I aros ar y testun o gyllid, mae eich adolygiad yn gywir i ddweud bod angen diogelu annibyniaeth S4C yn y dyfodol. Un o’r cwestiynau—neu bryder—sydd wedi codi yw bod y cyllid yn dod trwy drwydded y BBC efallai yn cael effaith ar hynny. Oedd hynny’n rhywbeth ddaeth i’r amlwg i chi—y ffaith bod y cyllid yn dod trwy’r setliad teledu yn cael effaith o gwbl, un ffordd neu’r llall, ar allu S4C i weithredu’n annibynol?

(Translation) Staying on the subject of funding, your review is correct in saying that the independence of S4C needs to be secured and protected in the future. One concern that has arisen is that finance comes through the BBC licence, which might have an impact on that. Did it become apparent to you that funding coming through the television licence settlement had any impact at all—one way or the other—on S4C’s ability to operate independently?

Euryn Ogwen Williams: Y peth pwysig cyntaf i fi oedd annibyniaeth S4C, a wedyn roedd rhywun yn dechrau o’r fan yna. Bues i’n holi cryn dipyn i sicrhau, o safbwynt y Llywodraeth, mai yr hyn sy’n cael ei ddweud yw mai ffi drwydded ydy hi, nid ffi drwydded y BBC na ffi y BBC—ffi drwydded, lle mae’r Ysgrifennydd Gwladol yn edrych ar S4C, y ddau beth. Yn y cyd-destun yna, roeddwn i’n teimlo’n hyderus bod modd mynd i’r cyfeiriad yma. Wedyn, ar ôl i’r BBC ac S4C arwyddo’r cytundeb—rhyw hanner ffordd trwy’r adolygiad wnaethon nhw arwyddo cytundeb newydd—roeddwn i’n teimlo’n reit hyderus wedyn bod y cytundeb yma’n clymu popeth i fewn tan 2028, fel nad oedd yna unrhyw beryg bod annibyniaeth S4C yn cael ei beryglu.

(Translation) The first most important thing to me was S4C’s independence, and one then started from there. I asked quite a lot of questions to ensure that, from the Government’s point of view, it is the licence fee—not the BBC licence fee or the BBC fee, but the licence fee, and that the Secretary of State looks at S4C and those two things. In that context, I felt confident that it was possible to move in this direction. Then, after the BBC and S4C signed the agreement—they signed a new agreement about halfway through the review—I felt very confident that this agreement would tie everything together until 2028, so there was no danger that S4C’s independence would be jeopardised.

Q14            Ben Lake: Ydych chi’n ddigon hapus y bydd y model cyllidol yn addas hyd at 2028?

(Translation) Are you happy that the funding model will be appropriate and suitable up to 2028?

Euryn Ogwen Williams: Mae yna un broblem, ond doedd hon ddim yn rhan o’r adolygiad oherwydd lefel yr arian. Mae yna broblem rhwng beth sy’n digwydd ar ôl y CSR nesaf. Fy nealltwriaeth i yw ei fod yn cario ymlaen ar y lefel yma, yn dod o’r Llywodraeth, tan bod y drafodaeth lle mae S4C yn cyflwyno’r achos ar gyfer y cyfnod ar ôl 2022.

(Translation) There is one problem, but it was not part of the review because of the level of funding. There is a problem with what will happen after the next CSR. My understanding is that it will continue at the present level, coming from the Government, until the discussion when S4C puts forward its case for the period after 2022.

Q15            Ben Lake: Ond byddai’n deg i ddweud bod angen i ni fel Pwyllgor ac Aelodau o Gymru gadw llygad?

(Translation) But would it be fair to say that Committee members and Members from Wales need to keep a watchful eye?

Euryn Ogwen Williams: Yn sicr. Rwy’n credu bod hwnna’n elfen beryglus—y ddwy flynedd yna.

(Translation) Yes, certainly. That is a dangerous element—those two years.

Q16            Susan Elan Jones: Yn eich barn chi, Mr Williams, beth yw ystyr annibyniaeth y sianel?

(Translation) In your view, Mr Williams, what is the meaning of the channel’s independence?

Euryn Ogwen Williams: Yr hawl i’r bobl sydd wedi cael y swyddogaeth o edrych ar ei hôl hi i wneud penderfyniadau heb fod yn ddibynol ar wleidyddion, masnach nag unrhyw gorff arall. Mae’r grŵp bach yma yn dehongli beth yw rôl y corff yma yn y gymdeithas mae’n nhw’n gweithredu ynddi. Maen nhw’n annibynol i wneud hynny o ran penderfyniad y rhaglenni—yn olygyddol maen nhw’n rhydd—ac o ran sut mae strwythur y peth yn gweithio, nad ydyn nhw’n gorfod modelu eu hunain ar unrhyw strwythur o’r tu allan.

(Translation) It is the right for the people who have been given the function of looking after it to make decisions without relying on politicians or commercial considerations, or indeed on any other body. That small group interprets the role of the body in the society in which they operate. They are independent in terms of programme decisions—they are free editorially—and in terms of the structuring of things, they do not have to model themselves on any other external structure.

Q17            Chris Davies: It is interesting to hear your comments, Mr Williams. On your last comment, in particular, do you ever see S4C being in a position where it would be outside a certain element of Government control, because there would be no Government funding going into S4C?

Euryn Ogwen Williams: No. I don’t think it works in that way because of our tradition of public service broadcasting in the UK. Because S4C has grown out of that tradition—it was built on to that tradition in 1982—it has never really left the mainstream, which is why I would be worried about going in another direction, unless we worked out all the details.

The fact that it is funded from outside makes no difference; the BBC will always be the BBC, even if it doesn’t receive Government funding. In fact— particularly in the past, but I think even in the future—it is quite important for the public service broadcaster to have some distance from the Government. The closeness of politics to public service broadcasting is never a good thing.

Q18            Chris Davies: Okay. I have two quick questions. Following on from that particular point, the National Audit Office is not fully responsible for auditing S4C, which came up in your review. Did you find that surprising?

Euryn Ogwen Williams: Yes and no. Nobody had looked at this for 35 years, so it was still operating under a system where it got all its money from ITV. The independent television system funded S4C for 10 years. It just ran like a company that was then regulated, but never licensed, by the IBA.

It wasn’t surprising, and I found it was important to tackle this straight away, because you would want to keep S4C independent of the BBC, with institutions as well. The NAO is a good institution to do this because it audits the BBC. It will now audit S4C and, hopefully, because they are separate, it will be fair to both.

Q19            Chris Davies: Interesting. Finally, you mentioned that you “came from an age”—I think was your quote. Well, I came from a similar age, but watching TV rather than making TV programmes. I remember that when I was a child, the Welsh language was brought to the BBC mainstream, so you would watch it in the course of programmes. My question really is, do you think the Welsh language would benefit from being on mainstream television channels, and do you think that S4C would benefit from having English programmes, bringing viewers to S4C?

Euryn Ogwen Williams: I think the digital revolution changes everything really. People now watch their own personal television. It is one-to-one, not one-to-many. The importance of channels running sequences of programmes is getting less and less. In fact, it is about the brand of the programme, whatever channel it is on. Many programmes appear on loads of channels straight after each other; that is the food of the industry.

At the moment, it is about a concentration on the Welsh language, but using digital means—becoming a digital organisation using big data and being able to relate to individuals wherever they live in the world and in whatever language. Even Netflix uses subtitling. It buys material in Spanish, Portuguese and different languages, subtitled into the language that the one viewer who is viewing it at that particular moment chooses. S4C has to be part of that, within the UK public service broadcasting structure.

Chris Davies: That’s very interesting. I must definitely still be of an age because I have not got that.

Euryn Ogwen Williams: Don’t worry about it!

Chris Davies: Thank you.

Q20            Susan Elan Jones: I droi at Awdurdod S4C, dydych chi ddim yn ffan mawr o’r strwythur fel y mae, nag ydych?

(Translation) Turning to the question of the S4C Authority, you are not a big fan of the structure as it is, are you?

Euryn Ogwen Williams: Na, achos dydw i ddim yn teimlo ei fod yn rhywbeth sy’n addas ar gyfer yr oes ddigidol. Yn yr oes ddigidol, mae angen cyrff sydd yn gallu ymateb yn gyflym ac yn sionc—nimble, felly—sydd yn gallu ymateb i unrhyw sefyllfa fel mae’n codi. Dydw i ddim yn credu bod hen strwythur analog awdurdod cyhoeddus—cyfarwyddwyr sydd yn cyfarfod bob mis, sydd yn cymryd gwahanol rhannau—yn addas. Mae angen bwrdd, a dyma welodd y BBC. Felly, roeddwn i’n gweld bod y ddadl wedi cael ei gwneud yn y BBC ac yn sicr, byddai S4C yn gallu elwa o gael yr un strwythur â’r BBC yn yr achos yma, sef yr Awdurdod yn troi’n fwrdd, efo’r execs a’r non-execs arno.

(Translation) No, because I do not feel that it is appropriate for the digital age. In the digital age there is a need for bodies that can respond quickly and in an agile way—that can be nimble and respond to any situation as it arises. I do not think that happens in the old analogue structure of a public authority with directors who meet every month and take different parts. I think there is a need for a board. That is what the BBC saw. I saw that the argument had been made within the BBC. Certainly, S4C would benefit from having the same structure as the BBC in this case, which is the Authority becoming a board with the execs and the non-execs on it.

Susan Elan Jones: Efallai, ond heb unrhyw awdurdod annibynnol, pwy fydd yn rhoi’r sialens o’r tu allan i waith y sianel, os oes na ddim rôl cryfach i Ofcom?

(Translation) Maybe, but who would challenge the work of the channel from outside without there being an independent authority? Who would set the challenge if Ofcom does not have a stronger role?

Euryn Ogwen Williams: Roedd hwn yn gwestiwn diddorol wnaethon ni feddwl amdano. Roedd yna un awgrym wedi cael ei wneud, a thrafodais hyn gydag Ofcom, o roi trwydded Ofcom i S4C. Ond, mewn gwirionedd, mae’r holl rheoleiddio—y ffactorau o reoleiddio—yn digwydd yn barod o dan Ofcom. Felly, does dim rhaid cael trwydded i S4C. Mae S4C yn gorff cyhoeddus, mae’n atebol i’r Senedd hon, mae’n cyflwyno ei adroddiad blynyddol ac mae’n agored i gael ei holi drwy’r amser. Oherwydd ei faint, dwi’n credu ei fod yn hollol iawn. Does dim angen awdurdod arall uwch ei ben.

(Translation) This was an interesting question that we thought about. There was one suggestion made—I discussed this with Ofcom—of providing an Ofcom licence for S4C, but really all the regulation already happens under Ofcom, so there is no need for there to be a licence for S4C. S4C is a public body. It is accountable to this Parliament. It presents its annual report. It is open to question at all times. Because of its size, I think it is completely fine. I think there is no need for another authority above that.

Q21            Susan Elan Jones: Iawn. Ond beth ydych chi’n meddwl bydd y gwahaniaeth pan ydych chi’n trosglwyddo’r cyfrifoldebau ar gyfer archwilio S4C i’r Rheolwr ac Archwilydd Cyffredinol?

(Translation) Okay. What do you think will be the difference when you transfer the responsibilities for S4C audit to the Comptroller and Auditor General? What would happen after that?

Euryn Ogwen Williams: Mae yna gyfyngiad mawr ar beth mae’r NAO yn gallu gwneud. Dyna’r ydych chi’n meddwl?

(Translation) Right. There is a major limitation on what the NAO can do. Is that what you mean?

Susan Elan Jones: Ie.

(Translation) Yes.

Euryn Ogwen Williams: Mae yna gyfyngiad mawr ar faint mae’n gallu gwneud y tu allan i sicrhau bod y corff hwn yn ymddwyn yn addas. Dyna ydy’r backstop, os liciwch chi.

(Translation) There is a major limitation on how much the NAO can do outside ensuring that this body conducts itself in a proper manner. That is the backstop, if you like.

Q22            Chair: Ar y pwynt hwn, mewn gwirionedd mae pawb yng Nghymru yn adnabod ei gilydd ac os oedd gennym ni un bwrdd, mae’n debyg byddwn ni’n tynnu pobl o bwll bach ac mae’n debyg y byddan nhw’n nabod ei gilydd. Beth sydd yn fy mhoeni i am un bwrdd yw’r posibilrwydd y byddwn yn colli’r gallu i graffu. Dydw i ddim yn siwr y byddai gan y non-execs ddigon o bellter o’r execs i wneud y swydd yn iawn. Beth ydych chi’n meddwl?

