(Secretary General of the Department of Further and Higher Education, Research, Innovation and Science) called and examined.
Chapter 19: National Training Fund
Dr. Colm O'Reardon
We have received apologies from Deputy Catherine Murphy. The witnesses are all very welcome. I remind all those in attendance to ensure their mobile phones are on silent mode or switched off.
Before we start, I wish to explain some limitations to parliamentary privilege and the practice of the Houses as regards reference witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the parliamentary precincts is protected, pursuant to both the Constitution and statute, by absolute privilege. This means that witnesses have an absolute defence against any defamation action for anything they say at the meeting. However, they are expected not to abuse this privilege and it is my duty as Cathaoirleach to ensure that it is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction. Witnesses are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against any person or entity by name or in such a way as to make him or her identifiable or otherwise engage in speech that might be regarded as damaging to the good name of a person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative that they comply with any such direction.
Members are reminded of the provisions of Standing Order 218 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policies. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.
The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness to the committee. He is accompanied this morning by Ms Paula O'Connor, deputy director of audit at the Office of the Comptroller and Auditor General.
This morning, we are engaging with officials from the Department of Further and Higher Education, Research, Innovation and Science to examine the following matters: Vote 45 - Department of Further and Higher Education, Research, Innovation and Science, Financial Statements 2022 - National Training Fund and Report on the Accounts of the Public Services 2022 - Chapter 19: National Training Fund. We are joined by a number of officials from the Department of Further and Higher Education, Research, Innovation and Science. They are Dr. Colm O'Reardon, Secretary General, Mr. William Beausang, assistant secretary general, Mr. Keith Moynes, assistant secretary general, Dr. Deirdre Lillis, assistant secretary general, Mr. Paul Lemass, assistant secretary general, and Ms Valerie Considine, principal officer. We are also joined by Ms Georgina Hughes-Elders, principal officer at the Department of Public Expenditure, National Development Plan Delivery and Reform. All the witnesses are very welcome.
Before I call on Mr. McCarthy, I acknowledge this is the 100th anniversary of the establishment of the Office of the Comptroller and Auditor General. There was an event on Tuesday to mark that. Some of us were in attendance. It was a very enjoyable event. I want to publicly acknowledge the work of the Comptroller and Auditor General's office over the past 100 years. Members of the committee across the board will agree the service provided is invaluable. The fact it is there means people who are handling public money are cautious with it. The level of scrutiny and detail carried out by Mr. McCarthy's office and their diligent work is something I have got to see in the past three and a half years. I wanted to acknowledge that publicly and thank him, Ms O'Connor and all the staff at the office. I ask Mr. McCarthy to make his opening statement.
Mr. Seamus McCarthy
Go raibh maith agat, a Chathaoirligh, and thank you for the good wishes. Obviously, the 100th anniversary of the establishment of any organisation is really important. It is time to reflect on the role and we look forward to contributing into the future in the same way.
The appropriation account for Vote 45 - Further and Higher Education, Research, Innovation and Science records total expenditure of €3.284 billion in 2022. Expenditure on the Vote in 2022 is accounted for under three programmes. Spending under the higher education programme amounted to €2.33 billion. Much of that funding was transferred to the Higher Education Authority, which has statutory responsibility for allocating public resources to the higher education institutions. Issues from the Vote included €1.33 billion to fund recurrent grant support for higher education institutions, €132 million provided for third level infrastructure projects, with a further €41 million for public private partnership, PPP, projects and €341 million to fund pension costs of retired third level staff. Just under €318 million was spent on student support and related expenses. Most of this was spent under the national SUSI scheme, which is operated on behalf of the Department by Dublin City Education and Training Board.
The programme for skills development involved expenditure of just over €695 million, including grant support to SOLAS, which funds further education and training activities, including apprenticeships. Just under €255 million was spent under the research, innovation and science programme. The bulk of this was transferred to Science Foundation Ireland. On the receipts side, appropriations-in-aid of the Vote amounted to €92 million in 2022. The majority of these receipts, just under €79 million, relate to additional superannuation contributions. These represent part of the pension contributions deducted from the salaries of staff in higher education institutions and in the Department’s aegis bodies. The Department also received €8.58 million in funding from Technological University Dublin towards the costs of the PPP to develop the university’s campus at Grangegorman.
The overall cost of the deal for that development is forecast to amount to €606 million over the term of the contract. The account also indicates that commitments of almost €718 million were entered into in 2022 in respect of a public-private partnership for six new projects for four higher education institutions, HEIs. For 2022, the net surplus on the Vote remaining at the year end was €18.94 million, which was liable for surrender to the Exchequer. I issued a clear audit opinion in relation to the appropriation account, and drew attention to disclosures in the account relating to some non-compliance with procurement rules, and a write-off of public funding of €117,000.
The National Training Fund was established by the National Training Fund Act 2000 as a dedicated fund to support employment-focused training. The Department has responsibility for the management and utilisation of the resources of the fund, and for related annual financial reporting. The NTF is funded mainly by way of a levy on employers collected through employers' pay related social insurance. The income of the fund in 2022 amounted to €951 million. Payments from the fund amounted to just over €681 million. Of this, €365 million was spent on skills acquisition for those looking to take up employment, while €313 million was spent on programmes for those currently in employment. The fund’s surplus for the year was €269 million, and the accumulated surplus at the year end was €1.37 billion.
The report before the committee today was undertaken to review the factors giving rise to the accumulated surplus of the fund, and the progress made on implementing recommendations made in 2018 to reform the National Training Fund. The 2022 fund income of €951 million was more than double that reported in 2017. The increase is largely due to a combination of increasing numbers in paid employment, increases in earnings, and increased annual levy rates over the period 2018 to 2020. The levy currently stands at a rate of 1% on reckonable earnings. Fund expenditure has also increased, but not at the same rate as income. This has given rise to annual surpluses each year since 2015. The Department agrees that the accumulated surplus at end 2022 was in excess of that required to maintain programme funding, and is not sustainable. However, plans to spend the accumulated surplus may be constrained due to budgetary and EU fiscal policy.
The NTF funds training programmes through a number of grantee bodies. In recent years, the main recipients of funds have been SOLAS and the Higher Education Authority, HEA. Funds allocated to the authority have increased from €37 million in 2017 to €314 million in 2022. We found there was a lack of consistency in the Department’s oversight and monitoring arrangements in place with bodies in receipt of funding from the training fund. I therefore recommended that the Department review its performance delivery arrangements with the grantee bodies to ensure specific relevant performance targets are agreed for all the grantees. An external review of the fund carried out in 2018 resulted in recommendations for reform across four key areas. While recommendations in three of the four areas have been addressed, little progress has been made on those aimed at improving the monitoring and evaluation of the fund. I recommended that the Department develop outcome-based performance metrics to evaluate both its own performance and that of the bodies it funds. The Department has accepted the recommendations made and has agreed timelines for implementation in 2024.
