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Thursday 2 October 2014

Fresh RTE cuts on cards after report voices new fears over finances

Published 05/09/2014 | 00:00

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RTE newsreader Aengus MacGrianna spotted canvassing outside the RTE canteen to be voted onto the board for workers' rights
RTE newsreader Aengus MacGrianna spotted canvassing outside the RTE canteen to be voted onto the board for workers' rights

Further cutbacks may be needed at RTE, according to a report drafted by Government officials.

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The national broadcaster "continues to have a serious financial position" and "a further fundamental adjustment" is required, the report said.

Officials at the Department of Communications issued the warning in a briefing report submitted to new minister for Communications Alex White.

The concerns were expressed despite the fact that RTE recently reported its first annual profit since 2007.

RTE has already implemented a major cost-cutting drive, which involved shedding a fifth of its workforce.

Officials told Mr White that, while the broadcaster had significantly reduced its costs, "its financial position will require a further adjustment to secure RTE's future position and ongoing relevance in the Irish media landscape".

However, further significant cost savings may prove difficult to achieve.

An expert report commissioned last year to examine efficiencies at the broadcaster is understood to have found few areas where savings could be made.

The concerns expressed to the minister are likely to be conveyed to RTE's new governing body when its membership is announced later this month.

A spokesman for RTE said it was aware of the document, which the department has made publicly available.

In a statement, the spokesman said the briefing given to Mr White "confirms what is already mutually understood; namely that in order to protect the future of the national public service media service, stability regarding RTE's financial position, including public funding, will be essential".

The department's warning spells bad news for RTE staff, many of whom have been calling for a reversal of pay cuts.

Newsreader Aengus Mac Grianna, who is seeking election to RTE's governing body, has been one of the most vocal staff members in calling for the restoration of pay.

RTE has already endured a seismic restructuring scheme in recent years, reducing its operating costs by €130m since 2008.

Voluntary early retirement and severance schemes have seen the number of people employed there slump from 2,351 at the end of 2008 to 1,856 at the end of last year. The restructuring saw a number of household names, such as Charlie Bird and Anne Doyle, leave and the broadcaster also shut down its London bureau. Pay has been cut at all levels, while performance-related pay has ceased and fees for leading presenters are now almost 40pc lower than six years ago.

RTE reported a net surplus after tax of €1.1m for last year, compared with a €65.2m net deficit in 2012. The scale of the turnaround is largely due to a significant reduction in costs and the figures were somewhat skewed by once off restructuring costs of €46.2m in 2012.

After the redundancies, former Communications Minister Pat Rabbitte commissioned a report from NewERA, a body under the National Treasury Management Agency which advises on financial performance and corporate strategy of State entities.

The report has not been published. However, a source familiar with its findings said: "NewERA went in and examined what further savings could be made. Broadly speaking there was very little fat left on the bone and they didn't really come up with major new possibilities of savings."

RTE is implementing a five-year strategic plan to transform the broadcaster into a public service multimedia organisation.

TV licence evasion continues to be a major issue for RTE, with one in six television users not paying the €160 charge.

Almost a third of licence fees are so-called "free licences", paid directly by the Department of Social Protection. The transfer of these fees to RTE has been frozen at 2010 levels, leading the broadcaster to miss out on revenue from new free licences issued. The amount payable by the Department of Social Protection was also reduced by a further €5m in Budget 2014.

Irish Independent

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