RTÉ faced an operational deficit of some €46 million in 2001, an increase of almost €24.5million over 2000. Operating costs rose by €15.6million, a rise of 5.6 per cent.
Sir, - Andrew McGrath (July 24th) states that "the reason for RTÉ thus breaking into its emergency savings is none too clear". I would like to outline RTÉ's financial situation as briefly as possible and clarify why it became necessary to use emergency funding.
Commercial revenue dropped by almost €16 million or almost 9 per cent. Staff costs rose by €8.1 million, or 8 per cent. As a labour and skills intensive industry, the greatest part of RTÉ's costs relates to personnel, and national pay policy for the past five years has supported improved earnings.
RTÉ also carries heavy statutory financial costs: it spent over €30 million (€20 million in 2000) with the independent sector, while its obligations to TG4 cost € 9 million (€8 million in 2000). Non-operating exceptional items provided for in 2001 included €21.5 million arising from the re-organisation programme announced in November 2001. Programme rights costs, especially for sports events, are also spiralling, as readers are by now aware. Most of our costs are already in the public domain and new financial systems are being put in place to ensure greater transparency of our operations.
The current high level of losses is, of course, unsustainable and undermines the very future of the organisation. Since last autumn, RTÉ has undertaken an extensive programme of cost-cutting measures to arrest the adverse trend. Some €26 million was cut from expenditure plans for 2002 and a strategic implementation plan will be agreed in September, with re-organisation completed by December 2003. Far from passing around "its begging bowl" at the Forum on Broadcasting, RTÉ has proposed the establishment of an independent review body, where any failure by RTÉ to meet performance criteria could have funding implications.
RTÉ has one of the lowest ratios of licence fee to commercial income in its European grouping and we trust that the Forum on Broadcasting will address this issue. The volatility of commercial revenue highlights the key role of public funding in sustaining public service broadcasting.
Finally, Mr McGrath suggests that RTÉ operates "as a state in microcosm, with no accountability". RTÉ is far more accountable than powerful global media interests; it is more concerned with social values than shareholder value and fundamentally committed to more than the statutory minima of other operators in its investment in home production.
Plurality and diversity in broadcasting come at a cost. To continue in one of the most competitive markets, where it is still the market leader, RTÉ needs the licence fee to support democracy, social inclusion and cultural expression. The Irish audience wants and deserves these. - Yours etc.,
DEIRDRE HENCHY, Corporate Information Manager, RTÉ, Dublin 4.