I wish Dr. O'Reardon well. He is a new appointee. I am not sure how long he has been in the position.
Dr. Colm O'Reardon
It has been 11 weeks.
The Committee of Public Accounts is one of the best places to start. The preparation for it is certainly a great induction. I wish Dr. O'Reardon well on his appointment.
Dr. Colm O'Reardon
I thank the Chairman. I appreciate his good wishes. I join with him in his comments about the centenary of the C and AG's office. I congratulate its staff.
I am pleased to be here as Accounting Officer to assist the committee in its examination of the 2022 appropriation account for Vote 45, and the relevant aspects of the Comptroller and Auditor General’s Report on the Accounts of the Public Services 2022 relating to chapter 19, the accounts of the National Training Fund. The Chairman has introduced my colleagues.
I provided some briefing material for the committee in advance of our meeting today. However, given that the Department is recently established, and this will be the first occasion its appropriation accounts have been examined by the committee, I will provide a brief introduction to the Department. The Department was established in August 2020, with functions and responsibilities being transferred from the Departments of Education and Enterprise, Trade and Employment. The establishment of the Department reflects the Government’s commitment to Ireland becoming a leader in the knowledge economy as well an understanding of the transformative power that education has, both to individuals and Irish society.
The Department’s gross voted expenditure in 2022 totalled €3.284 billion, which included a deferred capital surrender of €37.2 million. This expenditure resulted in a gross saving of €62.5 million against a provision of €3.346 billion. €55.2 million of this saving was carried forward for use into 2023 and the balance of €7.4 million was surrendered to the Exchequer. Excess appropriations in aid received of €11.5 million were surrendered in full.
The Department’s activity touches every household in the country, including students, researchers, apprentices and lecturers. We are deeply aware of the responsibility of our mandate and the importance of our success. To give a sense of how large the sector is, in 2022, the apprenticeship population was 26,325 and, in the same year, there were 186,000 further education and training enrolments. An additional 21,000 learners were enrolled on the national e-college system and there were 256,000 total enrolments in higher education. In 2021, the Government invested almost €1 billion in research and innovation and this Department accounted for €500 million. Research and innovation will provide many of the answers to the challenges that threaten our shared future, such as climate change.
In the three years since the Department’s establishment there has been a significant strengthening of further and higher education and research throughout the country. Developments such as the Action Plan for Apprenticeship, and the inclusion of links to further education and training options on the CAO website in 2021, have had a considerable impact on how Irish society views these invaluable learning paths. The adult literacy for life strategy and the prisoner education task force are two initiatives that demonstrate the tangible and positive impacts of education as well as the diversity of life stages at which people access and acquire new skills.
In the higher education sector, there are now five technological universities providing a meaningful impact both regionally and nationally. The Oireachtas has also enacted the Higher Education Authority Act 2022, representing one of the most significant governance reforms of the higher education sector in many years. The national tertiary office has been established within the HEA to develop joint further and higher education degree programmes. From September of this year, students will now be able to commence their third level experience in further education and progress seamlessly to complete the remainder in higher education institutions.
It remains a priority for the Department to ensure that the higher education student body, at all levels and across all programmes, reflects the diversity and social mix of Ireland’s population. To this end, we will continue to deliver the National Access Plan 2022 to 2028. The need to ensure the availability of appropriate accommodation for students will also remain a priority. For the first time, the State is investing in student accommodation and the Department will continue to work across Government, and with our sector, to boost the supply of affordable accommodation.
The Department has, in addition, overseen significant reform in Ireland’s research and innovation landscape, most notably with the launch of Impact 2030: Ireland’s Research and Innovation Strategy. All-island research collaborations are progressing under the HEA’s North-South research programme, which entails a €50 million investment in conjunction with the shared island initiative. A new research agency, research Ireland, will soon be established, following the amalgamation of Science Foundation Ireland and the Irish Research Council, to fund challenge and interdisciplinary research, in addition to supporting excellent research across all research areas. We are also formulating new structures relating to the generation of scientific advice, which will be led by a Government science adviser, that will enable the Government to be provided with the best possible counsel when considering national level issues and challenges.
I must also acknowledge the centrality of the bodies under the aegis of the Department regarding so many of these changes.
I will turn briefly to the NTF. I thank the Comptroller and Auditor General for his review of the fund. The Department accepts the recommendations set out in his report. Established by the National Training Fund Act 2000, the NTF is a dedicated fund to support employment-focused training. It is resourced by a levy of 1% of reckonable earnings in respect of employees of certain classes of employment. The NTF funds 18 schemes across ten Departments, agencies and business, community and voluntary organisations. In recent years income levels have grown faster than the rate of expenditure in the fund. While that is a positive indication of the level of growth in the economy, we acknowledge that the accumulated surplus is beyond what could be conceived as a prudent level. However, any increase in NTF expenditure must still sit within overall Government expenditure ceilings. There is potential to use the NTF surplus to support the workforce in the digital and green transitions. This is an approach that has been advocated by the employer-led NTF advisory group and others. Discussions as to how we can deploy the full potential of this fund, while also working within fiscally prudent spending levels, are ongoing with the Department of Public Expenditure, NDP Delivery and Reform. We look forward to engaging with the committee and answering any questions members may have.
I thank Dr. O'Reardon very much. The first committee member to speak this morning is Deputy O'Connor. He has 15 minutes.
I want to be associated with the Chair's comments on the 100th anniversary of the establishment of the Comptroller and Auditor General's office. I wish everyone there well. I also congratulate Dr. O'Reardon on his appointment as Secretary General. I wish him every success. It is a new Department and it must be a very exciting undertaking for all involved.
First, I want to raise an issue that appears quite serious. Obviously, with the benefit of hindsight, we could change everything, but this seemed a little bit off to me. It relates to the estimated provision of €423 million for student supports and related expenditure. There was an underspend in 2022 of approximately €105 million. Some may point to that as a consequence of the reduction in the student contribution as a result of Government policy, but we are in a time of such great hardship for families. The rising cost of living was a key component of 2022's household year for families in Ireland and for people going on to higher education. It seems to me that the money was wasted given how it could have been used. I, as a young person, do not need to tell the witnesses how difficult last year was for many younger people. That is something that comes up a lot in constituency offices in terms of SUSI supports for people going on to higher education. An amount to the value of €105 million seems to be astronomical and should probably have been dealt with at some stage last year rather than letting that overspend occur. I would appreciate a response on that first.
