Vote 29 - Department of Communications, Climate Action and Environment

Ms Dee Forbes (Director-General, RTÉ) called and examined.

This afternoon we will discuss matters relating to RTÉ arising from the appropriation accounts 2016 and Vote 29 - the Department of Communications, Climate Action and Environment. More than 40% of the Department's expenditure goes to RTÉ so we will engage with it to help us understand how this public funding is used. We are joined today from RTÉ by Ms Dee Forbes, director-general, who is very welcome. I believe it is her first time to come before the Committee of Public Accounts. From RTÉ we also have Mr. Jim Jennings, director of content, Ms Breda O'Keeffe, chief financial officer and Ms Eimear Cusack, director of human resources. From the Department of Communications, Climate Action and Environment we are joined by Ms Patricia Cronin, assistant secretary and Ms Barbara Leeson, principal officer. They are all very welcome to today's meeting.

I remind witnesses, members and those in the public Gallery that all mobile phones should be turned off, which means putting them in aeroplane mode. Putting them on silent is not adequate because they will interfere with the recording system.

I advise witnesses that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to qualified privilege in respect of that evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

Members of the committee are reminded of the provisions of Standing Order 186 to the effect that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies. While we expect witnesses to answer questions put by the committee clearly and with candour, witnesses can and should expect to be treated fairly and with respect and consideration at all times, in accordance with the witness protocol for Oireachtas Éireann.

I ask Ms Forbes for her opening statement.

Ms Dee Forbes

I thank the committee for inviting us here today. While we routinely attend meetings of the joint Oireachtas committee on communications, this is the first time RTÉ has been before the Committee of Public Accounts. As the Chairman mentioned, I am joined by my colleagues Mr. Jim Jennings, director of content, Ms Breda O'Keeffe, chief financial officer and Ms Eimear Cusack, director of human resources.

I hope that, between us, we will be able to answer any questions members may have. I also hope they have had the opportunity to read the briefing material we prepared and submitted earlier this week. As per the letter of invitation, the material covers in some detail how public funding in RTÉ is used and accounted for, and the extensive regulatory and oversight mechanisms that pertain to RTÉ and RTÉ's reporting. As clarified last week, it also specifically covers how RTÉ operates as an employer and sets out the context and issues in the recently published report on the future of RTÉ orchestras. I do not intend to go over the briefing material in my opening remarks, but we are happy to elaborate on any questions members may have.

I would like to outline the broader issues that are relevant to today’s discussion. I welcomed in the Chairman's letter of invitation the fact that the committee is supportive of the independence of RTÉ and that matters of programming are not intended for discussion. Editorial independence and impartiality is the bedrock of public service media in Ireland. It is central to understanding why RTÉ's journalism and programming remains highly trusted by the public, and still retains such large audiences on television, radio, online and on mobile devices, despite the growth of many alternatives. However, as the committee will surely acknowledge, what we can produce and commission, and the quality of all we do is inextricably linked to the resources we have. It may appear to some that the organisation has plenty of money but given the scope and breadth of our statutory obligations, the range of services we must provide and the nature and scale of the competition we face, RTÉ has inadequate resources. Over the past number of years that has been confirmed by numerous independent reports and reviews that have examined in detail everything RTÉ does, and is obliged to do. As the Department of Communications, Climate Action and Environment conveyed in its briefing material to the committee, the cost of RTÉ's public service activities is substantially in excess of the public funding it receives in the form of licence fee revenue. The balance comprises commercial revenue which, as members will note from the briefing material, has fallen by 36% or close to €90 million over the past ten years.

The greatest risk to public service broadcasting in Ireland and many other countries is restricted funding at a time of unprecedented competitive threats and fast-changing media consumption habits. It would be remiss of me as director general at a time of such turbulence in media, when so much of what we have relied upon for our news, information and culture is under such threat, not to impress on members the urgent and substantial financial challenges facing RTÉ and, by extension, the broader sector that relies on a healthy RTÉ. Since 2008, RTÉ's overall annual funding has fallen by in excess of €100 million or 23%, while, in parallel, our obligations to develop online and mobile services and to fund and deliver digital television have increased substantially. This is why we are not investing enough in television drama, children’s programming, arts and culture output, and Irish language television programming – programming that is essential if RTÉ is to support and sustain Irish culture and Ireland's most talented writers, animators, directors and actors. This is why RTÉ's investment in the independent production sector has halved from €79.5 million in 2007 to just under €40 million in 2016. This is why we are finding it harder to sustain audience share and compete for commercial revenue against highly resourced competitors such as Virgin Media, SKY, BBC, ITV, Netflix, Amazon and a host of opt-out channels that take advertising from Ireland but invest little or nothing in Irish programming or the Irish creative sector. This is why we do not have enough international-foreign correspondents at a time global and international affairs are affecting the lives of Irish people more than ever. This is why we are struggling to maintain, let alone grow, our investment in investigative reporting and programming, which is essential to our public purpose but which is high risk, difficult to produce and expensive. This is the context for the review we have just published on RTÉ's orchestras. This is why we have had to restrict capital investment to 50% of depreciation for almost ten years now, which is unsustainable for any industry but particularly for one that is changing so quickly.

There is much RTÉ can do and is doing to change the organisation to meet the challenges of the digital era. We are completely restructuring how we operate, moving away from traditional media-based structures and reorganising around key areas of output across our services such as drama and comedy, arts and culture, news and current affairs, factual, sport, Irish language, and young people's. We have sold a significant portion of land in Donnybrook, freeing up finance to invest in critical digital infrastructure and building fabric that has been in existence since the 1960s. Anyone who visits RTÉ today will see this change very much in evidence. We reduced our costs substantially - by €96 million or 22% - between 2008 and 2016 through a series of measures, including pay cuts and a large reduction in our workforce. We have much to do but we are well under way. This is a difficult process, particularly for staff, of whom much is being asked, but we are determined to ensure RTÉ continues to remain at the centre of Irish public and cultural life as so much changes around us.

Just as there is, rightly, a responsibility on me, and on us, to modernise and change RTÉ, surely there is also an obligation on policymakers and Government to modernise the television licence system, which is fundamentally unfit for purpose and unreflective of how people consume and interact with public service media and content today. As we have detailed in our briefing note, television licence evasion currently stands at 15%, which results in a gross loss of approximately €37 million annually; "No television homes", due to outdated television licence exemptions result in a gross loss of €24 million annually; as a percentage of revenue received, An Post collection costs are at 5.5%; and evasion levels in Ireland are more than twice that of the UK while collection costs are more than double those of other European counterparts. This is not something for which RTÉ is responsible but it has a massive bearing on our capacity to plan for the future and invest in the type of programming that we know audiences want and have a right to expect from us. Why is it acceptable that the television licence fee collection system is so inefficient that more than €60 million goes uncollected every year? The State is failing to collect what it believes is an appropriate fee for having a television licence and for the service that funding underpins. That is not acceptable in any other area of the public finances and it should not be acceptable when it comes to public service broadcasting. RTÉ is not asking for additional money from households; we are simply asking that the fee the State believes is appropriate for television licensing be collected. Aside from the lost revenue to a sector that badly needs increased investment, more than anything, the current system is fundamentally unfair on those who pay.

An all-party committee similar to this has made a series of clear recommendations, including the need for responsibility for collection of the fee to be ascribed to the Revenue Commissioners. The Joint Committee on Communications, Climate Action and Environment published a comprehensive report following months of consultations and hearings that resulted in sensible and achievable recommendations. All RTÉ is asking for is that the recommendations in the report be implemented. The broader sector, including the Independent Broadcasters of Ireland, which represents commercial radio, Screen Producers Ireland, which represents the independent production sector, and the Screen Directors Guild of Ireland, which represent directors involved in the Irish and international audiovisual industry, shares this view.

If members believe the future of public media and quality Irish programming is important, we ask them to do what they can to support the implementation of the recommendations advanced by their colleagues.

Much is now at risk. If one talks to anybody in our sector, he or she will tell you the Irish media sector is in real trouble. All of us who invest in quality Irish journalism and original reporting, all of us who invest in quality home produced programming – newspapers, commercial broadcasters and public service broadcasters – are struggling to sustain what we do.

The only organisations that benefit from a severely diminished Irish media are international media groups, tech companies and international content providers, none of which invest in Irish journalism, culture or programming or in the Irish creative economy. In television in particular, without reforms, Ireland will quickly become just an extension of the UK and the US markets. Is that really the future we all want? If not, there are options and there are solutions if there is political will to act. I understand, for example, that the newspaper industry in Ireland is requesting that the VAT rate on newspapers, currently at 9%, be reduced to zero as it is elsewhere in Europe. As for RTÉ, one such solution is to ensure there is strong indigenous public media service at the heart of Irish life that has the resources, authority and trust to ask the tough questions and address as its priority the issues, challenges and questions facing this society. It should be one that is strong enough to help sustain a vibrant indigenous culture, to support local programme makers and local creative talent and to ensure distinctive Irish voices on our airwaves, as well as ensuring we continue to have moments of shared national experience, available to all free-to-air, where all the expressions and iterations of ourselves have a home.

For more than 90 years, although at times imperfectly, RTÉ has uniquely and consistently connected journalism, politics, culture and communities in Ireland while retaining the trust of the public. This role is as relevant and important today as it was when RTÉ was established. RTÉ has reported net operating deficits for 2015 and 2016 and will do so for 2017. If this continues it will have a devastating impact on both RTÉ’s dual funding model and on its schedules, its capacity to deliver on its remit and its relevance to Irish audiences. Notwithstanding all we are doing, will continue to do and have done over the past decade, we are now at a point of decision. It is simply not possible for RTÉ to stabilise its financial position, continue to fulfil its role or act as an engine for the broader creative sector without addressing the issue of its resources and the TV licence system.

This meeting will no doubt touch on many issues and we will do our best to answer members’ questions but I ask them to also bear in mind the broader challenges facing much of our national media today and the implications they have for much of what we in this country hold dear, including our culture and identity; our obsessive interest in news and current affairs; our creativity, our music and our stories. It is surely in the national interest that this issue is urgently addressed.

I thank Ms Forbes. We will start with Deputy Cullinane, followed by Deputies Catherine Murphy and Connolly. We will organise this slightly differently and stick to 20 minutes and 15 minutes and will give people a second chance. This morning I let people go on a little bit longer. Everyone will get enough time but we will stick to the usual slots and members can get back in a second time.

I welcome Ms Forbes and her team. It is good to see a healthy gender balance in her delegation. I think this is the first time that RTÉ has been before the Committee on Public Accounts. My first question is to the clerk to the committee. Was a note sent to RTÉ in advance of this meeting that set out the issues we wanted RTÉ to address and is there a copy of that to hand?

Yes, we will try to get it for the Deputy.

Perhaps the clerk knows in general terms what issues we flagged up that we might want to address?

I am taking a note of it. It is contracts -----

Employment contracts was one of the key issues, is that correct?

I do not see it anywhere in Ms Forbes's opening statement. She mentioned how RTÉ operates as an employer in one line but I do not see much otherwise on employment rights and contracts and those issues in her opening statement.

Ms Dee Forbes

We address it in detail in the briefing note.

I know there is a briefing note but when a witness comes before the Committee on Public Accounts, it is in public session. The people who are watching, the public who we represent, do not have those briefing notes. They will only have or can see what Ms Forbes read out, her opening statement. It is all very wonderful that she has alerted the committee to her concerns about the licence fee, which is an issue worthy of its consideration, but members wanted to discuss what they saw as very important issues. I wanted to put some context on her remarks, as I am somewhat disappointed that it did not feature in the opening statement because it is a real problem. Incidentally, the reason Ms Forbes was invited before the committee was because the Accounting Officer, who is the Secretary General of the Department, was not in a position to answer specific questions members had. A large chunk of its voted expenditure goes to RTÉ - I believe it is €170 million of taxpayers' money - and there must be some level of public accountability.

How much of RTÉ's funding comes from the taxpayer, whether directly or indirectly?

Ms Breda O'Keeffe

In respect of the licence fee collected by An Post on behalf of the Department in 2016, €179 million was granted to RTÉ. In addition to the licence fee, we are also funded by commercial revenue. In 2016, we garnered €158 million.

In percentage terms, how much of overall expenditure comes from the taxpayer?

Ms Breda O'Keeffe

The public funding of €179 million is approximately 45%. It is a roughly 50-50 model.

So it is quite substantial?

Ms Breda O'Keeffe

Yes it is.

But RTÉ is not audited by the Comptroller and Auditor General.

