Oireachtas Joint and Select Committees
Wednesday, 17 October 2018
Joint Oireachtas Committee on Communications, Climate Action and Environment
Broadcasting Sector Reports: Discussion with RTÉ
In this session the joint committee will engage with RTÉ on its annual report for 2017, the independent review of the role and gender equality report and European Broadcasting Union peer review report.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the Chairman to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable. I advise that any submission or opening statement made to the committee will be published on its website after the meeting.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.
I welcome from RTÉ Ms Dee Forbes, director general; Ms Eimear Cusack, director of human resources; and Ms Breda O'Keeffe, chief financial officer. I invite Ms Forbes to make her opening statement.
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.
I will begin by asking some questions before calling other Deputies and Senators.
Ms Forbes mentioned that the BAI had recommended that RTÉ receive an additional €30 million per annum. I thank her for her comments on the joint committee's work on the future funding of public service broadcasting. Given that the elimination of the evasion rate of 14.6% would generate approximately €40 million, would that not be a way of resolving the issue of the funding shortfall identified by the BAI?
Ms Forbes mentioned that RTÉ had used the money it had received when it sold some of its lands at Donnybrook to reduce its bank debt. What is it current level of debt? By how much has it been reduced?
Ms Forbes referred to the finding made in the Mulvey gender and equality report that "RTÉ is both a fair and equitable employer". This is reflective of the position in the public sector generally. The report highlighted areas in which RTÉ was doing well. What are Ms Forbes's views on why a number of leading female journalists and broadcasters have expressed concern about the pay discrepancies within RTÉ? Is it a question of transparency? Is there a need to explain why there are differentials? What does RTÉ intend to do to improve the level of transparency? Perhaps there is a need to explain the various contracts. Will RTÉ be looking at phasing out anomalous contracts into the future?
I understand that in certain grades there might be an under-representation of a particular gender. For example, there is a lower percentage of male employees at the level of administrative and office-related operations. What is RTÉ planning to do to address that issue? I would like Ms Forbes to provide figures for the numbers of women in decision-making roles within the organisation.
According to Ms Forbes, RTÉ has addressed many of the issues raised in the EBU peer review report and acting on a number of them. I am aware that action is being taken as part of one RTÉ initiative, but will Ms Forbes tell the committee about any other area that is being addressed and worked on in this context?
I will bring in Deputy Timmy Dooley before I ask Ms Forbes to respond to the many questions I have asked.
I will try not to be repetitive. Ms Forbes has laid out the financial position clearly, as she has done previously on a number of occasions. In the past she pleaded with us not to get hung up on the capital moneys received by RTÉ from the sale of property because the moneys would be used to improve technology and try to keep pace with developments in the broadcasting sector. It is good that she is reiterating this point because people often tend to think the sale of an asset solves the funding problems caused by losses when that clearly is not the case. It is good that the BAI recently took the unprecedented step of setting out the need to ensure RTÉ had the appropriate funding. We regularly talk here about the funding of public service broadcasting. Members often prevail on the Minister and the Department to find that funding for RTÉ. I know that Ms Forbes shares our view that there is a need to help local radio stations to provide public service broadcasting as part of their remit under their licences, but they need State intervention and support. A programme of work is ongoing in that regard . All of this has been said.
A new Minister has been appointed to the Department of Communications, Climate Action and Environment. I suspect the joint committee will invite him to come before it in order that members can get a sense of his understanding of these matters and urgency in dealing with them. We have to undertake some work in that regard.
I would like to ask two questions in addition to those asked by the Chairman. The question of RTÉ's obligations to the self-employed and contractors may have been addressed by Ms Forbes when she appeared before the Committee of Public Accounts. Will she update us on the work carried out in that respect?
How is RTÉ's redundancy programme going generally? Ms Forbes reflected on that issue at a previous meeting of the committee. She might be able to update us further on it.
Ms Dee Forbes:
The Chairman asked about the evasion rate and the BAI's recommendation that there was an immediate need for €30 million in funding. As I said earlier, the 14.6% evasion rate equates to approximately €40 million in lost funding. In an ideal world everything would line up; the evasion rate would be tackled and we would get that money. We have been talking for some time about the need for reform. We recognise that it will take some time for the collection of the licence fee to be reformed. The BAI is stating this is an immediate need because RTÉ cannot wait for reform that would I hope generate additional income.
Deputy Timmy Dooley referred to the "unprecedented" nature of the BAI's statement that funding was needed now because RTÉ was in a crisis. That is the difference in the position and we have been saying this for some time. It is important to mention that additional money is not being collected in respect of homes that claim not to have a television. The current licence fee arrangement allows people not to pay the licence fee in respect of homes where RTÉ Player is watched online. That equates to a figure of a further €15 million. The other thing that is important is that that money would also help the industry. If we were to get it immediately, it would go back into creative industry to commission Irish content. The commissions would go to Irish production companies, which would help us to tell Ireland's story better. Our urgency is also reflected in the industry. I am sure the committee has heard from many people about the fact that our commissioning levels to Irish production companies have halved in recent years. We were spending €80 million on commissioned programmes, but we are now spending just €40 million on such programmes. Again, that is reflective. The urgency is reflected to us. In turn, it is reflective of what is happening in the industry. That is the difference.
