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RTÉ has made an 'initial payment' to Revenue over self-employment contracts, Dáil committee hears

The State broadcaster is facing a “structural funding problem”, according to its director general.

Dee Forbes, director general of RTÉ, speaking to the PAC via video link.
Dee Forbes, director general of RTÉ, speaking to the PAC via video link.

RTÉ IS NOT generating enough revenue to deliver on its remit or to invest appropriately in programming, the director general of the State broadcaster has told a Dáil committee.

Speaking to the Public Accounts Committee (PAC) this afternoon, Dee Forbes hit out at “persistent” government failures in the area of TV licence fee collection.

The committee also heard that RTÉ has made an initial payment to the Revenue Commissioners on foot of an ongoing audit of certain employment practices at the broadcaster.

In 2018, an external report by law firm Eversheds Sutherland, commissioned by RTÉ, revealed that up to 157 RTÉ employees could have been wrongly classified as self-employed, meaning they lost out on employment benefits.

Last month, Forbes told the PAC that some 81 freelance and self-employed contractors were offered staff positions following an analysis of the Eversheds report by the Revenue Commissioners.

In response to a question by Committee chair Brian Stanley this afternoon, RTÉ Commercial Financial Controller Fiona O’Shea revealed that the State broadcaster has made an initial payment to the Revenue.

The Sinn Féin TD asked whether, “on the basis of the Eversheds report and Revenue’s examination of that, has only money being paid back at this stage?”

O’Shea replied, “RTÉ takes its responsibility to pay its taxes very seriously and has made an initial payment to the Revenue Commissioners.”

Later in the hearing, O’Shea added, “The discussions in the review with Revenue is ongoing, so it’s difficult for us to comment in relation to an ongoing process with the Revenue Commissioners.”

Asked by Sinn Féin TD Matt Carthy to clarify how much the payment was for, O’Shea said she couldn’t give a figure.

“Sorry, I just don’t have it to hand with me today,” she said, which Carthy described as “most unfortunate”.

Speaking to The Journal this afternoon, PAC Chair Brian Stanley said he expects “full answers in a timely manner” from RTÉ.

“The clerk has been instructed to seek those and we look forward to those in the coming couple of weeks,” he said.

There are still “question marks” around bogus self-employment at RTÉ, an important issue for the PAC in general because it involves “a loss of revenue to the State” and the national Social Insurance Fund, Stanley added.

Operating deficit

RTÉ reported an operating deficit of €7.2 million for 2019 in its annual report, published in January. It followed deficits of €13 million in 2018 and €6.4 million in 2017.

Forbes told the PAC that the broadcaster is expected to report a profit in 2020. This is due to decreased spending on programming as a result of the pandemic and receipt of Covid-related Government supports, including the Temporary Wage Subsidy Scheme, of which it availed up to August last year.

However, the 2019 figures underline “a structural funding problem” at the State broadcaster that has emerged over the past decade since the crash, Forbes said this afternoon.

RTÉ has reduced staff levels by 22% since 2008 and reduced the pay for its top earners by 30%, she said. The broadcaster also sold part of its Montrose, Dublin 4 campus to housebuilder Cairn Home in 2017 for €107.5 million.

“However, cost-cutting and asset disposals cannot sustain RTÉ or allow it to invest to meet the needs of future generations,” Forbes added.

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Against the backdrop of increased competition from streaming services like Netflix and other global competitors, she said that RTÉ needs to “increase its investment in its journalism, its programming and key technology so that we can retain distinctiveness and connection with our audiences”.

Reform of the licence fee system is necessary to fund this investment, she said, adding that the current system is “is now losing over €50 million” every year.

While the Future of Media Commission has been tasked with investigating the licence fee to “come up with a model that is best of the country,” Forbes said, “Fixing this is the responsibility of Government.”

“Persistent failures to do so have already cost jobs, both within RTÉ and the broader audio-visual sector, and hundreds of hours of journalism, creative, and cultural programming,” she added.  

Forbes also defended the high levels of pay for its top earners, which she said had declined substantially in recent years.

In response to a question from Jennifer Caroll MacNeill, Fine Gael TD for Dún Laoghaire, Forbes said she understands why there is public interest in the pay levels of RTÉ’s top presenters.

However, she said that it’s a “feature of the media market” that top talent is paid “various rates above normal salaries”. She added that they “have a particular skill set” and “perform a public service” as well as a commercial role for the broadcaster.

“Since 2008, those salaries have reduced by 30%. And again, we committed in 2019 that they will reduce by a further 15%,” Forbes said.

“Now, of course, our 2020 report annual report isn’t out yet, but when that comes out you will see that that top talent group has been reduced by a further 15%. So, I am very conscious of it.”

However, she said, “We have to recognise that these people play a very important role both for us as a broadcaster commercially and doing their job.”

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