Thank you, Chairman. I should mention that I am joined by Mr. Michael Casey, the finance and operations director of the IUA.
Thank you, Chairman, for giving us the opportunity to address the committee. I would like to thank the Comptroller and Auditor General and his staff for having afforded us the opportunity to input to the report during its gestation. The report itself is very comprehensive, so in the time available to me, I will comment briefly on the issues raised, following the sequence in which they arise in the report.
The report records that there were 97,000 students attending university in the 2008-09 academic year. Total enrolments in the new academic year will be well in excess of 100,000. By contrast, enrolments in 2000 stood at 83,000. The Department of Education and Skills projects that student numbers will continue to rise in the period to be addressed by the forthcoming higher education strategy. In the context of those rising numbers, there has been significant change over the past decade. The growth in student numbers and increasing international competition for talent has placed new pressures on our universities. The unit of resource per student is less than that of competing countries and student staff ratios are higher. As well as educating more and more students, research and collaboration with industry and other universities has been a major focus of activity in recent years.
The universities have concentrated on how best to balance these different demands and to deliver the highest possible quality. This has meant a continuing reappraisal of how resources are utilised and the development of structures and processes that are efficient and relevant to the current environment and to the challenges we face. This is both appropriate for accountability and to deliver value for money.
The recent ECOFIN view of higher education indicates that the system is highly productive. However, there is need for constant change and optimisation. The Comptroller and Auditor General's report outlines areas for further improvement, which we welcome.
In this regard, the recurrent grant allocation model has brought greater transparency and equity to university funding. However, as the report records, its full implementation is constrained by the difficult funding situation. Similarly, the issues that have arisen in respect of the student services charge derive fundamentally from cutbacks and reductions in Exchequer funding. We welcome the report's recommendations in this area and will engage directly with the Higher Education Authority, HEA, in respect of them. As the report records, we believe this engagement should form part of a wider reappraisal of the entire system of funding higher education. We look forward to the recommendations of the forthcoming higher education strategy in this regard.
As for the issue of costing university activity, the full economic cost project is progressing well. While it is taking time to reach full implementation, I note this is a complex project that is something of a ground-breaking initiative in higher education internationally. There is a balance to be struck between rushing to completion and having a system that ultimately delivers the standards of robustness and transparency that are required. I also note that the timeframe for a similar activity in the United Kingdom, the transparent approach to costs, TRAC, system, is broadly in line with the timeframe we are following. In addition, we welcome the prominence given in the so-called Croke Park agreement on the public service to the issue of full economic cost and the academic activity profile. On quality, the report and its appendices detail the systems in place and demonstrate the commitment of the universities to a high-quality system of quality review and, most importantly, to acting on the recommendations that emerge from that review. The high satisfaction ratings given by employers to Irish graduates, as reflected in the ECOFIN study of higher education and the university rankings, reflect the quality of our institutions.
I will turn to the matter of remuneration, which is dealt with extensively in the report. It is appropriate for me to comment on the overall position, rather than the institutional specifics. As reflected in the report, there has been a difficulty in respect of the determination of the remuneration of senior university staff. Traditionally, the review body on remuneration in the public service dealt with a highly limited number of senior grades, that is, essentially professors, bursaries, secretaries, registrars and presidents. In the meantime, universities have been growing in the scale and complexity of their operations, as well as in the numbers of students, and have been obliged to adjust their structures and management accordingly. There has been a lacuna with regard to the process of determining remuneration levels for grades not encompassed by the established pay determination mechanisms. However, on the matter of allowances, I should make clear that we accept fully the provisions of the Universities Act in this area and that they must be complied with according to the procedures set down. There is no ambiguity in this. On determining remuneration, report No. 43 of the review body, which looked at a sample of posts in two institutions, is significant because it sets out principles in respect of remuneration for higher duties in the sector generally and recommends that this be achieved by way of allowances. Implementation of report No. 43 in full should form part of a concerted effort to develop a more comprehensive remuneration framework for higher education.
On the matter of external work, the growing emphasis on commercialisation and collaboration with industry is an important feature of policy. There has been an increasing public policy focus on ensuring that universities contribute to economic development to the maximum extent, such as, for example most recently in the recommendations of the innovation task force. External engagement is part of this and has significant benefits in exposing academic staff to professional and commercial developments that can then be reflected in teaching. This aligns with another policy focus, namely, that of ensuring that education is in tune with the needs of the workplace. Clearly it is important that external engagement has an appropriate regulatory framework. The report reflects this and makes useful suggestions for improvements in this area. It is important that such regulation should serve to support the overall national policy of encouraging external engagement by staff. We look forward to engaging with the recommendations of the Comptroller and Auditor General in that regard.
Given the constraints on time, I do not propose to comment on the matter of discretionary pension awards, other than to reflect that the decision-making process now ultimately is vested in the Minister for Finance on foot of the transfer of the university pension funds. This concludes my statement and I thank the committee for its attention.