Friday 9 December 2016

An Post licence fee collection contract to be put out to tender

Plans are progressing to tackle evasion which costs RTE up to €40m in revenue

Published 16/10/2016 | 02:30

Minister for Communications Denis Naughten
Minister for Communications Denis Naughten

Communications Minister Denis Naughten is believed to be proceeding with plans to issue a tender for the collection of the TV licence fee, which has historically been collected by An Post.

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Naughten has acknowledged on a number of occasions that licence-fee evasion is excessively high in Ireland and clamping down on the issue would give RTE a significant boost to its coffers.

Evasion in Ireland is around 16pc and is costing the broadcasting sector up to €40m a year. RTE receives around €180m of the money collected annually, while €14m goes into a broadcasting fund for the independent sector.

Sources said that An Post does not have any significant issues with the plan to put the contract out to tender.

However, it is likely that the post office network would continue to sell the licences, which would protect the role of local post offices around the country. This has been an issue of concern in the past.

Under the proposal, TV licence inspections would be put out to tender. This is essentially a debt collection service which An Post is satisfied to exit.

An Post receives almost €12.5m annually for the collection of the licence, although it is understood that it does not make a profit from the contract.

There is interest from third parties in the contract, with the UK outsourcing company Capita previously expressing interest at government level.

Capita holds the BBC's licence-fee collection contract and is understood to be promising a significant reduction if it won the contract.

It believes that evasion in Ireland could be brought down to less than 5pc, which is in line with the level of evasion in the UK.

If another company were to be awarded the licence, it may have to take on An Post staff in a transfer of undertakings.

There are 83 An Post staff directly working on TV licence collection and these staff could have to join a new contractor, sources said. This would mirror the transfer of undertakings which took place when a new operator took over the running of the National Lottery.

In recent years the semi-State organisation has made a number of efforts to crack down on evasion, such as the use of new technology. However, levels have remained high.

The contract is agreed on an annual basis and an agreement with An Post is already in place for 2017.

A spokeswoman for the Department of Communications said Naughten "remains very concerned at the impact that the high level of evasion is having on TV licence revenues".

"He has asked his department to examine the range of available options in this area as a matter of priority. A final decision on which measures might be pursued will only be taken once the Minister has fully examined the options presented."

Earlier this year RTE said that the lack of licence-fee reform now represents the most significant risk to its future sustainability.

New director general of RTE, Dee Forbes, said last month that the rate of collection of the licence fee here was among the worst in Europe. "Ireland has one of the highest rates of licence-fee avoidance rates in Europe. It is at 16pc, so I think there really is some low hanging fruit there on that front," she said.

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