Ms Dee Forbes:

I thank the Chairman and committee members for their invitation. It is a year since we last appeared before the joint committee, during which time a lot has happened at RTÉ. The expressed topics of interest are the financial statements in the most recent annual report, the publication of the review of the role and gender equality report in September 2017 and the assessment made by members of the European Broadcasting Union, EBU, as an informing element of the five-year plan for RTÉ which was submitted to the Broadcasting Authority of Ireland, BAI, and the Government on this date last year. What unites all of these disparate elements is that they reflect the journey of transformation RTÉ is on and also the challenges we face.

I turn to the annual report for 2017 which was laid before the Houses of the Oireachtas and published during the summer. It shows that RTÉ experienced a year of significant change in 2017. Against a difficult financial backdrop, it introduced a radically new organisational structure, reduced the size of its workforce, developed a new five-year strategy and managed the sale of land at its Donnybrook site, while continuing to deliver a breadth of compelling programming and content for audiences every day. Overall 2017 revenues were at the same level as 2016, but they were assisted by reduced operating costs. RTÉ returned a lower operating net deficit of €6.4 million in 2017 compared to a deficit in the previous year of €19.4 million. There were a number of exceptional events in 2017, as a result of which RTÉ recorded an overall net surplus after tax for the year of €42.1 million. This included a net gain after tax of €78.5 million from the sale of part of the Donnybrook site and deducting a large restructuring charge of €29.6 million. The net funds released from the land sale will be redirected to assist the organisation’s wider transformation priorities, used to finance an organisation restructure and invest in capital, as RTÉ has fallen significantly behind in essential capital expenditure and we need to keep pace with media and technological changes. This has also been cited in a range of independent reviews. A portion of the proceeds of the land sale has already been used to reduce the level of RTÉ’s bank debt.

Of the total of €216 million collected in licence fees in 2017, €186.1 million was received directly by RTÉ. This represented an increase of €7 million, primarily due to an allocation of €6 million in funding from the Department of Social Protection. This was announced in budget 2017 and a part reversal of the funding cuts in 2010. RTÉ welcomes the further progress made in that regard in budget 2018. As members are aware, in order to minimise the burden on the taxpayer, RTÉ is also obligated to support its public service provision through commercial activities. Its commercial revenue in 2017 was €151.5 million - €6.7 million less than in 2016. This was indicative of Brexit related impacts, including currency depreciation and investment uncertainty in the advertising market, as well as a decline in the overall commercial market in this country.

The outlook for 2018 and 2019 remains challenging. The fact that there are now 55 opt-out channels active in the media marketplace here will give members a sense of how competitive the Irish market is for indigenous broadcasters, to say nothing of digital advertising revenues which continue to migrate to the likes of Facebook and Google. Notwithstanding all of these financial challenges, RTÉ continued to deliver for audiences across all services, in broadcasting the most watched home produced television programmes, attracting over 1 million listeners each week to its radio services, while RTÉ news and current affairs continued to deliver the most trusted and comprehensive news service in the country.

I turn to the review of the role and gender equality report. Addressing diversity, both on air and within the organisation, is one of the stated objectives of the new strategy. As a means of assessing role and gender equality within the organisation, RTÉ commissioned Mr. Kieran Mulvey, former director general of the Workplace Relations Commission, to conduct a formal review. The resulting report contained a number of findings and recommendations, but, overall, it found RTÉ to be both a fair and equitable employer, with good terms and conditions of employment for its employees. The review found that RTÉ equalled and, in some cases, exceeded national policy objectives and targets for gender related employment. It found that the pay differential at RTÉ overall showed a disparity of approximately 4%, significantly less than the national average of 14% as quoted for the economy as a whole. It found that in the main there was little evidence to sustain any substantial argument that RTÉ discriminated in favour of either gender. It found that at the level of gender and pay, RTÉ was both a fair and equitable employer, with good terms and conditions of employment for its employees. It also made a number of constructive recommendations which included the need to streamline a legacy system of too many and too complex professional grades and that RTÉ needed to widen the context of its recruitment profile to include persons from more diverse ethnic backgrounds. We continue to work through the recommendations and many other human resources related transformation projects as part of a broader ongoing programme of change within the organisation.

Moving to the EBU peer review report, considerations for the future are inherent in any good strategy process. This meant that all aspects of the business were put under scrutiny and review in preparing our strategy. To assist us in that regard, RTÉ invited a number of members of other European public service media organisations to conduct an informal assessment of the organisation in terms of how it functioned, what it delivered, how it could better align itself with international best practice and challenged its understanding of public service values. The peer review group spent a number of days with us in May 2017 and the resulting report contained a number of recommendations and suggestions as to how RTÉ could best adapt to the challenges of the future and build towards future success. Many of the suggestions made in the report were already under consideration at that point and have been implemented since. While the report included many constructive suggestions for improvements, there was also strong praise for much of what RTÉ was doing and the passion and professionalism of its staff. The key findings made in the report were shared in the first instance with RTÉ’s own staff. The executive summary has been shared with the BAI as part of its deliberative statutory process for the five-year review and the Department of Communications, Climate Action and Environment. The BAI has concluded its own assessments in that regard and we await the Government's assessment of our submission and the recommendations of the BAI. Once it has formally responded to the BAI’s report and recommendations, its response and all of the relevant documents will be published. As per the last five-year review process in 2013, once the deliberative process concludes, RTÉ will publish its own five-year strategy and the EBU report in full, with appropriate redactions for commercial sensitivity.

Last but by no means least, I take the opportunity to formally record my thanks for the consideration given by the committee to the matter of public funding, as reflected in its own report which was published on 28 November 2017.

The report reflects a substantial level of research, international benchmarking, engagement with various stakeholders, public consultation and the committee's deliberations on this important subject. It is a comprehensive assessment of the current position and contains many cogent solutions. The committee's finding that more should be done to sustain national public service media is in line with the position of the BAI. When the BAI completed its review of our Renewing RTÉ for the Next Generation strategy, it issued a strong statement which recommended that "at a minimum, that RTÉ should receive an increase in its annual public funding of €30m per annum" and suggested that, in the light of "the urgency of RTÉ’s current funding position, the increased level of public funding recommended should be available to the broadcaster immediately". The regulator also concluded that RTÉ continued "to deliver value for Irish audiences".

When the Secretary General of the Department of Communications, Climate Action and Environment, Mr. Mark Griffin, appeared before the Committee of Public Accounts earlier this year, he noted that the TV licence model was broken. He also confirmed that there was a TV licence evasion rate of 14.6%, which represented a loss of €40 million a year. We reiterate our concern that the need for reform is urgent. In the absence of reform, there will be far-reaching consequences for journalism, national culture, creative expression and employment in the broader media sector. As the committee is aware, the former Minister for Communications, Climate Action and Environment, Deputy Denis Naughten, established a steering group to examine this issue further. We hope the recommendations that will emerge from this group will be implemented without delay.

I thank the committee for its attention. We look forward to addressing questions members may have.