RTÉ dismayed at what it saw as raid on licence revenues

A letter sent by the RTÉ chairman Tom Savage in response to the decision by Minister for Social Protection Joan Burton to reduce the subvention paid by her department for the free TV licence scheme by €5 million has a stridency of tone that is unusual for the RTÉ board.

The letter to Minister for Communication Pat Rabbitte was written in early November, about three weeks after the budget, and probably coincides with the first meeting of the RTÉ board after the cut was announced.

The three-page letter goes into considerable detail about the adjustments that have been made in RTÉ in recent years to reduce its cost base and to deal with the substantial fall in advertising revenue during the recession.

Savage refers to a €130million reduction in cost base which included reducing the number of people employed in the organisation by 500.

He implies in the letter that RTÉ was aware, or was made aware, of other adjustments that would have to be made and also had to deal with revenues that fell short of projections in the first half of last year.

The point made by Savage is that the €5 million reduction from Social Protection was all but sprung on the broadcaster, and that it would be “extraordinarily difficult to manage”.

In the letter, Savage writes: “RTÉ’s public funding has been reduced to make a saving in the budget of the Department of Social Protection. In effect, RTÉ is being asked to bear the cost of national welfare policy.”

Pensioners
All pensioners in the State are entitled to a free TV licence as part of their household package. The Department of Social Protection pays the licence fee to RTÉ through the Department of Communications. In all, there are between 405,000 and 410,000 in that cohort and the fee is paid on behalf of them all.

However, in a letter from Rabbitte to Burton, he complains her department had, even before the budget, not been paying the full amount due. His letter asserts that the department was paying only €145 per licence and not the full fee of €160. That resulted in a shortfall of some €6 million already. Combined with the budget day decision to reduce the subvention by €5 million (from €59 million to €54 million), the overall “hit” that RTÉ was taking was some €11 million, he asserted.

Full cohort
In speaking notes prepared for Burton, the department has justified the reduction on the basis that the single payment on behalf of more than 405,000 pensioners significantly reduces administrative costs (in other words RTÉ and An Post do not have to go chasing after them all individually). It is also argued that RTÉ gets paid for the full cohort of customers, unlike the general population, where there is an evasion rate of 16 per cent.

In his letter, however, Rabbitte goes to some length in warning Burton and her department – in direct terms – against any further raids into the revenues raised for the TV licence.