Tension over TV licence fee hike

Proposals to increase the television licence fee in early 1986 were opposed by a number of government ministers who were highly critical of RTÉ management.
Tension over TV licence fee hike

Finance minister Alan Dukes objected to a proposed £2 once-off increase on the basis that it was premature before “concrete action” had been taken by RTÉ to improve its financial performance.

Mr Dukes also claimed the licence fee increase would be “swallowed up by RTÉ’s ongoing excessive costs”.

He was supported by the minister for public service, John Boland, who strongly opposed the hike because of “RTÉ management’s attitude to pay issues”.

“It would release RTÉ from the discipline of coming to terms with their financial problems,” said Mr Boland.

He claimed it would also allow them avoid having to negotiate a phasing of outstanding pay awards.

“It has to be assumed, on the basis of experience to date that RTÉ will pay their staff the maximum round increase they feel they can get away with,” said Mr Boland.

He claimed only the imposition of real financial stringencies could force RTÉ to adopt a realistic attitude to the problem of pay costs in the organisation.

If the increase was to be granted, Mr Boland insisted on certain conditions being set including a repayment in full of interest-free loans given by RTÉ to its staff.

“The public should not be expected to sponsor this kind of irresponsible management,” remarked Mr Boland.

Communications minister Jim Mitchell, had been seeking Cabinet approval for a £5.50 increase to bring the annual charge to £62.50 for a colour TV licence.

Mr Mitchell said the increase was to take account of inflation since the existing fees were set in 1984 plus a £2 once-off addition that had been recommended in a consultant’s review of RTÉ.

He claimed the increase would help to address critical weaknesses in RTÉ’s financial position and enable the State broadcaster to record a surplus of £1.7m for 1986.

Mr Mitchell said the extra revenue was needed to meet £1.5m in outstanding special pay awards; a 4% pay increase; a £1m contribution to plug a deficit in the RTÉ pension fund; and to reduce staff numbers by 150.

He revealed RTÉ also wanted to pay a further £1.5m in “arrears” on top of those awards.

The consultant’s review had found RTÉ management and staff had failed to react to economic realities and the broadcaster was failing to keep expenditure below revenue.

Although Mr Mitchell said the increase would cost the State an extra £600,000 in respect of the free TV licence scheme operated by the Department of Social Welfare, he said approval for the rise would strengthen his hand in ensuring that RTÉ took effective action to implement the recommendation of the consultant’s report.

Mr Mitchell said the overriding consideration was to address the station’s financial problems before they became intractable.

“The delay in granting an increase now will probably mean a more unpalatable increase later,” he warned.

The Fine Gael minister said the increase was considered by the consultants as a critical element for RTÉ’s recovery.

Mr Mitchell said the repaying of loans by RTÉ staff was not particularly pertinent to the situation.

The TV licence fee was ultimately increased by £5 in March 1986.

Ministers opposed rise because of RTÉ management’s ‘attitude to pay’

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