(Translation) Just on this point, in reality everyone in Wales knows each other. If we had just one board, it is likely that it would draw people from a small pool. It is likely that they would know each other. What concerns me is the possibility that we would lose the ability to scrutinise. I am not sure whether the non-execs would have enough distance from the execs to do the work properly. What do you think?

Euryn Ogwen Williams: Na. Rydyn ni beth ydyn ni. Mae’r hen system wedi gweithio’n iawn, ar wahan i un neu ddau achlysur. Y broblem yw dyw e ddim yn addas ar gyfer byd sydd yn symud mor gyflym. Mae rhy ara’ deg, a dyw e ddim yn debyg i unrhyw fusnes chwaith. Mae yna rhywbeth hen ffasiwn amdano, yr hen strwythur. Mi ddaw’r bobl; mae’n rhaid i ni gredu.

(Translation) No. We are what we are. The old system has worked well, apart from on one or two occasions. The problem is that it is not suitable for a world that is changing so rapidly. It is just too slow. It is not like any business either; there is something quite old-fashioned about the old structure. People will come; we have to believe that.

Q23            Chair: Cwestiwn arall i gloi. Yn argymhelliad 3, roeddech yn siarad am bartneriaeth gyda Llywodraeth Cymru i helpu hybu’r iaith Gymraeg, ond beth sydd yn fy mhoeni ychydig bach am hynny, unwaith eto, yw pe buasai S4C yn cael rhyw fath o bartneriaeth gyda Llywodraeth Cymru, oes posibilrwydd y bydden nhw’n colli eu gallu i graffu ar y Llywodraeth pe tasen nhw’n rhy agos ac yn dibynnu ar Lywodraeth Cymru am ariannu?

(Translation) I have another question to conclude. In recommendation 3, you spoke about a partnership with the Welsh Government to help promote the Welsh language. What concerns me a little about that is, once again, if S4C were to have some kind of partnership with the Welsh Government, there is a possibility that they could lose their ability to scrutinise the Government. They would be too close and dependent on the Welsh Government for their funding perhaps.

Euryn Ogwen Williams: Dyma rhywbeth sy’n bwysig i’r bwrdd newydd i fod yn ymwybodol ohono. Gweithredu gydag asiantaethau’r Llywodraeth fydden nhw, nid gyda’r Llywodraeth eu hun. Un o’r broblemau yng Nghymru yw’r syniad “homogenous” yma, mai un Gymru sydd ac nid Cymru o amrywiol ddiwylliannau. Yn y byd digidol, allwn ni ddim fforddio meddwl ein bod yn homogenous. Os oes yna hanner miliwn o bobl yn siarad Cymraeg, mae pob un o’r hanner miliwn yna yn berson unigol, gwahanol. Mae’n rhaid i S4C gael engagement gyda phob un ohonyn nhw.

(Translation) It is really important that the new board is aware of that, because operating and working with Government agencies, not with the Government themselves, is what they would do. One of the problems in Wales is this homogenous idea that there is just one Wales and not a Wales of various cultures. In the digital world, we cannot afford to think that we are homogeneous. If there are half a million people speaking Welsh, each and every one of those half a million people is an individual, different person. S4C has to engage with each one of those.

Q24            Susan Elan Jones: Rwy’n credu eich bod chi’n iawn, dydyn ni ddim yn gallu homogeneiddio neu beth bynnag yw’r gair. Ond dy’n ni ddim yn sôn yn unig am y Cymry sydd yn byw yng Nghymru ar hyn o bryd. Rydym ni’n sôn am Gymry’r byd eang. Beth ddylen ni wneud i hyrwyddo gwaith S4C i’r Cymry sy’n byw dros y byd i gyd?

(Translation) Of course you are right that we cannot homogenise, or whatever the word is, but we are talking about not just the Welsh people who live in Wales, but Welsh people around the world. What are we doing—or what should we be doing—to promote the work of S4C to those Welsh people who live all over the world?

Euryn Ogwen Williams: Mae’n haws i Owen a Huw i ateb hwnna. Yn sicr, dwi’n gweld pethau yn digwydd. Ar ochr dysgu Cymraeg, mae pethau ardderchog yn digwydd, gyda SaySomethinginWelsh yn gwthio’r ffiniau a chael pobl i fewn. Rwy’n ymwybodol bod cynnwys S4C yn ei ffyrdd digidol yn cyrraedd llawer pellach nag oedd y cynnwys analog.

(Translation) It is easier for Huw and Owen to answer that question, but I certainly see things happening. On Welsh language learning, some fantastic things are happening. SaySomethinginWelsh is one of those examples that pushes the boundaries and gets people to learn. I am aware that the content of S4C in its digital formats reaches much further than the analogue content did.

Q25            Anna McMorrin: To pick up on that, surely S4C is a broadcaster for the whole of Wales and beyond—not just within Wales—of what Wales is. As you rightly say, it is not one homogeneous culture; it represents a whole mixture of different ethnicities, races, religions and all sorts of cultures. Surely what you have proposed in terms of funding, limited powers and being governed from outside of where it represents goes against what you are actually proposing here. You seem to be talking in conflict, almost. What you are saying is absolutely right, and I completely agree with you, but to do that, there needs to be more funding, and, as you say, a guarantee that funding will be there for a public service broadcaster. Surely the duty then is to reflect that across the whole of Wales and the world in the Welsh language, to reach the million speakers we need to reach and potentially go further than that. That means reaching out not just to current Welsh speakers and learners, but to everybody in the language. How is that possible with this limited amount of funding and with it being run in an English-centric way by people who, frankly, do not care about what is going on in Wales?

Euryn Ogwen Williams: I do not want to sound like a debating society, but what do you mean by “being run”?

Chair: Gwaetha’r modd, does dim amser am ddadl.

(Translation) Unfortunately, there is no time for a debate.

Q26            Anna McMorrin: The purse strings are being held by the UK Government, and with those purse strings come those restrictions.

Euryn Ogwen Williams: I do not accept that that actually makes up the equation. I see where you are coming from, but if you put it in the context of the digital world, rather than the analogue world, in the analogue world, things may well have been different, but in the digital world, the nature of digital is so fast moving and so difficult that the last thing you want is to be controlled from outside. There are other methods of finding money than just a grant from Government.

Chair: We are running out of time a little bit.

Euryn Ogwen Williams: It is an interesting discussion.

Q27            Anna McMorrin: It is about content as well. You can say digital, and maybe there are cheaper ways of producing digital and getting that out across the world, and it is much easier to do that than with analogue, but there is still the content and the issues—

Euryn Ogwen Williams: The content has to be created and it needs to be relevant.

Q28     Anna McMorrin: If you look at Channel 4 as a model, which is in English, S4C needs to be of that ilk, as big as that and funded properly. It is not being funded properly.

Chair: Diolch, Mr Williams. Diolch am adroddiad mor ddiddorol.

(Translation) Thank you very much Mr Williams. Thank you very much for a very interesting report.

Examination of Witnesses

Witnesses: Huw Jones and Owen Evans.

Q29            Chair: Diolch yn fawr i Mr Evans a Mr Jones am ddod yma unwaith eto.

(Translation) Thank you very much Mr Evans and Mr Jones for coming here once again.

Q30            Ben Lake: Diolch yn fawr iawn i chi am ddod prynhawn yma. I ddechrau, pa gasgliadau o’r adolygiad oeddech chi’n croesawu fwyaf ac oedd yna unrhyw gasgliadau nad oeddech chi’n eu croesawu?

(Translation) Thank you very much for coming here. To begin, which of the review’s findings did you most welcome and were there any findings that you did not perhaps welcome as much?

Huw Jones: Yn sicr, roedden ni’n falch iawn i ddechrau bod yr adolygiad wedi cael ei gwblhau a bod ymateb y Llywodraeth yn ymddangos yr un pryd. Mae hyn yn golygu bod barn y Llywodraeth ynglŷn â’r cynnwys yn glir ac ein bod yn gallu symud ymlaen yn gyflym ar sail hynny.

Y ddau argymhelliad yr ydym yn falch iawn o’u gweld yno ydy, i ddechrau, yr argymhelliad bod angen newid cylch gorchwyl S4C i fod yn gymwys ar gyfer y byd digidol. Fel roedd Euryn yn dweud, roedd y cwestiwn ynglŷn ag oedd gweithredu’n ddigidol, heb remit oedd yn dweud y dylen ni neud hynny, yn ultra vires neu beidio yn rhywbeth mae corff cyhoeddus yn gorfod meddwl amdano. Felly, mae cael y sicrwydd yna y bydd y cylch gorchwyl yn newid maes o law yn beth pwysig a chryf.

Yr ail beth wedyn oedd—fel y bydd y Pwyllgor yma yn cofio—roedd galwad am adolygiad yn dod o’r gred bod S4C yn gwynebu cyfres o doriadau ariannol, un ar ôl y llall. Felly, roedd y cwestiwn o gael sicrwydd ariannol o ryw fath yn bwysig i ni. Gyda’r adolygiad a gydag ymateb y Llywodraeth, dwi’n meddwl ein bod wedi cael tynnu llinell yn y tywod ac awgrym cryf bod toriadau drosodd ac y gallwn edrych ymlaen i’r dyfodol ar sail sefydlogrwydd. Dyna’r ddwy elfen rydym ni’n croesawu’n fawr yn yr adolygiad yma. Mae yna bethau eraill hefyd yr ydym yn hapus iawn i’w gweld nhw’n cael eu gweithredu, ac y byddwn yn cydweithio’n agos gyda’r Llywodraeth i’w gweld nhw’n cael eu gweithredu.

(Translation) First, we were very pleased that the review was completed and that the Government’s response appeared at the same time, which means that the Government’s view of the content is clear and we can proceed quickly on that basis.

We are particularly pleased with two recommendations. The first, the recommendation that there is a need to change the remit of S4C to be eligible for the digital world. As Euryn said, the question of whether operating digitally without a remit that stated that we should do that was ultra vires or not is something that a public body has to think about. Having that certainty that the remit will change in due course was an important and strong element.

Secondly, as the Committee will remember, the call for a review came from the belief that S4C was facing a series of financial cuts, one after the other, so having financial certainty of some kind was important to us. What we have had with the review and the Government’s response is the drawing of a line in the sand and a strong suggestion that cuts are over, and that we can look forward to the future on the basis of stability. Those are the two elements that we welcome greatly in this review. There are other elements that we are very happy to see implemented. We will work closely with the Government to see them through.

Q31            Ben Lake: Oedd unrhyw beth oeddech chi ddim yn croesawu? Oedd yna rhywbeth byddech chi wedi hoffi gweld yn cael ei gynnwys?

(Translation) Was there anything that you did not welcome, or something that you would have liked to see included?

Huw Jones: Un peth, efallai. Bydden ni’n derbyn nad oedd hwn yn ein cylch gorchwyl, ond cyn i’r cylch gorchwyl gael ei ddiffinio, roedden ni wedi gobeithio efallai y byddai ganllawiau i sefydlu beth fyddai’r Ysgrifennydd Gwladol yn y dyfodol yn ystyried wrth benderfynu lefel cyllido S4C. Mae’r adolygiad yn cyfeirio at gymal sydd yn y cytundeb fframwaith rhwng y BBC a’r Llywodraeth, sydd yn dweud ar ôl i’r adolygiad o S4C gael ei gyhoeddi, bydd y Llywodraeth yn datgan beth fydd y broses, maes o law, o benderfynu ar lefel ariannu S4C. Felly, mae hwnna’n rhywbeth sydd i’w gwblhau eto.

(Translation) There was one thing, maybe. I accept that this was not in the terms of reference, but before the terms of reference were defined, we had hoped that there would be guidelines for establishing what the Secretary of the State in the future would consider in determining the level of funding for S4C. The review refers to a clause, which is in the framework agreement between the BBC and the Government, which states that after the review of S4C has been published, the Government will state what the process will be in due course in determining the funding of S4C. That is something that is yet to be completed.

Q32            Ben Lake: Ydy hwnna’n rhywbeth mae’r Llywodraeth wedi cysylltu gyda chi amdano? Ydych chi wedi bod mewn unrhyw drafodaeth gyda’r Llywodraeth hyd yn hyn, neu ydych chi’n disgwyl cael y drafodaeth?

(Translation) Is that something that the Government are in contact with you about? Are you in discussions with the Government in that regard thus far, or are you anticipating having that discussion?

Owen Evans: Rydym ni wedi dechrau trafod yn barod. Yn amlwg, mae’n sbel eto nes bod hwn yn gorfod cael ei gwblhau ond, fel oedd Huw yn dweud, efallai buasen i wedi licio gweld mwy o “ground rules” o gwmpas y peth. Rydym ni wedi dechrau’r trafodaethau yna yn barod.