Dr. Colm O'Reardon
I thank the Deputy. It is a very important scheme. There are a couple of things to bear in mind. The Estimate for SUSI for 2022 would have been compiled in September 2021, at which time there would have been enormous uncertainty about a number of things. Of the €100 million underspend, approximately €50 million was a direct consequence of the Government decision to reduce the student contribution. That meant SUSI was paying out less money. However, money was being paid out from somewhere else in the Vote, so there is a €50 million element of that. There was also a very general contingency included in respect of Covid, which did not materialise as an issue. In terms of the remainder, there is no doubt that there is a difficulty certainly at that time and ongoing in estimating the number of students who would apply for and take up a SUSI grant. If we think about where we would have been in 2021, moving into the 2022 financial year, there was Covid, a lot of uncertainty about where the economy was, and a lot of uncertainty about student enrolments. That is the kernel of the problem. I am sorry, there are obviously the other issues that I mentioned, but there is a core problem in terms of being able to estimate or predict the number of people. In September 2021 we tried to estimate how many students would enrol for the 2021-22 financial year and then we tried to make an estimate for how many people might be likely to enrol in the 2022-23 financial year. It is an intrinsically difficult estimation process.
That is very insightful. Given the scale of the money involved, however, at what stage of that year would it have become apparent that that type of funding was becoming available and that there was such an underspend? Was there any conversation with the Minister or any of her Government colleagues in relation to that pot basically remaining unspent?
I do not need to reiterate it but it is worth referencing once more that this particular fund makes such a huge impact on students and their families, in particular to those who require it. The fund is a targeted pot of money totalling €105 million. I want to get an appreciation of what stage of the year it was apparent there would be an underspend. I accept the premise about it being a time of uncertainty. Dr. O'Reardon stated it was a direct consequence of Government intervention. Surely it would have arisen that this might occur prior to that decision when they were scoping out what could be done.
Dr. Colm O'Reardon
As Deputy O'Connor knows, I was not in the Department at the time. I might ask Mr. Moynes to give some more detail.
Mr. Keith Moynes
There are two issues. The first is the challenge of the academic year in that it is the last quarter of the year so the trends only really manifest very late in the day in terms of how it coincides with the budgetary cycle. That is always a challenge. There was a recognition of the challenges Deputy O'Connor set out and so within the subhead a number of decisions were made. An additional maintenance payment was given to students to address cost-of-living issues. More money was put into the student assistance fund and there was a postgraduate fee reduction, so there were interventions in addition to the fact that, as the Secretary General said, there was a €1,000 reduction across the board in the student contribution. There were a number of things in recognition of the cost-of-living issue. The challenge is that effectively we never close SUSI, so if students miss the deadline, they can still apply. We do not want a situation where if someone misses a deadline he or she loses the ability-----
Deputy James O’Connor
Just on that, does Mr. Moynes mind me asking about the fact that there were fewer applications for SUSI grants than anticipated for the 2022-23 academic year. That seems a bit bizarre to me because we know it was not a good year for household incomes. Is there any rationale behind that?
Mr. Keith Moynes
It seemed a bit bizarre to us as well, to be honest. Obviously, we have to look at trend data and if we look back over the trend in the previous year there were 76,000. The year before that there were 79,000 and the year before that there were 76,000 odd. In 2022-23, there were 66,000. It is a demand-led scheme. There are probably a couple of things happening. We obviously have a very strong economy and there is a high degree of correlation between SUSI applications and the economy, so that is part of it. There is something about thresholds as well. The eligibility thresholds were left untouched for a long period in the 2010s. We are only trying to catch up now. As household income changes, if the SUSI scheme is not keeping track with it then we lose the ability. It is a demand-led scheme, so we want people to avail of the supports.
Yes, but it is an obvious concern that there seems to be a decline. This is about helping the most hard-pressed families that do need the support. That is something we need to look at.
Mr. Keith Moynes
If I could just say, in the last budget we made additional improvements in terms of threshold changes and rate changes to try and do more. The numbers are going back up again this year. We are conscious that we want to target this in the right way. We do want people applying to this scheme.
Is there anything that could be done to improve the position regarding postgraduate funding? Quite a few PhD candidates have told us that there is a cut-off in the supports available to them if they had spent any time outside Ireland.
If they return, they are not eligible, despite having citizenship. The cause of some people returning to Ireland is to do that further education, with the intention of staying here, in the cases I have dealt with, in all fairness. We came across cases where people cannot get access to the supports. I know that is not covered for PhD funding under SUSI.
Mr. Keith Moynes
As a general rule, there is a residency requirement in the context of SUSI. The Deputy is right that it can present a challenge.
I suppose it has become a common fact of life in Ireland for many people who have obtained an undergraduate degree or a master's degree here to leave, but they intend to return. Does Mr. Moynes think it would be of assistance if the policy was changed to address this specifically in order to try to tempt people to come back here to pursue further studies?
Mr. Keith Moynes
There are two competing tensions in the policy environment. In an ideal world, there would not be that residency requirement. On the other hand, if there was not a residency requirement and if anyone was able to move within the EU, there could be a huge uptick in the scheme that would not be funded. There is a tension. The more we can do to attract people to study and to return home to Ireland, the better.
Going back to the issue of surpluses, when I was doing my research on the NTF, I read with great interest that there has been a large surplus there too. I want to go into that. The NTF is funded mainly by way of levies on employers collected through employers' pay-related social insurance. The income of the fund in 2022 was just shy of €1 billion, at €951 million. Payments from the fund amounted to just over €681 million. The surplus is €269 million. The accumulated surplus stands at €1.37 billion. That seems like another pot of money that could be put to very good use. Could the witnesses explain why such a surplus has been allowed to occur? Is there any benefit to the State from having a surplus of that scale? I cannot see how that is making an impact on anyone's life. What is that pot of money used for, whether Solas or other important programmes that have a direct impact on communities and on people's ability to avail of supports? All we seem to be doing here is accumulating money.
