Tuesday 21 August 2018

An Post claims licence fee crackdown would only deliver €11m a year for RTE

RTE's Dee Forbes has claimed over €40m is lost in evasion writes Samantha McCaughren

RTE director general Dee Forbes wants the TV licence fee collection process to be overhauled
RTE director general Dee Forbes wants the TV licence fee collection process to be overhauled
Samantha McCaughren

Samantha McCaughren

An Post has claimed that a crackdown on licence fee evasion would only deliver an extra €11.3m a year to RTE.

This is significantly lower than the €40m to €50m which director general Dee Forbes has estimated an overhaul of collection could bring in.

An Post, which collects the licence fee, commissioned consultants Accenture to assess RTE's claims about evasion levels and the additional revenue which could be used to boost RTE's coffers. Getting extra licence fee income has been a key plank in RTE's strategy to stem losses.

RTE's income has fallen significantly over the past number of years, but the report states that 79pc of the fall relates to a decline in commercial income and the rest relates to licence fee money. However, most of the fall in the fee income is due to changes implemented by the Government, such as a cap on the amount it pays for Department of Social Protection (DSP) or free licences. According to Accenture, An Post has increased the amount it collects by 2.3pc over the last five years, an increase of 23,000 licences.

The evasion rate worked out under a formula agreed with Government is judged to be 14.6pc and RTE has said this is much higher than in other countries. However, the report argued that the Irish rate is overstated by around 2pc to 2.5pc due to flawed assumptions.

It suggests there may be discrepancies with how new builds, vacant properties and businesses are accounted for.

An Post believes an evasion rate target in Ireland of around 10pc would be appropriate and in line with Northern Ireland and Scotland, rather than England, where evasion is around 6pc.

If it is accepted real evasion rates are closer to 12pc, it is believed there is an opportunity to drive down evasion by another 2pc or so over 12 to 18 months. An Post is now looking at ways of achieving that. An Post believes if it reduced evasion by 5pc, that money collected would result in an extra €11.3m for RTE as it receives 84pc of each licence fee collected.

Debbie Byrne, managing director of An Post Retail, said An Post would like to come together with the Department of Communications and look at the evasion rate methodology and the cap, and then look again at the DSP payments.

"We would welcome the opportunity to sit down with the department and RTE about how we could take a longer term view on how we collectively approach this and modernise the collection process."

The department sought expressions of interest from agents interested in collecting the fee last year but the process has not progressed.

RTE has long advocated that the licence fee collection contract should be put out to tender.

It estimates that people claiming they have no TV under the current definition is costing €24m a year and evasion equates to a gross loss of €36m.

Sunday Indo Business

Business Newsletter

Read the leading stories from the world of Business.

Also in Business