(Translation) We have already started speaking. Clearly, there is some time yet before this will be completed but, as Huw said, I would have liked to see more ground rules around this—but we have started those discussions already.

Q33            Ben Lake: Un peth wnaeth Mr Williams sôn amdani oedd effaith posib y comprehensive spending review. Ydy hwnna’n rhywbeth yr ydych chi wedi cael cyfle i godi gyda’r Llywodraeth? Ydyn nhw wedi rhoi unrhyw sicrwydd neu bach fwy o wybodaeth ynghylch hynny? Dwi’n ymwybodol bod y Gweinidog yn dod i mewn ar ddiwedd y panel yma. Mae’n rhywbeth gallwn ni godi gyda’r Gweinidog—yn syth bin, os oes rhaid.

(Translation) One thing that Mr Williams talked about was the possible impact of the comprehensive spending review. Is that something you have had an opportunity to raise with the Government? Have they given you any assurance or further information about that? I am aware that the Minister is coming in at the end of this panel. Perhaps that is something we can raise with the Minister—immediately, if we need to.

Owen Evans: Gawsom ni sylwadau eithaf clir pan gafodd yr ymateb ei gyhoeddi gan yr Ysgrifennydd Gwladol, Matt Hancock, ond hefyd efo Alun Cairns, ar ba mor bwysig oedd sefydlogi’r £7 miliwn dros y tair blynedd nesaf. Rydym wedi bod mewn trafodaethau efo’r Adran yn barod. Dwi’n gwybod bod y CSR yn torri ar draws ond, wrth gwrs, dyma un o’r pethau mae’n rhaid i ni wneud yn siwr sy’n digwydd dros y blynyddoedd i ddod.

(Translation) We had some quite clear comments when the response was published by the Secretary of State, Matt Hancock, but also from Alun Cairns, about how important it was to stabilise the £7 million over the coming three years. We have had discussions with the Department already. I know that the CSR interjects that but, of course, this is one of the things that we have to make sure takes place over the coming years.

Q34            Chris Davies: Mr Williams mentioned further areas for funding outside of Government funding. Could you just add a little more on what those would be and how you would expect to gain funding from them?

Owen Evans: Being a good west Walian and someone from Ceredigion, I’m always looking, as Ben will know, for other sources of funding for things. I think S4C has relied on its own funding over the years.

I think at the moment there is a fair opportunity for S4C to look beyond its own funding arrangements, to look for other funds. There are things like the creative clusters programme, which has come up from DCMS and which we’re currently bidding for, along with Cardiff University, Cardiff Metropolitan University and the University of South Wales. That’s looking at research around data and how we can use that research to underpin our data hub.

The second is the contestable fund, which I’m sure the Minister will talk about later. This is a fund to support programmes for children but also programmes involving minority languages. So within S4C we have a team looking at how we can tap into that, while looking at other areas of funding as well, where clearly it’s within our strategic remit to pursue those areas, and see where we can then try to leverage the money that we’ve got to do things with a little more capacity around them.

The one thing I would like to make clear, though, is that we’re not going to turn into grant farmers. We will stick to what we’re there to do and we will try to deliver what we’re there to do, rather than just looking for money for money’s sake.

Q35            Chris Davies: Would it be fair to say of any organisation that if the Government were to give them £1 million, they could happily spend £10 million? One can sit back and just let that money roll in and not go out and be hungry and look for it themselves. But you are, as an organisation, going out and you are hungry for outside commercial money.

Owen Evans: We are. The budget has been cut by 30% over the past seven years or so. We’re back to bare bones in some areas. So, to swing the investment, particularly the scale of investment we need in some areas to compete, we are having to look beyond just the money we get from DCMS. But I think that’s common for all organisations now.

Huw Jones: I think it is worth mentioning that over the past five years one of the factors that we have been faced with is that we don’t have the rights to our own programmes; we re-buy a licence to broadcast programmes. The rights are held by the independent producers, unless we put in commercial funding as additional funding.

Despite that, over the past five years there has been something like £15 million of funding that has just come in to add to S4C’s money to make the programmes that are shown on S4C, as co-production funds, a lot of which is pre-sales against international distribution. So I think that shows us working in partnership with our programme makers and with other funding agencies, distributors and other broadcasters to maximise the potential of the material that we need to make for our own needs in any case.

Q36            Chris Davies: I will just go slightly off piste, Chairman, if I may. You talked about your distributors. We heard a great deal about digital across the world. One would expect that the vast majority of Welsh speakers, wherever they may be in the world, would know that there is an S4C—that there is a Welsh language channel. So, my question is this: how are you going to increase S4C’s numbers? How are you marketing it? What are you doing?

Huw Jones: We have got some limitation to start with, because we are rights-limited in terms of territories. With the programmes we make, the rights are bought for the territory of the United Kingdom, unless we in some way negotiate additional rights in advance, for example worldwide rights. Very often that’s not easy, because you’ve got, for example, limitations on the use of music, sport will have a restriction to it, and drama will quite often have actors’ fees based on the fact that it’s for a single territory—that is, the UK. So you’ve got lots of limitations, but even with those limitations we’re very keen that we get out as far as we can.

Owen Evans: It is probably worth mentioning that we are currently in negotiation with various distributors, but also the other Celtic nations, about how we distribute and market things on a joint basis. We have seen what the Scandinavians are doing, for example. They are very efficient at coming together and using their collective clout.

When we are looking at where we think there is an opportunity to sell a programme internationally, the programme is probably going to cost more because we want to put more creative content into it and better protection values; it may also cost more because we are going to pay for the extra distribution rights up front. We are in negotiation with distributors already about future projects that we are working on.

Q37            Chris Davies: Sorry, but I am still a bit unclear on the territorial limits that you have. When we want to push the Welsh language across the world, are you saying you cannot do that because of various legal frameworks across the world? Or are you saying there is a way to do it, but you are just not doing it yet?

Owen Evans: It is money. On future programmes, if we decide, “This is a great programme—we have a great format and we are going to market it internationally,” we need to ensure that we have the rights bought up front. That usually involves a slightly higher payment than otherwise. If we did that for all our programmes it would, of course, mean the budget would decrease for how many programmes we could make. We have to be quite selective about which programmes we think are the ones we can distribute and for which there would be a demand internationally.

Q38            Susan Elan Jones: Gan ddefnyddio geiriau Saesneg, mae adolygiad Mr Williams yn dweud eich bod chi “slightly behind the curve”. Ydy hynny’n ddigon teg?

(Translation) Mr Williams’s review says that you are “slightly behind the curve”. Is that a fair judgment?

Huw Jones: Yn y cyd-destun digidol?

(Translation) In the digital context?

Q39            Susan Elan Jones: Ie.

(Translation) Yes.

Huw Jones: Fel rydym ni wedi sôn, dydy hi ddim yn afresymol i ddweud hynny, yn bennaf oherwydd rydym ni wedi teimlo nad oedd gennym yr hawl i fynd tu hwnt i’r remit ffurfiol. Ond dw i’n meddwl, eto fel dywedodd Mr Williams, mae yna gamau eithaf pwysig wedi eu cymryd i fynd i’r cyfeiriad digidol, ond yn sicr rydym ni’n gweld bod yna lawer iawn mwy sydd angen ei wneud ar fyrder, ac mae Owen yn arwain strategaeth ar hynny ar hyn o bryd.

(Translation) As we have mentioned, it is not unreasonable to say that, predominantly because we have felt that we have not had the entitlement or the right to go beyond the formal remit. As Mr Williams said, some quite important steps have been taken in moving in the digital direction, but certainly we see that there is still far more yet to do, as a matter of urgency, and Owen is leading the strategy on that at the current time.

Q40            Susan Elan Jones: A fyddai’n bosib i chi siarad dipyn bach am eich cynlluniau ar gyfer y dyfodol?

(Translation) Would it be possible to speak a little about your plans for the future?

Owen Evans: Wrth gwrs. I ateb y cwestiwn cynt, ydyn. Os edrychwch chi ar bethau fel Netflix, neu iPlayer, neu sawl platfform ar draws y byd, dyw’r “capabilities” sydd efo ni ddim yr un peth â beth sydd efo nhw, ac felly rydym ni wedi cytuno ar strategaeth fydd yn cael ei chyhoeddi fis yma yn y Sioe Frenhinol.

Mae yna ddwy elfen o gwmpas beth rydym ni’n ceisio’i wneud. Yr ochr gyntaf yw o gwmpas cynnwys. Rydym ni wedi gweld twf aruthrol yn y flwyddyn ddiwethaf yn ein pecynnau o raglenni Hansh ar gyfer pobl ifanc, sydd gan amlaf ddim yn cael eu darlledu ar y brif sianel. Maen nhw’n cael eu darlledu dros Facebook, YouTube a phethau fel yna, ac mewn fformat sydd braidd yn wahanol i’r fformat rydym ni fel arfer yn ei ddefnyddio—“short form”, fel maen nhw’n ddweud, felly pecynnau bach pum munud. Mae hynny wedi bod yn llwyddiant ysgubol, ac yn y flwyddyn nesaf byddwn ni’n esblygu beth rydym ni’n ei wneud o gwmpas Hansh a rhaglenni fel yna, achos mae i weld yn gweithio.

Ar yr ochr isadeiledd, fel dwi’n ei alw, un o’r pethau na allwn ei wneud eto yw personoleiddio. Rym ni’n anfon e-bost y mis yn dweud wrth bobl pa raglenni sydd i ddod. Ble licen ni fod yw mewn sefyllfa ble alla i anfon e-bost, tecst, Twitter, Snapchat—beth bynnag—pryd bynnag rych chi eisiau, i ffeindio mas beth rych chi eisiau ei wylio dros y misoedd, wythnosau, dyddiau neu oriau nesaf. Ac o fewn hynny, mae’n rhaid i ni sicrhau ein bod ni’n casglu beth mae pobl yn licio gwylio.

Soniodd Euryn am y meddylfryd o symud o farchnata o un-i-filoedd i un-wrth-un. Ac rwy’n credu fel rym ni’n dechrau deall yn well beth mae ein gwylwyr ni’n hoffi, fe allwn ni dargedu rhaglenni at y bobl sy’n licio’r rhaglenni yn y dyfodol. Ac rwy’n credu dyna beth fydd S4C yn ei wneud yn y misoedd i ddod. Ond hefyd, wrth gwrs, mae’n rhaid i ni gryfhau yr isadeiledd chwarae rhaglenni hefyd. O fewn y mis nesaf bydd newyddion newydd am Clic—ein chwaraewr ni—yn cael ei gyhoeddi am beth rym ni’n ei wneud i sicrhau ein bod ni’n gallu cystadlu efo Netflix, iPlayer a phethau felly. Ond, wrth gwrs, dal yn gweithio ochr yn ochr efo iPlayer, achos bydd iPlayer yr un mor bwysig i S4C yn y blynyddoedd i ddod â mae e nawr.

(Translation) Of course. To answer the earlier question, we are. If you look at thinks like Netflix or iPlayer or several other platforms around the world, the capability we have is not the same. Therefore, we have agreed a strategy, which will be published this month at the Royal Welsh Show.

There are two elements around what we want to do. The first is around content. We have seen huge growth in the past year in our packages of Hansh programmes for young people. They usually aren’t broadcast on the main channel—they are broadcast through Facebook, YouTube and things like that, and in a format that is a little bit different from the usual formats we use. It is short form—small, short, five-minute packages. That has been a huge success. In the coming year, we will be evolving what we do around Hansh and programmes like that because it seems to be working.

On the infrastructure side of things, one of the things we cannot do yet is to personalise. We send out an email every month to tell people what programmes are coming forward. We would like to be in a situation where we can send out an email, a text, a tweet, a Snapchat—whatever—whenever you want, to find out what you want to see over the coming month, weeks, days or hours. Within that, we have to make sure that we collate what people like to view.

Euryn talked about the mindset of moving from marketing from one-to-millions to one-to-one. As we are starting to understand better what people like, we can target programmes to the people who like them in the future. I think that is what S4C will do in the coming months. Of course, we have to strengthen the infrastructure for programmes as well. In the coming months, there will be news about Clic—our player—on what we are going to do to make sure that we can compete with Netflix, iPlayer and so forth. But of course, we are still working alongside iPlayer, because it will be as important to S4C in the years to come as it currently is.

Q41            Susan Elan Jones: Mae’r cynlluniau yn swnio’n ddiddorol iawn, ond a fydd yna ddigon o bres i wneud popeth?

(Translation) The plans sound very interesting, but will there be enough money to do everything?

Owen Evans: “You have to cut your cloth,” fel maen nhw’n ddweud.

(Translation) “You have to cut your cloth”, as they say.