Dr. Colm O'Reardon
I thank the Deputy. This is an important issue for us. As outlined in the Comptroller and Auditor General's report, this was reviewed in 2017 and the rate of contribution was increased gradually in 2018, 2019 and 2020. Since that decision was made, the income to the fund has come up by €585 million. Expenditure from the fund has increased by €544 million. There has been a rapid rate of increase in expenditure but, nonetheless, there is still an accumulating surplus. The NTF is an extra-budgetary fund which means it is not directly part of the Exchequer, but it does sit in the general Government sector, which means that expenditure from the fund is subject to the Government's fiscal rules. The Department certainly has policy options available for how the money could be spent, but the money can only be spent on the decision of the Minister for Public Expenditure, National Development Plan Delivery and Reform at budget time. That would sit alongside all the other competing priorities that he had. It is an issue. The Minister has indicated that he wants to review it. We can certainly identify policy areas which would benefit from additional investment.
It is worth referencing that the income of the fund, of €951 million, has doubled from what it was in 2017. It is a large sum of money. I wanted to touch on that too. I thank Dr. O'Reardon for his response.
On the issues that came up during the Comptroller and Auditor General's audit, non-compliance procurement issues for five IT contracts for project support that totalled just shy of €600,000, at about €582,000 in 2022. How did this occur? Which contractors were appointed? What safeguards have been put in place to ensure that does not happen again?
Dr. Colm O'Reardon
As I understand it, there is a company called EduCampus, which is under the remit of the Department of Education. It supplies IT services to a range of education providers, including the higher education sector. A number of procurements took place under a procurement framework which had timed out. They were originally compliant with the framework but the framework had timed out and, therefore, they were deemed to be non-compliant. Because they were over the limit and referred to the third level sector, they appeared in our accounts. As I understand it, that problem is being addressed with the renewal of the framework.
The Department obtained a sanction from the Department of public expenditure to write off €116,715. It related to misappropriated public funds. Can Dr. O'Reardon give an explanation of what happened there? That refers to funds that were provided to the Waterford Area Partnership CLG by Kilkenny and Carlow ETB and Waterford and Wexford ETB, arising from the overclaiming of rental payments between 2010 and 2018.
Dr. Colm O'Reardon
I might ask Mr. Beausang to comment. Our understanding is that that was an allocation which was made to the body the Deputy refers to. It was not used for the purpose for which it was intended. It used it for another reason. It was not possible to get the money back.
It says that the money was used for administrative purposes. What does that mean?
Mr. William Beausang
As far as we could ascertain, the organisation used the additional funding that it received, which was purportedly for rent, to just support its activities.
Has it provided receipts or any evidence of what it spent that money on?
Mr. William Beausang
Its overall financial allocation was expanded by virtue of money that it got, ostensibly for rent, which it used for services that it delivers. It is important to say that, as far as could reasonably be determined, there was no personal benefit that anybody in the organisation received from the overstating of the rental amount. Given the work that the Waterford Area Partnership does and the important services it delivers, requiring it to repay that amount would, I believe, have forced it into having to wind up. It was on that basis that we worked through the process in place and the secure write-offs-----
It is worth referencing that if it is claimed under a section need, the money has to be spent on that specific need. I am not taking away from the good work that any organisation does.
The Deputy's time is up. There will be a second round.
I appreciate my time is out. We might come back to it. I thank the witnesses
I would like to echo the sentiments expressed and the congratulations to the Comptroller and Auditor General and his office for the invaluable work the do. It is a significant help to the committee. At times, I do not know how we would carry out our own work without it.
I want to touch on the NTF and that ridiculous surplus of €1.37 billion. How long has that surplus been building?
Dr. Colm O'Reardon
It has been building for several years. I think the numbers are in the back of the Comptroller and Auditor General's report.
The Comptroller and Auditor General might have said that the surplus goes back to 2015. Would that be correct?
Dr. Colm O'Reardon
It would be at least that.
At least that.
Mr. Seamus McCarthy
It actually goes back to the foundation of the fund. There were only four years since its foundation in 2001 when there was a deficit, which would have pulled down the accumulated surplus.
Dr. O'Reardon would have to agree that this is not a sustainable position. It is an outrageous amount of money to have sitting in a surplus, not used.
Does Dr. O'Reardon agree?
Dr. Colm O'Reardon
Essentially, t is a matter for the Government to decide how to spend its money.
Given the length of time that surplus has been building, will there be more in the surplus by the end of the year?
Dr. Colm O'Reardon
There will be a surplus for 2023.
It is building and building. Will Dr. O'Reardon perhaps outline a few big ideas the Department has had for putting the surplus to good use and what happened to those ideas?
Dr. Colm O'Reardon
We did some work that looked at how it could be spent. There is a range of areas where the money could be invested. There are aspects of the areas where the fund is currently being spent where value for money could be obtained through additional investment.
What are those?
Dr. Colm O'Reardon
They include the higher education sector, investing in-----
In that period, has the Department not come up with any big ideas? You could go to any village or town and you would see early school-leavers who are crying out for an apprenticeship or training of some kind. I note that in his opening statement, Dr. O'Reardon mentioned there is an improved economic and labour market situation. That is true to a certain extent, but, as I said, there are young school-leavers in every village and town who are 17,18 or 19, for whom it would be life changing to be offered an apprenticeship or training of some kind. To hear that a surplus of that nature is gathering over such a length of time without the Department having any fresh big ideas-----
Dr. Colm O'Reardon
We have done some work on this. I might ask Mr. Beausang to outline some of the detail. I absolutely agree with the Deputy that there are places where additional investment would yield value for money. All I can say to the Deputy is that it is a matter for the Government to decide where it wants to spend its money and this fund is-----
Has the Department put those proposals to the Government in the past eight or ten years?
Dr. Colm O'Reardon
Yes, we have done a fairly large piece of work recently, which is the subject of ongoing discussion. I will ask Mr. Beausang to outline some of its content.
Will Mr. Beausang briefly tell me about one of the big ideas that was put to the Government?
Mr. William Beausang
The OECD carried out a review of school strategy, published last May, which helped to further refine the ideas we have for significant investment in such areas as digital transformation, decarbonisation, sustainability challenges; investment in the tertiary education system to deliver the kind of enterprise-led training and reskilling that will be important for dealing with the challenges that lie ahead; and ensuring there is cutting-edge technology in the further education and training system and the area of intermediate level skills. When we think about the importance of manufacturing in the Irish economy, as it is and as it can be in the future, we see that we need people, not only at higher level coming out of universities, but also coming out of the vocational education system who have the ability to work in the pharmaceutical and biopharmaceutical sectors and fill the technical and vocational roles.
Yes, we need to future-proof.
Mr. William Beausang
Yes, we need to future-proof the economy.
When was that report furnished?
