RTÉ won’t just be reporting the budget, it will be hoping for good news

When Minister for Finance Paschal Donohoe stands up in the Dáil on Tuesday to deliver his budget, RTÉ management will be hoping for a smidgen of good news. The last government put a cap on the amount of money the broadcaster gets from the Department of Social Protection to cover the cost of the free "Lifetime Licence" scheme for pensioners. RTÉ argues that cap is costing it more than €10 million a year, and wants the Government to accelerate the process of reversing it which began in last year's budget.

Getting rid of the cap would make a modest contribution towards addressing the national public service broadcaster's financial woes, but senior management at RTÉ argue that a lot more needs to be done, and they are slightly more optimistic that those arguments will be heard now that Michael Noonan is no longer at the Department of Finance. They point to the visible changes now taking place under director-general Dee Forbes.

Hoardings have gone up across Montrose, marking off the main RTÉ campus from the chunk of land which the broadcaster sold off for €107 million earlier this year to Cairn Homes. It will be spending at least €25 million of that money by the end of this year on around 250 voluntary redundancies, with the remainder earmarked for capital investment in new technology, infrastructure and facilities.

But that only goes a small way towards addressing the financial hole in which RTÉ finds itself. A 10-year freeze on the licence fee, widespread licence fee evasion, an advertising market which remains flat despite the rising economy, a splintering market with competition from digital services – all these and more challenges must be faced.

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There is long-standing criticism of featherbedding and inefficiencies in Montrose as well as complaints that RTÉ misuses its dominant position in the advertising market. RTÉ in turn points out that reports commissioned by the Department of Communications in recent years have judged that the broadcaster is efficiently run with limited scope for further cost reductions.

The same reports conclude that overall trends indicate commercial revenues will continue to decline and that significant investment is required in digital services if RTÉ is to continue to meet its public service remit.

It's a reasonable point. If there was actually a coherent political plan to shrink public service broadcasting in Ireland, then at least a debate could be had on the issue. But what's happened instead is a process of long-term inertia and a woeful failure to address glaring problems in the current licence fee system.

Ireland has one of the highest costs for licence fee collection of any country in Europe (around 5.5 per cent or €12 million) but one of the highest evasion rates (15 per cent or 232,000 households).

A reform in collection of the current licence – essentially taking it away from An Post and putting it out to competitive tender, as was done successfully 20 years ago in the UK – could yield in excess of €40 million per year in additional funding to public service media, while keeping the licence fee at its current level of €160.

How would that money be used? One creative industry which has suffered hugely because of RTÉ’s woes is the Irish independent TV production sector. At its height the broadcaster spent €73 million on independent production – that number is now down to €40 million. RTÉ has committed to spending at least 50 per cent of any money it gets from licence fee reform on independent commissions.

The broader question of whether a licence fee is the appropriate model in an era when you can watch all the TV you want without ever owning a television set seems to have been indefinitely deferred since former minister for communications Pat Rabbitte's proposal for a broadcast charge levied on all households foundered on the rocks of the water charges controversy. But this and other issues are currently being considered by the Oireachtas communications committee as part of its deliberations on a proposed Broadcasting (Amendment) Bill.

That committee saw some testy exchanges last week over another RTÉ proposal, to allow it to charge for the retransmission of its channels by platforms such as Sky, Virgin and Eir, when Fianna Fáil's Timmy Dooley bridled at the Sky representative's flat refusal to countenance any such idea.

In the UK, the push for retransmission charges is being led by the commercial broadcasters ITV and Channel 4. Here, TV3 would theoretically stand to gain if the legislation was amended, but its position is complicated by the fact that it is owned by Virgin. It's just one sign of the overlapping interests at play as the Government faces into finally making some decisions which could shape the Irish broadcasting landscape for the next decade.