It's difficult to believe that any company with a guaranteed income in the billions can be in financial crisis. But anyone tuned into British media will be aware that Auntie - the BBC - undergoes frequent storms, which dominate the headlines of broadsheets and tabloids alike, and then soon die down.

But the real crisis at the heart of the BBC, according to many industry leaders, is the decline of its public service ethos. And a very strong indicator of this is the health of its documentaries, the genre in which it has led the world for decades. Although the BBC still points with pride to its current affairs and documentaries as amongst its greatest achievements, it has been chipping away at the foundation on which they are built - its budgets and in-house program-making - to the point of no return.

The latest round of redundancies, announced in mid-October, called for 2,500 job cuts, the majority to come from in factual and news, with a total of 1,800 redundancies. Across the factual departments, 17 of 38 execs, 11 of 37 series producers, and 54 of 107 producer/directors are leaving. These departures are taking place on top of the already huge decline in in-house capacity over the last three years, as the BBC began to farm more programs out to indies. While several years ago around 100 directors would have been making social/observational docs, there are only around 10 left now, according to documentary executive producer Simon Ford, who has made many acclaimed documentaries, including the award-winning The Secret Policemen and The Tower. He says morale is now "catastrophically low" amongst BBC in-house factual program-makers. "These cuts which have just been announced will mean that most talented filmmakers will decide it's definitely not worth being in the BBC, and if you want to make films you should be able to offer them to Channel 4, internationally and online," says Ford, who himself is leaving.

Indeed the Beeb's former head of documentaries, Alan Hayling, says that it was the corporation's plans to greatly decrease the number of in-house producers that was the biggest danger threatening the broadcaster during his tenure from May 2004 to June 2006, as well as the inevitable repercussions that would be felt throughout the industry. "At the moment, the leading people in the independent sector, most of them were trained in the public service sector and spent many years learning their trade in the public service sector. So they still know how to do it," says Hayling. "The problem is the next generation won't know how to do it, and if you get rid of the pool of people who do know how to do it, then you are actually attacking the fundamentals of public service broadcasting."

Hayling points to the history of ITV as a warning. The UK's first commercial channel used to broadcast a number of acclaimed current affairs strands, such as 'World in Action' and 'First Tuesday,' but today is dominated by light formats such as I'm a Celebrity Get Me Out of Here.