Q42            Susan Elan Jones: Chi yw’r Cardi, ynde?

(Translation) And you’re a Cardi from west Wales, aren’t you?

Owen Evans: Ie. Mae’n rhaid i ni wneud yn siwr ein bod ni’n gallu fforddio fe. Mae’r pecynnau rym ni wedi cytuno arnynt—wrth gwrs, rym ni ddim yn gallu gwneud popeth liciwn ni, achos does neb yn gallu gwneud popeth maen nhw’n licio, ond rym ni wedi costi popeth rydym ni eisiau ei wneud. Rydym ni wedi gorfod gwneud penderfyniadau am beth i wneud gyntaf, neu beth i ohirio am sbel. Ond ydyn, am nawr rydym ni wedi cael rhywbeth sy’n fforddiadwy.

(Translation) Yes. We have to make sure that we can afford it. The packages that we have agreed on—of course, we cannot do everything that we would like—nobody can—but we have costed everything that we want to do. We had to make some decisions as to what to do first or what to delay for some time, and for now we have focused on what is affordable.

Q43            Susan Elan Jones: Beth am y bobl sydd wedi gwylio S4C am flynyddoedd a blynyddoedd ac sydd yn hoffi’r hen rhaglenni? Ydych chi wedi anghofio amdanyn nhw?

(Translation) What about the people who have viewed S4C for many years and who like the old programmes? Are you forgetting them?

Owen Evans: Na, yn bendant ddim. Un o’r pethau rydym ni di bod yn gweithio arno yw digiteiddio ein archif. Un o’r pethau efallai liciwn ni weld o fewn y flwyddyn nesa—o fewn Clic, fel esiampl—yw botwm retro neu archif, neu rhywbeth felly. Yna byddwn yn mesur y galw am hen raglenni, i weld beth mae pobl eisiau gweld. Mae hynny’n eitha cyffroes, achos ar y funud rydym ni’n ail-ddarlledu eitha lot ar y sianel.

Beth liciwn i weld yw mwy o ddewis a mwy o guradu o gwmpas pa fath o hen rhaglenni rydym ni’n rhoi ar y brif sgrîn—ond nid ar y brif sgrîn yn unig, wrth gwrs. Ddylech chi gallu mynd trwy Clic, deall beth rydych chi eisiau ac efallai, yn y dyfodol, bydd Clic yn gallu e-bostio chi i ddweud, “Da chi di hoffi hwn, hwn a hwn; hoffech chi wylio hwn, hwn a hwn hefyd?”

(Translation) No, definitely not. We have been working on digitising our archive. One thing we would like to see within the coming year—on Clic, for example—is a retro button or an archive button or something like that. We will then measure the demand for our old programming, to see what people want to see. That is quite exciting, because at the moment we repeat quite a lot on the channel.

I would like to see more choice and more curation around what kinds of old programme to put on the main screen. However, it will not only be on the main screen. People will be able to go through Clic and understand what they want. Perhaps in the future, Clic will email people to say “You have liked this, this and this; would you like to view this, this and this as well?”

Huw Jones: Dwi’n meddwl bydd y cwestiwn o beth yw’r blaenoriaethau o un flwyddyn i’r llall yn rhywbeth byw iawn i’r bwrdd newydd, fel ag y mae o i’r Awdurdod ar hyn o bryd. Does dim amheuaeth, mewn maes lle mae gofyn i chi wneud fwy o bob peth, eich bod chi ddim chwaith eisiau gwneud llai o beth rydych chi’n wneud ar hyn o bryd. Mae’n her ac mi fydd dewisiadau anodd iawn i’w gwneud.

Un o rheini bydd y cwestiwn o sut i gynnal sianel sydd yn llawn pethau newydd bob dydd o’r wythnos heb ormod o ail-ddangosiadau. Dyna sydd yn tueddu digwydd pan dyw’r arian ddim yn mynd digon pell: mae’r gofod yn derbyn ail-ddangosiadau yn lle darllediadau newydd. Rydym ni’n gwybod, yn enwedig gyda chynulleidfa deyrngar, hŷn efallai, sydd yn disgwyl eistedd lawr o flaen y teledu bob nos, mai dyna beth maen nhw’n mynd i weld os nad ydym ni’n ofalus iawn. Mae yna falans.

Pan ddown ni i drafod y bwrdd unedol ac ati, un o gyfrifoldebau sylfaenol yr aelodau anweithredol bydd i gytuno strategaeth o flwyddyn i flwyddyn ac i orchwylio’r strategaeth yna yn erbyn gofynion gwylwyr o bob math, o bob oed, lle bynnag maen nhw.

(Translation) I think the question of what the priorities are from one year to the next will be a living thing for the new board, as it is for the Authority at the current time. There is no doubt that, in a time when we need to do more of everything, we don’t want to do less of what we do at the current time. It is a challenge, and some very difficult choices will need to be made.

One of those will be the question of how to maintain a channel that is full of new things every day of the week with not too many repeats. That is what tends to happen when the money doesn’t go far enough: repeats are played, rather than new broadcasts. We know that the loyal, perhaps older audience who expect to sit down in front of the television every night, will see that if we are not very careful. There is a balance to be struck.

When we come on to discussing the unitary board and so forth, it will be one of the fundamental responsibilities of the non-executive members to agree on a strategy from year to year and to have oversight of that strategy against the needs of viewers of all types and all ages, wherever they are.

Susan Elan Jones: Mae hynny’n sialens mawr oherwydd natur y sianel, on’d ydy? Diolch yn fawr i chi.

(Translation) That is a big challenge because of the nature of the channel, isn’t it? Thank you.

Q44            Ben Lake: Yn gyflym iawn ar y pwynt yna, yn enwedig o ystyried cydweithio gyda iPlayer, byddwn i’n tybio, yn y tymor byr, mae sicrhau bod rhai o rhaglenni S4C yn cael eu gweld yn fwy amlwg ar iPlayer yn bwysig. Gwn i ddim os yw hyn wedi digwydd neu beidio, ond rwy’n cael yr argraff bod yr amlygrwydd ar gyfer rhaglenni S4C wedi lleihau tipyn yn y blynyddoedd diwethaf. Oes na unrhyw fodd—algorithm neu rhywbeth felly—i gynyddu’r ffordd mae rhaglenni S4C yn cael eu ddangos ar brif dudalen iPlayer? Ydy hynny’n rhywbeth gallech chi drafod gyda’r BBC yn uniongyrchol, neu ydy e’n bach yn rhy gymleth?

(Translation) Quickly on that point, especially with regard to working with iPlayer, I imagine that, in the short term, ensuring that some of the S4C programmes are seen more prominently on iPlayer is important. I do not know if this has happened or not, but I get the impression that prominence of S4C programmes has reduced considerably. Is there any way—such as an algorithm—of increasing the prominence of S4C programmes shown on the main iPlayer page? Is that something that you could speak to the BBC about directly, or is it too complicated for that?

Huw Jones: Mae’r defnydd o’r iPlayer yn un o’r pedwar pwnc penodol yn y cytundeb partneriaeth newydd rhyngddon ni a’r BBC. Dwi’n meddwl mae’r ateb ydy: yn sicr, byddwn i yn disgwyl, os oes darganfyddiad bod ein presenoldeb ni ar yr iPlayer yn lleihau am ryw reswm—dydw i ddim yn siwr os yw hynny’n wir—byddwn i yn pryderu am hynny ac yn dymuno ei drafod.

(Translation) The use of the iPlayer is one of the four specific subjects in the new partnership agreement between us and the BBC. I think the answer is that we would certainly expect that, if there is a perception that our presence on the iPlayer is reducing for any reason—I am not sure if that is true or not—we would be concerned about it and we would wish to discuss it.

Q45            Ben Lake: Yw hynny’n rhywbeth gallwch chi godi mewn trafodaeth yn ddigon hawdd?

(Translation) Is that something you could raise in discussions quite straightforwardly?

Owen Evans: Ydy. Ond hefyd, wrth gwrs, mae Ofcom ar fin ymgynghori ar EPG “prominence”. Un o’r pethau mae’n rhaid i ni sicrhau sydd yn digwydd yn y dyfodol yw mai nid rhywbeth llunol, analog yn unig yw “prominence” a EPG—y “programme guide”. Mae pobl yn edrych i’r byd digidol i ddod, gyda phethau ar iPlayer, a ble mae pobl yn gallu ffeindio S4C o fewn y sianeli i gyd.

(Translation) Yes. Also, Ofcom is about to consult on prominence on the EPG. One thing we have to ensure for the future is that “prominence” and EPG—the programme guide—aren’t just linear and analogue. People will look to the coming digital world, with things on iPlayer, and where to find S4C on all of these channels.

Q46            Chair: Mae’r adroddiad hwn yn tynnu sylw at y pwysicrwydd o wneud mwy i hybu’r iaith Gymraeg, er enghraifft trwy weithio gyda Llywodraeth Cymru ac efallai ffyrdd eraill. Sut allwch chi wneud mwy i annog pobl i ddefnyddio a dysgu’r iaith Gymraeg?

Q47            (Translation) The review draws attention to the importance of doing more to promote the Welsh language, such as working with the Welsh Government and perhaps in other ways. How do you think you could do more to encourage people to learn and use the Welsh language?

Huw Jones: Mae wastad wedi bod yn amlwg—mae’n synnwyr cyffredin—bod yr hyn mae S4C yn wneud yn helpu’r iaith Gymraeg. Er ein bod ni yn dod o dan y drefn ddarlledu, a bod yr iaith yn dod o dan oruchwyliaeth Llywodraeth Cymru, eto i gyd mae’n synnwyr cyffredin y dylai fod yna feysydd lle mae’r hyn rydym ni’n wneud yn gallu gweithio ochr yn ochr â’r hyn mae asiantaethau sydd yn cael eu rheoli gan Lywodraeth Cymru neu yn derbyn arian gan Lywodraeth Cymru yn ei wneud. Fel hyn, maent yn gallu gweithio gyda’i gilydd i gael mwy o “impact” na pe tasen nhw’n anwybyddu’r hyn maen nhw’n gwneud.

Mae yna waith wedi digwydd yn y cyfeiriad yna dros y blynyddoedd. Ond rydw i’n meddwl mai’r peth arwyddocaol fan yma yw’r ffaith bod Llywodraeth y Deyrnas Unedig yn cymeradwyo’r argymhelliad yma ac yn dweud, “Ie, er eich bod yn dod o dan drefn ddarlledu Brydeinig, mae’n iawn i chi gydweithio gydag asiantaethau ac, yn wir, gyda Llywodraeth Cymru er mwyn cael yr ‘impact’ mwyaf posib ar gyfer yr iaith Gymraeg.” Dyna fyddwn ni’n wneud, yn fwy ymwybodol ac yn fwy hyderus nag erioed o hyn allan, oherwydd hynny.

(Translation) It has always been clear—it is common sense—that what S4C does helps the Welsh language. Even though we come under the broadcasting system and the Welsh language comes under the Welsh Government remit, once again it is common sense that there should be areas where what we do can work alongside what agencies that are controlled by, or receive funding from, the Welsh Government do. They can work together and have a greater impact than if they were to disregard what they do.

Work has taken place over previous years in that direction, but I think the significant thing here is the fact that the UK Government approve the recommendation and say, “Yes, it’s fine for you, even though you come under the broadcasting system at a British level, to collaborate with agencies and, indeed, with the Welsh Government to have the greatest possible impact for the Welsh language.” That is what we will do from now on, and we will do so more confidently than ever before, because of that.

Owen Evans: Rydw i eisiau rhoi cwpl o esiamplau. Rwy’n cwrdd â’r Llywodraeth ddydd Iau a rydym wedi bod yn cwrdd dros y misoedd diwethaf. Cyn i’r adroddiad gael ei gyhoeddi, roeddem wedi tynnu’r mawrion—os liciwch chi—yn yr iaith Gymraeg at ein gilydd i weithio mas beth allwn ni ei wneud ar y cyd. Does dim anghenraid ein bod ni i gyd yn rhoi arian i mewn, ond rydym i gyd yn gwneud pethau sy’n cyffwrdd â’i gilydd.