I ask my colleague, Ms O'Keeffe, to speak about the land sale and the debt.
Ms Breda O'Keeffe:
I might also finish off the point about evasion. It is not conceivable that the current evasion level of 15% would decrease to 0%. The rate in the United Kingdom is 5% or 6%. The percentages are lower in some of the Scandinavian countries. While the rate of evasion here is 14% or 15%, it must be borne in mind that the rate is 0% in very few countries. The pot about which we are talking is probably between €20 million and €22 million.
In commenting on the bank debt I welcome Deputy Timmy Dooley's affirmation of our decision-making process for the land sale. We said clearly from the outset that the land was being sold to enable RTÉ to restructure, invest in capital, strengthen its balance sheet and capital structures and invest in the future. We welcome the Deputy's comments in that respect.
The proceeds of the sale were used in the first instance to repay €10 million of bank debt before the end of last year. That figure is included in our accounts. At the end of December our bank debt was €49.5 million. It is still high, but we reduced it by €10 million directly. As was rightly pointed out, the remainder of the proceeds will go towards the organisation's restructuring programme and the capital investment projects we have in mind.
Ms Dee Forbes:
We commissioned the report in September 2017. It came on the back of a great deal of controversy stemming from the BBC. There was a perception within RTÉ that we might have a problem, which is why we commissioned the report. Instead of reacting and addressing individual issues, Ms Cusack and I took the view that we needed to understand whether our organisation had a problem and to get the facts right. It is an emotional and emotive subject. That is why we asked Mr. Kieran Mulvey to undertake a thorough report on role and gender equality across the organisation. We have the facts from it. We are doing well in terms of the national average, but we have room to improve and much work still to do on some aspects. The report gave us a benchmark against the national average. I will let Ms Cusack discuss some of what we are doing to address areas of concern.
It is worth pointing out that ours is an organisation that has been around for 50 plus years and that we have many issues that have been around for a long time. We are working through a number of them systematically. We began with a review of role and gender equality. On the back of it, I committed to undertaking a contractor review. We are doing so. We are also committed to undertaking a grade review. As a legacy, there are more than 160 grades within RTÉ. We cannot continue with that number. We are systematically working through some of the issues to give ourselves the proper facts with which to work.
I ask Ms Cusack to showcase what we are doing on the back of the gender equality report.
Ms Eimear Cusack:
Mr. Mulvey made a number of recommendations in his report, some of which were easier to implement immediately than others. One of the issues he raised was the complexity of the grading structure within RTÉ. As it took 56 years to get to this lovely state, it will take us a bit of time to get out of it. We have started reviewing all grades in detail. In total, there are 167, including grades within grades. Our idea is to move to more of a job family model. The grades do not allow for as much mobility or flexibility for employees across the organisation as we would like. The purpose of the grade review is to simplify career paths for them and give opportunities for greater mobility.
Mr. Mulvey's report referred to diversity. The gender balance in RTÉ is more or less 50:50, but we have more work to do in terms of diversity outside gender. This morning we launched our diversity and inclusion strategy, which will take us to 2022 and beyond. It incorporates a detailed action plan for what we intend to do on and off the air and will address issues beyond gender, for example, perspective, thinking, background, etc. We are carrying out an in-depth employee survey to understand what
As for women in decision-making roles, Mr. Mulvey's report outlined that the ratio last year was 68:32 male to female. One year later, it is 61:39. It has primarily been done through internal competition. We continue to work on improving the balance where opportunities arise. Not unlike many other organisations, RTÉ has areas in which there is a preponderance of one gender over another. Administrative employees were mentioned. The same applies to engineering, an area which involves considerable shift work. It will take us longer to address, as we are not doing much recruitment. The majority of recruitment is internal. As part of our diversity and inclusion strategy, we hope in the medium to long term to open up our policies to make them even more inclusive, which should change the position a little.
That explains why, when the story broke, considerable concern was expressed about the transparency of pay disparities. There were different grades. Some of it was historic, with people working different hours, etc. Is RTÉ working on this matter? Transparency is key to understanding why people are earning particular salaries.
Ms Eimear Cusack:
Much of it is down to legacy issues in terms of how grades have built up over time and roles have morphed into others. We have an employee base of almost 1,800, most of whom are governed by grades. Grades are tied to union agreements and so on. The new model would provide for simplification and greater transparency because there would be less to examine.
Ms Dee Forbes:
The question about the EBU report. It was a voluntary request on our part for benchmarking and to have guidance for the future. The report set out good recommendations, all of which are in train. I will cite a few examples.
In terms of internal culture, one recommendation involved reconsidering project management to bridge the gap between announcing the new vision, going for a strong training plan and change management policy. We are going through a transformation and have put in place a number of elements. We have a change management leadership group which is representative of the organisation, for example. It meets regularly to drive the change agenda. It works closely with employee groups in order to discuss change and keep its ear to the ground concerning what is happening.
