I propose to take Questions Nos. 2 and 4 together.
RTE lodged a formal outline application with me on 5 October 2000 for an increase of £50 in the television licence fee. On 31 October 2000 RTE lodged detailed documentation in support of the application. My Department engaged PricewaterhouseCoopers to advise on the application. The consultants' report was received in late January 2001. That report identified a number of significant issues of concern arising from the consultants' examination of the RTE application which were not resolved by the further information supplied to the consultants. These issues were of sufficient significance as to preclude any submission by me to Government in the absence of additional information and clarification from RTE.
Following a number of meetings with the chairman of the authority, arising from the findings in the consultants report, at my request PricewaterhouseCoopers met the chairman and senior management of RTE to set out the type of information that RTE would need to provide in the form of an additional submission in order to address the issues identified by the consultants. Additional information supplied by RTE in support of its application for an increase in the level of television licence fee was received in my Department on 20 April 2001 and was examined by PricewaterhouseCoopers. Its report on the additional information was received by my Department on 5 June 2001. I have today made arrangements for copies of both reports to be laid before the Houses of the Oireachtas.
Having regard to the reports I formed the view I had no option but to adopt a phased approach to the question of a licence fee increase. On 3 July 2001 the Government reached a decision on the application. Based on my recommendations, the Government agreed to an increase of £14.50 in the television licence fee to take effect from 1 September 2001 bringing the colour television licence fee to £84.50 (107) and the monochrome licence to £68.50 (84), and to consider a further increase in the television licence fee from 1 April 2003, subject to prior independent verification that certain conditions have been met.
The intention behind this decision is to enable RTE to continue to provide the existing level of service while maintaining reasonable cash reserves. A very significant proportion of the additional revenue which a £50 increase would generate was proposed by RTE to be spent on improving the level of output and quality of indigenous programming. The Government could not agree to this element of the application because the RTE supporting argument was found to be less than convincing.
It is Government policy that public service broadcasting must be supported and strengthened. However, Government has to be assured that RTE has prepared itself both in its organisation and thinking for the new broadcasting era. Technological developments will allow for the establishment of many extra broadcasters who will compete for the attention of Irish viewers and listeners. Therefore, there must be confidence that additional public moneys provided to RTE through the licence fee will be efficiently spent on improving the quality of services rather than maintaining existing cost bases. Structures must be put in place to ensure that RTE's performance in delivering on its statutory remit is transparent and effective. The Government has deferred further consideration of this element of the RTE application in order to allow it the opportunity to provide such reassurances.
Having regard to the analysis by PricewaterhouseCoopers, the Government also found the case made by RTE to introduce new digital channels to be less than convincing. The Government believes that, as the national public service broadcaster, RTE has a vital role to play in the roll out of such services. The Government wants to see more convincing plans from RTE regarding the introduction of digital channels.
I look forward to receiving in due course its robust submission that will enable the Government to address with confidence RTE's financial requirements. I am satisfied that the Government decision in its entirety represents a satisfactory approach that will seek to ensure the financial viability of RTE in the long-term and render it more accountable without creating unwieldy bureaucratic structures.