TV licence: A huge risk of backlash but Government have no choice

TV licence: A huge risk of backlash but Government have no choice

There is a well known approach to delaying something, frequently employed in politics, known as “kicking the can down the road”.

A greatly enhanced version of this was used recently when Communications Minister Richard Bruton announced the traditional TV licence fee would be replaced, but not until five years time.

Considering that Mr Bruton will be 67 early next year, it is possible he has kicked this particular can so hard and so far that he will actually be retired from politics before that particular section of the road is ever reached.

There are all sorts of reasons for this particular can-kicking approach — the political unpopularity of such a move, an upcoming general election, Fine Gael not really appearing to give much of a toss about public service broadcasting, and wanting to keep RTÉ in its place among them.

It is a disappointment and a real worry that Fine Gael has been in power now for eight years and has failed to do anything about the serious financial problems at the public service broadcaster. The TV licence fee has remained at an annual fee of €160 since 2008. Now it looks set to remain as is for 16 years.

Speaking to RTÉ’s Morning Ireland on the day of the announcement, the minister gave an interesting defence of the Government inaction on the licence fee over those many years when he said: “This system has been in place for far longer than eight years. It’s in place since I was a boy.”

Essentially what Mr Bruton explained is that the Government will put out to tender the TV licence fee collection, currently held by An Post. Under measures contained in the new Broadcasting Bill, which arose from recommendations of the Working Group on the Future Funding of Public Service Broadcasting, a five-year contract will be awarded. Once that time has elapsed, a new “device-independent broadcasting charge” will be introduced, intended to charge every household. This will be regardless of whether there is a TV set, laptop, iPad, mobile phone, or whatever else exists by then, or not.

It is a tough job to come up with a new system that is effective and covers all angles, but it must be done; this charge is absolutely necessary if we want to keep Irish audio-visual production alive.

At the time of the announcement, Mr Bruton said this would future-proof the funding model, taking account of changes in technology and in how content is now consumed. Actually, technology is changing so much, so fast, that, in all probability, the landscape will be unrecognisable in five years time anyway.

His deciding on such a lengthy delay does not make things easier, and finding a solution will certainly not take that length of time. RTÉ, under current circumstances, and the timings proposed, would be long gone or changed beyond recognition. There is a fear among senior management that the station, with its dwindling commercial revenues could actually run out of cash by next year. In 2018, the station recorded a loss of €13m. The Broadcasting Authority of Ireland (BAI) has recommended that it should get a €30m increase in funding.

The theory behind the new proposal in putting the licence fee out to tender and awarding it for five years is that whoever gets the contract will be able to invest in the process and the necessary technology and significantly reduce evasion rates.

In 2018, An Post raised €166m in TV licence sales revenue. The evasion rate that year was 12.8%, down from 14% the previous year, still significantly higher than in the UK and other European countries. The bulk of that money goes to RTÉ, with the rest going to An Post, BAI, and TG4.

However, RTÉ has said that when you consider the number of homes that do not currently have a traditional television set, but who still consume public service content, then the current television licence fee mechanism reflects reality less and less. The station estimates that, when added to the evasion rate, around 25% of homes are now not paying the TV licence due to this outdated system.

An Post has gotten a good kicking over the licence fee collection for a number of years now. The company is clearly tiring of the stoic approach, especially now that the contract is going out to tender.

It would say it has done a “decent job” on a contract that only rolled over from year to year. For years, it has privately highlighed to the Department of Communications the difficulties regarding the swing towards devices, and how their TV inspectors get responses from householders along the lines of “I haven’t watched TV for years”, not to mention the “cultural resistance” that exists among Irish people to paying such charges.

“Licence fee collection is a difficult and complex task as the TV Licence is a voluntary tax,” said An Post issued following the minister’s announcement.

Achieving a compliance rate of 87% under current conditions is a credit to An Post’s Licence collection team across the country.

The company has 86 people dealing with the TV licence fee, including 45 inspectors who work around the country, with an additional 10 temporary inspectors. One of the biggest hurdles for the company has been the failure by the Department of Communications to update its 40-year-old TV licence database.

Remarkably it is still apparently quite accurate but very clunky to operate, even on something as basic as adding an Eircode. There would also be the incredible information wonderland opened up if the Government insisted that Sky, Virgin and others handed over their list of subscribers. Such a move would clearly raise all sorts of issues.

Postmasters around the country say the licence business is worth around €3m to them and it would be a further blow if An Post lose this contract.

Whatever is the outcome, RTÉ remains in a complete financial stew, a fact which many people

refuse to recognise or acknowledge. It does not help that there are constant rumours in media and political circles that director general Dee Forbes is not keen to stay in the job, a fact which she is said to strongly reject in private. Both she and the chairwoman of the board Moya Doherty need now to take the more public route on outlining the gravity of the situation.

There is a backlash risk in putting it up to the Government in this way, but they are left with little choice.

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