Ms Breda O'Keeffe

No, we are audited separately and independently by an externally-appointed auditor, which is currently KPMG, which is entirely in order.

Ms Forbes might answer what the relationship is between the Department and RTÉ? Is there a service level agreement for the €170 million? What is the mechanism which ensures that RTÉ is accountable? Ms Forbes is not an Accounting Officer to the people in this room and we are the representatives of the public. What is the accounting relationship between the Department and RTÉ?

Ms Dee Forbes

A number of arrangements are in place that set out our relationship with the Department and what we account for. There is an oversight agreement with the Department, which is binding until 2020. In accordance with the Department's policy on the monitoring of governance arrangements, we meet the Department quarterly, or more frequently as required, to provide updates on developments and achievements of targets as set out in that agreement.

When was that agreement signed?

Ms Dee Forbes

That was signed at the end of last year.

And something was in place which preceded that? To clarify, there has always been one of those agreements?

Ms Dee Forbes

That is correct.

Can Ms Forbes clarify the difference between an oversight agreement and a service level agreement?

Ms Breda O'Keeffe

If the Deputy does not mind, I will pull back a bit for a moment. I will answer the question about accounting oversight a bit more specifically. On the Department's accounting oversight with RTÉ, we submit monthly management accounts. They are very comprehensive with around 40 pages of information that goes to the Department every month. We meet the Department quarterly on governance and finance matters. Furthermore, when we develop annual budgets, we meet the Department and discuss the budgets and the challenges within them every year. At the end of every year, our annual accounts are audited extensively by external auditors.

Those accounts are approved by the board of RTÉ and then they are submitted to the Department by the end of April. We would have just, in the past few days-----

That is what the oversight agreement does. I understand that. However, what is the difference between the oversight agreement and what would be a service level agreement, which normally would be in that type of relationship especially when there is significant funding? There could be a very substantial service level agreement. The HSE, for example, would operate them with organisations.

Ms Breda O'Keeffe

Perhaps that is on the accounting side, which was the Deputy's question-----

Does Ms O'Keeffe understand the distinction between the two?

Ms Breda O'Keeffe

Not particularly the difference. I understand the oversight arrangements that are currently in place between ourselves and the Department under the Broadcasting Act. There are extensive requirements under the Act. In addition to that, the Broadcasting Authority of Ireland, BAI, is the regulator for RTÉ. It makes sure that the various sections of the Broadcasting Act are implemented. Beyond that, obviously, we have all the financial controls. Then there is the annual statement of performance commitments, which is, perhaps, the territory the Deputy is talking about. Every year, we submit to the BAI our annual statement of performance commitments. It is RTÉ's commitments on what it will do with that funding every year.

If that is the case-----

Ms Breda O'Keeffe

Absolutely.

-----and if RTÉ has a very robust relationship with the Department, as Ms O'Keeffe says, in terms of measuring performance and so forth, how is that when the Accounting Officer appeared before the committee and questions were put about how the €170 million was being spent, few of the questions were answered and, in fact, the replies were very vague? That is the reason we invited our guests to this meeting. Would it not be better if the director general of RTÉ was accountable to the Committee of Public Accounts? Is there a problem in the relationship with the Department? I accept that Ms O'Keeffe cannot speak for the performance of the Department's Accounting Officer but the view here is that it was quite weak and he was not in a position to answer very basic questions about how the €170 million was spent.

Ms Breda O'Keeffe

All I can speak about, with respect, is what we do. We have a very good mutual relationship with the Department. We share information extensively, particularly on financial matters. As the director general outlined, there are significant financial challenges in RTÉ at present and we meet regularly. We report very extensively on what one might call the service level arrangements, which is our annual statement of performance commitments. We submit that to the BAI and an independent reviewer, appointed by the BAI, comes to RTÉ each year and reviews those obligations and reports on them. In turn, we also report on the outcome of the annual statement of performance commitments in our annual accounts, which is published on our website and extensively across radio and television.

It might be helpful if a detailed note could be forwarded to the committee on the precise nature of the relationship with the Department and the oversight models that are in place. The briefing document that was provided refers to "over and above" the statutory requirements. Perhaps we could be given a detailed note on what they are. The document also says that in the interest of working to best practice standards, RTÉ has also been the subject of external assessment sought on a voluntary basis. What type of external assessment? Perhaps a detailed note could be provided. That would be helpful.

I wish to move to the employment issues and to put a question to Ms Forbes. The 2016 annual report is very good and extensive and I congratulate RTÉ on that. The report was very helpful in preparing for this meeting. It is stated on page 14 that, 31 December 2016, there were 1,984 employees, of whom 278 were part-time casual. The full-time equivalent head count at 31 December 2016 was 1,834. Does Ms Forbes see that?

Ms Dee Forbes

I do not have it in front of me but I know the numbers.

They are the figures. Are all 1,984 people, of whom 278 are part-time casual, directly employed by RTÉ?

Ms Dee Forbes

Absolutely, they are all directly employed by RTÉ. It is important to put some context around that-----

If I need context, I will come to that. With respect, I know Ms Forbes is being helpful but I am anxious to get to a particular issue. I am seeking clarity that these people are directly employed by RTÉ.

Ms Dee Forbes

Correct.

Is there a separate cohort of people who would not make up the ranks of that 1,984 but who would be on contracts?

Ms Dee Forbes

Correct.

How many are there?

Ms Dee Forbes

The number is 472.

What is the nature of those contracts?

Ms Dee Forbes

The nature of those contracts varies. Across the organisation, they span everything from broadcast-related activities to special events, sports programming and on-air presenters. The nature of our business is wide and varied. There are times when it does not make sense to have people in the organisation on a full-time basis. Take the example of the Olympics. Every four years, we may need the services of a swimming expert to come in and talk to us. Likewise, the Eurovision is coming up in a few weeks and we will need some specialist services around that. We bring people into the organisation on a contract basis for a special service. That is reflective of the wide and varying business we conduct.

That would make perfect sense if that was solely the case. However, that is not what I have been told or what has been put in the public domain, which I will get to shortly. What is Ms Forbes's understanding of the difference between a contract of service and a contract for service? Is she aware of the distinction between the two?

Ms Eimear Cusack

Yes.

Ms Dee Forbes

Yes. Does Ms Cusack wish to take that question?

A contract of service would be for somebody who is an employee, while the other is a contract for a service.

Ms Dee Forbes

Yes.

In an organisation like RTÉ, it might suit both the employee and the employer to have a contract for service. However, it has been suggested, even on one of RTÉ's programmes, that it is much wider than that and that many of RTÉ's employees are being coerced into accepting contracts for service. It was described by one of the Ms Forbes's colleagues as rife within RTÉ. This is the notion of bogus self-employment. Essentially, some employees are not being given a choice. They are being told by management that it is a contract for service and they do not have any choice. Does Ms Forbes accept that there is a problem in RTÉ with bogus self-employment? Is the latter rife within the organisation?

Ms Dee Forbes

That is probably an unfair representation of RTÉ as an employer. The organisation has existed for over 50 years. Do we have issues? Yes, we do.

What are those issues?

Ms Dee Forbes

If I may, since joining the organisation I have dealt with issues that arise in a considered and measured way, based on assessment and evidence based review. Last summer, which is what I believe the Deputy is referring to, it became evident we had some issues around gender and-----

No, I am not talking about gender at all. That is important, however, because there was an issue relating to gender pay. There was a report on it. Ms Forbes need not answer questions on that, although some other members might take up that matter. It is an important issue, and I welcome the fact that there was a review and a report. However, I am talking about bogus self-employment and contracts for service, which was clear in my question. Does Ms Forbes believe that practice is rife in RTÉ?

Ms Dee Forbes

The answer is that we have issues in the organisation and I-----

What does having issues mean? How does that differ from it being rife? Is Ms Forbes saying it is not rife or is she just saying that RTÉ has some issues?

Ms Dee Forbes

It is important to point out that, as I mentioned, we have 472 individual contractors who provide a particular service. At the end of last summer, on foot of the Kieran Mulvey report, I committed to investigating the situation around contractors in the organisation because it was pointed out that there might be some concerns. I committed to that review and it is currently under way. Eimear Cusack, our head of human resources, is in the middle of that review. Perhaps she might wish to talk a little about that.

Before Ms Forbes does so, I wish to play a clip from one of RTÉ's programmes in order to provide some context. Before I do that, I should point out that the 472 people Ms Forbes refers to as contractors do not see themselves as such and do not want to be contractors. In fact, they are being forced into being contractors and self-employed. I have met a number of them and they have informed me that they lose rights in terms of sick pay, holiday pay, trade union recognition and a range of employment rights and benefits. Many of them were not given any choice and felt they were coerced into accepting these contracts. This was dealt with on the "Drivetime" programme. Ms Forbes will recall a programme by Philip Boucher-Hayes.

To provide context, I will play a clip from a feature he did on the issue, during which he gave his view.

The committee heard audio evidence.

He said that this is "rife". He spoke directly to people. Many of them were fearful about coming forward. That was his view. He went on to say that people were fearful about talking to him, although some people did. That was my experience when I dealt with people who came to me after I raised these issues. They privately expressed concern to me that if they raised any issues, their contracts might not be renewed. I ask Ms Forbes to respond to the view that has been communicated to me and to Mr. Boucher-Hayes.

Ms Dee Forbes

I think it is a view. I need to understand whether it is correct. For that reason, I have committed to undertaking a thorough root-and-branch review of the situation of our contractors. That is currently under way. For now, it is a view. It was important for me to look into it in a proper and measured fashion. That is what we are doing. We have done that in tandem with our unions. The results will probably be forthcoming shortly.

Ms Forbes has accepted that it is a view, but if I were the head of an organisation, I would be concerned.

Ms Dee Forbes

Sure.

I would want to know.

Ms Dee Forbes

Absolutely.

I welcome the fact that Ms Forbes is concerned and is looking at this. The perception is that these people are being forced into these contracts. As a consequence of being forced into these contracts, they are essentially being asked - the word "coerced" was used during the programme in question - to surrender rights. If any other organisation were doing this, it would be looked at by "Prime Time" or "RTÉ Investigates" so that such organisations could quite rightly be called out. I think Mr. Boucher-Hayes is quite right to say that RTÉ cannot point the finger-----

Ms Dee Forbes

Absolutely.

-----if it may be guilty of the same thing.

Ms Dee Forbes

Sure.

I will play a second clip, which further illustrates what Mr. Boucher-Hayes says is the extent of the problem.

The committee heard audio evidence.

The final clip I would like to play features Mr. Boucher-Hayes interviewing Mr. Dooley of the National Union of Journalists. Ms Forbes has said that she wants to talk to the unions as well.

The committee heard audio evidence.

It is clear from these clips from one of RTÉ's own programmes, which was based on research done by of its own employees, that the individual in question is of the view that there is a problem. I have spoken to people who say there is a problem as well. As there are consequences in terms of PRSI contributions, which are different for the self-employed, there may well be a cost to the Exchequer. That is a difficulty. The question of how RTÉ potentially treats some of its staff is also an issue. We need to know whether this is now a pattern. Is it going to get worse and worse? Is it a policy of RTÉ to have more people on contracts for service and fewer people on contracts of service? That is an obvious concern. I have a number of other questions. Is Ms Forbes saying that RTÉ will review this issue?

Ms Dee Forbes

We are in a review. We are undertaking quite a detailed piece of work. As I have said, this is important and serious. We need to get to the nub of this problem. Ms Cusack is in a better position to talk about what we are doing. She might be able to provide some comfort in this regard.

Ms Eimear Cusack

I started with RTÉ in April 2017. A number of months into my employment, the trade union group raised some concerns with me about contractors. At the time, we were beginning the investigation into gender and role equality, which resulted in the Mulvey report. The trade union group and others were given a commitment that when the investigation was complete, their concerns would be addressed by means of a full review of all of those who were providing contracts for services into RTÉ. It was intended that there would be two parts to the review. The first part involved a review of the situation to ascertain whether everyone providing services was properly categorised as a contractor or should be categorised as "other". It was intended that in the event of improper categorisation, it would be dealt with upfront.

The employees on these contracts, those who spoke to Mr. Boucher-Hayes and those who are concerned would say that a review is all well and great, and might well show up that there is a greater use of these self-employment contracts and that people are more likely to be described as contractors, but they want to know whether all of this is going to change. Is the review simply a fact-finding exercise? Is it simply about finding out whether this is a problem? I would urge that there should be full disclosure as part of RTÉ's genuine, open and transparent consultation with its employees. People should not have any fear about expressing their views. That should underpin part of the review. People who have experience of these contracts should be able to give their full views without any fear of reprisal. Maybe that would be a better way of approaching the issue.

