DÁIL ÉIREANN AN COMHCHOISTE UM IOMPAR AGUS CUMARSÁID JOINT COMMITTEE ON TRANSPORT AND COMMUNICATIONS Dé Céadaoin, 22 Bealtaine 2013 Wednesday, 22 May 2013 The Joint Committee met at 9.30 a.m. MEMBERS PRESENT: Deputy Michael Colreavy, Senator Terry Brennan, Deputy Timmy Dooley, Senator Ned O’Sullivan, Deputy Dessie Ellis, Senator John Whelan. Deputy Terence Flanagan, Deputy Tom Fleming, Deputy Noel Harrington, Deputy Seán Kenny, Deputy Mattie McGrath, Deputy Patrick O’Donovan, Deputy John O’Mahony, Deputy Ann Phelan, In attendance: Deputy Luke ‘Ming’ Flanagan. DEPUTY TOM HAYES IN THE CHAIR. 1 Budgetary POSITION AND Editorial POLICY: DISCUSSION WITH RTE The joint committee met in private session until 9.45 a.m. Budgetary Position and Editorial Policy: Discussion with RTE Chairman: We are now in public session. I welcome Mr. Noel Curran, director general of RTE, and his colleagues, Mr. Kevin Bakhurst, managing director of RTE news and cur- rent affairs, Ms Breda O’Keeffe, acting chief financial officer and Mr. Brian Dalton, manag- ing director, corporate development. The purpose of the meeting is to discuss the procedures put in place at RTE in light of the Broadcasting Authority of Ireland findings and the Horgan report following the recent controversies. We would also like to hear from witnesses how they propose to address RTE’s current budgetary position including the matter of salary levels and contractors’ pay. On behalf of the committee, I welcome the witnesses. I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If witnesses are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable. I also advise them that any submissions or opening statements submitted to the committee will be published on the committee’s website after this meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable. I now call upon Mr. Curran to make his opening statement. Mr. Noel Curran: I thank the Chairman and members for inviting me here today to discuss the issues outlined by the Chairman. The Chairman has already introduced the people with me - Mr. Brian Dalton, Ms Breda O’Keeffe and Mr. Kevin Bakhurst. I hope that between us, we can answer any questions that members may have. In the past year, RTE has overcome considerable challenges, some of which have, under- standably, been explored in detail at this committee. Recovering from and implementing im- portant changes in response to the very significant editorial mistakes made in the “Mission to Prey” and “Frontline” presidential debate programmes in 2011 was a key priority for RTE throughout last year. Informed by the findings and recommendations from external investiga- tions and reports, we completely restructured RTE television current affairs. The changes were made to ensure greater clarity in the editorial management chain and to allow for an increased focus on journalism and editorial decision making at the programme level. As part of the restructuring, we announced we were changing our approach to investigative journalism through the establishment of a new RTE investigations unit. The new unit will now be responsible for managing and producing RTE’s key investigative journalism output for tele- vision, radio and online. RTE also made key appointments to the most senior positions within the restructured RTE news and current affairs division at the levels of managing director, man- aging editor, programme editor and head of the new RTE investigations unit. 2 JOINT COMMITTEE ON Transport AND Communications At a group wide level, we created a new role of head of editorial standards and set up an edi- torial standards board to support and challenge programme makers, particularly those involved in high-risk programming. In addition, we completely updated RTE’s journalism guidelines during early 2012. We have also included new guidelines for social media and rolled out train- ing for all editorial staff across the year. Many of the changes we have made have become ap- parent to our audience with a refreshed multi-format “Prime Time” running three nights a week and a new morning news programme, “Morning Edition”, both beginning earlier this year. The first long-form documentaries, “Riches from Rags” and “Bethany: the Home the State Forgot”, produced by the new investigations unit, were broadcast in just the last few weeks. There are more investigative reports from the unit coming shortly. There will always be risks and, as I have always said to this committee, we will, of course, make mistakes; such is the nature of journalism. Having learned difficult lessons, all of the ac- tions we have taken were designed to minimise the risk of serious editorial mistakes happening again while at the same time supporting and nurturing challenging and important current affairs journalism in RTE. Over the course of time our audience will ultimately be the best judge of how we are doing. Mr. Kevin Bakhurst will be able to give more detail on the specific changes and initiatives. Of course we have more work to do. Nobody is getting complacent here. How- ever, given where we were, I am pleased to say where we have now got to. Over the past five years, like many organisations and businesses in Ireland, particularly in the media sector, RTE has had to adjust to a new financial reality. RTE’s commercial revenues first began to decline in 2008 as a direct result of the economic slowdown. Over the next four years our commercial revenues fell by €84 million, that is, 35%. In addition, public funding allocated to RTE from the licence fee was reduced by €20 million during that period. In total, RTE has experienced a decline of €104 million in revenues between 2008 and 2012. RTE has responded decisively to this severe contraction in revenues. We implemented sub- stantial cost reductions across all areas of our activities between 2008 and 2011. We reduced our operating cost base by €86 million. The cost reduction initiatives included a voluntary pay cut taken by staff, suspension of increments, cancellation of bonuses or performance pay, reductions in headcount levels, reductions in programme costs, renegotiation of supplier and service contracts and reduction in all overhead and discretionary costs. In 2012, in response to further declines in both commercial income and licence fee revenues and a very difficult commercial market for all media companies, RTE undertook a major organi- sational restructuring. A key element of the restructuring programme was the voluntary exit schemes under which 350 people left RTE during 2011 and 2012. At the end of 2012, RTE’s headcount had reduced by almost 500, a reduction of 21% compared with 2008 levels. The benefit of this restructuring began to take effect in 2012. RTE’s 2012 operating cost base was some €104 million less than 2008 levels. This helped generate a small but positive operating profit last year despite further declines in revenues. As I have already publicly indicated, RTE will report a net deficit for 2012 in excess of €60 million, after a large once-off restructuring charge. The cost of restructuring is considerable but will deliver annual ongoing savings, which reduces RTE’s 2013 operating cost base to al- most 30% lower than 2008 levels. As reported in a recently published report from Pricewater- houseCoopers, PwC, the scale of the operating cost reduction that RTE has achieved is almost unique across the Irish semi-State sector and it underlines our strong commitment to our stated aim of returning to financial stability this year. 3 Budgetary POSITION AND Editorial POLICY: DISCUSSION WITH RTE By the end of this year, staff costs in RTE will have reduced by more than €42 million since 2008. In July 2009, RTE was the first public body to agree and implement reductions in basic salary for all staff. The pay reductions were fair, ranging from 2.35% to 12.5%, with those staff members on higher incomes taking the largest reductions. Salary increments in RTE were sus- pended for a period of time by agreement. They have been reintroduced but on condition that their reintroduction was offset by other personnel related cuts. In respect of management and all other grades, no bonuses have been paid and managers are no longer placed on incremental salary scales. Average basic pay for RTE staff serving at December 2012 was €55,500. This places RTE’s salaries, compared with both public and private sector organisations, in the median or mid-range for comparable organisations and companies. Alongside our staff, RTE has always contracted a wide range of personnel and companies to deliver services, including on-air presenting talent. For many years, the earnings of RTE’s top presenting talent has been a subject of considerable public debate and criticism. It is the issue more than any other that I am asked about, not just by the media and politicians but also by the public, for whom it is an area of concern.