Communicating with staff is another important element. During a change process there is never enough communication. That is something on which we have worked hard. In the past year we have set in motion a number of focus and work groups. We have a group of 141 people across the organisation with whom we check in regularly to obtain views. We have increased our communication on the hub, our internal website. As Ms Cusack mentioned, this morning saw the launch of our diversity and inclusion policy. We are communicating in an attempt to help staff to understand what is happening and, importantly, receive feedback. We have a feedback loop via email. Much is happening on the communication front.
The structure piece was important. It came across loud and clear in the EBU report that RTÉ had a silo structure. We did and it served us well for many years. Given that the industry is now dependent on collaboration and understanding the audience, we have changed it. The structure is more reflective of audiences and content. With our content, we are putting the audience at the heart of the organisation. We are thinking about it as an audience first and the distribution mode second. The old silos of television, radio and digital are breaking down. They have not yet been broken down because it takes a while for a structure to bed in, but the early signs are good. There is some great cross-thinking across the organisation and projects that would never have happened two years ago are now happening. For example, we would typically have had a radio event on Culture Night.
This year it was streamed on RTÉ Player; it was on radio and a great live event in Collins Barracks. We are seeing a real transferral of ideas across the organisation and the organisation working on ideas in tandem. Audience needs were also talked about. It was mentioned that we needed to rethink the audience research in order to inform decisions. That is at the core of what we are doing and we have a new insights team helping with it that is working hand in hand with programme makers to help to influence what the audience is looking for, to identify what its needs are and, importantly, to reflect the diversifying nature of the population. We have to reflect what is happening in Ireland and through research we now understand it much more.
They are a few examples of initiatives that are ongoing.
I thank Ms Forbes for the report. It has been very frustrating for the joint committee because we commissioned a good report which we had hoped would give the Government cover to make some necessary decisions on the funding of all media, not just RTÉ. Our intention was to try to provide support for Irish media because, as we all recognise, local Irish media are under threat as advertising revenues go to largely international organisations. Ms Forbes mentioned the likes of Facebook, Google, Netflix and others in her presentation in that regard. It has been deeply disappointing that the committee and I have been unable to get an answer from the Taoiseach or the former Minister to get a sense of what their response would be. The €8 million allocated in the budget does not provide the funding necessary. Our concerns were added to by the Broadcasting Authority of Ireland echoing its concerns again this year and seemingly being ignored.
Can Ms Forbes give us a figure for projected commercial revenue in 2018? At this stage she must have a sense of what the end of year outcome will be. If it was €151.5 million last year, what is the estimated figure for this year because it will inform the urgency of the political decisions that have to be made. I admit that I was deeply concerned when I saw that there was only €42 million left of the capital windfall. What is the projected further cost of restructuring, given that there has already been a €29.6 million restructuring cost? What will RTÉ's minimum capital investment requirement be? I presume the investment will be in digital technologies and new studios, etc. but can Ms Forbes give me an indication of what the figures are in order that we will have an understanding of the financial position?
On content and strategy, it was interesting to read the EBU's peer to peer review of public service media, PSM, values. It picks up on a concern that RTÉ must have and which would be shared by everyone, namely, that the average age of the audience is 45 years. It signals the need for new channels and a new approach to children's broadcasting. When this issue first arose at the committee, there was controversy about what the future of children's programming would be within the strategic review that was under way. Can Ms Forbes update us on the plans for children's television, radio and other formats?
In the same vein, can Ms Forbes provide an update on what the approach will be to the orchestras? That is another issue about which concern has been aired in public.
Ms Forbes mentioned investment in independent broadcasting. That is why RTÉ is important for the wider creative industries in the country. The budget is down to €40 million. As I remember, that is the basement figure for funding and under the Broadcasting Act 2009, it is not possible to go any lower. I presume that that legislation stipulates that the figure has to be maintained, but if RTÉ runs into further financial difficulties, is that spending at risk?
I have another small question, but it is not insignificant. Ms Forbes mentioned the research reports on GAA rights overseas. Can she give me some indication of how much revenue it is bringing into RTÉ because I have always been of the view that it is part of a continuing trend, whereby the GAA has effectively been privatised, with Sky plc getting the rights and so on. I am interested in receiving from Ms Forbes an indication of the figure, if she can provide it.
On gender equality and equality for all, I was reading all of the figures for pay rates. Can Ms Forbes tell me what sort of family friendly arrangement RTÉ has? Is it possible for workers, be it a mother or a father, to take a sabbatical to work part time, not just because they might be contractors but because there might be a time in their career when they want to spend time with their children? There are many statistics for pay rates, but what flexibility is there for parents within RTÉ?
Ms Dee Forbes:
I will begin with the issue of commercial income before passing over to Ms O'Keeffe for some information on restructuring costs. We can proceed from there.