Mr. William Beausang
The Deputy will not be surprised to hear that this plays out in the context of the Estimates. Every Department brings forward proposals for how its budget could be increased to meet the needs it is responsible for. We did that in the context of this year's budget, as we did for last year's budget and the Government responded, through engagement on the Estimates with the Department of Public Expenditure, NDP Delivery and Reform in the first instance and then with final decision-making on the budget. That is the process we went through this year, which is the same as the one we go through every year.
That is a whole lot about the process. I am looking for the delivery of the big ideas. Mr. Beausang listed quite a few, including digital transformation and so on. None of them have come to fruition as yet and Mr. Beausang stated that is down to the Government not making a decision to fund them.
Mr. William Beausang
No, I would not put it in those terms.
What is the reason?
Mr. William Beausang
The tertiary system as a whole is doing a huge amount to prepare the country for the digital transformation and indeed-----
We are talking specifically about the surplus that is sitting there and building. Nothing is happening with it. The Department said it furnished a report to the Government last year and nothing has happened. Everything has gone through the Department. The surplus is still sitting there and being added to. People are looking for training and trying to access apprenticeships and training to future-proof their skills and nothing is happening.
Mr. William Beausang
A huge amount is happening with the funding that is already going out from the fund.
I am talking about the surplus.
Mr. William Beausang
There is a reference to the €1.3 billion surplus but last year we spent, approximately €900 million. The surplus is not the full €1.3 billion because every year we spend a volume of resources to fund the activities that are currently funded.
I will not use the rest of my time. From the answers, I gather that not a whole lot has happened. There is a lot of talk, a report went to the Government and the Government has not acted on it. We will leave it there. The surplus is still there.
Dr. O'Reardon said that the operation of EU fiscal rules has meant additional expenditure cannot be sourced from the NTF. Yesterday afternoon, John McCarthy, the chief economist, was at a committee meeting and he said that absolutely no EU fiscal rules are obstructing the use of this fund's surplus. He categorically stated that he is not aware of any restrictions on the use of this fund's surplus. Would Dr. O'Reardon contradict that?
Dr. Colm O'Reardon
That is not what it says in the note I received from the Department of Finance before I came here. To be clear, the use of the money in the fund is part of the general Government sector so if EU rules are in operation, they apply. If a domestic rule is in operation, as the Government's policy to limit expenditure is at the moment, this fund is counted under the expenditure rule.
He said there is no impediment to spending, which-----
Dr. Colm O'Reardon
The Government can make a decision to spend the money if it chooses to do so, but it is operating an expenditure rule. That is the Government's policy on the prudent management of the public finances. As a Department, we are bound by the decisions of the Ministers for Finance and for public expenditure and reform. There is no shortage of ambition in the Department to improve the education system.
It is fairly slow moving. Is it not?
Dr. Colm O'Reardon
We are subject to the Minister for Finance and the Minister for public expenditure-----
I already asked that question and I did not see any evidence or hear about any big idea that has come to fruition. Meanwhile the surplus is building.
I will touch briefly on precarious employment in the university sector. More than one third of staff are on temporary or casual contracts. Two thirds of the 6,000 workers are women. One of them visited my constituency clinic this month. It was a person who has a number of degrees and a doctorate, who receives a salary of €9,500 and does not get maternity leave, holiday pay or sick pay. This is replicated across the board. Some people do not even have a written contract; they have a verbal contract. This was flagged with the Department at a meeting of this committee a year ago. The Department committed to carrying out research. Will the Department give an update on that research and on what has been done to address the issue since then?
Dr. Colm O'Reardon
A report has been completed. It has come to the Department and we have not had a chance to review it.
Did the Department carry out research on foot of that meeting?
Dr. Colm O'Reardon
We asked for a report to be done. It was recently concluded and we are considering it.
Could the committee get sight of that report, because we asked and the Department committed to the research being carried out? We would be interested in seeing it. It is a serious issue.
Dr. Colm O'Reardon
It is a very serious issue. The Minister will have to consider the report and publish it.
Can Dr. O'Reardon clarify, for the Deputy, whether the report has gone before the Minister for consideration?
Dr. Colm O'Reardon
I will check with Dr. Lillis. I think we have not got it to the Minister yet.
I refer to research carried on precarious employment in the university sector.
Dr. Deirdre Lillis
That is different. The PhD review is with the Minister but that is a particular piece of this piece.
I am talking about precarious employment within the university sector. We were given a commitment by Dr. O'Reardon's Department last year that it would conduct research. Has that research been done? Has it been completed? Has it been published? I want to know where it is at, particularly on this topic.
Dr. Deirdre Lillis
Sorry, I am one part of this jigsaw.
Dr. Colm O'Reardon
I may have misunderstood the question asked by the Deputy and I will have to check.
So no research has been carried out.
Dr. Colm O'Reardon
Sorry, I was talking to the piece on PhD researchers.
I made it very clear.
Dr. Colm O'Reardon
Yes.
I stated that the researchers have no benefits and earn €9,000 a year.
Dr. Colm O'Reardon
I do not know, Deputy. I will have to check and get back to you.
The phrase, "I do not know", does not bode well.
Dr. Colm O'Reardon
I will get back to the Deputy.
Is it possible for Dr. O'Reardon to ask someone to check during the meeting?
Dr. Colm O'Reardon
I will see what we can do, Chairman, yes.
Perhaps some of the support staff who have accompanied Dr. O'Reardon will check.
Dr. Colm O'Reardon
Yes.
Last year, a commitment was given by the Department to carry out research on the very serious issue of precarious employment for a huge number of people in the university sector, two thirds of whom are women. However, Dr. O'Reardon has come in here a year later and none of that research has been done.
Dr. Colm O'Reardon
I am saying, Deputy, that I do not know what the position is and I am happy to come back to her.
Perhaps we can have a response before this meeting is over. I call Deputy Ó Cathasaigh.
I join with my colleagues in wishing the C and AG a happy birthday on the 100th anniversary of the establishment of his office. I also congratulate Dr. O'Reardon on his recent appointment.
My first question is for the C and AG. I want an overview of the funding for the Department of Further and Higher Education, Research, Innovation and Science and the higher education sector. Vote 45 provides a funding pathway whereby funding travels to the HEA and down into higher education institutions. The HEIs and particularly the universities have assess to other - outside - sources of funding. In terms of our understanding of the spend within the sector, is the C and AG content that we have an adequate overview of the type of funding streams that come from entities outside of the designated higher education institutions, which operate substantially for the benefit of or under the auspices of the institutions both inside and outside the State? That is essentially the profit money that flows into our universities. Is the C and AG happy that this is adequately captured in terms of overview?