Ms Eimear Cusack

Yes. That is one of the issues. The terms of reference for the review were shared with the trade union group. As I have said, there are two parts to the review. The Deputy has mentioned the fact-finding element of the review, which is the first part. If we find that there are things to be rectified, we will consider how to rectify them. The second part of the review, which relates to the point made by the Deputy, involves ensuring we engage with contracts for service in the right way. We will always have contractors. We need to engage with them in a manner that is future-proof.

This will have to be the Deputy's final question because other people want to come in. He will get back in again.

I ask the Chair to put me down for a second round of questions.

Ms Cusack is right when she says there are people who find being a contractor very lucrative. Most of the ten most highly paid people in RTÉ are on contracts and are paid through companies. I have raised this previously with the Office of the Comptroller and Auditor General. When these companies are established, the person is not paid directly. The company is paid. After the person involved, who might be a well-paid presenter on a six-figure salary, has paid PAYE, PRSI and the universal social charge on the income he or she derives from this activity, the rest of the income is profit and is taxed at the corporation tax rate of 12.5%. How many people in the organisation are paid through companies?

Ms Breda O'Keeffe

I will pull back a bit. The 472 contractors mentioned by Ms Forbes related to the use of contracts for service for the entirety of 2017.

How many of them are paid through companies? That was the question.

Ms Breda O'Keeffe

I want to put it in a little more context.

Ms Breda O'Keeffe

As Ms Forbes has outlined, many of these contractors are brought in for short durations. We are talking about sports analysts, for example, or those who are brought in for events like the Eurovision song contest. They do not fall into the category the Deputy is talking about. Contracts of a longer duration can apply to on-air presenters, producers, directors and researchers, etc. Of the 472 people we contracted in the year in question, 391 of them were sole traders and 81 of them were incorporated limited companies.

What was the average income of the 81 companies?

Ms Breda O'Keeffe

I do not have an analysis of the 81 companies. In the case of the 472-----

Many of them would be well paid. This is public information. The figure for Tuttle Productions, in the name of Ryan Tubridy, was €495,000.

Ms Dee Forbes

Absolutely.

What Next Productions, Montrose Solutions Limited, Marian Finucane - €295,000.

Ms Dee Forbes

On that point, in terms of airing, I do have figures. I just do not have the 81 to hand. Of the 472 contractors, the average earnings before VAT - if they exceed the VAT threshold, appropriate VAT is charged on those services - the average fees, let us call them, were €29,820 for the year 2017.

I am not talking about the 472. As Ms Forbes knows, I am talking about those who are being paid through companies and what the average would be on that.

Ms Dee Forbes

Absolutely. We disclose our top broadcaster fees earned every year, two years in arrears. For the top ten, the total was a little over €3 million so the average is €300,000.

It was €300,000. That is fine but, with respect, Ms Forbes has been able to give me an average for the 472. I am asking her for an average of the 30 - what was the number?

Ms Dee Forbes

Of the limited companies? It was 81.

What is the average amount paid to those companies?

Ms Dee Forbes

I do not have that to hand but I can certainly get it for the Deputy.

Ms Forbes has the figure for the 472.

Ms Dee Forbes

Yes. They are just not split in the analysis that I have here.

I would imagine the figure is fairly high. Based on what I can see here, it is mostly very well-paid people who avail of this service. That is the contrast, if I may make one final point. Those employees are very well paid and can establish companies. I will not suggest why it is attractive to set up those companies; people can make up their own minds and then there are others who claim they are on bogus self-employment contracts.

Ms Forbes mentioned the employment practices in RTÉ earlier. Gender was one of the issues, as Ms Forbes knows herself, that is being addressed, which I welcome. RTÉ has a long way to go on that issue. There also seems to be an issue here with bogus self-employment. I have a difficulty with people on six-figure salaries not paying full taxes if that is the case. There is a lot of work to be done in those areas. RTÉ gets very substantial taxpayers' money and, as Mr. Boucher-Hayes says, it has a special responsibility to make sure that the employment practices are what they should be.

Ms Breda O'Keeffe

May I come back to the Deputy?

Ms O'Keeffe might have done a little figuring there.

Ms Breda O'Keeffe

Yes - something I prepared earlier. I do have the figures. For 2017, as I mentioned, of the 472 contracts for services, 81 of those were through limited companies. Some of them are the names the Deputy mentioned and some are less well-known names. The total payment to those 81 companies for 2017 was €5.4 million and some change. The average there is €66,700 per company. Obviously there is a range there but that is the average.

I would say the range would be weighted towards the higher end, that there would be a small number getting a fair chunk of that. Ms Forbes might come back to us with the range. It might be useful to see and we can make up our own minds then as well.

Ms Breda O'Keeffe

Certainly. The average is €66,700.

Ms Forbes announced a review of employment practices in RTÉ some time ago and the firm Eversheds was employed to do that review. It was due to be delivered in March. Where is it at this stage? Will it go before the executive board? Could Ms Forbes briefly give us an outline of the terms of reference?

Ms Dee Forbes

I will give that to Ms Cusack.

Ms Eimear Cusack

We engaged with Eversheds to carry out the independent review, which was to look at all of those providing contracts for services to the point that Deputy Cullinane was making. There are two parts. I will give the Deputy the high-level outline.

Just very briefly.

Ms Eimear Cusack

It was analysing our contractual engagements from an employment law perspective to review the current arrangements for contracts for service with reference to Revenue guidelines and the jurisprudence from the Workplace Relations Commission, WRC, and civil courts; and analysing RTÉ's criteria and processes for identifying and engaging contractors. There are two parts, one in respect of remedying the current state of affairs, and the other setting up the protocols and processes to ensure that it is rectified going forward.

As we have heard, RTÉ employs a significant number of workers across the organisation on contracts for service. RTÉ insists that they register as self-employed. Did I hear that correctly? They are not on a temporary contract. They are registered as self-employed on RTÉ's insistence. Is that the case?

Ms Breda O'Keeffe

In terms of tax clearance, is that what the Deputy means?

In terms of the status of employment for work.

Ms Breda O'Keeffe

At the point of engagement, we do seek tax clearance from all of our contractors and also seek that they are self-assessed to taxes. That is correct.

So they are not temporary employees, they are contractors, self-employed, whatever.

Ms Breda O'Keeffe

They are contractors, yes.

What range of skills does that go across? Is it right across the spectrum or confined to particular aspects of the work?

Mr. Jim Jennings

Perhaps I can answer that. I have kept very quiet so far.

Mr. Jim Jennings

Yes. It can be anything from a musician, actor, scriptwriter, researcher, a contributor to a programme - there is a threshold for contributors to programmes and if they exceed it they must have a contract of employment. There is a whole range of people we use throughout out programme making, both behind the scenes and in front of the microphone or camera. It is a whole spectrum of everything - runners, singers, writers, comedians - you name it.

Some of those, as we have heard, would be of short duration. Some of them would be almost permanently deployed in and around Montrose or for RTÉ. Would that be the case?

Mr. Jim Jennings

I think that is what this review will show us. The evidence we hear when we are talking to people is that there will be some people who fall within that category.

For example, if somebody who was working constantly, and it was their main employment, was deemed to be self-employed, could they contest their employment status? Could they seek to be an employee? Is that available to them at this stage and has it happened?

Ms Eimear Cusack

That is exactly what will come out of this review. The purpose of the review is to make sure that all those who are providing contracts for services are appropriately categorised as such. Where differences emerge and where it emerges that this is not the case, it will be rectified.

Through their working life, people can end up with a difficulty of some sort. An employee has recourse to the Workplace Relations Commission. A self-employed person would not have this recourse. Is that something RTÉ is looking at in the context of that review?

Ms Eimear Cusack

When we get the results of the review and see what the current state of play is, they are all the issues we have to look at as part of that.

Ms Dee Forbes

To answer the Deputy's first question, we hope to have the review by the end of this month. It has been delayed a little bit. It is quite detailed and we want to make sure it is correct. We hope to have it by the end of the month and we will then be able to discuss the findings and recommendations with the employees.

I presume it will go in front of the executive board and that is where the discussion will happen first.

Ms Dee Forbes

Absolutely.

Is it likely to be made public? At what point will that happen? Would it be after discussions? I am presuming there will be a process to be gone through.

Ms Dee Forbes

As the Deputy can imagine, there will be some sensitive information in it. The important thing is that we have a dialogue with our own people first. At the appropriate time, we will publish the recommendations in particular and the actions we are taking.

I presume some of the more high-profile people who would be self-employed would have agents.

Ms Dee Forbes

Some of them do.

Is there a variation? Has there been an analysis suggesting that somebody who has an agent does better than somebody who has not? Is there anything that gives a preferential advantage by virtue of the fact that they have an agent as opposed to somebody who is a direct employee?

Ms Dee Forbes

Again, that will come out in the findings.

Okay. I presume promotional opportunities will also be considered in that context. In terms of trade union recognition, is a self employed person treated differently from an employee?

Ms Eimear Cusack

Trade union recognition is for employees. Anybody can be a member of a trade union. Our collective agreements with the various trade unions are for employees.

I want to move on to other issues. I thank the witnesses for their detailed document, on page 5 of which there is a table which sets out total income and operating costs. The difference is very notable. Commercial revenue has dropped by 36% and licence fee revenue has dropped by 12% such that total income is reduced by 23%. The licence fee revenue was easy to determine. In terms of the commercial revenue, is the market a smaller market? I note that there are online platforms and more targeted advertising which were not available in 2008 to the extent that they are now. What evaluation has been done on this particular component? I am presuming that the absence of being able to invest in output such as drama probably inhibits the ability of RTÉ to earn by virtue of the fact that it can sell content to other platforms. Perhaps the witness would provide an overview in this regard.

Ms Dee Forbes

The advertisement market is reflected in the moneys we have got from commercial income. This market has reduced significantly in Ireland and around the world since the big recession. In this respect, television has been particularly and seriously affected. Why is this? It is to do with the amount of choice now available to advertisers in the marketplace. As advertising revenues on television have reduced they have increased in the digital arena. For example, there are now a lot more places to advertise, whether on Facebook or on other websites. This is to where a lot of the money has shifted. It is not a traditional place for RTÉ to be in. We are there but we do not have the level of volume that Facebook in particular would have in this area. It is a fact of life in Ireland now that of every euro spent in digital advertising 80 cent goes to the big players.

The market has evolved and it is a challenging place to be in. In terms of our response to this, we have to ensure that we have a very compelling place for Irish advertisers to advertise and we do this by having really strong Irish content. There is demand for it. We hear every day from agencies that they want to have their advertisers surrounded by strong indigenous content. When we do not have as much of that as we would like there is a problem. Coupled with this, we do not have extensive dramas for sale on the external market. It is the golden age of television. Most countries in the world are investing heavily, particularly in drama. Denmark and Israel are seeing big returns in this regard. To benefit from this, one has to have a lot of volume and, obviously, quality. We are not able to go there. That said, we are doing everything we can. We have to look at new revenue streams. For example, sponsorship is a growing area, as is product placement in programming but it is not yet making up for what has been being lost. The market is a very different place. Everybody is being challenged in this area. As I said, our best response is to have the best environment for the advertisers, which allows us to compete. That is our challenge.

People are choosing a different way to view content such as Netflix and so on.

Ms Breda O'Keeffe

On commercial revenue, one of the other issues in this area, as well as the dissipation of audience, is the increased number of opt-out channels that are offering advertising in this market. They are non-indigenous television channels that advertise in Ireland. There are more than 40 of them at this point and they earn €250 million from the advertising revenue. Indigenous channels such as RTÉ and TV3 reinvest in the marketplace but these opt-out channels do not.

For the benefit of the non-technical people, will one of the witnesses explain "opt-out channels"?

Ms Dee Forbes

They are channels that originate in the UK such as the Sky channels and discovery channels and Channel 4, which allow a special place in the advertisement break for advertising only for Ireland such that they opt-out for the Irish market. For example, if one is watching Channel 4 in Ireland one will see advertising directly targeted at Ireland. That is an opt-out option.

If I were watching the same channel in Liverpool I would see a different set of advertisements.

Ms Dee Forbes

Yes, one would see the UK advertisements. They are allowed to opt-out for the Irish market.

Essentially, the revenue is not shrunk, it is spread.

Ms Dee Forbes

It is shrunk and spread.