On the issue of commercial income, year on year the marketplace in Ireland is behind. When I mention the marketplace, I am talking about the traditional marketplace - the television and radio of old. We are expecting the market to be down a few percentage points this year. So far this year the indicators have not been as good as we would have liked because the impact of Brexit is continuing and some of the big advertisers that plan their media campaigns from the United Kingdom such as MARS Advertising Inc., Unilever and Procter & Gamble are feeling the pressure in their UK businesses and Ireland is affected as a result. There is also caution in car market advertising because it is being hit by the impact of the pound sterling being weak. There are some big months yet to come. October, November and December are significant for us in terms of our commercial income. Therefore, we do not yet have the final number, but I expect it to be behind that for last year. The counterpoint is that the world of Facebook and Google, etc. continues to increase. While we are not in that marketplace, we are about to launch our new player which has been in development for almost two years. It will be a much more pleasant experience for the user and the consumer because the front end has been designed in a much better way, but we are also hopeful there will be the ability for us to earn revenue on the new player because this is the area for which advertisers are looking. They are looking for environments where they can plan across all audiovisual content, from television to digital platforms. We hope we will be able to increase our revenue, but it is a worrying trend that traditional broadcasters, newspapers and even indigenous radio services are having a difficult time at the mercy of Google and Facebook.
Ms Breda O'Keeffe:
On restructuring, Deputy Eamon Ryan rightly points out that there is a charge of €29.6 million in the 2017 accounts. As part of the overall restructuring process, we provided that we were projecting that we would reduce overall staffing levels by between 200 and 300. The money was included in the €29.6 million. Our severance and early retirement schemes are entirely voluntary; therefore, when we launch them, we do not know at that point in time who will accept them, whether we can allow them to go or not, with the pressures on resources in the organisation. Therefore, the provision we made was based on a projected number of between 200 and 300 staff leaving. That is our overall provision and what we estimate the total cost of restructuring to be. Approximately 150 people have voluntarily left the organisation under the early retirement and voluntary restructuring scheme.
The Deputy also asked about the minimum capital investment. We have said before that for a number of years we have been under-investing in capital. Our depreciation level is around €14 million each year; therefore, on balance, it is expected that capital investment would be in that order of magnitude for normal replacement. Unfortunately, however, due to our financial circumstances, we have been curtailing capital investment for a number of years to about half of that level, which is not ideal.
The land sale will enable us to rectify some of this. As the director general said, we are still in catch-up mode in that sense. We anticipate investing somewhere between €30 million and €40 million of the proceeds in capital.
Ms Dee Forbes:
I will move through the questions asked by the Deputy. He asked about the orchestras. We are in the midst of a follow-up. Again, where we are with them is indicative of our overall position. I commissioned an independent person, Ms Helen Bolton, from the BBC to look at the position we were facing and come back to the organisation with a view on how we could sustain two orchestras in the future. She came back with a thorough review of the need for orchestral provision in this country and to sustain two orchestras. She made it clear that the system of funding was simply not sustainable. Her view was that the drain on RTÉ was significant and that to sustain two orchestras, something would have to be done. Her recommendation was that the concert orchestra should remain with RTÉ. Typically, in the old days of the radio orchestra, it would have been used in broadcasting. The view then was that the symphony orchestra should be taken out of RTÉ and either set up as an independent body or aligned with the National Concert Hall.
Since the report there has been much debate and discussion with the Department and the Department of Culture, Heritage and the Gaeltacht. It was recommended by both Departments that the RTÉ National Symphony Orchestra should be aligned with the National Concert Hall. We are going through the mechanics of how that will happen. Importantly, it was also stated an extra €4 million would need to be allocated for the symphony orchestra to enable it to happen. All of that is under way. A working group is in play to look at how it will happen. Importantly, there is recognition on the part of everyone that we need to sustain the two orchestras. It will take some time to work through this. In the meantime, we are, of course, working closely with the orchestra, the National Concert Hall and both Departments to ensure the provision of orchestral services is maintained throughout this period. Considerable work is ongoing on that project.
Another area mentioned was investment in children's and local production. Our spend on children's programming has been severely curtailed in recent years. In 2008 we were spending €16 million on such programming, while in 2016 we spent €6.5 million. That is really not good, nor is it where a public service broadcaster should be. Again, we were faced with some difficult choices. In recent times we have been working differently with children's content in that we are commissioning all such content. We are working closely with the independent sector to ensure the content we are commissioning is coming from within the country. In particular, we are working with the animation sector which is so strong in this marketplace. We have been doing considerable work with it. That is where we have been focusing our efforts. Recently we appointed a new head of young people's broadcasting. She is working on her strategy to ensure we know where children are. The player will play a significant role in that regard. We need to recognise that children are consuming content differently. They need to see content when and where they want it. They are not defined by schedules. The new player will allow us to have a dedicated area for children that will be completely child-friendly. It will have parental controls, etc. Again, what we will see in this sector is a great deal of activity taking place on the player for children because that is where they are going. It is an evolving strategy but one in respect of which we are spending as much as we can on Irish content for our audience.
Reference was made to family-friendly working. Ms Cusack will address that question.