Mr. Seamus McCarthy
A number of years ago, we were pushing for the consolidation of foundation funding. Now I think the resolution that was achieved with the universities in some cases consolidated the foundation affairs. In other cases, they publish the foundation financial statements with the financial statements of the universities, particularly with what we might call the traditional universities. It is less of an issue with the former institutes of technology and technological universities.
Do they not have access to that type of funding at all?
Mr. Seamus McCarthy
Not as I understand it. I mean there are obviously fees. A fee income is a significant matter. That comes into the financial statements of each of the HEIs and is fully audited.
I would be more concerned about direct research funding from outside institutions. I put the same question to Dr. O'Reardon. The State provides a significant proportion of funding for the higher education institutions but there is money that comes from elsewhere and, with money, values are very often attached. Is Dr. O'Reardon happy that his Department has adequate oversight of where the universities source their money and the decisions a university might make as a result of sourcing that money elsewhere?
Dr. Colm O'Reardon
Does the Deputy have a specific example?
I do not want to get into some of the examples and have made a general point.
Dr. Colm O'Reardon
Yes.
We are obliged, when the State puts so much money into a sector, and there is other money, to know that our money is being spent in a way that is consistent with our values.
Dr. Colm O'Reardon
I will make a general comment and Dr. Lillis will add to that. I think there is a process under way to enhance the governance of the third level sector, generally. There was a fairly significant piece of work done on the Higher Education Act, which was passed. That has changed the landscape in terms of governance. Maybe "regime" would be too strong a word but there is a new set of arrangements in place around the general level of governance of higher education institutions. They are autonomous institutions-----
I understand that.
Dr. Colm O'Reardon
-----so it is really important that they take responsibility for those kinds of decisions. We cannot run those organisations from the Department. It is important that there is autonomy and that can be an issue in the same place.
I accept that they are autonomous institutions but they derive a lot of funding from the State.
Dr. Colm O'Reardon
Yes.
I will not dwell on the matter and have my eye on the clock.
Dr. Colm O'Reardon
Yes.
I want to ask a quick question on the pension outturn. The Estimate provided €197 million and the outturn was €341 million, which is quite a differential. Of all of the costs that an institution might incur, I would have thought that pension costs would be among the most predictable so why is there such a variation?
Dr. Colm O'Reardon
I will ask Mr. Moynes to give a little history. There was a funded university scheme that covered five institutions which the State effectively took over in 2009. The State took on whatever pension funds were there, but it also took on the responsibility for paying out the pensions through the higher education institutions. There is an ongoing process of estimating what the deficit is or what the requirements are. It depends on the number of people who retire in a given year. Year by year, the Department is trying to address an historic deficit in those pension funds.
Mr. Keith Moynes
It is an issue of concern for us as well. It is one on which we have worked with the Department of public expenditure and reform to resolve. As the Secretary General has said, we are trying to resolve it through a mixture of core and supplementary funding. Essentially, that is how we have been doing it over the past number of years.
My question was not really on the level of expenditure incurred. I asked about the difference between the Estimate and the outturn. That is my concern.
Mr. Keith Moynes
Absolutely. In an ideal world the subhead would be fully funded in core but we are trying to build up the core. There was €65 million core funding in 2021; €85 million core funding in 2022 and €105 million core funding this year. All of those were supplemented by Supplementary Estimates as we tried to address it. There is always a tension as one makes these calls. If we were to put all our money to address the core issue upfront, that would have a significant impact on the delivery of education provision. We are working with the Department of public expenditure and reform to resolve the matter as we build up core funding.
I want to touch on a couple of issues concerning the NTF. We are heading towards €1.5 billion of an accumulation by the end of this year. Is that correct?
One of the three sources of income is the levy on PRSI. There is massive frustration among employers who pay in this money. One of the frustrations and a real challenge in the current workforce is employee retention. These employers want to get their hands on some money to provide in-work training. I have talked to many of these employers. One could knock on any door of any employer who has a business in the Waterford industrial estate and they would say that employers are dying to upskill their employees while in work but they cannot get access to that.
There is also money direct from the European Social Fund, ESF, and deposit interests are mentioned as well, which I shall ask about first. It is a very sizeable amount of money. Simply, it seems the funding is just sitting there in barrels of cash.
What rate of interest is that attracting as it is on deposit?
Dr. Colm O'Reardon
As I understand it, the surplus is managed for the Department by the National Treasury Management Agency. Approximately 3% is our expectation. It is important to point out that in previous years, that would not have been a very large amount of money but it is becoming a significant amount of money.
The figure of 3% is not bad out there in the market in terms of attracting interest. It was a better number than I was expecting. When one looks at the amount of money that has remained on deposit over the last, let us say, three years, when the rate of inflation has been so high, has the Department an estimation in real terms of how much that fund has depreciated by sitting there, against the rate of inflation? That is my concern. If we are only doing 3% with regard to the actual interest rate of inflation over that period, it means there is a substantial loss of value on the money that has been left to sit there, although I do not have a figure for it. Would that be correct?
Dr. Colm O'Reardon
I do not have that number in my head but we could calculate it for the Deputy. It is essentially the GNP deflator or whichever deflator one chooses to use versus the rate of interest achieved.
I would be interested in having some sort of rough calculation on that because if one maps it over a figure of over €1 billion, it essentially means that by allowing it to sit there, we are losing money. We are bleeding taxpayers' money through the differential between the interest rate. I am aware of the clock.
On the European Social Fund, ESF, we got nothing in 2022. In the receipts of 2021, we got €82 million. What is the explanation for not getting any ESF funding at all into that?
Dr. Colm O'Reardon
I will ask Dr. Lillis to address that, as it is a technical point.
Dr. Deirdre Lillis
On the ESF funding generally, it is a receipted fund in that it is a core financing model. The State pays up front and we claim back from the EU, and that is the high-level model on it. Specifically regarding the reduction in the number of receipts in 2022, there were a number of reasons for it. There was an accelerated drawdown of ESF receipts in 2021 effectively, which was part of the European response to the Covid-19 pandemic payment-----
I will state my concerns in simplistic terms. My concern is that because we are not spending the NTF, we did not manage to draw down the ESF. Is there anything to that? As I was reading through it and trying to understand, I asked myself the question, is it because we did not adequately spend the National Training Fund? There is the matching allocation here. Is that the issue with ESF or not?