On costs, Ms Forbes referred in her opening statement to high risk. High risk would be in the current affairs area. Is RTÉ's legal team employed in-house or are they contracted in?

Ms Dee Forbes

The majority of our legal team is in-house. There are times when we need to go out of house, perhaps for specialist help but we have a legal team that works regularly with our programming teams, particularly in the area of investigative journalism, which is highly risky. We have lots of obligations in terms of, for example, compliance in respect of which we need to have legal expertise in-house on a regular basis. We also have a lot of legal staff on contracts.

Has the cost in that regard been quantified?

Ms Dee Forbes

I do not have that figure to hand but I will forward it to the committee.

When it comes to the creative side of almost anything, what strikes me is that there is almost always the presumption that if people eat less it costs them less to live. The creative sector is a very exposed and precarious area. Is Ms Forbes conscious of this when contracting in staff or is there a public service obligation from the point of view of protecting the indigenous resource that is RTÉ, which is very much a people resource?

Ms Dee Forbes

As a national broadcaster, one of our obligations is to ensure that we foster, nurture and develop creative talent. RTÉ and I take this very seriously because that is the next generation that will come through. What is incredibly said in all of this, given where we are as an organisation from a funding point of view, is that we typically work with the independent creative sector such that we make some programming in-house and we also contract out as part of our obligations. A number of years ago we were spending €80 million in the independent sector on programming coming to RTÉ from outside. This has halved over the years, again because of the reduction in funding. I am concerned about the sector, as is the sector generally, because without RTÉ being strong in this area the sector is under-developing. As I mentioned in my opening remarks, the sector is desperate for a solution on the licence fee because the licence fee is one of big mechanism in this country to develop creative output but it is not being collected to the fullest extent. This is a problem. A few of us were in London last week at an event where the Irish ambassador was celebrating the great collaboration that goes on between the UK and the Irish creative sectors. There was a lot of Irish talent there, including actors and comedians, because they do not have jobs at home.

They are there because we in particular are not able to invest like we should do in that sector. That is a worry and is one of the biggest arguments that we as a society need to think about as we look to developing for the future. Without that creative culture, we are seriously missing out.

Mr. Jim Jennings

Can I add something to that as well? I think it is important to note that in our last strategy document, which we have submitted to the Department and to the Broadcasting Authority of Ireland, BAI, we outlined that we have worked very closely with all these external bodies. I refer to the Independent Broadcasters of Ireland, IBI, in the radio sector, Screen Producers Ireland, SPI, in television production, the Irish Film Board and the Screen Directors Guild of Ireland. We have worked in partnership with these people to develop a strategy to enhance the creative sector in Ireland, create jobs and maybe bring it back to the level it was at. My own view is that the sector that has been hardest hit in this downturn has been the independent sector, particularly in the television sector. Halving the available revenue has hit a lot of families and a lot of people's jobs. People have had to move abroad to find jobs in other sectors. It has been very difficult for those people with whom we work on a regular basis.

I have two other questions. Obviously we have got a list of RTÉ's top ten earners. If RTÉ did not publish that, we would all be complaining that it did not publish it. Let me acknowledge that first. However, it does give the impression that RTÉ has shed-loads of money. Whether the witnesses like that or not, that is the impression that it gives. It is then very difficult to argue that RTÉ is short of money. I do not know how the witnesses square that circle but I would be interested in a comment from them on that.

Ms Dee Forbes

First, I appreciate why the Deputy would think that and why people think it generally. Let us put some context around it. First, the cost of that talent to us as an organisation is 1% of our total cost base. Some 99% of our costs go to other things. That is the percentage that expenditure takes up.

The other thing that we really have to remember as we think about this is that we get half of our funding from the licence fee and half from commercial revenues. It is incumbent on these presenters and broadcasters, who are the best in the country, to ensure that RTÉ gets strong audiences, both from a relevance point of view and to be attractive to advertisers. We should remember that there is an onus on those people not just to provide a public service but also to make us attractive from a commercial point of view. One of our objectives as stated in the Broadcasting Act 2009 is to optimise our content from a commercial point of view.

The other thing to bear in mind is that there is a competitive marketplace for broadcasters. It is not unnoticed, in this country and in others, that these broadcasters can command big audiences and are in demand. There is a market for that. Outside RTÉ, some other broadcasters are being paid even more than some of ours but that is another discussion. It is also important to bear in mind that my predecessor, Noel Curran, looked at the situation a couple of years ago and corrected the level of salaries. They were significantly higher than they are today and were reduced by between 30% and 40%. We have committed as an organisation to maintain that and I am committed to that. When contracts come up for review, they will be assessed on the basis of the market at the time, as well as on a number of other factors. I recognise that it looks like a lot of money but a lot is expected of these people.

Is there really the competition that Ms Forbes talks about? Are there really so many options?

Mr. Jim Jennings

I think there is, to be honest. One only has to read this morning's newspapers, which mentioned the company returns of somebody who has left our company. They have gone up significantly in the last couple of years, so obviously there is a market out there. Our assessment is that of the top ten broadcasters in the country, five work in RTÉ and five are in the independent sector. That is our honest assessment of it.

I will also add a further point. The director general has noted that our top talent is really important to us but our top talent cannot produce programmes without the production team. I am always cognisant of the fact that it is not just the top talent; it is the production teams, that is, those who work with them on a daily basis. It would be remiss of me if I did not say that.

We must move on to Deputy Connolly's questions.

I will come back in if the Chair could put my name down.

The Chair has my name down to come back again.

I have .

I thank the witnesses for appearing and for the briefing papers, which were very helpful. I realise that RTÉ does not come under our remit, although my understanding is it did come under the Comptroller and Auditor General's remit until 1990. Is that right?

Mr. Seamus McCarthy

That is correct.

It changed after that. That might explain Ms Forbes' opening statement, because it certainly does not look at value for money. I appreciate the opening statement, and I actually share her concerns about the challenges facing RTÉ, which I will come back to. However, it really does not address what we are here about. Certainly in a personal capacity, let me say that I want to support RTÉ. Public broadcasting is absolutely an essential tool of any democracy, so let me preface all my comments with that.

However, there is also a duty on the public broadcaster to show that they are providing value for money. That is certainly not jumping out of Ms Forbes' opening statement. Maybe she was more concerned about telling the committee RTÉ's difficulties but it would be easier to address those difficulties if we saw the value for money. Before I ask a few questions, on a personal level, I certainly do not think the top presenters, the vast majority of whom are men, deserve that money. I have just done a quick count of the women listed. I think it is something that RTÉ should look at. I think the broadcaster has a very important role in providing a different voice and a different ear. As it is statutorily obliged to do that under the 2009 Act, there is huge scope to be different, instead of falling into the traditional market idea that we have to pay the top price, particularly for men. I do not think it is justified, that is just a comment.

I had a question about the review but I think the witnesses have partly answered it. Is the review due to be completed at the end of this month?

Ms Dee Forbes

At the end of this month. Part one.

Who is carrying that out?

Ms Breda O'Keeffe

Eversheds.

What is that costing? Is that a permissible question?

Ms Breda O'Keeffe

I believe that is commercially sensitive.

Why would that be commercially sensitive?

Ms Breda O'Keeffe

It pertains to competitive tender rates. We could supply that information separately.

Mr. Jim Jennings

We obviously have to go through a tendering process for all these contracts. There are a number of companies that compete for them.

Eversheds have got the contract and that company is in the process of doing the work. Why is it commercially sensitive at this point?

Ms Breda O'Keeffe

We can provide the information.

I do not mean to put the witnesses on the spot. Every month and week we look at these questions, and I have heard that phrase, "commercially sensitive" so often.

Mr. Seamus McCarthy

If I could intervene, I think one of the reasons for the decision to remove RTÉ from the remit of the Comptroller and Auditor General was to allow it a certain amount of commercial freedom in order that it could make payments and not be subject to the same level of scrutiny as might be appropriate to a body that is within my remit.

Ms Dee Forbes

To assure the Deputy, we have a tender process for all of these reviews. Our procurement process is very detailed and we have a lot of compliance regulations around that.

Have any issues ever arisen in relation to procurement? That is something that arises every single week with every public body. The issue of failure to comply with procurement processes arose this morning with the Department of the Taoiseach. Has that happened with RTÉ?

Ms Breda O'Keeffe

If the Deputy likes, I can take that question.

Ms Breda O'Keeffe

We have an extensive procurement-----

Please note my question, because my time is limited.

Ms Breda O'Keeffe

Is the Deputy asking if we have exceptions?

Have difficulties arisen, or incidents of non-compliance?

Ms Breda O'Keeffe

Under the code of practice, there are new reporting requirements for our compliance under procurement. We completed an extensive register, I would say for the first time, across our six business divisions, which are now restructuring. During that, we identified some exceptions, as of the end of the year. Those were cases where tenders perhaps should have gone out. Since that time, we have subsequently tendered one third of those. It was a very small number of tenders.

How many non-compliant incidents were there?

Ms Breda O'Keeffe

I do not have the number to hand but I can provide it.

Ms Breda O'Keeffe

We have identified them, and since that time we have been in the process of ensuring that the contracts are up for tender.

I note that language again. I do not mean to refer to Ms O'Keeffe personally, but I have heard similar language for two years. "We are in the process". "We are looking at it". Why is there non-compliance with procurement requirements in a public body?

Ms Breda O'Keeffe

I would say it occurs for a couple of reasons. We had 2,006 suppliers in 2017. We have a vast range of supplies. We have six separate business divisions. Moreover, it is a large organisation across multiple sites throughout Ireland and so it can be distributed.

The structure does not always lend itself to a centralised policy. Our systems are very old. That our overall finance and resource planning systems date from 2003 is one of the reasons for this issue, as is the lack of capital investment. I do not blame the committee in that regard but we need more investment in our equipment. We have identified some exceptions and have dealt with over 30% of those since year end.

Some 30% of non-compliant customers have been dealt with.

Ms Breda O'Keeffe

Yes.

What is the approximate overall cost of non-compliance?

Ms Breda O'Keeffe

I must apologise as I do not have that figure to hand because I did not think it------

That is okay. It is relevant to the committee. I have looked at the large but very succinct report of the Oireachtas committee. It is made up of appendices and contains ten recommendations. Do the witnesses wish for all of those recommendations to be implemented or are there some with which they disagree?

Ms Dee Forbes

They have all been accepted.

Ms Forbes wishes to implement the ten recommendations.

Ms Dee Forbes

Yes.

Of the €24 million that RTÉ has not collected, my household is responsible for €160 because níl teilifís agam.

Mr. Seamus McCarthy

Ná raidió ach an oiread.

No. Tá raidió agam. The evasion rate is between 14% and 15%.

Ms Dee Forbes

That is correct.

RTÉ is down some €37 million.

Ms Dee Forbes

That is correct.

The witnesses wish for that to be collected as it would make a huge difference to RTÉ.

Ms Dee Forbes

Absolutely.

In addition, they want my household and others like it, teach an fhir sin san áireamh. Ba mhaith leo go mbeidh ceadúnais againn.

Agus leis seo, the front page.

Mr. Seamus McCarthy

I do not have a television.

How does Mr. McCarthy watch himself on television?

Mr. Seamus McCarthy

I do not do so.

Ms Forbes is seeking a charge not based on a device.

Ms Dee Forbes

The way people consume media has changed so much, whether it is on a phone------

I understand all of that.

Ms Dee Forbes

That is why we are seeking such a charge.

Ms Forbes is seeking a charge that will not be based on a device such as a television, radio or iPad.

Ms Dee Forbes

Yes.

It is a recognition of the importance of public broadcasting.

Ms Dee Forbes

Exactly.

I think RTÉ has a role in that regard. In a personal capacity, I am open to the consideration of such a charge, although I am not in favour of extra taxation. Did RTÉ have a role in demonstrating the importance of public broadcasting?

Ms Dee Forbes

I agree with Deputy Connolly. We are currently running a campaign on our channels to showcase the depth and breadth of our news and current affairs programming. Such programming would not be delivered if it were not for RTÉ. We will be doing that throughout the year.

The value attached to a very good presenter should be based on his or her ability to do that job and rewarded with a very good salary - although not of the level that many currently receive - while recognising that such presenters at RTÉ are performing a public service, which is distinctly different to the situation at a for-profit radio or television station.

In answer to Deputy Cullinane, Ms Forbes stated that RTÉ meets the Department on a quarterly basis in regard to the oversight agreement.

Ms Dee Forbes

Yes.

Does that deal with RTÉ's obligations under the Broadcasting Act in regard to governance and finance matters? Does RTÉ report on those in the quarterly meeting on the oversight arrangement?