Ms Eimear Cusack:
Ours is a 24-7 business 365 days of the year. A high degree of flexibility is built into the business model, as it stands, because we have people working 24-7. Our policies have been designed to afford flexibility. There is part-time working and reduced hours, etc. We more or less have the full suite of family-friendly policies.
Will RTÉ's representatives come back to me with a written response to the question of GAA funding and how much money comes from it? It is a specific technical area in which I am interested.
I wish to make a general political point. I asked the Taoiseach last week or the week before about promised legislation on the funding of broadcasting in Ireland. He said Ms Forbes, the chairperson of RTÉ or other representatives had been in to meet him and, I presume, the Minister. I note that a steering group was set up to look at the licensing issue. Another working or steering group is looking at the European Broadcasting Union's report and the Broadcasting Authority of Ireland's report. Does RTÉ have any sense from the Government as to when there will be a resolution of the question of the future funding mechanism, especially with reference to the licence fee? Does RTÉ have any timeline for when the steering group will report on our report, the BAI's report and the EBU's report? Almost everyone knows that the current system is not sustainable for a range of reasons. It is not even sustainable politically to allow a 14% underpayment of any tax. That undermines public confidence in the public funding system. When are we going to address that issue? Did RTÉ's representatives get any sense at the meeting with the Taoiseach as to when it would be resolved or when the steering group would report?
Ms Dee Forbes:
I gather that the new group that has been formed will report back at the end of quarter 1. That is what we have been told and it is being seen as a critical point. Between now and then, we very much hope we will receive a report on our strategy because it has been with the Department for some time. Certainly, the Taoiseach said it was a priority to have it looked at, that the recommendations of the steering group would be listened to and that we would then regroup. Again, it is worth saying we were pleased at receiving €8.6 million in the budget. It is not €30 million, but it will certainly go some of the way towards helping our situation. I hope it is the start of something. I have to remain optimistic.
Ms Dee Forbes:
I will say again - I said it here last year - that our position is critical and that we cannot go on, given the world and the industry we are in. We are surrounded by competitors that are spending multiples of millions and billions in this area. For us, the uncertainty is proving to be our biggest Achilles heel. We are simply not doing the things we should be doing. We have to be particularly cautious, although we are asked to be innovative and forward-thinking, but it is particularly difficult to be that way when we are unsure of from where our next tranche of money will come. There are things we all wish we could be doing and which, frankly, we should be doing as a national broadcaster. The uncertainty is stopping us from doing them.
I welcome our guests. I strongly believe we should adequately and comprehensively fund RTÉ within the normal budgetary parameters as we need an independent and successful national broadcaster. There is great sentiment for RTÉ which I share. We are very proud of it and want to keep it. I do not think there is an issue in that regard.
Through my work as a public representative, an approach was made to me by representatives from the independent production sector.
Naturally, it is constrained in terms of finance and potential. Arising from my conversations with the sector, how would Ms Forbes see RTÉ using some of the extra €8.5 million it received in the budget? While we want to see more and a better long-term arrangement, it would not do to allow this meeting to pass without recognising that in the new budgetary environment there has been an increase of €8.5 million, which is both significant and welcome. We were in constricted circumstances up until now, but there is now an acceptance that funding RTÉ is necessary. In the next three years what does Ms Forbes propose to give to the independent productions sector? Does she see RTÉ increasing its payment or grant aid to the sector? She mentioned sourcing material for children's programmes from the sector, but can she do more for it? Does she accept that it has a problem?
Having said that, I favour State investment, but in the light of my last question, there is an elephant in the room. It is populist, but let us address the issue as people throughout the country are talking about it. I would like to hear Ms Forbes address it again. If she addressed it in the early part of her presentation, I hope she will forgive me as I missed the first few minutes of it. If I were to go back to my local community tonight and tell it what I was doing this evening, I would be asked why I did not ask about the salaries of the top broadcasters. I personally recognise that one cannot have high quality broadcasters and pay them peanuts, but the question still arises. Does Ms Forbes think the salaries paid are proportionate? Are they necessary to attract the best people? Does she see a drain if the best people were on lower salaries? How would she inform us in that respect? There is an audience, perhaps a misinformed audience, who would like to hear the answer to that question and believe the amounts paid are too great. It is a constant theme. I do not want to cite individual broadcasters, but people will cite broadcaster X or broadcaster Y and ask me what we are doing about his or her salary. They will ask me why the salary is two or three times that of a Minister or double that of the Taoiseach.
My third point concerns evasion. I am very impressed by RTÉ's recent advertising campaign on licence fee collection. It is very good and effective to bring in extra licence fee income. I hear the advertisements in the car and think they are good. I take the point that 14% is probably a relatively acceptable level of evasion. It is not acceptable, but it is normal enough. Does Ms Forbes see methodologies, whereby it could be reduced, beyond RTÉ's very effective advertising campaign which is excellent?
