Simon Coveney (Cork South Central, Fine Gael)
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Question 1: To ask the Minister for Communications, Energy and Natural Resources the discussions he has had with RTE in relation to funding difficulties over the past 12 months; the outcome of such discussions; and if he will make a statement on the matter. [24368/09]

Eamon Ryan (Dublin South, Green Party)
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I have met representatives of RTE on several occasions in the past 12 months. We have discussed a wide range of issues, including the current economic climate and the impact it is having on RTE's funding difficulties. RTE, as a dual-funded broadcaster, is heavily dependent on commercial revenue, of which advertising revenue is the primary component. RTE, like many other commercial organisations, has been subject to a significant decline in its commercial income in the latter half of 2008 and throughout 2009. I understand from RTE that following a satisfactory start to 2008, its commercial revenue fell sharply in the second half of that year. RTE's commercial income amounted to €239.9million in 2008, compared to €245.5million in 2007, representing a decline of 2.25% for 2008. It was clear early in 2009 that RTE's shortfall in commercial income was continuing at a rapid pace as the adverse domestic and international climate took a firmer hold. RTE is not alone in facing such problems. Along with officials from my Department, I meet the various interests that comprise the broadcasting sector from time to time. All commercial, independent and public service broadcasters face difficult and challenging times. They will need to manage their day-to-day operations as carefully and prudently as possible. RTE has put in place a package of cost-saving and efficiency measures. It is taking steps to address the significant shortfall in its commercial revenue. While the nature of these measures is an operational matter for RTE, I am satisfied that RTE is endeavouring to deal with its financial problems in the most prudent manner possible. I will continue to liaise with the RTE Authority and RTE management on an ongoing basis on issues, including the financial situation in the organisation.

Simon Coveney (Cork South Central, Fine Gael)
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I thank the Minister for his response. In 2007, did the Minister receive the Indecon report on costings within RTE that was referred to in last weekend's newspapers? What actions did he take, or insist that RTE take, as a result of the recommendations in that report? I understand the Indecon report indicated that Ireland's national broadcaster had higher per capita staffing costs than the BBC, and that the gap was growing. It suggested that the station needed to develop a corporate commitment to cost savings. It criticised RTE's failure to undertake any formal benchmarking exercise over recent years, whether by comparison with public service broadcasters outside Ireland or commercial broadcasters in Ireland and elsewhere. It pointed out the obvious fact that 50% of RTE's costs can be attributed to staffing costs. It said that while other public service broadcasters, like the BBC, were successfully introducing ambitious systems to reduce staffing costs, the opposite was happening in RTE. A series of warning signs should have been noted by RTE and the Minister before the downturn and the subsequent collapse in RTE's advertising revenues. Did the Minister act on the recommendations in the Indecon report? He said he has had a number of conversations with Cathal Goan and others in RTE. Were those conversations influenced by the independent report I have mentioned?

Eamon Ryan (Dublin South, Green Party)
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I received the report in November 2007. I acted on it by sanctioning a television licence fee increase. The report mentioned that a five-year plan, including measures of performance, was set out after RTE's licence fee revenue increased significantly in 2002. The station had to reach certain hours of programming, for example. The report stated that although the plan had been successful in increasing the production of home-produced output, for example, RTE needed to go further.

We needed a metric of performance in RTE that first measured the quality of content not only simply in hours of output but in detailed metric analysis as to how it met its public service obligations. Second, we had to measure the efficiency or the effectiveness with which RTE delivered such programming on the basis of the measures the Deputy mentioned, namely, performance compared to other countries in terms of RTE's flexibility, efficiency and cost efficiency. We wanted a new measurement system in RTE on quality and effective flexibility to achieve savings within the operation. To achieve that we appointed PricewaterhouseCoopers in March 2008 to work with RTE to examine how we would develop that new metric of performance and efficiency within the organisation. That work was ongoing and is now completed. We are now assessing the 2007 and 2008 accounts on the basis of the original five year measurement system, but from 2009 onwards we will apply this new assessment method to establish how efficiently RTE is working and what is the quality of its programming.

Simon Coveney (Cork South Central, Fine Gael)
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Is the Minister happy that just fewer than 150 people in RTE earn more than €100,000 a year? Seven or eight people in the organisation earn more than €300,000 per annum. Is that appropriate for an organisation the size of RTE? Perhaps it is, I do not know, but it is my job to ask those questions when RTE is currently under significant pressure financially and that pressure is being added to by the increased responsibilities in the organisation that will arise from the Broadcasting Bill and in particular from the DTT service.

I would like to recognise the vote among unions in RTE to introduce wage reductions, which involve significant sacrifices for many staff members. That was not an easy decision and it is important to recognise that.

Eamon Ryan (Dublin South, Green Party)
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I also recognise that decision by RTE unions, which was not an easy one to take to provide savings. In that consideration process, the rate of pay across the organisation was a central issue, but I am not going to intervene and micro-manage its payment structures.

Even with the efficiencies that we have introduced and the new ways of measuring that, it is clear that RTE in the current downturn, like all other broadcasting companies, will have to make difficult choices to make savings to make up for the loss of commercial revenue They will have to be in pay costs and other non-personal operation costs, which is happening. It already made significant savings early this year. Decisions will have to be made on other one-off items to achieve savings. That is not an easy task, but at least it is starting off on the right foot in that both unions and management have agreed the broad principles in terms of the pay related issues.