Ms Breda O'Keeffe

Our oversight arrangements under the Broadcasting Act are quite-------

Are they dealt with separately?

Ms Breda O'Keeffe

There are many reporting requirements under the Broadcasting Act. The principal requirement is under section 108, which is in regard to showing the attribution of our licence fee funding by service and also our public service and non-public service activities. We deal with that very detailed reporting requirement in notes 2D and 2E to our annual report, which we have attached to the briefing note submitted to the committee. It is quite extensive and-----

I thank Ms O'Keeffe. I have that note. Are obligations under the Broadcasting Act discussed with the Department in the context of the quarterly meeting? I refer in particular to an Gaeilge. Does RTÉ report to the Minister on a quarterly basis on its obligations in respect of the Irish language television programming?

Ms Dee Forbes

We do not go into that level of detail at the quarterly meetings. There is much discussion on an annual basis. I am sure the Deputy has concerns regarding our delivery of Irish language content.

Ms Dee Forbes

I also have concerns in that regard.

What are those concerns?

Ms Dee Forbes

That we do not spend enough money on it. We are currently spending €25 million on it annually, which is less than was previously allocated. However, we provide "Nuacht" as Gaeilge and several other programmes and are doing a lot on radio. Raidió na Gaeltachta-----

What programmes are being provided? I ask to be told if I am straying into areas members were asked not to inquire into. I do not believe I am doing so because I am addressing the matter in the context of RTÉ's obligations.

Ms Dee Forbes

We provide "Nuacht" for RTÉ and TG4. We also have programmes such as "Scannal" and produce certain theme-related programmes throughout the year. We recently had a programme on women in the GAA.

It must have been a very short programme.

Ms Dee Forbes

It was very good. When we submitted our strategy document to the Broadcasting Authority of Ireland, BAI, for the next five years, we were of the opinion that Irish language programming would benefit from the collection of the licence fee to the required level.

I am on record as stating that Irish language programming is not top of the list for RTÉ and that it is suffering inappropriately as a result of RTÉ's serious financial troubles. That is evidenced by the proposal to broadcast a recorded version of the "Nuacht" rather than a live broadcast.

Ms Dee Forbes

That did not happen.

Mr. Jim Jennings

We have not done that.

I am delighted. Tá mé thar a bheith buíoch nár tharla sé ach bhí sé ar intinn ag na finnéithe é a dhéanamh. That was proposed and I am using it as an example. In the context of RTÉ's understanding of its obligations under the 2009 Act, it is worrying that that was the first thing that it was proposed should go when RTÉ was in trouble . The proposal to record the "Nuacht" rather than broadcast it live was seriously considered because the news in English was more important and deserved better scope was the first item to be considered when RTÉ was being restructured. The witnesses may correct me if I am wrong

Mr. Jim Jennings

Without going into detail, that was not proposed because it was the news in Irish but, rather, because of where it was to be filmed. That has now been resolved between RTÉ and TG4. That was the issue in that regard.

Does Mr. Jennings understand that no matter what the issue was,------

Mr. Jim Jennings

I absolutely understand it.

------the consequence would be that a recorded version of the news in Irish would be broadcast, and that would go directly against the obligations of RTÉ.

Mr. Jim Jennings

May I say something on this matter?

Absolutely. I do not mind at all.

Mr. Jim Jennings

This is a matter in which I am very interested.

Mr. Jim Jennings

As the director of content, I do not believe we are fulfilling our remit in terms of Irish language programming.

RTÉ is not fulfilling its remit.

Mr. Jim Jennings

We are not doing so in terms of Irish language programming. I have expressed that view at the executive board. I have been in my current role for six months and have told the director general that I want the production of Irish language programmes within cláracha Gaeilge restored to its level before the cuts were imposed because that is important for us. I worked in rannóg na gclár Gaeilge many years ago and have strong feelings on the issue. There are many gaps in our Irish language output. The Irish language output on RTÉ Radio 1 is not stellar. We recently piloted a programme with Daithí Ó Sé and Maura Derrane and I hope to get it on the air. Leaving aside "Nuacht" and Raidió na Gaeltachta, we are doing things which are very important and quite costly parts of our remit------

It is not up to scratch. Mr. Jennings is unhappy with the current situation.

Mr. Jim Jennings

Yes.

What is the plan to change it within the existing budget and what case has been made to the Department to ensure that RTÉ complies with its obligations?

Mr. Jim Jennings

As the Deputy is aware, we submitted a five-year strategy. Irish language programming is not the only area that is challenged-----

I understand that. I ask Mr. Jennings to listen to my question because I have a limited amount of time and am currently homing in on the Irish language.

Mr. Jim Jennings

Yes.

RTÉ submitted a five-year strategy.

Mr. Jim Jennings

Yes.

What is the next step?

Mr. Jim Jennings

The next step is for that strategy to be approved by the Department and the BAI. We are waiting to see what happens in that regard. It will be on the Minister's desk.

It is about to land on the Minister's desk.

Mr. Jim Jennings

That is not within our control.

Where is it at the moment?

Ms Dee Forbes

That is with the Broadcasting Authority of Ireland, the BAI.

Is the BAI looking at it?

Ms Dee Forbes

It will go to the Department imminently.

What is the BAI looking at?

Ms Dee Forbes

It will look at everything. The BAI is our regulator and the first port of call. We are obliged by the BAI to do this strategy. We send it to the BAI and then it sends it to the Department. The BAI will have some recommendations or some commentary on the strategy for the Department.

Mr. Jim Jennings

I will answer one of Deputy Connolly's previous questions. Within the BAI's remit there is a level of commitment. RTÉ is answerable to the BAI with regard to a number of commitments around content and on whether we deliver. The BAI is our regulator.

That is what I was coming to. In the context of the Irish language, for example, and I could use the example of current affairs-----

Mr. Jim Jennings

Absolutely.

To date, what has happened with BAI's monitoring of RTÉ and its Irish language obligation?

Mr. Jim Jennings

The BAI would say, for example, maybe in the last year, that we are not fulfilling our remit on Irish language and we would say-----

Has the BAI come back and said that?

Mr. Jim Jennings

-----I cannot remember what the BAI said on that particular aspect.

I am not holding Mr. Jennings to one or two words. I am just trying to get to the essence of this. Has the BAI acknowledged, or come back to RTÉ to report that RTÉ is not complying with its obligations?

Mr. Jim Jennings

I cannot remember if the BAI has said that, to be honest. I would need to go back and look at it.

Ms Dee Forbes

The general theme is that at the moment we are not complying with a number of our commitments because of where we are in the funding space.

What are those commitments?

Ms Breda O'Keeffe

Specifically, I refer to RTÉ's annual report where one of our annual statement of performance commitments, which I mentioned earlier and about which Mr. Jennings is speaking, relates to what we call our Raidió na Gaeltachta audience. The commitments included that we would reach out to new audiences outside the Gaeltachtaí and abroad, set commitments to grow listeners aged between 35 to 54 years old, and maintain weekly share at a specific level. Those commitments were reached. These are just the specific commitments that I mention.

I am asking the witnesses what was not reached. Under the obligations in the Broadcasting Act, on page 64, it is all listed out-----

Mr. Jim Jennings

There is one. In the Meáin Ghaelige we gave a commitment that RTÉ would restore to full capacity the production in the Irish language department in television, and I believe this was communicated when Rónán Mac Con Iomaire attended the committee. This has not happened. This is one commitment that has not been reached, for example.

I am nearly finished. I have two more points. The strategic communications unit was before us this morning and gave to the committee documentation that was very interesting. The company that worked for the unit wrote to all the newspapers to suggest wording such as "working in partnership" with regard to Project Ireland 2040. The adverts went into the papers - unusual does not capture it - with straplines saying "in partnership with". Was there any such suggestion to RTÉ from the strategic communications unit?

Mr. Jim Jennings

That we would work in partnership with it?

Was there any contact from the strategic communications unit on Project Ireland 2040?

Mr. Jim Jennings

We can check that for the Deputy.

Ms Dee Forbes

We can check.

Mr. Jim Jennings

We worked with Departments on various things, particularly the 1916 projects and 1921 projects.

I am only trying to elicit information. Having read this, my mouth is open that advertisements would go out to the regional and national newspapers stating "... in partnership with the Government of Ireland". Did this happen with RTÉ?

Mr. Jim Jennings

No.

Ms Dee Forbes

Is the Deputy speaking of Project Ireland 2040?

Mr. Jim Jennings

Absolutely not.

Ms Dee Forbes

Absolutely not. We did not and there was nothing in that regard. No.

Mr. Jim Jennings

The Government would come to us directly if there was a particular project. The 1916 project was a good example. RTÉ found itself financially challenged. There were a lot of big projects that we wanted to broadcast for 1916 and we could not have done it without the support of certain Departments, such as the then Department of Arts, Heritage, Regional, Rural and Gaeltacht Affairs and the Department of Communications, Climate Action and Environment. Extra funding was delivered-----

On the issue of being financially challenged, the newspapers are also financially challenged and this was a wonderful opportunity for the newspapers. It was not a wonderful opportunity, however, for democracy and the media. They found themselves in a financially challenged situation with lots of money and the promise of more. Was there any Project Ireland 2040 work?

Mr. Jim Jennings

No.

Ms Dee Forbes

No.

No. Were any programmes offered by TG4 to be broadcast on RTÉ for nothing, to make RTÉ's life easier? Could "Ros na Rún", for example, be broadcast on RTÉ? It is cost neutral with no money involved.

Ms Dee Forbes

We are working on that with TG4.

What is being worked on?

Ms Dee Forbes

We are looking to take some TG4 programming to broadcast on RTÉ. We have a protocol arrangement with TG4 so we are obliged to provide content to TG4 regularly. As part of that arrangement we also look at what could help TG4 in branding.

That is what I am asking, about the reverse and that it would-----

Ms Dee Forbes

Exactly. That is currently. It is hoped that it would be up and running by the autumn.

Go raibh maith ag na finnéithe.

I will ask a few questions. I am aware that some members might also want to come back in. Given that the witnesses have said that RTÉ is financially challenged and so on, what is the wish for the National Symphony Orchestra, the RTÉ Concert Orchestra and the suggestion for the National Concert Hall?

Ms Dee Forbes

The wish is that Ireland maintains two orchestras. That was the recommendation from the Boaden report, which was published recently. The report also outlined that, because of the challenges we have, it is not feasible for RTÉ to continue to fund both orchestras in the current format. RTÉ must engage with the Government on how this will go forward because the Department of Culture, Heritage and the Gaeltacht and the Department of Communications, Climate Action and Environment have said that they recognise the need for two orchestras and they are willing to engage in conversation. It is the wish of everyone in RTÉ-----

Has that commenced yet?

Ms Dee Forbes

No. It is about to.

With regard to who will pay for it next year, RTÉ might have the issue sorted before the budget at the end of the year. Is that the view?

Ms Dee Forbes

I would hope so.

Okay. I have just a few more questions on the finance side. Ireland has one national broadcaster and we just take it as it is. The best judge of how that broadcaster performs is probably through comparison with television stations in other countries. I will ask some simple questions. What is the average cost of content for one hour? What is the average cost per hour of bought-in programming and home-produced programming, be they produced internally or through local production companies? How do RTÉ's figures compare? To me this is an obvious question. How much does it cost a station to put out one hour of television? Maybe my description of different ways of getting on air is not the same as the descriptions used by the witnesses, but they get my point.

Ms Dee Forbes

Again, I am very happy to provide the Chairman with detail on this because it very much depends on the hour. One hour of drama compared with one hour of documentary, for example, is very different in cost. I will happily come back to the Chairman with detail on this, but in broad terms and with regard to value-----

Ms Forbes must have some global-----

Ms Dee Forbes

Sure. With regard to value, some of the most inexpensive programming tends to be acquired programming.

This is bought in such as American soaps and so on.

Ms Dee Forbes

Exactly. The highest value programming would, for example, be a local, Irish, indigenous drama.

That is the highest cost per hour.

Ms Dee Forbes

Yes. It is Irish and it has high production values. This is the same the world over. The BBC and Netflix are putting the biggest money into drama. These are two very broad issues on costs.

Of the drama output that is broadcast, how much is produced by RTÉ and how much produced by other companies?

Ms Dee Forbes

Does the Chairman mean on RTÉ?

