WEDNESDAY 13 JULY 2005

HERR RAINER CONRAD AND DR HORST WEGNER

  Q1560  Baroness Howe of Idlicote: But given what you were saying, is there beginning to be a debate with digital switchover and all of this, "Why should we pay a licence fee?" and so on? Are you getting quite a lot of backlash now about the licence fee anyhow, and how do you measure the financial needs of broadcasters? Do you measure them against any other form of organisational financial needs?

  Dr Wegner: Up to now the vast majority of the German population have had no problem in accepting the licence fee. There has been a development that there are now more people who are opposed to a rise in the licence fee but in general it is still accepted.

  Q1561  Chairman: Do you know how many refuse?

  Dr Wegner: Ninety-5 per cent of households have TV sets or radios, and out of that amount 8.5 per cent approximately is exempt from paying the licence fee for social reasons, such as handicapped people or people with a very low income or no income at all. The amount for loss of claims is 1.75 per cent. That means 1.75 per cent do not pay the licence fee, but we expect this percentage to increase because that tendency is going up. The fact is that people have difficulty in paying the licence fee rather than that they refuse to pay.

  Q1562  Baroness Howe of Idlicote: It is just lack of money?

  Dr Wegner: Yes. Economic problems have their consequences.

  Q1563  Chairman: But the licence fee is not a matter of enormous controversy?

  Dr Wegner: No.

  Q1564  Lord King of Bridgwater: I am not quite clear about this licence fee point. Whose responsibility is it to collect the licence fee? Is it the broadcasters' responsibility?

  Herr Conrad: Yes.

  Q1565  Lord King of Bridgwater: And the cost of collection is paid by the licence fee payer in the end?

  Herr Conrad: Yes.

  Q1566  Lord King of Bridgwater: Because it is part of your calculation as to what it will cost?

  Herr Conrad: It is part of our calculation.

  Q1567  Lord King of Bridgwater: Moving on from there, you presumably therefore have powers to investigate both the efficiency of the broadcasters to carry out value-for-money studies, to make an informed judgment on their need for certain expenditure levels, and the efficiency of the collection process as well?

  Herr Conrad: Yes. KEF has existed for 30 years. That means that KEF has developed many methods for reviewing and checking the efficiency of the broadcasters and also the conduct of the broadcasters. Perhaps you are interested in a few examples. For instance, we have been having an inquiry for many years into the profitability of the production institutions, and we have ascertained in the course of many years' experience that it was also due to the pressure exerted by KEF on these institutions that they get more profitable all the time in terms of efficiency. This even goes as far as the fact that TV institutions now produce one minute nominally more cheaply than they did in 1983. Another example is a comparison by benchmarking, for example, on expenditure for administration and so on.

  Q1568  Lord King of Bridgwater: Do you have full rights of access?

  Herr Conrad: Yes.

  Q1569  Lord King of Bridgwater: Can you choose any part of the organisation that you wish to look at in terms of their efficiency?

  Herr Conrad: Legally, no. It is sometimes tough to get the figures that we want from a specific department but the broadcasters do not have the right to refuse to deliver the figures.

  Q1570  Chairman: Therefore you do have the powers to require that?

  Dr Wegner: Yes, we do have the powers. We can get all the figures that we want but we are not entitled to go to the institutions and check their affairs there as the public prosecutor can.

  Q1571  Lord King of Bridgwater: How many people have you got?

  Herr Conrad: KEF has 16 members. They are not really honorary members but they are not doing this as a principal profession. For instance, in my case my main job is that I am a Vice President of the Supreme Court of Audit.

  Q1572  Lord King of Bridgwater: In your Länder?

  Herr Conrad: Yes, in Bavaria.

  Q1573  Lord King of Bridgwater: I really meant the staff. What staff have you got?

  Herr Conrad: Dr Wegner is our Managing Director. He does this on a full-time basis. We have a secretary. All of the 16 members have a small fund that they can use to hire one employee but not a full-time employee. It is maybe one quarter of an employee. We have some members who are university professors so, they have assistants and they hire these assistants for a certain period. The members of the Court of Audit have more man-power. In my case it is one employee.

  Q1574  Lord King of Bridgwater: I do not know whether this is a fair question. How do the costs of production of news programmes in ZDF compare with the costs of production of the BBC?

  Herr Conrad: We cannot say that. We have no figures from the BBC. We have no possibility to make a comparison between international broadcasters.

  Q1575  Lord King of Bridgwater: On the collection of fees situation how does the cost of collection in Germany compare with the UK?

  Herr Conrad: I do not know; I am sorry.

  Q1576  Baroness Howe of Idlicote: How long do the 16 members serve for? Are they, say, one or two terms of five years?

  Dr Wegner: For five years but they can be re-elected.

  Q1577  Baroness Howe of Idlicote: For how long? How long is the longest one?

  Dr Wegner: Every federal state nominates one member of the commission, so it is 16.

  Herr Conrad: One member has been there for 30 years. In my case, I have been in KEF since 1985.

  Q1578  Chairman: A good innings!

  Dr Wegner: So there is no limit.

  Q1579  Chairman: Do you encourage the broadcasters to increase as much as possible their commercial earnings?

  Herr Conrad: Again, this is a very interesting question. First of all, we are interested in the licence fee not going up too much. There are other revenues which come from advertising, merchandising, participating interests, sponsoring. All these help to ensure that the licence fee does not increase too much. However, there are problems with the private broadcasters and with the European Commission. The European Commission sees the public broadcasters nearly exclusively from economic aspects and therefore from the aspect of competition. Therefore, we are arguing with Brussels especially regarding the issue of commercial activities.