Un esiampl o beth sydd wedi esblygu dros y chwe mis diwethaf yw bod S4C yn paratoi llawer o raglenni i ddysgwyr. Un o’r pethau na wnaethom ni oedd mynd mas i weld y ganolfan addysg oedolion ar gyfer yr iaith Gymraeg yng Nghaerfyrddin. Nawr rydym wedi cwrdd â nhw a gofyn “Beth ydych chi eisiau o’r sianel i’ch helpu i gynnal ac i wella’r ffordd yr ydych chi’n ymdrin â phobl sydd eisiau dysgu’r iaith Gymraeg?” Ar sail hynny, rydym wrthi’n trafod gyda nhw—ac efo’n cyflenwyr hefyd—sut i wella a phecynnu pethau’n wahanol fel bod y math o raglenni sydd angen arnynt i hybu dysgwyr yn cael eu cyflenwi gennym ni. Dydyn ni ddim yn gwario unrhyw arian ychwanegol, ond rydym ni’n gwneud pethau’n well ar sail cyd-destun y pethau sy’n digwydd o’n cwmpas ni.

(Translation) I want to give a couple of examples. I am meeting the Welsh Government on Thursday, and we have been meeting over recent months. What we have done, before the review was published, is bring together the important players—if you like—in the Welsh language to work out what we could go together. We will not have to put money in necessarily, but we all do things that interlink with each other.

Perhaps one example of what has evolved over the past six months is that S4C prepares many programmes for learners. Something that we had not done was go out to see the adult learning centre in Carmarthen. We have now met them and asked them, “What do you want to get from the channel to help you maintain and improve the way you deal with people who want to learn Welsh?” On that basis we are now discussing with them—and our suppliers—how we can improve and package things differently, so that we can provide the sorts of programmes they need to promote learning. We are not spending any additional money on this; we are just doing things better in terms of the context of what is happening around us.

Q48            Anna McMorrin: In what way would you say that you are reflecting modern Wales in your broadcasting?

Huw Jones: From where I sit, I think we take account of the whole range of viewers in Wales, but of course with particular emphasis on Welsh speakers. Our remit is to provide a service in the Welsh language, so we have to start from that, but we fully recognise that Wales, as Euryn said, is not a homogenous nation. I have a little example from Tafwyl over the weekend, which was apparently a wonderful success.

Anna McMorrin: I was there.

Huw Jones: An email reached both of us this morning noting that there were young children who were obviously from ethnic communities and very keen on getting their pictures taken with the characters from Cyw, because they were familiar with them and Cyw was part of their life. It is also important for us, of course, that youngsters coming now from ethnic communities as Welsh speakers are fully reflected on the S4C service. I think that is happening; that is in train.

Fundamentally, it is about recognising that we are there to provide a comprehensive, fully fledged service that is trying to reflect as much life through the medium of Welsh as is reflected in the whole of UK broadcasting in English on the other channels. That is a challenge, but it is as broad as that. It is a full public service, which needs to make sure that people in north-east Wales, north-west Wales and all parts of the south as well are reflected, and that their interests are reflected.

Q49            Anna McMorrin: To follow up on that, how is that reflected in terms of your internal workforce, and then your commissioning in terms of content? I am talking about reflecting a modern Wales and equality, including gender equality. We have three white, dare I say it, middle-aged men in front of us today. That is not an aspersion on each of you, but in terms of reflecting a modern broadcaster—

Chair: Can I throw something in as well? We are both being a bit mischievous, but these are important questions. That is a fair comment from Ms McMorrin, but the majority of people in Wales voted for Brexit, and I do not see much evidence that the people with—

Anna McMorrin: That is not a follow-on from my question.

Chair: We are talking about diversity, and I do not see it anywhere in broadcasting, and certainly not in S4C or Welsh language broadcasting—

Anna McMorrin: If you could respond first to my question, we can go on to that. On my question, and also in terms of the BBC and equal pay, where do you stand?

Owen Evans: I take this really seriously. We are not caught under the publishing gender pay gap legislation, but when I came in I said we had to do it. We have just published it. I will take it from the top and work through the organisation. My top team is 50/50. We are roughly 50/50 in staff.

When I joined S4C, one of the first conversations I had, strangely, was with Greg Dyke. I remember his statement in the first week of him being at the BBC that the BBC was very white. If you walk the corridors of S4C, it is very white and very middle class. We are doing a number of things to try to widen our perspective on the population. In that context, we have people from all walks of life, I have to say. We have people from urban, rural and all areas of Wales represented within S4C, even in the commissioning capacity. On the diversity front, though, we have work to do.

On the gender pay gap, we are probably slightly worse than some of the other broadcasters. The main reason for that is that we are one of the few that has not outsourced its IT department, and that is one area at which I am looking at the moment. It is very heavily male, as you might expect, and that quite significantly influences the gender pay gap in the organisation. The most important thing is that I have recognised it, I have seen it as a problem, and we will start to do something about it. The other thing about the industry is that it is fairly white as well.

Anna McMorrin: You could be a pioneer.

Owen Evans: I meet new production companies coming in now that are far more diverse than we have perhaps seen in the past, and that is a fantastic thing, but I think we can do more. One of the things I am keen to do, which is something we have been discussing with TAC and with DCMS and the Welsh Government, is around how we can leverage apprenticeships from the £67 million we spend every year with our production companies. I would like to use apprentices as a way to bring new faces into the sector.

Chair: This is a very interesting discussion for us, but I gently point out that the Minister will be here in about 20 minutes, so if you feel something has been asked, perhaps we can ask the next one.

Q50            Anna McMorrin: I think we can look in a little bit more detail at the proposed new funding models, and have a conversation about that and the sustainability in the long term. What would you like the long-term model to look like? What is your ask from the UK Government from your point of view, regardless of what the review said? What is your ask from the Welsh Government on that in terms of funding? And then obviously looking at commercial options. If you would like to comment on some of those.

Huw Jones: We take very much to heart the word “stability”, and the certainty that that is what is being offered in the review and in the Government’s response to the review. As we have already mentioned, the first element that will raise its head is what happens to the two years of the new comprehensive spending review. The second element is what happens in terms of 2022-23 for the next five years of money coming from the licence fee. There are some concerns that that implies that losing the Government funds means a big cut for us. Now, we don’t read it that way at all. We assume that the Government’s intention is to make sure that the new funding settlement for the licence fee more generally reflects the need to cover the element of funding that used to come from the Government.

What is happening more generally to broadcasting at that time will also have to be taken into account. That will impact on the Government’s view of what the licence fee should be. There is a balance to be struck there, obviously, but we would expect in that big discussion about the licence fee that there should be a very clear focus on, and within that, what is it fair to expect S4C to receive in that broad context. We will want that discussion to be transparent and open. We want to be involved in it and we want the public to be involved in it as well at that time.

Owen Evans: I think it will always come down to stability and sufficiency. We will never get sufficiency, because no organisation ever gets sufficiency. We will just have to have a very pragmatic and honest conversation with DCMS, the Secretary of State and others, because there is a realisation that whether we like it or not the quality of programmes and the money we spend on them—the production values—tend to feed into audience figures. This is just something that we have to push, and we have to have an adult conversation about it.

Q51            Anna McMorrin: Is devolving broadcasting the answer?

Owen Evans: That would be another conversation with another set of politicians with the same set of budgetary problems.

Anna McMorrin: You should be a politician.

Chair: Perhaps he will be one day.

Q52            Ben Lake: Os gaf i symud, dim cweit i Geredigion ond i Sir Gaerfyrddin a phrosiect Yr Egin. Rydw i’n gwybod bydd Anna eisiau siarad rhywfaint am hyn. Yn benodol, ble’r ydym ni arni nawr? Sut mae Yr Egin yn datblygu o ran y cynllun? Yn y gorffennol, cynigiodd y Prif Weithredwr y byddai symud i Gaerfyrddin yn arbed tipyn o arian i’r sianel. A fyddwch chi’n gallu cadarnhau os yw hynny’n wir neu beidio? Mae yna ddau gwestiwn yna.

(Translation) If I can move not quite to Ceredigion, but to Carmarthenshire and Yr Egin project—Anna will want to touch on this too—specifically, where are we at? How is Yr Egin developing, in terms of the plan? In the past, the Chief Executive proposed that moving to Carmarthen would save quite a lot of money for the channel—is that true or not? There are two questions there.

Owen Evans: Mae pethau’n mynd yn oce hyn o bryd. Mae’r adeilad i fyny. Bydd kit-out yn digwydd dros yr haf a rydyn ni’n disgwyl mynd i fewn, gobeithio, ym mis Medi. O fewn pythefnos ym mis Medi bydd rhan fwyaf o’r staff yn trosglwyddo o Gaerdydd i Yr Egin. Mae yna falans i gael rhwng cadw’r arbenigedd i gadw’r sianel i fynd ac, wrth gwrs, gwneud yn siwr ein bod yn dechrau’r broses o gymryd pobl ymlaen yn lleol. Rwy’n meddwl ein bod wedi cadw hwnna i fynd ar y funud. Rydym wedi cyflogi dros 12 o bobl lleol yn barod. Mae tua naw o’n staff ni nawr wedi penderfynu eu bod eisiau symud draw yno, ac mae rhan helaeth o’r gweddill eisiau trio’r peth am chwech neu 12 mis i weld sut maent yn ymdopi ac efallai symud. Mae’r broses o symud draw wedi dechrau. Mae pobl yn reit egnïol am y ffaith. Mae’n anodd i rai, mae’n rhaid i mi fod yn onest am hynny. Ond mae’r ffaith ein bod yn dechrau gweld pobl o’r ardal yn ymuno efo ni yn beth calonogol iawn.

Mae’r croeso rydyn ni’n dechrau cael o bobl Sir Gaerfyrddin yn anhygoel. Mae pobl wir eisiau ein gweld ni yno. Mae pobl, hyd yn oed mewn bwytai cyri yn y dre, yn gofyn pryd mae S4C yn dod, sydd yn neis i weld. Rwy’n credu bydd hwn yn cymryd tua pum mlynedd nes bod y lle yn teimlo fel rhywbeth Sir Gâr, achos yn amlwg pobl Caerdydd fydd yno i ddechrau. Her i fi, wrth gwrs, bydd gwneud yn siwr mai un S4C ydyn ni a bod pawb yn cydweld efo beth yw S4C.

Ar ein hochr ni, mae’r patrymau gwaith wedi sefydlu, mae’r dechnoleg wedi’i huwchraddio i sicrhau bod gweithio hyblyg yn gallu digwydd mas o’r swyddfa. Wrth gwrs, dylwn ni ddim anghofio y bydd 30 o bobl yn gweithio yng Nghaerdydd yn cyd-leoli efo’r BBC. Ac, wrth gwrs, bydd y swyddfa yng Nghaernarfon yn dal i fynd. O’n hochr ni, mae pethau’n mynd yn oce ar y funud a rydyn ni’n weddol gyfforddus dros y peth.

Ar ochr cyllid, mae’r cynllun yna, sef y bydd hwn yn arbed arian dros yr 20 mlynedd nesaf. I roi esiampl o’r math o ostyngiad welwn ni: ar y funud, byddai ein swyddfa yng Nghaerdydd yn costio tua £12 y droedfedd sgwâr. Yng Nghaerfyrddin, mae e tua £8. Felly mae yna arbedion allwn ni wneud o gwmpas hwn.

(Translation) Things are going okay. The building is up, the kit-out will happen over the summer and we expect to move in, hopefully, in September. In a fortnight in September most of the staff will transfer down from Cardiff to Yr Egin. There is a balance to be struck between keeping the expertise to keep the channel running, and making sure that we start the process of taking people on locally. We are keeping that going at the moment. We have employed more than 12 local people already. About nine of our existing staff have decided that they want to move over there, and lots of the others want to try it out for six to 12 months to see how they manage and maybe move. The process of moving over has started, and people are very energised by it. It is difficult for some, I have to be honest about that, but the fact that we are starting to see local people join us is very encouraging.

The welcome that we are getting from people in Carmarthenshire is fantastic. People really want to see us there. Even in the curry houses in the town, people have asked when S4C is coming, which is nice to hear. I think it will take about five years until the place feels like a Carmarthenshire place, because there will be Cardiff people there to begin with. The challenge for me is to ensure that we are one S4C, that everyone agrees about what S4C is about.

On our side of things, the working patterns have been established, the technology has been upgraded to ensure that flexible working can happen out of the office and of course we should not forget that there will be 30 people working in Cardiff, who will co-locate with the BBC. Of course, the office in Caernarfon will keep running. On that side of things, things are going okay at the moment, and we are quite comfortable.

On the finance side of things, the plan is in place to save money over the next 20 years. To give you an example of the kind of reduction that we will see: at the moment the costs of our office in Cardiff are about £12 a square foot; in Carmarthen it is about £8, so there are savings to make.

Q53            Ben Lake: Wrth gwrs, fel un Cardi i’r llall, mae’n llawer gwell bod yr arian yna yn cael ei fuddsoddi mewn pethau pwysig a beth mae’r sianel yn gwneud.

(Translation) As one Cardi to another, it is far better that that money is invested in the important things and what the channel does.