Ms Dee Forbes

We have a combination. It is fair to say that at the moment, for the reasons I have outlined, we do not have enough Irish drama. We have had a couple of dramas this year. They will be supplemented by some overseas-produced drama such as "Homeland", which is on at the moment. That would be classified as-----

I mean Irish-produced drama, be it produced internally by RTÉ or by companies who make it-----

Mr. Jim Jennings

"Homeland" could be acquired for about €5,000 per hour.

Okay, that is-----

Mr. Jim Jennings

To make an Irish produced drama would cost up to €1 million per episode.

That is €1 million per hour.

Mr. Jim Jennings

Yes. It can do.

Ms Dee Forbes

An important point was raised-----

Give me an example of an Irish home-produced drama that-----

Mr. Jim Jennings

We did "Rebellion" for the 1916 centenary.

Was that produced by RTÉ or externally?

Ms Dee Forbes

It was commissioned externally.

It costs €1 million per hour for some of those big dramas. Is much of it produced internally or is it nearly all external?

Mr. Jim Jennings

"Fair City" is produced internally.

What does that cost per hour?

Ms Breda O'Keeffe

Approximately €130,000 per hour. Soap dramas typically-----

What does the bought-in programming from England or Australia cost, such as "Neighbours"? What is the average for a programme such as "Neighbours"?

Ms Dee Forbes

It can be a couple of thousand euro an hour.

A few thousand euro an hour.

Ms Dee Forbes

That is because it is sold throughout the world.

The witnesses will understand that gives us information. It is all well and good to talk about drama, but there is a big difference between €2,000 an hour and €1 million an hour.

Ms Dee Forbes

Absolutely.

I do not think RTÉ gets that out there enough.

Ms Breda O'Keeffe

Can I just add on that-----

I am here a few years and I never heard that. Obviously we all know there is a big differential, but I am taken aback at the level of differential. RTÉ needs to get this type of information out. RTÉ can state it can run away on this cheaply bought in stuff but that if people want Irish content, this is what is required. There is no harm in starting to put some of this out there as part of the public debate and information. I hope today might help, or be the start of it.

Mr. Jim Jennings

There are different models and we have moved away from totally funding drama ourselves because it is too expensive and we cannot do it. We have looked to create partnerships with the BBC, with Netflix on one occasion, and with other production companies to make Irish drama here. There is an interest in Irish drama abroad also. With section 481, with the Broadcast Authority of Ireland sound and vision fund and with our funding-----

To explain, so the people who are watching us know what we are talking about, section 481 is the Finance Act provision with regard to tax relief for film production.

Mr. Jim Jennings

There is a model that we believe is more in tune with the creative sector here, which can bring in more partners and create more drama. We are looking at different models. When we do big, landmark, high-end drama such as "Rebellion" or "Love/Hate"-----

They are the exceptions. "Love/Hate" was expensive.

Mr. Jim Jennings

Yes, it was.

It is, however, authentic Ireland to an extent.

Mr. Jim Jennings

And sellable. That is the thing. When we put on one of those dramas, it creates a huge amount of employment here in Ireland when we think of everybody, from the actors and directors, to needing a writer's room of perhaps six or seven writers working full-time on it, to having the camera crew and all of the production crew. It creates a huge number of jobs in the industry.

Will the witnesses give us an indication of the programme that was on Sunday nights, "Dancing with the Stars"? I am sure that had a very big viewership.

Has the Chairman been approached to do it?

I am only asking about the cost.

Mr. Jim Jennings

Is the Chairman available?

Please do not do that to me. I am not talking about content, I am talking about cost. It is a franchise, so how does that work? If there is an outstanding programme-----

Mr. Jim Jennings

It is a franchise.

Will the witnesses explain the cost?

Mr. Jim Jennings

Stations pay a licence fee for it.

This is what the witnesses are here to talk about. They made a very strong pitch financially, and by God they are giving it everything here with regard to the licence fee. The other half of this is the cost of output and this is a fundamental part of our discussion. Will the witnesses talk about the funding and cost model of "Dancing with the Stars", and not the lovely costumes and dancing?

Mr. Jim Jennings

There is a licence fee. I will not tell the committee the exact cost of it because it is commercially sensitive.

Yes, I know.

Mr. Jim Jennings

A licence fee is paid to BBC Worldwide which owns the "Strictly Come Dancing" franchise internationally. We then pay for the production and the costs of the production, which are significant. There is a team of approximately 60 to 70 people, from the dancers to the producers, working on it here in Dublin to bring it to air every week.

Is it profitable for RTÉ to air it in terms of the advertising it gets and the viewership?

Mr. Jim Jennings

Is it profitable?

This is why we are here. We are the Committee of Public Accounts. These are the questions we ask.

Ms Breda O'Keeffe

We do not look at our programmes individually because of the dual-funded model. Programmes are funded by licence fee and they generate commercial revenue so we do not look at individual programmes.

I want to come back to the point on cost per hour and address the Chairman's point on efficiency, which it was remiss of me to let go because it is the same point. On transparency and cost per hour, we disclose our programme costs per hour by channel in our annual report. It is there. The Chairman has explored very well the range of costs per hour on our channels, which can vary.

I am going to ask the witnesses to send us as much information as they can, subject to commercial sensitivity.

Ms Dee Forbes

No problem.

I do believe it would help RTÉ's case to put it out there.

Ms Breda O'Keeffe

On the point on efficiency and value for money that Deputy Connolly raised, in 2015 NewERA did an extensive review of efficiency, in particular on cost per hour.

To explain NewERA, it is a holding company for the Minister for Finance for his shareholding in some of the State companies. Did it come in on a consultancy basis?

Ms Breda O'Keeffe

It came in on behalf of the Department-----

It is just when we use such words people do not understand them.

Ms Breda O'Keeffe

It came in and did a very extensive review throughout 2014 and made a report in 2015. With regard to efficiency, and I know the point Deputy Connolly raised on cost per hour, it covered both of those points. On efficiency, it stated in 2015 that RTÉ was producing more for less cost than we did in 2003. Almost 12 years later, we produced more than we did in 2003.

More for less. We have heard that phrase.

Ms Breda O'Keeffe

It has improved our financial transparency. In terms of cost per hour for programmes, it benchmarked us against other European broadcasters. It did an extensive exercise in some of the other European broadcasters and stated it read positively for RTÉ, with RTÉ's cost per hour at the low end of the range versus TV-only European broadcasters and at the mid-range of TV and radio broadcasters. NewERA judged us to be very efficient, and we should not be surprised to hear that, in that our cost base had reduced by almost one quarter.

I will ask the witnesses to share with us and send on as much of the full report as they can, because if there is information such as this in there and RTÉ is making a case on its financial stability, it needs to be out there because that is what the people see. People give out about the €160, and I know RTÉ regularly shows what we get for the licence fee and I understand that.

I have another small point. I notice the financial statements for 2016 were signed on 20 April 2017. RTÉ must be on the verge of signing last year's now. How close is it?

Ms Breda O'Keeffe

We signed our financial statement for 2017 and lodged with the Minister before the end of April, as required, and it now needs to be laid.

Approximately how long to do witnesses expect this to take? Is it a week or two or three weeks?

Ms Breda O'Keeffe

It is in the hands of the Minister-----

Traditionally, how long does it take?

Ms Breda O'Keeffe

July or August is generally-----

I say now to the witnesses they are not doing RTÉ justice and they should take this back to the Minister because it is not personally for them and we say it to every Department. A big organisation such as RTÉ has gone to the trouble of signing off its audited accounts at the end of April. The Minister should do whatever the Minister has to do to get them out there in the public arena as soon as possible. Coming out three months later makes it look as if it took the organisation six or seven months to publish its accounts. There is no good reason for this. I am sure it only takes a few minutes. If it has these quarterly reports, there should be nothing in the financial statements of surprise to the Department. It should be a very quick process to give a memo to the Minister to get them cleared. I ask the witnesses to speed up this process. This is something we are asking across the board with regard to shortening the release of annual financial statements. RTÉ is there or thereabouts.

We have asked about the top presenters, but there is a section on the remuneration of the director general. Will the witnesses explain and refresh my memory on this? It is on page 112 and it mentions Ms Dee Forbes and Mr. Noel Curran. I take it they are operating within public sector guidelines.

Ms Dee Forbes

Absolutely.

Why were the two there? It states that in 2016 both-----

Ms Dee Forbes

That is because Noel Curran left early in the year and I joined mid-year. We were-----

That looks like a total of about €370,000 for the two of them for 2016. Noel Curran is down for €190,000 and Dee Forbes is down for €178,000. Are the headings right?

What page is it on?

It is on page 112 of the annual report. It is normal to have the chief executive or board of directors. It also lists the directors' remuneration. In that year, Moya Doherty as chairperson received €31,000 and the ordinary members received €16,000. The witness can come back to us on this. They can send a paragraph to confirm it to us. I am not being personal, but it is regular that board remuneration crosses our desk.

I have a question or two more to ask. Will the witnesses talk to me about the sale of RTÉ's lands in Donnybrook and the impact it will have? It is something in the order of €100 million - I forget the figure. What will it do for RTÉ's balance sheet? It has loans of approximately €50 million. Will the witnesses tell us what happened? How helpful will it be to RTÉ's financial situation?

Ms Dee Forbes

A number of years ago NewERA recommended that RTÉ should look at its assets in terms of sale. A number of years ago the board decided that we should look at the sale of some land. It was agreed that we could sell up to ten acres of unused land within Montrose. Of course we had to go through the various Department consents. That involved a combination of our Department and the Department of Public Expenditure and Reform. We did all of that and we had consent to sell the land in March 2017, although it seems like it was longer ago. As you said, Chairman, we received €107.5 million for that land. In the course of seeking the approval and consent we were required to have clear guidelines with regard to what the money would be spent on.

The guidelines fall into three categories. One is around capital investment. As we mentioned earlier, we have not been spending money on capital over the years because of the cuts. Capital investment is much-needed in RTÉ throughout the country. The second area relates to paying down some debt. We have some debt. Again, we had to pay some of that down. The third area was to allow us to restructure the organisation. Again, we are cognisant of our costs in the organisation. We launched a voluntary exit plan that was enabled by the land sale; it was an attempt to reduce our cost base. These were the three areas of expenditure for which we could use the land money. It is clear. We have a clear process internally about how we do this. The money is ring-fenced. It is only for those purposes and nothing else. It will not be used for operational purposes because there are state aid rules etc. involved in all of that.

Can you give me an approximate breakdown of how much went on capital and debt reduction and approximately how much went on restructuring?

Ms Breda O'Keeffe

All of the figures relating to the land sale will be included in our 2017 annual report-----

We are getting a preview.

Ms Breda O'Keeffe

As you know, Chairman, the gross land sale proceeds were €107.5 million. Transaction costs were associated with that figure. We used external parties and advisers etc. There is a significant tax bill of 25% to be paid on the sale of the land. We needed to undertake a number of sales-enabling projects to vacate the land that Cairn Homes bought from us. The N11 entrance, as committee members will see-----

There is a big new entrance. Did RTÉ have to pay for that?

Ms Breda O'Keeffe

Absolutely. It was an important part of opening up the land and making it available and capable of functioning for additional housing.

There are lovely stone walls.

Ms Breda O'Keeffe

There are a number of other projects. We have a number of other projects that are currently under way. These involve moving RTÉ activities around the site. We will have significantly less than €107.5 million to report.

Is RTÉ carrying the land sold in the accounts? What is the cost that RTÉ will have to pay? What is the 25% tax? Is it capital gains tax?

Ms Breda O'Keeffe

Corporation tax is being assessed.

This was considered a trading asset and not a capital asset. Why was that so?

Ms Breda O'Keeffe

Yes, it is part of our trading operations.

Are you referring to the buying and selling of land, Ms O'Keeffe?

Ms Breda O'Keeffe

I am not referring to buying and selling of land, but it is part of the activity of the organisation. It is among the assets of the organisation. The ultimate tax bill will be in excess of €20 million on the land sale.

RTÉ will use that against losses forward. Is that correct?

Ms Breda O'Keeffe

No.

Why not?

Ms Breda O'Keeffe

I am not a tax expert, Chairman.

Did I see a figure for losses forward in the financial statement?

Ms Breda O'Keeffe

Tax losses forward are absolutely significant but we cannot use tax losses from a broadcasting trade against this particular trade on the assets.

I am going to ask you to send us a note, Ms O'Keeffe. Is that point specifically covered in the financial accounts?

Ms Breda O'Keeffe

It is not at that specific level of detail, but the tax charge is there in our current year losses. We have broadcasting current year losses in 2017.

Did RTÉ clear €17 million?

Ms Breda O'Keeffe

We did; we cleared a little more than that in fact.