I see that there was a 24% drop in RTÉ's operating costs between 2008 and 2017. Will Ms Forbes elaborate a little on the factors that impinged on that reduction? What drop in operating costs would be sustainable, even in good times? In other words, has RTÉ got rid of some pulp such that the drop could be sustained? How much of it is sustainable and how much of it was down to the exigencies of the recession? How much of the reduction was made in areas in which Ms Forbes would like to funding reinstated? How much of it was a genuine cull that will prove helpful in the long term? People listening to this debate will want to know the answers to thse questions. I welcome the decline in the sense that RTÉ was in a difficult budgetary position, with which it coped well, but I would like to hear more.
The gender equality issue is one of which Ms Forbes is well aware, but will she comment on the lower salary bands, in which women are disproportionately represented? I do not need to go through them again. I do not think it is necessary to do so, as we are aware of it. There is a disproportionate number of women on basic salary levels and, as one moves towards the top salaries, it is almost the inverse or the converse. Of course, that would be a source of great concern in any civilised society. Will Ms Forbes comment on the issue? Is she confident that she can address it practically and successfully in the short term?
As a country person and somebody from a Border constituency, I am concerned about the issue of regionalisation and local news media. I would like Ms Forbes to comment in two ways. Unfortunately, because of the nature of our job, we do not get to see enough television programming because we are on the road. Perhaps I am wrong or right, but I get the sense that RTÉ is making a concerted effort to move towards regionalisation in its broadcasting, something I would welcome. Does Ms Forbes see it as intensifying or increasing? Could RTÉ do more in that regard? How can it be twinned with better financing of local and community radio services? Is there an inherent conflict in that rgard? I hope there is not.
I am very interested in TG4 because it has done a huge amount for the language, our culture and heritage. It is the jewel in the crown from many's perspective. It is amazing the number of people living in the Galltacht or the Pale who watch it. Where are we at with it? Is Ms Forbes confident that it can continue at the same level? Is it adequately funded? Where does she see it going in the future? There is a huge constituency with a passion for and interest in TG4. I am one of them. I would like to hear about this, but it is not just me who is relevant but the people we represent.
On the archives, my good friend and colleague, Deputy Eamon Ryan, was Minister when the legislation on the Broadcasting Authority of Ireland was piloted through the Oireachtas. I was spokesperson for my party in the Seanad at the time. We spent many successful days together. I have a great passion for and personal interest in the archives. I am, therefore, very impressed by what Ms Forbes had to say about them. The extra use being made of them is wonderful. I hope I will not be involuntarily retired at the next general election - I do not intend to retire voluntarily - but whenever I get to retire, one way or the other, I would love to spend a lot of time looking at the archives which are fascinating. My area of interest is history. The archives are a huge national resource for the people, emigrants and future generations. It was a wonderful development. If one were to check the Official Report - I do not propose that anyone should do so - I constantly went on in the Seanad about the archives and their importance.
They are some of the points-----
I am finishing. I have tried to marry two things: my personal interest and the many questions the public would wish us to ask. They might seem to be superficial or populist, but they are real. As people are very concerned about them, I would like Ms Forbes to address them head on.
Ms Dee Forbes:
First, I thank the Senator for his comments and support for RTÉ, about which we are very pleased. Long may it continue. I have a little tip for him in being on the road so much. I do not know if he is aware of this, but RTÉ News Now has a fantastic app he could download on his phone. If he is in the car and travels around a lot, he should download it. It has the most up-to-date news from all around the country. In fact, I will dovetail that point with our regionalisation piece because the Senator is right, regionalisation is a huge focus for RTÉ. Obviously, we have offices and correspondents throughout the country and many of our programmes focus on bringing stories from the regions or localities to the public. We will absolutely continue doing so. With the advent of digital and the proliferation of mobile phones, having a strong app, with a regional focus, was very important and we were very keen on having it. Many stories come in every day from throughout the country that do not make the "RTÉ News: Six One" or "RTÉ News: Nine O'Clock". Now we have a place on our app for them. If one opens the app, it is broken down regionally and one can see more stories. If one wants to open the Munster, the Connacht or the Dublin section, one can drill down and find more local stories than one would on "RTÉ News: Six One" or "RTÉ News: Nine O'Clock" because physically we do not have the space on these shows for them.
One of the great advantages of the digital era is that we now have platforms on which we can tell more stories in that way. It also allows people to catch up when they are travelling. The app is updated regularly; there is video and it sends notifications, if people want them. If the Senator does not have the app on the phone, he should download it to keep up to date with what is happening throughout the country.
The Senator asked how we would spend the extra €8.5 million. He also raised the issue of top talent pay.
Ms Dee Forbes:
Yes. We are very grateful for the additional funds. It is important first to consider that the organisation has been and is in an environment of deficits. What we are doing above everything else in the organisation is trying to protect content because that is what our audience wants and what we are there to deliver. We are doing everything we can to protect spending on content and, in turn, ensure we have the best programmes for the audience. There are two core areas on which we really want to focus in the coming years with the Irish production sector, namely, drama and children's programming. We have already begun that work. We have gone from having very little Irish drama content to really increasing our investment in it. This autumn will see a strong drama on RTÉ called "Taken Down", on which we are working with the sector. As I mentioned to Deputy Eamon Ryan, the second area where we really want to do more is children's programming. We have an obligation to ensure kids get the best content. They are areas on which we really want to focus. The big question is whether we can get there because, as I said, the money must be considered in working against a backdrop of deficits.