Owen Evans: Gofynnais i’r staff beth mae’r DWP, y Swyddfa Trethi a thri cwmni sector preifat mawr yn rhannu. Maen nhw gyd wedi eu lleoli o fewn milltir sgwâr yng Nghaerdydd. Mae’n bwysig i bawb feddwl am sut ydyn ni’n mynd i wasgaru swyddi da o gwmpas y wlad, felly mae’r ffaith ein bod ni’n mynd i Gaerfyrddin yn beth pwysig.

(Translation) I asked the staff what the DWP, the tax office and three major private sectors shared. They are all located in the same square mile in Cardiff. It is important for everybody to think about how we will distribute good jobs around the country. It is therefore important that we are going to Carmarthen.

Q54            Chair: Oes gennych chi ffigwr am faint rydych chi’n mynd i arbed?

(Translation) Do you have a figure for the money that you will save?

Owen Evans: Bydd 55 person yn gweithio yn ein pencadlys yng Nghaerfyrddin. Mae 15 wedi dweud eu bod nhw ddim eisiau mynd. Mae hynny’n iawn; rydw i’n deall y penderfyniad yn iawn—mae gan bobl deuluoedd.

(Translation) Fifty-five people will work in the headquarters in Carmarthen. Fifteen have said that they do not want to go. I fully understand that decision because they have families—

Q55            Chair: Faint o bres ydych chi’n mynd i arbed o ganlyniad i symud?

(Translation) How much money are you going to save as a result of moving?

Owen Evans: Dydyn ni ddim yn siwr eto oherwydd ry’m ni jyst yn gorffen y “contingencies” o gwmpas cadw’r sianel i fynd dros y blynyddoedd nesaf, ond ry’m ni’n ffyddiog bydd arbedion reit swmpus dros y 20 blynedd.

(Translation) We are not sure yet because we are just finishing off the contingencies for keeping the channel going over the coming years. We are confident that over the total 20-year period there will be very substantial savings.

Q56            Chair: Mae’r cyn Brif Weithredwr wedi dweud eich bod chi’n mynd i achub miliynau o ganlyniad i symud. Ydy hynny’n debygol o ddigwydd?

(Translation) Your former Chief Executive said that you are going to save millions of pounds as a result of the move. Do you think that is likely?

Owen Evans: Bydd rhaid i mi siecio. Yn y cynllun sydd gennym ni ar y funud, mae yna “best case scenario” a “worst case scenario”. Hyd yn oed yn y sefyllfa gwaethaf, byddem yn arbed arian.

(Translation) I would have to check. In our current plan, there is a best case scenario and a worst case scenario. Even in the worst case scenario, we will save money.

Q57            Anna McMorrin: Just quickly on that, as the Member for Cardiff North, where you are currently situated, I regret your move completely, but I understand and welcome your investment throughout the whole of Wales. You will be aware that Cardiff has reached the shortlist for Channel 4 coming to the city. How can you help to develop that relationship? How can you work strongly with Channel 4? Will that be a help, a hindrance or a support? How will that relationship develop?

Owen Evans: Funnily enough, we are meeting Alex from Channel 4 over the next three weeks. We have been in some negotiations with her already and have been quite a fervent supporter of the bid. There are two ways of looking at it: either as a threat, because people will come in and poach the best talent. Obviously, they spend more money on programmes than us so it will be difficult. Or you think this is a major broadcaster coming into Wales looking to commission programmes.

In the interim, we are keen to discuss with Channel 4 our infrastructure for commissioning programmes in Wales, which they do not have. Channel 4 and S4C can work together on co-commissioning and understanding the marketplace better between us. Recently, we worked on probably our first major co-commissioning for several years for Channel 4—that will be in north Wales. There is plenty to do and plenty of opportunities for S4C to work with Channel 4 on expanding the way our infrastructure works in the country, but also bringing better value to the channel, because we can leverage extra funding to do it.

Q58            Anna McMorrin: On a final point, when Channel 4 came to look, they were very impressed by the availability of broadcasting talent and skills in Cardiff. That is really positive and it is a testament to you.

Owen Evans: We have a very vibrant creative economy.

Q59            Chris Davies: Mr Evans, you have had a couple of challenges to moving the governance of S4C with the Welsh Government, where you have slightly resisted. As a former senior civil servant in that organisation, does that have any bearing on your decision?

Owen Evans: None at all. This is a political question.

Q60            Chris Davies: Okay, we will move on. Mr Jones, there have been various discussions in the review about the Authority being replaced by a unitary board. Is that something you would welcome?

Huw Jones: We made the point that we recognise that there can be confusion about whether the Authority and S4C are two separate bodies. There is room to believe that there has been confusion on this in the past. Doing away with the term “Authority” and creating a unitary board would make it absolutely clear that there is only one body, as there is legally at the moment. We can move in this direction with comparatively little problem. We need to be clear about numbers. The review and the Government’s response do not specify the numbers of people involved. Legally, we have the right to get nine members appointed. That implies six non-executives and three executives. I recognise the validity of some of the questions that were asked earlier, but we can give an assurance that this is possible and that the appropriate level of governance and scrutiny can still be applied. That is because of the substantial majority of non-executive directors, who are clearly there to represent the public.

It is important that, while non-executives are there to drive the organisation forward in the way that the review suggests—to be fleet of foot and so forth, and to make it clear that one body is making the decisions—nevertheless there will be a division of responsibilities between the executives and the non-executives, which will need to be clear. For example, primarily, I do not foresee there being any change in the situation whereby, at the moment, the non-executives, that is, the Authority as presently constituted, play no part in the commissioning of programmes. I foresee that the non-executives will continue to develop and approve strategy and to monitor its execution, to ensure that the organisation is carrying out its responsibilities properly.

Q61            Chris Davies: And you don’t think it would get too cosy?

Huw Jones: I actually took some exception to the suggestion that we in Wales are more prone to that than anyone else. Without pointing any fingers, there are certain aspects of metropolitan life where you can say exactly the same—that the people know each other very well. What is important is that people understand their respective responsibilities and take them seriously.

Q62            Chris Davies: By accepting the change, do you acknowledge that the current situation is not perfect?

Huw Jones: I acknowledge that, as Euryn mentioned, the present structure is derived from the original creation of S4C back in 1982 in all sorts of ways. We have seen that in the remit, the NAO aspect of it and in the term “Authority”. It is a term that is of a certain period; particularly since 2003, practically all the regulatory aspects are now undertaken by Ofcom and will continue to be undertaken by Ofcom. It is time to look at it. This can be made to work in an appropriate manner. It is important to say that we do not want a proliferation of scrutiny at too many different levels; otherwise you just get bureaucracy. It needs to be effective and it needs to be proportionate, and I think it can be done.

Q63            Chris Davies: So looking at it, making it work as you said—how and when? Are you looking to have a unitary board running as a shadow to the current Authority? When would you look to cease the Authority and move fully to a unitary board?

Huw Jones: Yes, indeed. We are in discussions with DCMS at the moment, with a view probably to implementing a shadow board structure as early as September.

Q64            Chris Davies: Of this year?

Huw Jones: Of this year. Actual legislation will depend on the Government’s timetable—there are one or two other matters of pressing importance there, I believe—so we may not get legislation for some time. It is therefore important that, if this is the direction it is agreed we all want to move in, we implement what it is possible for us to do in the shadow structure. For example, we are expecting the announcement of three new Authority members very shortly, and I know they have been told that, even though they are appointed as members of the Authority, it is not expected that they will need to be reappointed. They will automatically become members of the new shadow board and ultimately the new unitary board, when it comes into being.

Q65            Chris Davies: Very quickly, as Chairman of the organisation, how much input and influence do you have in the selection of these board members?

Huw Jones: I am a member of the panel, which is chaired by a civil servant from DCMS. There is a representative of the Wales Office, a representative of the Welsh Government and a layperson. The panel’s advice is then put forward to the Secretary of State, who consults the Welsh Government but ultimately makes the decision about who is appointed.

Q66            Chris Davies: Do you see that format remaining?

Huw Jones: That is an interesting question. It hasn’t been considered in the review, because the BBC has a process whereby the chairman appoints certain members after a process of appointment. That is perhaps for consideration at a future date.

Q67            Susan Elan Jones: Yn gyflym iawn am fuddsoddiadau SDML yn Loteri Cymru. Ydy beth sydd wedi digwydd yn golygu bod llai o arian i wario ar raglenni? Mr Jones, rydw i’n gwybod bod Awdurdod S4C fod i graffu ar reolaeth. Beth ddigwyddodd ynglŷn â buddsoddiadau SDML?

(Translation) Very quickly, on the situation with SDML’s Loteri Cymru, does what happened mean that there is less money to spend on programmes? Mr Jones, I know the S4C Authority is supposed to scrutinise the management, but what happened with SDML’s investments?

Huw Jones: Oherwydd bod y buddsoddiad neu’r arian oedd ar fenthyg i Loteri Cymru yn rhan o bortffolio o fuddsoddiadau masnachol, ni fydd yn cael effaith uniongyrchol yn y tymor byr ar beth fydd ar gael i redeg y gwasanaeth. Mae’n wir i ddweud—i’r graddau ein bod wedi gobeithio, maes o law, y byddai incwm ychwanegol yn dod i S4C o’r buddsoddiad yn y Loteri—na fydd hynny’n digwydd nawr. Maes o law, mae’r incwm masnachol yr oeddem wedi gobeithio ei gael yn mynd i fod yn llai.

Rwy’n meddwl ei fod yn deg i ddweud bod yna wersi i’w dysgu o hyn, ond mae’n bwysig pwysleisio mai arian masnachol oedd hwn. Does yna ddim arian cyhoeddus wedi ei wario ar y fenter yma o gwbl. Does gan S4C ddim yr hawl i wario arian cyhoeddus ar fentrau masnachol. Y peth arall ydy: ni fyddai gan S4C gronfa masnachol o gwbl oni bai bod S4C yn y gorffennol wedi mentro yn fasnachol ac wedi gwneud elw ar fuddsoddiadau sydd wedi arwain at y gronfa, sydd yn dal i fodoli.

Yr un wers fydden i ddim yn tynnu yw bod angen i S4C beidio bod yn fentrus yn y dyfodol. Oes, mae eisiau cael y cynllun busnes yn iawn ac yn y fan honno mae yna wers bwysig i ni ddysgu yn hyn o beth: doedd yr amcangyfrifon ynglŷn â’r gobeithion o’r Loteri ddim wedi eu seilio ar beth oedd yn gywir yn y pen draw. Os liciwch chi, camgymeriadau masnachol ydy’r rhain. Dyna lle mae angen i ni ganolbwyntio.

(Translation) Because the investment, or the money that was lent to Loteri Cymru, was part of a portfolio of commercial investments, it won’t have a direct impact in the short term on what will be available to run the service. It is true that, to the extent that we hoped that there would be additional income coming into S4C from the investment in the lottery, that will now not happen. In due course, the commercial income we hoped to have will be less.

It is fair to say that there are lessons to be learned from this, but it is important to emphasise that it was commercial money. No public money was spent on this initiative in any way, shape or form. S4C is not entitled to spend public money on commercial ventures. S4C would have no commercial fund at all if it were not for the fact that it ventured commercially in the past and made a profit on investments, which led to the fund that continues to exist.

One lesson not to draw is that there is a need for S4C not to be enterprising in the future. Yes, the business plan needs to be right, and there is a very important lesson for us to learn there: the hopes for the lottery turned out to be unfounded, but these were commercial mistakes, and that is where we need to focus.

Q68            Susan Elan Jones: Ydych chi’n teimlo’n gwbl hyderus ynglŷn ag argymhellion yr adolygiad i chi wneud mwy o hyn yn y dyfodol? Dydw i ddim yn golygu gwneud mwy o hyn efo SDML, ond buddsoddiadau.

(Translation) Are you absolutely confident about the review’s recommendation that you do more of this in the future—I do not mean with SDML?

Huw Jones: Rydym yn cytuno gyda’r argymhelliad o ran bod yn rhaid i’r gweithgareddau masnachol hyn ffocysu ar bethau sydd yn gweithio law yn llaw gyda’r gwasanaeth cyhoeddus. Mae’n rhaid i’r staff sydd yn rhedeg y gwasanaeth cyhoeddus yn S4C—yn gweithio ar raglenni, er enghraifft—fod yn ymwneud â phrosiectau masnachol os ydynt am gael y budd mwyaf, yn hytrach na bod y ddau beth yn sefyll ar wahân. Dan arweiniad Owen, dyna’r strategaeth y byddwn yn ei mabwysiadu.

