RTE plans to make savings of £15 million over three years through the introduction of a financial plan and a "transformation agreement" with unions. This is expected to reduce its 2,165 workforce by more than 10 per cent and reverse a slide into loss-making.
After addressing staff yesterday, Mr Bob Collins, RTE's director general, gave a media briefing where he said the plan would enable the State broadcasting company to return to profitability by 2002 following an expected group deficit of £5 million this year. It follows a profit of almost £6 million made last year. He would not comment on the precise level of job losses but said a minimum figure of 270 redundancies, arrived at by a review group last year, was "a very relevant figure".
The plan "will certainly mean that we will have quite a number fewer people working for RTE than we have at the moment". The report, A Review of RTE's Structures and Objectives, recommended that a reduction of between 270 and 370 in staff numbers should be sought to avoid deficits of between £10 million and £20 million by 2001. Staff costs absorb £115 million of RTE's annual expenditure of £192 million. Mr Collins said that deficits next year would be "probably significant enough", but a smaller deficit was envisaged in 2001 and a small surplus in 2002. "Thereafter we should be in a position to continue with surpluses," he said.
He added that up to £43 million - one third of the £130 million RTE received from the sale of its 25 per cent stake of Cablelink - would be used to fund severance packages. E's audio and visual archives, provide digital production facilities and make broadcast-related commercial investments. Mr Collins addressed RTE staff yesterday as part of the first stage of the process to make the organisation more flexible and to deal with the challenges of the digital television age and to continue with investments in online services.
Later he told journalists that when he became director general in 1997 it was clear to him that there would have to be "a very significant re-orientation" to take account of technology. He expected Digico, the designated digital broadcasting company for all companies, and in which the Government envisages RTE having up to a 40 per cent stake, to be operational by 2001.
RTE plans to launch three new channels, one dedicated to news, another for learning purposes and a third for an, as yet, unspecified purpose. Legislation, giving Digico statutory authority, is expected to be enacted early in the new year.
This year, RTE expects to make a broadcasting deficit of £17.8 million, compared to one of just £5 million in 1998. With total revenues of about £177 million expected, it will make a group deficit of about £5 million compared to a group surplus of £5.94 million last year.
Asked to account for the discrepancy between the two years, Mr Collins said a provision of about £4.5 million had been made for one-off millennium programmes including The Irish Empire and a series on Irish 20th century history due to be aired next year. RTE would also increase its morning television news content in 2000.
He added that there was a continuing provision in the accounts for a staff reduction programme and there had been a significant increase in investment in the independent production sector which had not yet been offset by a reduction in its own production costs. External programme acquisition costs had increased because of the euro's weakness.
Mr Collins reiterated his view that the contract for collecting the TV licence should be put out to tender. Collection costs for An Post, which has the contract, works out at about 11 per cent of the £65 million collected, compared to a European norm of 6 per cent.
