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PROJECT AUDIT - COLLECTION OF T. V. LICENCES INTERIM REPORT OF THE COMMITTEE OF PUBLIC ACCOUNTSIntroduction:The Committee in the course of its examination of the C. & A.G. ’s project audit called and examined 1) Mr. Bernard McDonagh, Accounting Officer, Department of Tourism, Transport and Communications. 2) Mr. John Hynes, Chief Executive, An Post 3) Mr. Joe Barry, Director General, R.T.E. The Committee noted:*The charge for a colour licence is £62 and £44 for a black and white licence. These amounts were fixed in 1986 and have not changed since. Black and white licences as a percentage of total sales have declined since 1986. They accounted for 24% in 1986 and only 5.5% in 1993. *When a person is prosecuted in Court for not having a licence, experience shows that the frequent imposition of fines which are less than the licence fee makes it cheaper for the person not to hold a T.V. licence. There is no real impetus even after prosecution to renew the licence. No records are kept but the impression in the Department of Tourism, Transport and Communications is that the average fine is somewhere between £50 and £100. *Licence evasion arises through (a) failure to acquire any licence and (b) late renewal of licences. In 1991 a total of 99,195 unlicensed television receivers were detected by An Post inspectors, yet licence sales in 1991 increased by only 20, 119 over the 1990 sales figure. An Post suggest that this was due mainly to the fact that the majority of the 99, 195 related to persons who were late in renewing their licences. *Under Social Welfare schemes certain categories of social welfare recipients (in practice those receiving free electricity allowance) are not required to pay for a monochrome television licence. The licence may be uprated to colour on payment of £18, the difference between the monochrome licence and the colour licence. Licence fees for licences issued are invoiced by An Post to the Department of Social Welfare (or the Department of Defence in respect of holders of military service pensions) on a monthly basis. These Departments then pay to the Department of Tourism, Transport and Communications a sum equal to the value of these licences. Almost 19% of all licences, or one in five licences, fall into the “free” category. An Post states that it is just as costly to process the “free”licence applications as it is to process ordinary licences and sometimes more so. This arises because of the manual effort at Post Office counters, as all applications are renewed annually and the confirmatory requirements are quite stringent. *The C. & A.G. ’s Report which refers to 1991 also notes that under the present system of collection An Post, the agent, considers that the evasion rate of 11.5% which represents about £7m. of lost annual income from licence fees, is fairly close to the lowest level obtainable in economic terms. The same evasion rate also applied in 1992. The Department of Tourism, Transport and Communications does not unreservedly accept this view and draws attention to the effect which the availability of black and white licences has on the level of evasion. The Department considers that at least some of the difficulties arise because of the two licence system. *As matters stand, one licence per household is required. As far as hotels are concerned one licence is required no matter how many televisions are on the premises. *Licence fees are collected by An Post throughout the year. The monies collected are transmitted to the Department on a bi-monthly basis and then passed on by the Department to RTE on the same day. The money comes to the Department from An Post in the form of a cheque and a payable order is issued to RTE. In the event of any delay in lodging the cheque from An Post interest is lost to the Department. In 1989 and 1990, interest was lost to the Department because there were serious delays in lodging cheques from An Post resulting in a loss of interest amounting in total to £120,000. The Committee welcomes the Department of Arts, Culture and the Gaeltacht recent assurance that the same day value is being obtained in respect of cheques sent to the Department’s account from An Post and in respect of payments to RTE. Recommendations:While the Committee has heard the evidence of the Accounting Officer from the Department of Tourism, Transport and Communications, the Chief Executive of An Post and the Director General of RTE, it has heard nothing to indicate that any fundamentally better system of collection is as yet available. Therefore, it does not recommend any fundamental change. However, it would like to suggest some improvements and automation changes: 1)The need to retain a separate black and white T.V. licence is rapidly disappearing and its existence can facilitate evasion. Therefore, it recommends that in future there should be one licence fee to cover colour and monochrome televisions. 2)It also recommends that the legislation be amended so that it can never be economically beneficial to pay a fine instead of a licence fee. 3)An Post should concentrate its anti-evasion efforts on those households which have not held a television licence in the preceding few years. 4)The Department of Social Welfare should consider offering the facility to Social Welfare recipients of having their T.V. licence fee stopped, on a weekly basis, at source. 5)The Department of Arts, Culture and the Gaeltacht and the Department of Social Welfare should consider a less cumbersome and less costly method of administrating the free T.V. licence scheme. Each applicant for a free licence must apply annually at the Post Office counter like everybody else. This incurs an avoidable administration cost. It seems to the Committee that the Department of Social Welfare could issue directly to those entitled a T.V. licence or warrant in lieu and save public money in the process. The Department of Arts, Culture and the Gaeltacht should examine the equity of having the same licence fee for large hotels as for domestic residences. The Committee feels that new arrangements, and perhaps new legislation, are required to deal with households within multi-dwelling buildings, i.e. apartment blocks or houses converted into flats. Consideration should be given to requiring the landlord and/or Management Company to ensure that a separate current T.V. licence exists in respect of each dwelling within the complex or house. 8)The Committee recommends that the transfer of funds should be by automatic electronic transfer rather than by cheque. The Department should consider means by which monies collected by An Post or any other Agency appointed to do so, might be transferred direct by electronic means to RTE without conceding the Department’s right to control the amount of money so transferred.
JIM MITCHELL T.D. Chairman 8 September 1994. |
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