(Translation) We agree with the recommendation that the commercial activities have to focus on things that work hand in hand with the public service. Staff who run the public service within S4C—those who work on programmes, for example—have to be involved in commercial projects if they are to get the greatest benefits, rather than the two things sitting separately. Under Owen’s leadership, that is the strategy we will adopt.

Q69            Chair: Faint yn union mae S4C wedi colli o ganlyniad i’r buddsoddiad hwn?

(Translation) How much exactly has S4C lost as a result of the investment in the lottery?

Huw Jones: Mae yna £2.5 miliwn o fenthyciad, gyda £600,000 ychwanegol o hawliau darlledu sydd ddim yn mynd i gael eu hadennill. Mae’n swm sylweddol.

(Translation) £2.5 million of loan, plus £600,000 of broadcasting rights, which will not be regained. It is a significant sum.

Chair: Diolch yn fawr iawn i’r ddau ohonoch am ddod yma heddiw.

(Translation) Thank you very much for coming in today.

Examination of witness

Witness: Margot James MP.

Q70            Chair: Minister, thank you very much indeed for coming along to talk to us today. The UK Government has stated its commitment to the future of Welsh language broadcasting—something the Committee very much welcomes. What is your view of the contribution that S4C makes to Welsh culture and society?

Margot James: Prynhawn da. Thank you for inviting me here this afternoon.

I think that S4C makes an important contribution to the cultural life of Wales, not only through the good-quality programming that it puts out, but by its contribution to the life and growth of the Welsh language. To that end, I think it is very important. That is one of the key reasons why we continue to support it in my Department. We are pleased to see it put on a firm financial footing for the next few years. I am pleased that the review has unearthed a number of areas where S4C can build on its capabilities and improve its output into the future and I am pleased that the organisation has embraced the review and intends to implement the findings in full.

Q71            Chair: As the Minister responsible for S4C, do you feel that you can say that you are happy to engage with the television company to find out what its needs are and also the needs of its audience? Are you happy to have contact with it whenever it needs it?

Margot James: Yes. I like to think that I am an accessible Minister to all the stakeholders that fall under my responsibility. S4C is an important member of that group and my door is open to it at any time. I have engaged with it already since taking office on a number of occasions and intend to do so in the future.

Q72            Anna McMorrin: Welcome—croeso. I want to ask you about S4C’s remit, in terms of legislation. It is set out in primary legislation at the moment and you have accepted that this needs to be amended. Can you tell me when you expect these changes to be brought about?

Margot James: There are a number of areas where legislative change is likely to be required. In some cases that is primary. I cannot really give you a very clear answer to that question—I apologise—because we have pressures on parliamentary time, in part due to Brexit, for the next 18 months. There has to be some agreement, following that, between the Government’s business managers and the Opposition as to what then comes before Parliament. I am sorry not to be able to give you a clear answer to that question.

Q73            Anna McMorrin: This has been quite a long time coming, though. It can hardly be a surprise that this was in the review. You accepted that, which is good. As it has been a long time coming—it is not going to be a large piece of legislation—surely this is something that can be put in.

Margot James: You rightly point out that it would not be a big piece of legislation. That, therefore, gives us ground to hope that we will find time for the elements of the change that require legislation as a priority. That is in part because it is important, because it is—hopefully—unlikely to be too controversial and because it is, as you say, relatively small, as Government legislation goes, therefore I would be quite optimistic about time being found for it as soon as possible. But let us not forget that there is an awful lot in the report and the review that does not require legislation, which S4C can be getting on with.

Q74            Anna McMorrin: In your words, what would be involved in that small piece of legislation?

Chair: Can I just add something? We have gone through the Government response to this. Just to build on my colleague’s point, this is not controversial. My colleague from a different party seems to accept it, I accept it and the Government certainly have accepted it. I know you are not a business Minister, but I would have thought business Ministers would be delighted to have a piece of legislation that is not going to require people to be called back from Strasbourg at short notice, or dragged back from anywhere else. This is surely something that is begging to be put in on a Thursday.

Anna McMorrin: It is a rare time that I agree with David Davies.

Chair: This is not an entirely fair question for you. Maybe you can pass back the thought that this is a wonderful opportunity for the Government to pass some legislation without any rancour.

Margot James: Thank you, Mr Chairman. I quite agree with you. To come back to your question, the main legislative hurdles will be recommendations 1, 5, 6 and 7. They will require a combination of primary and secondary legislation. I trust that answers your question. We are still exploring legal options. We are not really in a position at this stage to give much more information on implementation in respect of those areas that require legislation. We are discussing the implications with S4C.

Q75            Anna McMorrin: Have you had legal advice from your own Department on this?

Margot James: We are in the process of obtaining legal advice and are exploring the options. I am sorry that this inquiry has fallen at a point before which we are able to come back with anything definitive on that score.

Q76            Anna McMorrin: The review was published last December, if I remember rightly. That was seven months ago. In all that time, not one person in your Department has come to you with those proposals?

Margot James: The pattern of my involvement in this important issue began for the first time probably in February, when the issue of funding from my Department to top up the licence fee funding that S4C enjoys came across my desk. At that point, there was some debate as to whether or not the funding would be forthcoming. I engaged with the issue and looked at the review. I decided that it very much was the case that it should be forthcoming. I then focused my efforts and energies on making sure the funding was forthcoming, rather than on looking in detail at the legislative options at that point.

Anna McMorrin: I want to follow up on that.

              Margot James: Please do.

Q77            Anna McMorrin: What was your understanding of S4C prior to that? You have only come into the role this year.

Margot James: In January, yes.

Anna McMorrin: What was your understanding of S4C before that?

Margot James: I had very little awareness of S4C when I assumed the role I currently occupy. I am very conscious of the Welsh language and the importance of the Welsh language and I knew there was Welsh language programming, but I would not have known in any detail about the channel that put it out. Not speaking Welsh myself, I hadn't availed myself of the opportunity to watch the output. Sadly, really—I am sure in common with many other Members—I am not a big television consumer despite having responsibility for the sector, because I am so busy. In other words, I had very little awareness of S4C before I came into this post.

Q78            Anna McMorrin: So now, as the Minister responsible, what would be your overriding principles in terms of S4C?

Margot James: My overriding priorities in my discussions with S4C are being there to assist them with any issues that might arise as they implement some of these important recommendations—as they, for instance, effect their move from Cardiff and as they engage with more independent producers. I will be engaging with them on things like the children’s programming contestable fund, which I hope they will do well out of. I am hoping to see a more commercial focus so that they are able to raise moneys to supplement the licence fee income and the income they receive from my Department. Those are my priorities for the first 12 months of my association with S4C.

Q79            Anna McMorrin: In comparison, what are your priorities for the BBC as a whole? Can you give a brief answer on that? We are looking at a public service broadcaster for the whole of the Welsh language and the Welsh nation—and, further afield, internationally. I am trying to get at what your priorities are with regards to that.

              Margot James: I have given you my priorities. The BBC are obviously important, clearly for many reasons, and you asked me for a brief answer, so I shall not go into all of those. As far as S4C are concerned, they clearly get the vast majority of their money from the licence fee. They have to have a relationship with the BBC, and my priority here would be to ensure that S4C, as a relatively small broadcaster compared with the BBC, is in a position to punch above its weight and get the maximum support possible from the BBC.

Q80            Susan Elan Jones: You will have heard a little bit about the interesting history of Government and S4C relations over the years. One thing we were concerned about when the whole issue of S4C funding came to this Committee six or seven years ago, when major changes were being made to the channel, its constitution and its funding, was that that was done with no consultation with the National Assembly for Wales, very little consultation with Welsh MPs and precious little consultation with us, until we kicked off. The structures have changed slightly, and we know that that could never happen again, but are you aware of some of the history of that?

Margot James: To be honest, I was not, but thank you for making me aware of it. I thought for one horrible moment you were talking about the recent consultation and review. Now I appreciate that it is historical, but it is useful for me to be aware of that so I can look out for any signs of hangover from that culture, which obviously is not appropriate. I am sure that the people in charge now would agree.

Q81            Ben Lake: The review states quite clearly the importance of ensuring transparency and certainty for S4C’s funding. There have been a few concerns about S4C’s ability to operate independently once they receive all of their funding from the licence fee. Can you elaborate on the safeguards that will be placed on ensuring that all money allocated for S4C through the licence fee will end up with S4C?

Margot James: We can be very clear about funding up to 2022, which at least enables S4C to have absolute certainty for the next three to four years. The licence fee negotiations will commence again with the BBC in 2021, and at that point I am sure Ministers in my Department will ensure that S4C’s interests are protected in those negotiations, because we are very committed to S4C’s long-term future and the importance of its place within public service broadcasting.

Obviously, the BBC has its own public service broadcasting principles and standards to live up to, one of which will be to ensure the plurality of public service broadcasting, whether that be Channel 4, ITV or S4C. I think it is built into the ethos of the BBC, but because S4C is by comparison a small channel I think it will always need an open door to Ministers in my Department. Ministers in my Department will have a responsibility to watch out for it, be a sounding board at Government level and so forth, perhaps more so than for other public service broadcasters.

Q82            Ben Lake: So post-2022, you envisage—

Margot James: I envisage that after 2022 all of the public funding for S4C will come from the licence fee. I think that decision has been made. That does not mean to say that all of its income will come from that, because obviously we look forward to it achieving more on the commercial stage, supplementing its income from the public purse.

Q83            Ben Lake: But post-2022, do you envisage the need for your Department or the Government to intervene at all to ensure that they receive their fair share from the BBC when it comes to the licence fee?

              Margot James: I myself have not been involved in any licence fee negotiations. I imagine, and I have heard, that they are complex, take a long time, involve many aspects and have twists and turns, and so forth. I imagine that Ministers will expect the BBC to make proper allowance for S4C and its growth in the future, and I imagine that if any alarm bells were ringing during the negotiations that indicated to the contrary, Ministers would take an active role in redressing that balance.

Q84            Chris Davies: We hear every now and again that broadcasting—that is, S4C—should be devolved to the Welsh Assembly. I am very keen for it to stay in its current position, and we heard from both panels earlier, even from the organiser of the review, that the same problems and difficulties would appear wherever that may be, and we do not want it to be more bureaucratic. Did you agree, and do you look forward to looking after S4C as a Minister?

              Margot James: Yes, I definitely do. I agree with your assessment. Broadcasting is not devolved, and the fact that the BBC serves all nations within the United Kingdom is a good reason for that state of affairs to continue. Although there are lots of commercial operations around the country that might have a closer association with national Governments or Assemblies, for public service broadcasting I do not see any change in that. I do not see any devolution in prospect for public service broadcasting.

Chris Davies: With your direction—

Margot James: Sorry to interrupt, Mr Davies, but that does not preclude, of course, the management of S4C working closely with the Welsh Government and Assembly on matters of common interest, of which I am sure there will be plenty, certainly around the Welsh language, for example.

Anna McMorrin: The Welsh language is actually devolved.

Q85            Chris Davies: Do you see, in your position as Minister, that the BBC is a very different organisation from S4C, albeit they work closely, and do you think that S4C should be allowed and encouraged to go down various routes independently of the BBC?

Margot James: Yes, I certainly think that management freedom is very important, and that S4C should be fully empowered while under the auspices—as long as they are sticking to their public service remit and principles, they should have the freedom to innovate and reach well beyond the Welsh borders. That cannot be done effectively if they are under the management control of a body that is still quite London-centric.

Q86            Chris Davies: You say it should be allowed to get on with things. S4C needs to have a very strong commercial element—a commercial arm—as a broadcaster, to bring in revenues from elsewhere. Where do you see S4C going, and how much freedom would you pass on to S4C to allow them to make any changes that may need to come from the current review? Where do you see that going, basically? How will they get that freedom and that independence?

Margot James: I think there are many opportunities for them within the current review, and before any legislative change, that might be important, such as exporting content. One of the recommendations that I know they are enthusiastic about is creating the digital hub. They already have a pretty strong digital footprint. They have viewers online all over the world. There is huge potential to build on that and to sell their programming.

There are groups of Welsh speakers around the world. Not every Welsh speaker lives in Wales. There should be a good future for them to create. They have a bit of a monopoly there, in a sense, and that bodes well for commercial opportunity, whether that be digital or export. There could be some commercial tie-ups. There is a bit more freedom in terms of bringing in revenues from advertisers. There are many more opportunities, I think, that can be achieved post the review being implemented.

Q87            Chris Davies: Finally, Mr Williams has produced an excellent review. How seriously are the Government taking that review?

Margot James: We have taken it very seriously. Certainly we have provided the funding on the back of the commitments by the board to evolve and implement the review findings. We have made some new appointments. There are new appointments to be made to strengthen the board and to bring in some non-executive directors. We are looking for people with a passion for the principles behind S4C, with in-depth experience and knowledge and the ability to challenge the organisation going forward. We have taken the review very seriously, and we see the future of S4C as being quite bound up by most of the recommendations that we are now acting on.

