Thursday, 15 November 2007
Television Licence Fee.
Question 1: To ask the Minister for Communications, Energy and Natural Resources if he will grant RTE a licence increase; if so, the amount of same; if he will attach conditions to a licence increase; and if he will make a statement on the matter. [29139/07]
On Tuesday last, the Government approved an increase in the television licence fee from 1 January 2008 at my request. This increase follows an independent review by Indecon consultants of RTE's performance in 2006. The review is an annual exercise undertaken to assess RTE's output commitments and its progress in its change programme.
The Indecon report concluded that RTE had exceeded most of its output commitments such as its objectives in broadcasting output and financial managements. It also progressed well in its change programme, including restructuring and change management. Overall, the report concluded that RTE was providing value for money for the Irish taxpayer. Details of the report will be made available on my Department's website shortly.
This increase will bring the cost of a television licence from €158 to €160. This modest increase will allow RTE to continue to strengthen the schedule it delivers in increasingly competitive television and radio markets.
To date the annual reviews to which I have referred have been carried out by independent consultants engaged by my Department. It is my intention to renew and reinvigorate the current annual process. There must be an increased focus on value for money, cost management and more precise and structured performance indicators aligned to high quality, high impact public service broadcasting. I will be asking RTE to engage fully with my Department as we re-engineer and strengthen the process so that the qualitative aspects of measuring RTE's performance are brought more to the fore.
I want to raise two issues with the Minister. First, he might be surprised to hear me say this is a miserly increase for RTE this year considering that in 2002 the Minister stated that RTE will be able to seek annual increases up to the level of the consumer price index and that all future increases will be subject to the strict monitoring of performance against financial, management and programming targets. According to an independent consultant, those performance targets were met and RTE delivered value for money. We probably could not have said that a number of years ago but there has been genuine improvement in a series of sectors in RTE. Does the Minister agree that we appear to be punishing RTE for producing a budget surplus last year by reducing in real terms its licence fee with an increase of €2 when the CPI level would be €4 or €5?
Second, is it not time we did away with collecting a television licence fee and find a more efficient way of funding public service broadcasting? Will the Minister agree that continuing to collect a licence fee is an archaic, expensive, regressive and intrusive way to collect money to finance public service broadcasting? The cost of collecting taxation generally is 1% of the revenue that comes in. The cost of collection and enforcement of the television licence fee is nearly 8% of what comes in and, in addition, up to 16% of households do not pay the licence fee. The rest of us, therefore, must pay for those who are not willing to pay. People who are compliant are being punished for those who are not. It is similar to the car insurance system whereby people who pay insurance must pay for those who do not. Is it not time we examined a more modern way of financing public service broadcasting through general taxation and because in the future many people will watch television through a broadband connection on their computers or mobile phones? Are we seriously proposing to ask those people to pay a licence fee for that, whether it be on a mobile phone or a computer?
One could take the position that it is miserly and that we should have given the full CPI inflationary figure, which would have been closer to a sum in excess of €7 rather than €2 but we must also take into account a number of different factors. First, the actual revenue from the licence fee will increase due to the increased number of households that exist. It does not just relate to the level of licence fee but the number of houses. While I take the Deputy's second point that there are inefficiencies or difficulties in the licence fee collection system, it is becoming more efficient and accurate in the amounts being raised and therefore the cost is reducing. One must recognise also the general financial position in RTE, which is strong currently and something I welcome. It comes on the back of strong commercial revenues as well. It is a balancing act that is further complicated in that the way RTE is meeting its performance targets must be assessed. The agreement with RTE a number of years ago for a significant increase in the licence fee, followed by a period of five years where each year an independent review would be done to determine whether it was meeting its obligations, is the process I was engaged in. RTE has met its obligations but what I determined in this process was that those obligations were reasonably broad and largely based around programme hours in any particular programme category area.
I will conclude if I may. We must improve those quality indicators to take into account more qualitative information, better cost management information——