You are smiling at me, Ms Forbes.

Ms Dee Forbes

I am simply smiling.

This is the Committee of Public Accounts. This is what we look at. The total sum was €107 million but there were enabling works and associated costs. Did RTÉ know about the tax bill coming at 25%? You probably did, Ms O'Keeffe.

Ms Breda O'Keeffe

Absolutely.

Mr. Jim Jennings

We did lobby-----

Ms Breda O'Keeffe

Let me clarify that we did not lobby not to pay. We did not lobby.

That was the wrong word. RTÉ representatives cried about it publicly.

Ms Breda O'Keeffe

We may have done that but we are very tax compliant and we hold that. We need to be and we are. That is a right and appropriate tax bill that we will be settling with the Revenue in due course.

RTÉ did net a healthy gain from the sale of land.

Has RTÉ received all the proceeds at this stage?

Ms Breda O'Keeffe

Absolutely, we closed the deal in July 2017. We banked the funds. They are ring-fenced for specific purposes, as the director general has outlined. These include expenditure relating to capital, restructuring and repayment of debt.

Do you have an approximate split of the capital versus debt reduction versus restructuring?

Ms Breda O'Keeffe

Yes, we have a high level of debt.

We know that.

Ms Breda O'Keeffe

As you can see from our balance sheet, Chairman, we had debt of almost €50 million at the end of 2016. We have repaid €10 million of that debt to Bank of Ireland to reduce our debt and gearing levels as well as to reduce our interest charges. That is the first thing that has happened and we have done that.

Organisational restructuring is ongoing.

That means redundancy payments and everything else. Is that right?

Ms Breda O'Keeffe

It is wider than that. It is not only about voluntary redundancy.

As a public body, what is RTÉ paying? Is it six weeks per year of service plus statutory redundancy? There must be a standard figure.

Ms Breda O'Keeffe

There is a standard. The terms and conditions of our voluntary exit and early retirement severance package have been set. There are two options. One involves early retirement. The second is a voluntary severance scheme, which provides for one week per year of service. We had extensive discussions with the Department of Public Expenditure and Reform on the offering and it was approved by the Department. It varies depending on weeks per year of service.

It was agreed with the trade unions too. Is that correct?

Ms Breda O'Keeffe

Yes, Chairman. You asked whether the offering was similar to other public sector or semi-State arrangements, and it is.

If it was not and if it was extra generous, then RTÉ would be used as a precedent in other organisations. You know where I am coming at this from.

How much went on capital? Was there some refurbishment?

Ms Breda O'Keeffe

We have to undertake significant capital investment. We are investing at half our depreciation levels at the moment. We anticipate that the majority of our funds – between €30 million and €40 million of the funds – will go on capital reinvestment. Some of that has already happened. It will take some years to roll out the projects but we are in dire need of capital investment.

I have some other questions. I am looking at page 141 of the RTÉ financial statements. How much interest has RTÉ been paying up to now? What are the interest rates? If RTÉ had borrowings of €50 million, the company must have been paying €3 million or €4 million. What is the ballpark figure? It is a complicated structure in the financial statements. Can you simplify it for viewers, Ms O'Keeffe? Is RTÉ paying much in annual interest? Can you give a figure to the nearest million? I am not looking for an exact figure.

Ms Breda O'Keeffe

I will have to come back to the committee on that. We have a couple of different facilities. We have a project finance facility with Barclays, which is a longer-term fund.

I am coming to the Barclays fund now. The details are on page 141 of the document. Will you explain one detail before I ask my next question, Ms O'Keeffe? What is 2RN?

Ms Breda O'Keeffe

2RN is our transmission network. It was previously known as RTÉ Transmission Network Limited. The company was re-branded 2RN. It is the transmission network, which provides the broadcast infrastructure for Ireland.

Does that include the big masts throughout the country?

Ms Breda O'Keeffe

Yes.

I will read out the note on page 141 - it really surprised me. It refers to lender security for the project loan facility. The note refers to how the facility for 2RN has been arranged with Barclays Bank Ireland plc amounting to €53 million in aggregate. The note relates to lender security. I am surprised at the level of security that the bank appears to have over RTÉ assets. One of the conditions of the availability of the project loan facility was that 2RN executed a security deed agreement and provided lender security, including security of lands of 13 main digital terrestrial television transmission sites. The bank has security on the land and all RTÉ re-transmission sites throughout the country.

Ms Breda O'Keeffe

Yes, they are on the mountain tops.

The security also covers 2RN present and future fixtures and fittings on the DTT transmission sites. That includes anything 2RN constructs on those sites. The bank has security over all 2RN rental income from occupational leases. That is fine. The bank has rights and benefits of 2RN insurance policies and an insurance proceeds account.

Will Ms O'Keeffe explain it to me? If there is a claim in respect of any of the properties, is it the case that Barclays Bank will have first call on the proceeds?

Ms Breda O'Keeffe

There is €53 million outstanding with Barclays Bank, of which €40 million was to fund the transmission network which RTÉ built in 2012. It cost in excess of €60 million. The Barclays project finance enabled it. Barclays Bank is an important business partner for us. The loan is secured on the assets and the income, if we or 2RN do not pay. However, 2RN is a profitable subsidiary in the overall RTÉ group, meaning that there is not an issue in that regard. It is not unusual to have project finance facilities secured on the assets with which they were built.

However, if there are receipts from an insurance policy, does Barclays Bank have first claim?

Ms Breda O'Keeffe

That is what was negotiated. It is not unusual. There are some insurance policies involved, but it is primarily secured on the assets.

As well as any income which arises.

Ms Breda O'Keeffe

Yes.

The witnesses referred to Sky, Virgin Media and competition in the marketplace. I have a Sky package, but I do not seem to get everything from RTÉ as part of it.

Ms Dee Forbes

The Chairman should be able to get everything from RTÉ as part of his Sky package.

Will Ms Forbes send me a note on the matter? For example, there is one channel on Saorview that is not available on Sky.

Mr. Jim Jennings

Is the Chairman referring to the RTÉ Player?

I see many things on Saorview that I do not see as part of my Sky package. I know that RTÉ has to pay to have them on Sky, but it has much content that is not getting to those of us who watch television programme on Sky. RTÉ does not have the RTÉ 1+1 channel on Sky.

Ms Dee Forbes

It is under discussion with the Department. One can get RTÉ 1, RTÉ 1+1 and RTÉ 2, but there is no RTÉ 2+1.

Why not? It is a big loss. I want to watch RTÉ 2+1, but I cannot do so on Sky. I am sure this affects 750,000 houses.

Mr. Jim Jennings

We have asked for it to be included.

What is the problem?

Ms Dee Forbes

For any change or addition we make to our services, we have to get permission from the Department.

Will the Department explain why RTÉ cannot use all platforms to gain maximum coverage in the homes of Ireland?

Ms Patricia Cronin

On the specific points raised by Ms Forbes, under the Act, RTÉ has to get our permission. Before that, the Broadcasting Authority of Ireland has to carry out a review which is then sent to the Department and the Minister for a decision.

At what stage is the process?

Ms Patricia Cronin

It is with the BAI. Once it is finished, the review will come to us and the Minister who will make a decision on it.

How long will that take? The hundreds of thousands of homes in Ireland which take their TV service from a Sky dish are missing out on much of RTÉ’s output. Then RTÉ complains to the committee about the competition in the market. It is like my local newspaper complaining that its sales are down when it does not put copies in all of the shops in the area. Do the witnesses agree or is there a hidden issue that I am missing?

Ms Dee Forbes

We agree.

Why are we only looking at the matter now? Why was it not sorted out years ago?

Ms Patricia Cronin

RTÉ had to make the proposal to the BAI first. There are processes set out in the Act which is prescriptive. The BAI must look at the proposal and then the Department. After that, the Minister makes a decision. There is no agenda.

Is cost a factor?

Ms Dee Forbes

There is a small cost but not much.

Will RTÉ do it as soon possible in order that we can watch more of its output?

Ms Dee Forbes

Absolutely.

Perhaps I am giving a perspective that the witnesses may not have expected. I just noticed that some RTÉ stations were missing on the Sky platform.

The Chairman did not want to miss “Dancing with the Stars”.

No, I always watched it live.

Ms Breda O'Keeffe

To go back to an earlier question, our interest costs in 2016 were €1.6 million.

That was not too bad.

Ms Breda O'Keeffe

Interest rates are relatively low.

There is good news from RTÉ. Obviously, there was an ask from the political system in terms of the licence fee. Most of it is not within the committee’s remit, but obviously the issue of value for money is. As the committee produces periodic reports, we will be reporting back on issues which arise from this hearing.

I am precious about the editorial independence of the national broadcaster which I fully respect and support. Like other members, I have a huge interest in public service and public broadcasting. Accordingly, editorial independence is important to me. However, so too is impartiality, most certainly political impartiality. How is it policed? Is it policed internally or externally to ensure there is no political bias, or any other bias for that matter, on RTÉ programmes?

Ms Dee Forbes

It is an important part of the principles of RTÉ to be unbiased, impartial and objective. We have strict journalistic guidelines to go along with this. We have our own internal check and balances. If one takes the current referendum, we have a strict process for measuring the amount of broadcast time given to each side. There is a group in place to do this. We take the matter seriously. I hope the Deputy will appreciate that we have to look at it in the round. On one programme one may get one particular viewpoint and the same viewpoint in another. We have to make sure that, in a given week, we are being impartial, unbiased, etc. It is a big principle and for what we stand. We take it very seriously.

Does RTÉ engage in an analysis of the social demographics to ascertain who might watch what shows? It may be the case that a different section of society watches “Love/Hate” or “Fair City” from those who watch “Prime Time” or listen to a current affairs programme on radio.

Ms Dee Forbes

Yes, on a regular basis. Knowing who is watching is important to us. For television programmes, one can look at the ratings in detail. We get them every morning for programmes shown the previous night. We can see who has been watching across age groups and demographics.

A distinction was made between a current affairs programme run by a private radio or TV station and the one run by the public broadcaster. Would Ms Forbes be concerned if any such programme was geared more towards the upper middle classes than the ordinary working class?

Is that something Ms Forbes would be aware or conscious of? Is it something that forms part of the analysis of the demographic breakdown? I assume that the organisation wants all sections of society to be informed about what is happening politically.

Ms Dee Forbes

Absolutely. It is important that our news and current affairs are broad and that is something we strive towards every day. The stories vary from politics to human interest and that is the nature of what we do. We provide a broad church to the people because that is what needs to happen. Some programmes are of more interest to certain people and that is the way it goes but, generally, our news and current affairs output attracts a broad spectrum.

Does RTE broadcast programmes on radio and television in which there is a fine line between current affairs and light entertainment, depending on how one views that? For example, is the Marian Finucane show considered to be current affairs or light entertainment?

Ms Dee Forbes

Current affairs.

Mr. Jim Jennings

Current affairs but it also deals with entertainment as well. It is a mixed genre programme.

Has RTE conducted an analysis of what type of listener the programme attracts? Is it pitched at a certain demographic?

Mr. Jim Jennings

No. Much like the television ratings, we get JNLR figures which go into detail geographically and demographically about the audience. We look at those for all our programmes to identify the gaps or, if we are super serving a particular audience, whether we need to change the emphasis.

Could Mr. Jennings share those breakdowns with the committee?

Mr. Jim Jennings

Yes, they are published.

Mr. Jim Jennings

Nielsen has its own website. The Deputy can access that information online. The JNLR figures are published every three months for all stations, not just us. They make for interesting reading sometimes.

Ms Dee Forbes

One of the greatest challenges all broadcasters have, on which we spend a great deal of time, is targeting specific audiences, particularly in the younger demographic. No matter where a company is in the broadcast world right now, it is a challenge. We are spending time on how we can address that, for example, by putting programmes on the player rather than on mainstream television.

I do not watch as much television as the Cathaoirleach and, therefore, I will have more time to study this documentation and I will read over it.

I have a number of questions regarding the employment issues I raised earlier which I was unable to put at the time. Further questions were raised during Teachta Connolly's slot. I will put these questions to Ms Cusack. RTE has just under 2,000 employees while it uses 500 people who are classified as self-employed or freelance, which is 25% of the overall staffing complement. Teachta Murphy asked about trade union representation. Is it correct that 75% of people employed by RTE enjoy fully collective bargaining and trade union rights while 25% do not?

Ms Eimear Cusack

Yes.

If any of the 75% has a grievance or a concern, he or she can go to their trade union. There is then a process whereby they engage with Ms Cusack's office. Is that correct?

