Licence fee rise would sponsor ‘irresponsible management’ at RTÉ

State papers 1986: Minister strongly critical of broadcaster’s handling of its finances

Minister Jim Mitchell, second from left, sought government approval to increase the television licence fee.

Minister Jim Mitchell, second from left, sought government approval to increase the television licence fee.

 

The public should not be expected to pay a TV licence fee increase to sponsor “irresponsible management” in RTÉ, a government minister suggested.

Documents from the National Archives show a memo was brought to government by minister for communications Jim Mitchell on the proposed fee increase in January, 1986.

It followed a major review of RTÉ carried out by consultants Stokes Kennedy Crowley (SKC) the previous year.

That review had found RTÉ had “failed to react to present-day economic realities”, that it was failing to keep expenditure below revenue and that staff should be reduced by 320, the memo noted.

Mr Mitchell sought government approval to increase the annual television licence fee by £5.50 a year to give revised fees of £62.50 for a colour set and £44.50 for a black-and-white television.

This was based on inflation from November 1984, plus a £2 once-off addition to finance a performance improvement/cost-reduction programme as recommended in the SKC review.

Then minister for finance Alan Dukes and minister for the public service John Boland opposed the increase.

‘Strongly opposed’

In his observations, Mr Boland said he was “strongly opposed” to the granting of a licence fee increase to RTÉ at that point. His objection arose “largely from the circumstances applying to RTÉ on the pay front and the attitude of RTÉ management to pay issues generally”.

Mr Boland said the payment of a licence fee increase “would lead to the dissipation in pay costs of at least a part of the licence fee increase and that it would release RTÉ from the discipline of having to come to terms with the gravity of its financial position”.

“It has to be assumed, on the basis of experience to date (and in particular the managers’ pay issue) that RTÉ will pay their staff the maximum round increase they feel they can get away with, and that they will not be prepared to seek savings by negotiating a phasing of outstanding pay awards.”

The minister added it was his view that “only the existence of real financial stringencies at this stage can force RTÉ to adopt a realistic attitude to the problem of pay costs in the organisation”.

Mr Boland also noted that during 1985, the broadcaster had paid interest-free loans to members of staff.

“This was during a period when RTÉ was experiencing or anticipating grave problems regarding overdraft, replacement of capital items, and cashflow.

“The minister believes that the public should not be expected to sponsor this kind of irresponsible management, which has been all too much in evidence in RTÉ, certainly on the pay front.”

Mr Boland said that before he could agree to a licence fee increase, RTÉ would have to ensure the repayment in full of all outstanding loans to staff, the resolution of existing pay issues, and a “clear and definitive” response to the minister for communications on foot of the SKC report.

Mr Dukes considered the £2 “performance improvement” aspect of the proposed increase was “open to serious question”. But he accepted the arguments for an increase in the licence fee in line with the consumer price index, however, in light of the “very heavy debt profile” of RTÉ and its serious pensions under-provision of £24 million.

This increase would amount to £3.50 for the colour licence and £2.50 for the mono licence. The minister said the “disproportionate” increase in the cost of the mono licence should be rejected as “a regressive measure hitting the poorest members of the community hardest”.

The government ultimately approved a £5 increase, to include the £2 performance-improvement element.