Q88            Chris Davies: I have one quick question. I am a very proud Welshman, but as someone who looks at these things from outside and inside Wales, do you think it is important to have a mix on the new governing body? They do not all have to be Cardiff-centric, Rhyl-centric or Brecon-centric, as much as I would love them to be. Do you think it is important to get a wide spread of knowledge and experience, rather than just knowledge or experience of Welsh affairs?

Margot James: Yes, I do. It is a fine balance, isn’t it, because one of the key objectives for the channel is to protect, grow, entertain and enrich in the Welsh language? You do, I would have thought, therefore want a majority of Welsh speakers on the board, but if there is someone brilliant with Welsh connections who will add diversity and challenge to the board and bring new ideas, I do not think there should be any constraint on who that is. I do think it is important to ensure that the board is to a certain extent reflective of the whole country of Wales. It would not be a good thing to have too much of a preponderance of people from one part of the country, I would suggest.

Q89            Chair: Gaf i ddweud rhywbeth bach ar y pwynt yma? Mae hynny yn bwynt pwysig. Mae’n bwysig bod pawb yn cofio bod rhai sy’n siarad yr iaith Gymraeg yn pleidleisio dros y blaid Geidwadol. Mae rhai yn cefnogi Brexit. Dydw i ddim yn hollol hyderus fod pawb yn S4C ac yn y cyfryngau yn gyffredinol yn sylweddoli hynny.

(Translation) Can I just say something briefly at this point? You make an important point. It is important that everyone should remember that some who speak the Welsh language vote for the Conservative party. Some of them support Brexit. I am not absolutely confident that everyone at S4C and in the media generally realises that.

I am looking forward to diversity being reflected in political views as well as in views on Brexit.

Chris Davies: Is that the BBC in general?

Chair: You can take that comment any way you like. I am sure the Minister might have some sympathy with my point, which is directed to a wider audience.

Susan Elan Jones: I always feel, when we hear Conservatives talking about Brexit, that it is rather like an unhappy family on Christmas day.

Margot James: I don’t think we’re the only party you can say that of.

Q90            Susan Elan Jones: Moving on to the serious issue of the commercial activity of S4C, I appreciate you do not have control over the Government’s specific timetable of how it is done, but it would be awfully useful if that approval was granted pretty soon, would it not?

Margot James: It would. I do agree with you. It is frustrating that there are things that need legislation, that are not controversial and that are not a huge ask. Unfortunately, I cannot really say any more than I have already said on that front. Anything further would be speculation, which I do not think would be helpful to the Committee. I have quite strong views on certain legislative priorities, but I am one of many Ministers who are queuing up to get slots when the time arises.

Q91            Susan Elan Jones: Have you any additional thoughts—you mentioned some of the Welsh diaspora and the like—on the sort of things S4C should be looking to do in terms of generating commercial revenue? Do you have any particular ideas?

              Margot James: While maintaining the integrity of its public service broadcasting principles and obligations, I think there will be all sorts of opportunities on the digital front for above-the-board promotion, tie-ups and that sort of thing. I caution slightly that one would not want to see the commercial tail wagging the cultural-broadcasting-quality dog, but notwithstanding that, I am sure there will be opportunities. I have not given great thought to what sort of opportunities they might be. The review gives some examples, and I am sure that the new board will take it upon themselves to pursue them vigorously for future programming success.

Q92            Susan Elan Jones: I think, Minister, you are right in saying that not all Welsh speakers or everybody who watches S4C lives inside Wales. Many of us would say that there is an issue where Welsh-speaking families or, as is often the case nowadays, partially Welsh-speaking families move outside Wales for a few years and then go back again. There is a real issue of the language being lost at that point. What role do you think S4C could play on those sorts of occasions?

Margot James: You mean when families move away and then come back?

Susan Elan Jones: Often, the children can speak Welsh initially—

Margot James: Yes, and then they lose the language. That is definitely something to be guarded against. I hope that S4C will be successful in—I am sure they will want to bid for the new children’s contestable fund, which will come out this year. It is worth—I would have to get back to you with the exact amount—something in the order of £50 million or £60 million. It is to encourage plurality and independent producers.

There are opportunities for that issue to be addressed by getting more programming that is aimed at children and, further up the age range, at young adults as well, to try to keep them in touch with the Welsh language if they move away.

The other area of growth, to go back to an earlier question, which that has reminded me of, is in co-productions. There is a lot of scope to improve a small channel’s output by co-producing content with specialists elsewhere, who may even be abroad—they do not have to be in the UK. There is growth, certainly in the independent production sector, of co-productions across national borders. With the specialist nature of what S4C do, there is scope to improve their content and get new viewers—I think it is all about getting new viewers, and not just sitting on your laurels and catering to your population of current viewers, who are by definition getting older. The issue has to be getting new viewers and instilling a viewing habit in Welsh in children, whether they are born to Welsh families living in Wales or to Welsh families living abroad or elsewhere in the United Kingdom.

Q93            Chair: Can I ask a couple of questions about the new board? Obviously, the Government have agreed with the findings and the recommendations in the report, and I would go along with that, but I want to raise a bit of question mark. The thing that worries me about one single unitary board is its ability to scrutinise effectively. I am slightly worried, and perhaps this is a particular problem in Wales, that the relatively small number of people who will be knowledgeable about broadcasting in Wales and proficient in the Welsh language means that we will be fishing from a slightly small pool. In reality, it is likely that people will know each other fairly well. Do you feel confident that a single board, consisting of execs and non-execs, will be able to scrutinise financial decisions effectively?

              Margot James: That is a very good question. The answer is that we do think it will be able to do that, but I should perhaps explain some of the thinking behind that. It is important that we appoint non-executive directors who have real knowledge and expertise and the capacity to challenge decision making among the executive board directors. That is very important. I don’t think there would be any les scrutiny than with two boards’ worth of people, if you like, as under the former arrangements.

The thinking, in terms of business, is that unitary boards are more effective and less bureaucratic. The key people making the decisions—the executive directors—can only be on one board, and the scrutiny will therefore probably be more effective if the non-executive directors are on the same board as the executive directors. A lot rests on the chairman, of course. I think the chair has to be an effective and independent voice within the boardroom.

We have some safeguards, in that these appointments have to have ministerial approval. We are not connected so well into the, as you rightly point out, relatively small environment of Welsh programme making. There is that counter as well. Indeed, there is not only ministerial oversight but things like your Committee. If we make the wrong decision about people, you will soon spot it and hold us to account. We are mindful of that, too. We account to Parliament.

Q94            Chair: The model that is being planned here is similar to that which would be used in a large plc—one single, unified board.

Margot James: Indeed, and in effective mid-sized, mid-cap companies as well.

Chair: Forgive me for asking—

Margot James: Sorry to interrupt, but that of course does not preclude the fact that an executive board can manage the day-to-day operations of the company. The fact that you have a unitary board, for legal purposes and for all the accountable officers to sit on, and to be the place for non-executive directors to advocate and scrutinise; you can have an organisation within the company—whatever you want to call it—that is responsible for day-to-day decision making, but it needs to have the legal paraphernalia of a board around it, as would have been the case with a two-tier structure, such as S4C has had to date.

Q95            Chair: What I have heard from everyone on the different panels has been reassuring, but I just have that slight concern, that is all.

Margot James: It is a well-placed concern.

Chair: The circumstances are a bit different, perhaps.

Margot James: The pool of people who might be considered for such an appointment is relatively small. However, going back to my answer to Mr Davies, I don’t necessarily think that someone not being Welsh and speaking the Welsh language should preclude them from being on the board. Such an individual would quite rightly be an exception on the board, but it wouldn’t be such a closed community that it would preclude such an individual if they had fantastic experience that would benefit the board and S4C more widely. Diversity is important to all boards, and you are right to point out that there is a risk in this environment that, if we don’t proactively seek diversity, things might become a bit cliquey.

Q96            Anna McMorrin: What role will the Welsh Government have in working with you and agreeing the make-up of the board?

Margot James: I mentioned earlier that I felt that it would be quite appropriate for S4C to work with the Welsh Government and the Welsh Assembly on areas of common interest. However, I do not see in that a role for the Welsh Government to approve directors of the board, because it is not a devolved matter.

Q97            Anna McMorrin: Broadcasting, you are right, is not a devolved matter—yet. However, the Welsh language is. You have said yourself in this evidence session what S4C is, and that is a broadcaster for the Welsh language, both in Wales and across the rest of the UK and the world, although as we determined earlier, it is hampered by the legislation which we need to get through quickly. The Welsh language is a devolved matter. Do you therefore see a contradiction in the make-up of the board and the agreed governorship of the board?

              Margot James: I don’t think that there is a contradiction. I think there is a case for close working—indeed I do—but I don’t think that there is a contradiction in having S4C’s governance and accountability through the BBC and my Department. I think Britain is unusual in having such a powerful public service broadcaster, which does devolve a great deal of content and production around the United Kingdom but is none the less based in London. It is an unusual situation and I think that therein lies the case for broadcasting not being a devolved matter. I quite see that there might be tensions with the Welsh Government because of the fact that the Welsh language, which S4C is designed to promulgate and support and to provide entertainment via, is the responsibility of the Welsh Government, as you rightly point out, but for the most part I think that the two organisations should be able to work together with a common aim.

Q98            Anna McMorrin: Following on from that, quickly, to finish, in ensuring that therefore there needs to be the certainty of funding, which you have said there is going to be, can you guarantee the certainty of the £7 million DCMS funding ongoing through the BBC?

Margot James: I think we can guarantee it up to 2022. I couldn’t give you that guarantee beyond then simply because it will be subject to a new licence fee negotiation, but I can reassure you that it would be quite appalling were anything to happen to undermine S4C's financial viability and that I cannot imagine any Government overseeing such a situation. To all intents and purposes, S4C can be sure of the funding post-2022. One of the reasons that we have backed support from the Department up to 2022 is that we believe in what S4C is doing; we believe that it is taking the right steps implementing the review; and we want to see that continuing indefinitely. I cannot imagine any circumstances in which S4C would be denied funding over the longer term post-2022.

Q99            Ben Lake: On that point, Minister, although I appreciate that you cannot provide any guarantees on the specific level of funding post-2022, will the Government entertain the idea of giving greater clarity through publishing before 2022 what they believe to be an appropriate level of funding for the channel, or even some of the criteria against which S4C should be measured? I think Mr Evans on the previous panel said that it would be good to have some sort of idea of what the Government might mean by an appropriate level of funding. While of course I appreciate that the Government cannot give a firm commitment, that information and clarity might nevertheless be helpful for the channel.

Margot James: Yes, I think it is important that S4C has continuity and security of funding, and that it knows it is incumbent on it to supplement that funding by taking a more commercial view, as the rest of the BBC does. There are a lot of opportunities for it to do that. It receives over £80 million a year. That is its public funding—the core funding that it needs. Beyond that, I am sure it would be a good thing for the Government to sit down with S4C before 2022 and look at the criteria, assess how it is doing, and make sure, working with it, that it is fit for the future and that the review implementation is going well.

I can’t say much more beyond that, in terms of security post 2022, but that would be the same for any public service broadcaster. S4C is not at any disadvantage in that respect. It is just that it is all subject to future licence fee negotiations.

Q100       Anna McMorrin: But if that is given through the BBC licence fee and through the BBC, there is that additional security there. If the BBC survives, S4C survives.

Margot James: Yes, definitely, and we all want to see the BBC survive.

Q101       Anna McMorrin: Can you commit to that?

Margot James: Yes, I certainly can.

Q102       Anna McMorrin: Ongoing?

Margot James: Of course. The BBC is a world-class institution, and this country is extremely fortunate to have it at its disposal. I see no threats to the future of the BBC.

Q103       Anna McMorrin: And funding S4C through the BBC?

Margot James: Funding through the BBC? Yes, of course. That is going to be the system from 2022. I can’t foresee any change to that. In fact, I did go into some detail on that earlier in the proceedings, when I was talking about the future of funding post 2022 and our expectations. I expect that any Minister in my position at that point will be looking out for S4C. I mentioned that it is a smaller player, and therefore we don’t want to see it overlooked. If it seemed for some strange reason that it was being overlooked, I would expect any replacement in my office to be alerted to that, to intervene and to bat for S4C.

Chair: On that positive note, if there are no further questions, I thank the Minister. Diolchaf hefyd i’r cyfieithydd. I also thank the interpreter.

Margot James: Diolch. Thank you all very much indeed. It has been a pleasure.