Wednesday 22 November 2017

Burton to tackle RTE for a discount on licence fees

John Drennan

John Drennan

Social Protection Minister Joan Burton is believed to be seeking a discount of between 8 per cent and 10 per cent in the €60m her department pays in television licences to RTE.

The 'minister for discounts' -- who is also demanding a concession from the ESB -- is looking to Montrose to 'do a deal' with her department in the coming weeks as part of her plan to protect the vulnerable from budget cutbacks.

It is believed contacts have been made already via informal channels and that discussion may soon be put on a formal footing.

RTE's top executives have been worried for some time that the Department of Social Protection would seek to cut its multi-million exposure to the licence fee -- which would inevitably increase pressure on the station's highly paid stars to take a cut in their own rate of pay.

RTE'S nervousness is likely to be increased by the "furious" reaction of Ms Burton to the derisory nature of the discount the ESB offered to her department for its bulk purchase of light and heat for pensioners.

Last year, the department paid more than €141m to the semi-state company for heating and electricity.

It is believed, however, that the recent increases of 21 per cent in the cost of ESB services, and increased numbers using the scheme, mean that this year's bill will be closer to €200m.

The department's status as a bulk buyer means that the ESB, whose workforce is the most highly paid in Europe, offers the department a discount of €1.4m.

However, in spite of the fiscal plight facing the State and -- perhaps more important -- the security of knowing the Department of Social Protection will never be a bad debtor, so far the ESB has only offered an increased discount of €300,000.

The move is believed to have infuriated Ms Burton. One source noted: "There was smoke coming out of her ears, she went ballistic." They added that the most astonishing feature of the discount was that it was actually €18,000 less than the new salary of incoming CEO Pat O'Doherty.

A secondary problem with the scale of the ESB discount is that it reduces the possibility of cuts on Bord Gais charges since its rates follow the template set by the ESB.

It is unlikely, however, that Ms Burton will concede in her battle with the ESB soon.

Instead, the mood was epitomised by the comment of one source that "there needs to be a fundamental change in public service culture. Departments are currently too anxious to behave like good boys and girls and accept whatever charges semi-states impose on them".

Sunday Independent

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