Ms Eimear Cusack

Yes, that is correct.

However, that is not the case for the self-employed and freelance staff.

Ms Eimear Cusack

As they are not employees, they are not represented by the trade unions.

If they were a member of a trade union, would HR engage with them?

Ms Eimear Cusack

No, we have not done.

Ms Eimear Cusack

Because all our collective agreements are employee-based.

It is fine to have a collective agreement. Why refuse to engage with the trade union representatives of those on self-employment contracts, especially if they have been only given that option? They have not been given an option to be an employee. That would answer the question that was raised by people in the clips we heard earlier. They are being forced to accept the loss of the right to be represented by their trade union. Is that an outworking of the logic of having to accept that contract? Ms Cusack said that people on such contracts are not covered by a collective agreement. If people have a grievance about their terms and conditions, their trade union representative will be unable to have a conversation with her.

Ms Eimear Cusack

No. Any discussions are directly between the contractor and one of the-----

People join a trade union for a reason, which is that the trade union will properly represent the workers. There is a two-tier system in place in RTE. Some staff have access to trade union representation whereas others do not.

Ms Eimear Cusack

Yes, because those who are self-employed have their own companies and they are VAT-registered and so on. We do not go through trade unions in our discussions with them.

That is a problem. I have met them and some are women. They told me that they find it difficult to raise issues regarding their contracts for various reasons. There is an unhealthy relationship between the employer and employees in terms of power and they find it difficult to raise issues, which is why some joined a trade union. If they are saying this is an issue, then RTE is not a good place for people, yet they are being paid by an organisation that receives substantial funding from the taxpayer.

Ms Eimear Cusack

I go back to the point I raised earlier. Concerns have been raised and we have taken those on board fully transparently. That is why we have a review under way.

We will see what comes out of that review.

Ms Eimear Cusack

Exactly and we-----

Let us juxtapose this. I ask the witnesses to put themselves in the shoes of those who are earning €30,000 or less on one of these contracts but who are in the trade union. Their contract might be due to expire or they might have a difficulty with an element of the contract but RTE will not engage with their trade union for the reasons outlined by Ms Cusack. However, when it comes to those in the top ten or 20 earners who are contracted on the same terms and who are paid through companies, their agents engage with Ms Cusack. Why will she engage with the agents of these contractors who are well paid but not with the trade union representatives of contractors who are at the lower end of the scale?

Ms Eimear Cusack

I cannot answer that.

Ms Cusack cannot answer that because it does not stack up and there is no justification for it. RTE has a two-tier system. The well-paid contractors have leverage because of who they are and they can have an agent walk in and have a conversation with her about their contracts but she will not deal with the poor unfortunate contractor who is not as high profile as them and who does not have agent but who many have a trade union representative.

Ms Eimear Cusack

I am answering truthfully in that concerns have been raised by individuals and by the TUG and I do not hide behind that. The commitment has been given to carry out the review and address the issues as a result of that. There may be elements of the Deputy's questions that I just cannot answer and that is me being truthful.

Silence often speaks for itself when people cannot answer questions because if there was a logical and fair reason as to why this is the case, then it would be given but I have not been given one. I accept that Ms Cusack and Ms Forbes are committed to reviewing these issues and I have no reason to doubt their sincerity but there is a problem. Ms Cusack has not explained why one of these contractors on €400,000 who employs an agent can have access to her with the agent negotiating on behalf of him or her, yet other contractors do not have such access. I spoke to one of the more high profile people before the meeting. Mr. Jennings outlined why these presenters are so valuable and why are paid so much. There is competition and so on. He rightly mentioned that their producers and researchers are equally important. I have spoken to some of them who work on these high profile programmes. They are on these contracts but they are not happy and they are also concerned. These issues affect all of them as well.

Mr. Jim Jennings

We understand that and we have said that we are dealing with it. We can only deal with what is in front of us.

But what is in front of Mr. Jennings and his colleagues is difficult for those people.

Mr. Jim Jennings

And we have given a commitment that we will deal with it.

Ms Eimear Cusack

That has been shared openly with the TUG in the context of the terms of reference-----

Can I make one final observation? One of those very senior people I mentioned - one of those people the witness was quick to praise who is a producer on one of the top programmes and who is on one of these contracts - said to me when I spoke to them yesterday that if we do not address this issue, the RTÉ canteen will continue to look like a sample of people from Dublin 4 and will be not reflective of society. The reason is that if a person is offered one of these contracts on less than €30,000 a year, or something in that territory, one has to pay rent costs or mortgage costs, live in Dublin, etc. There is a particular type of person who is attracted to those jobs and it might be somebody who comes from a very wealthy background and whose parents can subsidise him or her as opposed to people from other backgrounds. The person I spoke to would be very respected within the organisation and a very public person. There seems to be an issue and that is why I raised the issue of class, which is important to me, and that the public broadcaster is not seen as reflective of one class of society, but of society in general. I welcome the fact that this is being reviewed, but I ask Ms Forbes, who certainly seems to be pioneering - I really commend her on the gender pay issue and some of the other work that is being done - that she look at this if possible.

I completely agree with the Cathaoirleach on Irish productions and the value of these and the spin-off from them. I would encourage more of that because it is of real benefit in terms of keeping talent here, notwithstanding the cheaper costs of getting in some of the American franchise programmes, which can attractive to do and which may be easier, and that it is more expensive and more difficult to hone domestic talent. I commend the director-general on that because it is very good.

I now call Deputy Catherine Murphy.

I will try to be brief. I wish to return to some of the employment-related points. Very often people who are working want to pay PRSI because there is social protection associated with pension rights and such matters. Indeed, there is a very big difference even if somebody is earning as much. That status can determine, for example, the ability to get a mortgage and so on. People's life choices can be determined by virtue of the type of employment they are in.

Leaving the review out of it for a moment, if someone was working constantly and looked for a change in his or her status, that is, to become an employee, would that be available to him or her? Is there an option like that for people who are essentially employees but who are self-employed?

Ms Dee Forbes

Does the Deputy mean going from being a contractor to a full-time employee?

Ms Dee Forbes

That would very much depend on whether or not there was an opportunity on a full-time basis because, as we said earlier, the mix we have at any one time is varied. We have a combination of full-time, part-time and then contractors.

Take for example a person who was working 20 hours a week for the last five years in RTÉ as a self-employed person but who would prefer to be an employee as opposed to a self-employed contractor who has to get an accountant and do all the kinds of things that would be ancillary to an employee. Would that be available to that person?

Ms Eimear Cusack

We have made those sorts of conversions from contractor status into employee status. If the requirements of the role similarly have changed, then on a number of occasions these positions are boarded or advertised as well. I have seen a number of those conversions in the time that I have been with RTÉ.

Was that a small number?

Ms Eimear Cusack

It would not be a huge number.

It is open to staff-----

Ms Eimear Cusack

It has happened.

I was conscious of the clips that were played. There was one employee of RTÉ and Mr. Seamus Dooley from the NUJ. They are probably in more secure positions. Would the security of a position make a difference, for example, to a contractor presenting that kind of a story as opposed to someone who is a direct employee and who would be more secure in his or her employment? Would that play a role at all or would the witness be conscious of that playing a role? Is that something that is part of this review?

Ms Eimear Cusack

I am not sure that I understand the-----

Would they be brave enough to do what Mr. Philip Boucher-Hayes did, basically?

Ms Eimear Cusack

I believe they would.

Would there be a consequence for them in doing that?

Ms Dee Forbes

Absolutely not.

Okay, I am happy that the witness has answered that.

The witness was asked about in-house legals. In terms of the influence of the legals in regard to programmes broadcast, obviously legal people are very cautious. Judgment calls have to be made all the time. How are the conflicts resolved when they come up because it may well be that RTÉ may be broadcasting something more hard-hitting that people might be happy to engage with in terms of programming? Does that inhibit such programming? Are the defamation laws something that the organisation would be concerned about in regard to the risks that the witness talked about in current affairs broadcasting?

Ms Dee Forbes

We have a steering group in place. We call it a compliance group. If there is a programme that is deemed risky or deemed controversial, we will take it to this group, which is made up of internal people, who are very experienced journalists. Those people will work with the producer on that programme to discuss, debate, etc. and to bring the programme to place where it will be okay to air.

The defamation laws are restrictive, of course, but we also have to be mindful of what is said. However, I do not think it inhibits us in doing our job. The journalists and producers are very well-versed in this. I cannot think of one instance of this since I have been there. Typically, we have an elevation and if there is a concern, I am the last port of call.

There was a high-profile case a few years ago and I am sure brought an extra degree of nervousness. People are entitled to their good names and so on. That is what I was thinking of in terms of how that might permeate through the organisation and it becoming possibly risk-averse.

Ms Dee Forbes

The important thing in all of this is that we are telling the truth. That is an integral part of what we do and that we are doing it within the boundaries of compliance. There are compliance rules that we have to adhere to. It does not stop us and Mr. Jennings might like to come in here.

Mr. Jim Jennings

I was in RTÉ when that editorial crisis happened. As the committee is aware, there was a thorough review of the editorial process within RTÉ. There were new editorial guidelines put in place. There was an editorial standards board, as the director-general said, put in place to deal with these issues.

We value and invest a lot of money and resources into investigative journalism. We are one of the few companies on this island that does this. We value it highly. If one looks at our output from the RTÉ Investigations Unit over the last few years, many of these programmes and their outcome have been debated in the Houses. It is really important in terms of public service broadcasting. It is something that we support wholeheartedly. There are some challenging decisions. One has robust debates, editorially, with lawyers and with the teams. As the director-general said, there is a structure in place and if editorial issues need to be escalated, they will be. Legal advice is legal advice and, ultimately, an editorial decision will be taken on these programmes.

I echo the point the witness made in regard to some of the very good broadcasting. In fact, there was an excellent programme broadcast last Thursday night on child and youth mental health. I would hope that this programme might be repeated because it has been trapped in yet another crisis, and it did not get the kind of attention that it certainly deserved afterwards.

I want to finish by returning to the licence fee and the evasion rates. Are we comparing like with like in terms of other countries?

Is it very similar? I am only familiar with the Irish licence fee arrangement.

Ms Breda O'Keeffe

I am happy to comment on that issue. We met the British Broadcasting Corporation, BBC. It is comparable. The Royal Mail used to collect the fee in the United Kingdom a number of years ago, but there was a move from the Royal Mail to collection by an independent third party and the evasion rates reduced dramatically. Before the agent was changed, the evasion rate was in the mid-teens. The Department's calculation was that there was a 15% evasion rate in Ireland; it is around 6.5% in the United Kingdom. It is mentioned in the briefing document that the rate is lower than that in some of the Nordic countries.

Ms Dee Forbes

It is 2% in Germany; 4% in Austria and 6% in Norway.

Ms Breda O'Keeffe

It is 6.8% in Norway, Switzerland and Denmark.

It may well be a different format, or is it a straight licence fee?

Ms Dee Forbes

In the United Kingdom it is a straight licence fee.

What is it in the other countries?

Ms Breda O'Keeffe

There is a straight licence fee in Norway and Denmark. We have not included Finland, for example, as it has a tax. There is a very low evasion rate and it would not be comparable. This is from an independent report of the European Broadcast Union, EBU, on licence fee evasion rates in 2016.

I refer to the figure of 24% which the witnesses say is due to outdated TV licence exemptions. Presumably, they are talking about people who are watching things on tablets and other such devices.

Ms Dee Forbes

On their screens, yes.

I thank Ms Forbes and the staff from RTÉ, the officials from the Department of Communications, Climate Action and Environment and the Comptroller and Auditor General. A piece of history was created today which marked their first appearance which I think went well. The meeting has been informative which is important and one of the reasons we are here.

Our next meeting is next Thursday at 10 a.m. We have changed our schedule for the public session. The purpose of the meeting will be to discuss the CervicalCheck scandal and the screening programme run by the HSE at a cost of €60 million. It also includes BreastCheck and BowelScreen. We have been in touch with the HSE to discuss its policy on open disclosure and legal costs and the State Claims Agencies to discuss its policy on open disclosure and the management of claims. We have to confirm who precisely will be here next Thursday. We will work on that matter tomorrow, but both organisations will be represented. We will try to reschedule the meeting that was planned with the Department of Public Expenditure and Reform. We have a commitment that both organisations will be represented next Thursday.

Who says we are not productive?

We are very productive.

The witnesses withdrew.
The committee adjourned at 5.05 p.m. until 10 a.m. on Thursday, 10 May 2018.