Dr. Deirdre Lillis
I do not think so. My understanding is that they are separate funds. I know there is a link between them in some parts of it. This specific issue, I think, was linked to the Covid-19 pandemic and how the EU processed payments that we submitted to it. It was also the tail-end of the last ESF programme, the programme for employability, inclusion and learning, PEIL. Some 97% of that had been drawn down and we were into the movement between the previous programme and the new programme, the employment, inclusion, skills and training, EIST, programme which is from 2021 to 2027.
As a very last point, as I understand it, EU fiscal rules are currently suspended but we are applying our own fiscal spending rules, which was that 6.1%. People in the Department of Public Expenditure, National Development Plan Delivery and Reform will be able to confirm this. Deputy Munster asked some questions around the ideas that the Department was trying to put forward. Was it the case that the Department of Further and Higher Education, Research, Innovation and Science went to the Department of Public Expenditure, National Development Plan Delivery and Reform with some nice ideas, and was told, "Computer said no"? I know that is the dynamic in every budget and it is the job of the Department of Public Expenditure, National Development Plan Delivery and Reform to say "No". However, did the witnesses' Department say that it could spend the NTF in a bunch of nice ways, and here are some ideas, only to be told that it is not compliant with national fiscal spending rules?
Dr. Colm O'Reardon
We have a series of expenditure proposals. We have plenty of ambition for how we can spend the NTF funds. We acknowledge that the Government has to exercise prudent fiscal management. Every Government Department wants to find ways to do better by the sector it is responsible for. We are like that. We have plenty of ambition but I also acknowledge-----
That was a very practised response to that question.
Dr. Colm O'Reardon
I hope to get better.
We have the Department of Public Expenditure, National Development Plan Delivery and Reform in the room. We have Ms Hughes-Elders here. Would she like to respond to that question around the 6.1% limit, and if that fund was spent in total, where that would arrive at, and what are the brakes that are put on it?
Ms Georgina Hughes-Elders
The Government expenditure ceiling is the sum of the gross ministerial expenditure ceilings which outline the gross expenditure, which is the sum of next expenditure and appropriations-in-aid of each ministerial Vote group plus any unallocated funding. Upon establishment, the Department of Public Expenditure, National Development Plan Delivery and Reform was assigned responsibility through the Ministers and Secretaries (Amendment) Act 2011 to manage public expenditure within the overall envelope set by Government. The Minister for Finance has retained responsibility for the overall budgetary parameters. This means that the Minister for Finance retains responsibility for the overall Government expenditure ceilings, while the Minister for Public Expenditure, National Development Plan Delivery and Reform has responsibility for the allocations within that.
Ministerial and Government expenditure ceilings are set out and agreed by Government in the Revised Estimates memo, where the Minister for Finance requests the Government to agree the Government expenditure ceiling. Where additional allocations are required in excess of this ceiling, through further Revised Estimates or Supplementary Estimates, the Minister for Finance will request the agreement of Government to a new expenditure ceiling as required.
Even though it does not come from the State or out of Exchequer funding, it is from employers connected with PRSI, and is still counted within the overall envelope. It is the EU that is determining that, or is it the State? Is it a judgment that the State is making here?
Ms Georgina Hughes-Elders
The Government has agreed the overall ceilings.
Is that counted within the overall spend?
Ms Georgina Hughes-Elders
The NTF is counted within the overall Government ceiling.
Who makes the decision as to why it is there?
Ms Georgina Hughes-Elders
The decisions are made at Government level with regard to the quantum of that ceiling.
Okay.
Ms Georgina Hughes-Elders
Then our Minister distributes that between the different priorities of different Ministers.
The Government could, perhaps, decide to remove it from overall expenditure by the State.
Ms Georgina Hughes-Elders
It is in the legislation that the NTF is within the overall Government ceiling.
It would require a legislative change, to answer Deputy Ó Cathasaigh's question. It is important to clarify that because, in reading the information yesterday, I was struck by that. I thank Ms Hughes-Elders for the clarification.
I would like to agree with colleagues regarding the 100th anniversary of the Office of the Comptroller and Auditor General. It has had huge achievement over that 100 years, and long may it continue. We have been very good and successful with regard to both the democratic system and the management of expenditure in this country. It is a job well done over the past 100 years, and may it continue.
I welcome our guests here this morning, and I will open with the issue of SUSI grants and the process for them. One of the particular problems I have had over the past two years has been where there was a variation in the parents' income from one era to another, and it particularly applies where someone has been out on sick leave. They have been genuinely out, and then income levels have dropped. For instance, I know of one application where I was going back and forth on behalf of an applicant, and the parents were as well, for over eight months.
I wonder about the SUSI grant process. There is no process, really, for Oireachtas Members to put forward an argument for an applicant. For instance, I can ring Revenue at the moment with regard to an issue, or email it. On most occasions, within 48 hours, I will get a response from Revenue, and in a lot of cases, it will contact the person who has the issue directly as a result of the representation.
I find the SUSI grant representation process an absolute disaster. We cannot talk to anyone. We find that the replies we get are just a box-ticking exercise. I ask that it be reviewed. Will the Department look at this issue? It is not satisfactory from our point of view or from the view of parents. I know of one parent who has three children in third level education at the same time. This person is totally frustrated trying to make ends meet and just not getting anywhere with the applications.
Dr. Colm O'Reardon
If this is the Deputy's experience, I am certainly happy to look at it. I acknowledge that public representatives have a particular role to play. I am happy to investigate this and see what arrangement we can come to. A number of appeals processes are in place. There are appeals mechanisms and the Deputy is probably familiar with them and we can speak about them.
The replies we get in the appeals process seem to be someone ticking boxes. No matter what element of social welfare or Revenue I am dealing with, within 48 hours I will get a response to state the issue is being dealt with or a detailed explanation as to why a decision was made in a particular way. Here I find that explanations are not given and it is very hard for us to explain to constituents when this happens. I ask that it be reviewed and that the Department look at the procedures that other Departments have in place to see how we can improve it. For a parent to be going back and forth for eight months is totally frustrating. This is just one of a number of people I had to deal with this year.
Another issue I want to touch on is the availability of various courses in our third level institutions. There are ongoing discussions on veterinary courses. We have one veterinary college in the country. It has been there for a long number of years and there has been no increase in numbers. Recently I had a meeting with the Department about radiation therapists. There are 30 places available in Trinity and 12 postgraduate places in Cork and that is it. We have a significant shortage. Has the Department had an overall look at the number of courses available? The population of the country has increased by 40% in the past 23 years. We have not had the same increase in many areas where we need people. I know the Department is doing a very good job on apprenticeships but is an overall review being done on what is available at third level? I know work is being done on apprenticeships.
