Wednesday 17 July 2019

RTE and the Department of Communications locked in discussions over €108m windfall


The sale of RTE’s Donnybrook site netted e107.5m
The sale of RTE’s Donnybrook site netted e107.5m
Samantha McCaughren

Samantha McCaughren

RTE and the Department of Communications are locked in discussions about how the broadcaster spends its windfall from the €107.5m sale of land at its Donnybrook site.

Documents released under the Freedom of Information Act show that significant discussions around the use of the extra money have been ongoing between RTE, the department and the Broadcasting Authority of Ireland (BAI). These discussions are against a background of RTE strongly pushing for a number of measures to increase its licence fee income.

RTE's annual report recently showed it recorded a net gain after tax of €78.5m from the land sale after project costs and restructuring costs of €29.6m were accounted for.

The documents show that the BAI sought legal advice on its role in relation to the surplus recorded as a result of the land sale. RTE has insisted that money be used for capital investment and restructuring and has already used some money to reorganise its campus.

It has made it clear that it does not want to use the windfall to plug holes in its running costs after reporting a deficit of €6.4m in 2017. However, the department is understood to be working closely with RTE on its spending plans.

RTE previously submitted its redundancy plan packages to the Department of Public Expenditure.

RTE director general Dee Forbes said last month that if the broadcaster is to return to a sustainable financial footing, Government action on reforming the licence fee system is essential, asserting that the current system is missing out on more than €50m. One of her key issues is the licence fee evasion rate, which is at close to 15pc.

However, An Post recently commissioned an analysis by consultants Accenture which concluded that a crackdown on licence fee evasion would only deliver an extra €11.3m a year to RTE. 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 An Post report argued that the Irish rate is overstated by around 2pc to 2.5pc due to flawed assumptions.

It also argued that some countries' evasion rates were closer to 10pc, which would narrow the gap between current evasion rates and acceptable levels of evasion.

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