Ms Dee Forbes:
If we have the money, of course we will. Our five-year strategy outlines clearly where we want to put more money. In recent years the content of every genre on RTÉ has reduced, but the areas of drama and kids' programming were probably the most affected.
The matter of top broadcasters' pay is something on which RTÉ has been very focused for several years, even before my time. In 2008 we began to publish the salaries. It is important to say that at the time we made a commitment to benchmark ourselves and maintain a 30% reduction from that time. We have maintained it and will continue to do so. Last year when we published the salaries, I said it was something I was examining very carefully and that, as and when contracts came up for renewal, we would have to address the issue. I appreciate that it is a concern.
Does Ms Cusack want to address the pay bands and women in different roles?
Ms Eimear Cusack:
It returns us to my earlier point that we had a grading structure that was very rigid and did not allow for mobility. There is a system of increments that are capped at a certain point. One of the driving forces behind the grade review is opening it up to reduce the number of grades and create job families to give people greater opportunities to move and progress within the organisation. The matter is in hand, but it will take a little time to get there.
Ms Breda O'Keeffe:
There was reference to a 24% reduction in operating costs. If one rolls back the clock, as a result of the exigencies of the economic crisis, in response to the fall in revenues, we had to reduce our cost base significantly by about 30% or over €100 million between 2008 and 2012 or 2013. We did this through very significant pay cuts for our staff, averaging between 2.5% and 12.5%, the suspension of bonuses which have still not been restored and other things such as voluntary exit programmes and a reduction in staffing levels by over 400. Significant and extensive cuts were made at the time. The Senator asked if they were sustainable.
Ms Breda O'Keeffe:
It is very difficult to do so. In any organisation there are cuts to be made. However, it is clear from what NewERA stated in its very extensive report on efficiency levels at RTÉ in 2014 and 2015 which found that we were above the norm in the levels of cuts made that there were very few further cuts that could have been made. In its recent report the Broadcasting Authority of Ireland has confirmed that was the case. The answer to the question as to whether the cuts were sustainable is no. That is why the cost base is 24% lower than it was in 2008. We have restored pay levels for our staff who had borne the cost for several years. There is a significant level of inflation, as the director general noted, since to make good content, one must spend money. Our competitors are doing so and to make high quality programming, one must spend money and invest.
Ms Dee Forbes:
TG4 is completely independent of RTÉ, but the two organisations have a very strong relationship. We do Nuacht together, for example. Nuacht on RTÉ and TG4 is a combined news service for both organisations. The Broadcasting Act includes an obligation on RTÉ to provide content for TG4 on an ongoing basis for an hour a day, of which the news is a very big part. To be candid and honest, it is difficult to sustain it, given our financial position. However, we have worked as well as we can to be a good corporate cousin for TG4. We are behind on the commitment, but we are trying to work it through. However, it is another indicator of where we are financially as an organisation.
The archives are hugely important to us as an organisation and something that gives a great deal of energy and delight to the nation. We are about to embark on a significant capital project to digitise the archives. So much of the material is in its old format. Whether it is tape or film, we need a significant upgrade to digitise it. We had done some of it previously, but we are starting on a bigger programme that will represent a significant capital cost. However, it is one we believe we must undertake because we are protecting the nation's history. We must ensure the archives are protected for the future. It is something that we are taking very seriously.
I would like to ask a supplementary question. I recall that Ms Forbes' predecessor had mooted an arrangement whereby the independent production sector in Ireland and other broadcasters and media would have open and free access to the archives in return for more stable funding, if a stable funding solution was provided for RTÉ. It could potentially really open up Irish creative industries. The quid pro quowould make a great deal of sense, rather than Irish independent production companies having to pay very large costs and, in my experience, having very real difficulties in accessing archive material. Is that still on offer from RTÉ?
When one follows Deputies Timmy Dooley and Eamon Ryan and Senator Joe Reilly, there is very little left to say.
I will be very brief because many of the topics have been raised and I came here to mention two, one of which is regionalisation.
I accept that RTÉ has a remit as a national broadcaster, but I wish to talk about investment in regional offices such as those in Athlone, Galway and my home town of Cork in physical infrastructure such as studios. There are several broadcasts on television and radio every day from Cork. Given the long-term plan, the unfortunate financial position and the uncertainty the director general has so eloquently explained to us, will the regional offices become the hind tit in terms of developments? Is there a plan for the major campuses in some locations and how we can promote them in order that they will remain important regional centres? No other broadcaster can do what RTÉ can do and no other broadcaster has the same base as it in the regional cities. There is, therefore, some concern, given the implications of the financial position of RTÉ, about how it will develop and change the regional networks. Will the director general give us some insight into how the regional broadcasting centres can be developed?
