Vol. 543 No. 4
4 Mr. McGinley asked the Minister for Arts, Heritage Gaeltacht and the Islands if her attention has been drawn to the impending financial crisis being faced by RTE; the plans she has to save the national broadcasting service from insolvency. [27301/01]
It is a matter for RTE in the first instance to arrange its financial affairs. Section 24 of the Broadcasting Authority Act, 1960, provides that:
It shall be the duty of the Authority so to conduct its affairs as to secure that its revenue becomes at the earliest possible date, and thereafter continues, at least sufficient–
(f2>a) to meet all sums properly chargeable to current account, and
(f2>b) to make suitable provision with respect to capital expenditure.
As the Deputy will be aware the Government decided in July of this year, based on my recommendation, to grant an interim licence fee increase to RTE. As I have previously explained to this House, the intention behind this decision was to enable RTE to continue to provide existing levels of service while maintaining reasonable cash reserves.
I am aware that RTE has recently indicated that its advertising revenues for the current year have fallen below projections and that it is facing financial difficulties as a result. RTE has also placed on the public record a range of measures that its executive board has decided to take to reduce its cost base. While it is Government policy that public service broadcasting must be supported and strengthened, I reject the inference that can be drawn from the question that the television licence fee should be regarded as a cushion against the real world market realities in which RTE operates.
When the Government approved the interim television licence fee increase last July, it agreed that it would consider a further increase when RTE got its act together in terms of the particular issues outlined in the Government proposal. RTE is aware of that decision and the work that needs to be carried out.
I am sure the Minister realises – indeed, she has admitted it in her reply – that there has been a drastic deterioration in the finances of RTE since the Government decision last July to grant a £14.50 increase of a licence fee application for £50. There is almost a weekly reappraisal of the downward income levels. Does the Minister realise advertising revenue will be down by £10 million this year?
Along with the rationalisation programme, where 330 personnel in RTE will be made redundant, it is now addressing a further number of compulsory redundancies – probably 150 – which would mean 480 redundancies altogether – almost one-quarter of the workforce of RTE. Does the Minister agree that the situation in RTE, if allowed to continue, will almost reach the same crisis level in which Aer Lingus is at present? She promised to carry out a review of the licence fee application and the situation in RTE in 2003 but there may be no RTE in 2003 unless matters are checked. Are the Minister and the Government prepared to bring forward that review to the end of this year at the latest because RTE cannot tolerate the drain on its finances as it will be out of cash next year if matters are allowed to continue?
I advise the Deputy not to put words into my mouth. It is acknowledged that costs at RTE are too high. This is acknowledged within RTE which has planned for a transformation agreement. The proposals that the executive board will put to the authority have been detailed in the media. The authority has a specific role in law and there will be discussions between the authority and the trade unions. RTE must arrange its financial affairs and that is what the authority is there to do.
With regard to the review, the Government decision was based on the fact that there were a number of issues that had to be looked at immediately. This has accurately been referred to as an interim licence fee increase. There were a number of other issues that needed to be addressed before that situation could be reviewed. I have said time and again that if those issues referred to in the Government decision are addressed before 2003, the Government will be delighted to hear from RTE. However, all of us know that serious issues must be addressed for the conditions set down by the Government to be satisfied, although RTE's financial difficulties in no way diminish what must be achieved. The licence fee should never be regarded as a cushion against the real world market realities in which RTE operates.
Can the Minister confirm the status of the development plans that RTE had relating to its education station and digitalisation programme? In the light of the serious financial losses at RTE, can we expect our national broadcasting service to finance these ambitious development plans? The plans are necessary if RTE is to compete in the 21st century in the areas of digitalisation, education and elsewhere.
The Deputy is referring to the work done by PricewaterhouseCoopers. In its report it was clear that much work needed to be done by RTE before any proposals could be brought forward with regard to digitalisation, for example. When we speak of possible licence fee increases we are speaking about public money, not an anonymous pot of money that people can dip into from time to time. If the Deputy is interested in seeing a further licence fee increase, perhaps he might advise the House on the increased amount that the believes people should pay.
It is the Minister who holds the position with responsibility for that matter.
