Has BBC World Service become a sacrificial victim?

Mark Thompson last week used his first speech since the government's dramatic decision to freeze the licence fee for six years to welcome the World Service back into the BBC fold. The director general told the Voice of the Listener and Viewer's annual conference on Wednesday that the corporation will increase spending on the World Service from April 2014, when the BBC will fund it for the first time since before the second world war.

The problem is that by the time it takes on responsibilty for the organisation, it may already have shrunk as a result of Foreign & Commonwealth Office (FCO) cuts.

It is becoming increasingly clear the World Service was one of the biggest casualties of George Osborne's comprehensive spending review (CSR), a fact that was partially obscured when the chancellor delivered it in October because the BBC was determined to put a positive spin on the settlement it negotiated as part of the CSR.

The FCO funds the World Service via an annual grant that has already been reduced from £272m to £261m this year. Osborne said in October it would be subject to a further 16% cut in its budget by 2014. That is simply too big a cut not to have a devastating effect on services, some of which will be shut down completely.

Senior executives are saying very little about where the axe will fall when the CSR budget cuts are implemented. But they do not dispute there will be painful cuts.

Uncertainty will continue

The 2,000 staff who work for the World Service were told a week ago there will be no announcement on which services will go, and where, until January. Briefings had originally been planned for this month, but the uncertainty will continue over the holiday period; it is unlikely to be a happy Christmas for some of the BBC's most dedicated journalists.

In his speech on Wednesday, Thompson conceded "there is no getting away from [the] fact" that the World Service faces "a significant reduction in services as well as job losses". Foreign Secretary William Hague has placed the brunt of departmental savings on the World Service to protect the FCO from deeper cuts elsewhere.

MPs on the foreign affairs committee quizzed the department's most senior civil servant, Simon Fraser, on Wednesday, and asked why the FCO claimed after the CSR its budget had been cut by 25%. In fact, the committee's chairman, Tory MP Richard Ottaway, claimed the real figure is closer to 6% once the World Service and British Council have been stripped out. Mike Gapes, a Labour member of the committee, said: "Clearly some parts of the (FCO) family had been treated more badly than other parts of the family."

Forcing the two organisations to be the chief victims has left the rest of the department virtually unscathed. William Hague's empire is more or less intact, a testament perhaps to the clout he wields in cabinet.

Some insiders at the World Service are taking solace from the fact it will be in safe hands at the BBC, whose own journalism is arguably the best in the world. Other senior BBC insiders fear that it may not fare too well when it is subsumed by the corporation, whose own £3.6bn budget is being cut by 16% in real terms over the coming years. They worry that the BBC executives tasked with implementing huge cuts will face some difficult choices about future funding. They may be tempted to pull a TV service in Belarus if the alternative is axing a youth show on BBC3.

There is also a concern that the World Service may fall victim to cuts within BBC news itself. One senior corporation figure said: "At the moment there is a World Service radio correspondent in Washington – his job is to report America from the perspective of the non-Anglo-Saxon world. Does that post stay in five years, 10 years? What will be lost is the perspective these [journalists] have.

"They are sometimes a bit 'spotty' – if all BBC reporters are expected to be 'bi-media' (as domestic [reporters] are) then what happens to the 'ugly folks' who are good reporters? You could argue it promotes the glamour boys at the expense of the serious lot."

He added that David Cameron himself had pointed out that the BBC sometimes sends several reporters to cover an event when, in the PM's view, one would probably do. "Cameron … spotted three BBC chaps," he said. "So in the future if they lose one, who will it be? The 10 O'Clock News man? No. The Newsnight [correspondent]? No. It'll be the World Service person – sitting underpaid and unnoticed at the back but serving the Hindi Service."

Middle East presence

In the run-up to the CSR, senior Foreign Office officials argued closing embassies or consulates in less strategically important countries was a false economy. The cost of reopening them again should the world change would prove prohibitive, they argued. But what's true of embassies is also true of the World Service.

Withdrawing from territories completely will end the BBC's presence forever because it will be too expensive to relaunch them, and the goodwill they generate may have evaporated by then in any case.

Five years ago, when the last major World Service cuts were pushed through, it was at the behest of a Labour government which wanted to build a presence in the Middle East. That was expensive, but it was in effect paid for by closing down services in the old Eastern Bloc. More than a decade since the fall of communism, that seemed sensible enough. Progress towards democracy had been patchy but free and independent media had taken root in most if not all of those countries.

This time around, there are no services that can be closed down without depriving populations who are too often deprived by state-sponsored media of a trusted source of independent news. The Spanish language service is sacrosanct, so too are those in the former Soviet Union. They are the largest and most expensive, and taking the axe to the rest will mean many of them will have to disappear if the sums are to add up.

The World Service is a classic illustration of how "soft power" can be used to project Britain's values in the national interest. But its influence may be on the wane at a time when other nations – including Russia and Iran – are spending heavily on similar services.

The more pressing concern, however – and one shared by senior figures at the corporation – is that once the government cuts have been pushed through, the BBC may not inherit a World Service worthy of the name.