In his 13 questions Senator Joe O'Reilly covered the majority of the issues. The second issue I wish to raise concerns the broadcasting of children's programmes and where we are going in that space. In homes there are smart TVs, on which YouTube and a variety of programmes are available. Children flick through the options and move on. With respect to RTÉ, RTÉ Player never comes into it. The older generation use it. My seven and eight year old children never engage with it while they have the ability to look at everything else in between. The national broadcaster is losing space in that regard and it will be a major challenge for it to come back into it. Unfortunately, the days of "The Den" and other such programmes are gone. There is a new generation and I fear that unless something is done, we will lose that space totally and that content will be brought in from every other part of the world, bar Ireland. We need to really focus on the strategy to be followed in that regard because the world has changed in three years because of smart TVs and everything else that goes with them. Will the director general outline what she is proposing and how she can fill the space that, unfortunately, has been lost?
Ms Dee Forbes:
The Senator's first question was about investment in the regions. As I mentioned, our regional contributors - journalists and studios - are hugely important to us. Members might recall that owing to the cuts made a number of years ago under my predecessor, the regional studios were affected significantly. We moved from having studios and aligned with some of the ITs in local areas. Again, we have had to make some hard choices. For example, in Galway, just over a year ago, we aligned with the Galway-Mayo Institute of Technology. We moved out of central Galway to the college campus to be mindful of our costs and scale back on them. I am hopeful it will not mean fewer stories from Galway; it has just meant that we have had to reduce our costs and be sensible in having a front-facing premises versus one that is aligned with the college.
Our chief financial officer, Ms O'Keeffe, mentioned that our ability to invest in capital was incredibly restricted. That goes back to the overall funding position. There is no doubt that we would like to do more in these areas, but we have to be incredibly careful about where and how we spend money. I would like to invest more in Cork, Limerick, Waterford and Galway, but until we have some security about our future, I do not believe we can put much more into these centres. We have to make some very hard choices, particularly in terms of investment in capital. I have mentioned that we will use money from the proceeds of the land sale for capital projects, but it will be eaten into very quickly. We are trying to be as creative as we can in where we spend money from our existing capital budgets. We must decide whether we will upgrade technology and ensure we are operating at the optimum level. We will do that, but how much more we do will be dictated by our future funding position.
Does Ms O'Keeffe wish to add anything to what I have said?
Ms Breda O'Keeffe:
No. I reiterate that we make choices every day on investment in capital. We have an operating capital budget of approximately €7.5 million, which is half of what we need. We have prioritised capital projects. We do not invest as much as we would like in the regions in capital infrastructure. As the director general mentioned, in some cases, we have moved to institutes of technology, for example, in Waterford, Athlone and Dundalk. We could invest more capital in the regions if we had the money, but, unfortunately, we must make these choices.
Reference was made to the archives. It is a significant capital project for us in investing in the technology and storage platform to support the archives and their digitisation. We also look forward to receiving funding from the Broadcasting Authority of Ireland through the archives scheme. I agree with the director general that we are not investing enough in capital infrastructure in the regions.
Ms Dee Forbes:
That leads me to the Senator's second point about children's programming and where it is going. That is the big question. We have also seen, through our children or nieces or nephews, that the way in which children are consuming media is completely different from when we were growing up. That is the reason we are taking a very long and hard look at how we move forward in this space. The Senator is correct that our main offering is linear. It is either broadcast on RTÉ in the afternoon or RTÉ Junior. The Senator is correct that RTÉ Player is not the place for children. As we move forward with the new player, the area we are creating will be more attractive. The Senator is correct that, as a national broadcaster, we must do an awful lot more to endear ourselves to children. One thing that is working very well for us is that every day during the school day we have "News Today", a news programme for children. A lot of schools record it and play it in classrooms the next day and talk about it. There was much talk online about a particular piece we did to explain Brexit to children. It went down really well. When I talk to children, "News Today" comes up time and again because it is being opened up in the classroom. What we want to do is have more such experiences.
We have changed the organisation and while we still have somebody responsible for children's programming output, we encourage all genre heads across entertainment, factual programming and other areas to think not just about the adult audience but also the children's audience to have more experiences for them across many sectors. That is something I hope will reap rewards, but we must also recognise that the relationship with the national broadcaster with which we grew up will not be replicated in the future. It simply cannot be because life has moved on, but we must ensure there will be moments, experiences and programmes that will result in children and families coming to us and being hugely proud that they are watching RTÉ. We need to spend more in that space to ensure we are relevant. When I see such programmes as "News Today", it gives me hope that when we do it right, we provide content for children that they want and that excites them. Partnership is also very important in that space. We made a programme recently with those involved in the junior entrepreneur programme, a fantastic programme that happens all around the country to encourage schoolchildren to become entrepreneurs. We linked in with it and this year will go further by having more content on air. We will engage in partnerships and work with educational institutions and other organisations to see how we can talk to children together in order to move forward.
I thank members for their excellent questions. I also thank Ms Forbes, Ms Cusack and Ms O'Keeffe for coming before us. It has been a very worthwhile engagement. It is proposed that the committee publish the opening statement received on its website. Is that agreed? Agreed.