Dr. Colm O'Reardon
I will speak in particular about medical places. There is a lot of activity and a lot of work being done. It is important to say the Department does not set a limit on the number of places that third level institutions can offer on these types of courses. However, in practical terms, in order to increase the level of provision in some of these courses, we do hit barriers that might have to do with capital spending or might be connected with clinical placements. Part of the training for a doctor or a nurse is a clinical placement. They have to find a place in a hospital and they have to have a trainer who is skilled in training them. A number of these issues have to be addressed. We are working with the Department of Health on medical places and with the Department of agriculture on veterinary places. There has been quite a lot of activity. Mr. Moynes is closer to this and might speak on it.
Mr. Keith Moynes
We are trying to increase the number of places in the system at present. We have a phased introduction of 200 new medicine places and over the past two years, we have put in an additional 390 nursing places. In allied health therapies we put in place 126 places last year and 147 places this year. We have been trying to increase organically the number of places, including in areas such as radiation therapy which I know Deputy Burke is particularly interested in. We have been trying to do this.
To take radiation therapy as an example, the colleges tell us they need funding to employ additional people.
Mr. Keith Moynes
Absolutely.
It is very straightforward. Trinity College has said it is prepared to increase its number of places from 30 to 50 overnight if it gets the funding for additional staff. Likewise, UCC is prepared to double the number of places overnight, from 12 to 24. Even if we do this, it will still take four years to have Trinity graduates and two years to have UCC postgraduates. At the same time the hospitals have a shortage.
Mr. Keith Moynes
Yes.
Approximately 50% of dental places are going to students coming from abroad. Can we have something in place by September next year to deal with a lot of these issues?
Mr. Keith Moynes
We are trying to maximise the number of places we can provide in the current constraints of the system, which are placements and capital infrastructure. We have also looked at what could be done if we were able to invest more in capital infrastructure. We have a range of issues with regard to medicine, nursing and dentistry whereby if we were able to secure additional capital funding as part of an NDP review, we would be able to increase numbers in a range of disciplines. We are working with the Department of Health and the Department of agriculture on this.
Can we get a report a some stage during the year on what progress is made on this issue? It is a big challenge. In nursing, medicine and dentistry, we have a number of people coming in from abroad to provide a great service because we do not have the people here who are qualified. I would like a report at some stage during the year on this issue.
I want to touch on another issue, which is a joint approach between third level institutions in the Republic and Northern Ireland. I can go back to 20 years ago when I was Lord Mayor of Cork. The then ambassador from China based in Dublin was very anxious that there would be a link with universities in Shanghai. One was established whereby people can study for three years in Cork and one year in Shanghai. People can also study for three years in Shanghai and for one year in Cork. What have we done to try to encourage a joint approach with universities in Northern Ireland? It is all about establishing contacts and giving context to the challenges we have in the South and the challenges in Northern Ireland. We could have a four-year course with three years in UCC and one year in Queen's or another university in Northern Ireland or vice versa. Has the Department had any engagement on trying to encourage this connection with third-level institutions in Northern Ireland?
Dr. Colm O'Reardon
I will ask Dr. Lillis to comment. There are several issues. One is about trying to make it easier for students from Northern Ireland to study here. Work needs to be done on this. There is also work being done on encouraging research collaboration between the universities to build relationships. We are also involved in an initiative to invest in the Derry campus of the University of Ulster. I will ask Dr. Lillis to comment on student mobility.
Dr. Deirdre Lillis
As the Secretary General mentioned, there are quite a number of strands of activity in this area. On the research side we have a North-South research collaboration call which will invest €50 million. Of this, €37 million has been allocated through the first call, which is up and running. There is collaboration between universities in the South and typically the University of Ulster and Queen's in the North. Hopefully we are about to launch a major research centre using the SFI research centre model. This is co-funded between Ireland, Northern Ireland and the UK for the two areas of climate and sustainable food. The SFI call for this is live and should be announced shortly. There is some very strong collaboration on the research side, which then filters down to the undergraduate space.
We recently approved approximately €2 million to support Northern Ireland students to go on exchanges because, once the UK left the EU as a result of Brexit, those students lost access to the Erasmus programme. We supplemented that and provided some opportunities for Northern Ireland students to come to Ireland for a semester but also to travel to European countries.
I am specifically talking about co-ordination between third level institutions here and in Northern Ireland. For instance, more than 40 years ago, the Washington Ireland Program was set up, whereby young people from both communities could work in Washington for a period of six or 12 months. Nothing like that appears to have been developed between our universities nor have any incentives been put in place for students doing three-, four- or five-year courses in Northern Ireland to spend one year in the South or for students in UCC, Limerick or wherever to spend a year there. Such a connection is extremely important. It is also about business connections and people having that connectivity with Northern Ireland when they go out into the workplace. Sufficient work has not been done on that. Could consideration be given to how we could work with our universities on that issue?
Dr. Deirdre Lillis
Part of the suite of initiatives we have identified in the new international strategy, which will be launched shortly, is the promotion of that flow and mobility between the two jurisdictions, which is really important. The ESRI has just published a report illuminating some of the reasons it has been difficult to get that mobility and greater fluidity. We will certainly be looking at that. There are some other initiatives in this skills pace, such as the EU PEACEPLUS programme. Work is also under way on the allied health and medical places in higher education. Mr. Moynes will want to mention that.
I presume that, if the assembly and executive were back up and running, it would help matters and that some of that could be developed. What the Deputy is putting forward is important.
What I find strange is that I did this in respect of Shanghai 20 years and it worked. Shanghai is a long way away.
It would help if we had an assembly. I believe there would be openness in the North towards such exchanges with the South and such co-operation.
Dr. Colm O'Reardon
On those two points from Deputy Burke, there is an interesting development in respect of medical places that is worth noting.
Mr. Keith Moynes
We are engaging with Queen's University Belfast and Ulster University about having medical places in the North that include internships and placements in the South to avail of that all-Ireland capacity and build up the connections the Deputy has talked about.
I will also congratulate and put on record my appreciation for the C and AG and his team for their role, the support they give this committee and the historical impact the office has had on public bodies in this State over the century it has been in existence. I commend the team on the wonderful commemorative event that took place the other day. I thank them for that and again thank them for their support to the committee.
Mr. O'Reardon is probably one of the quickest off the block in coming here. His feet were only just under the desk and now he is here at the PAC. I congratulate him on his new role. We look forward to working with him. I thank him for being here this morning and for the information he supplied to the committee in advance of his presentation.
I will start with the C and AG's report, which recommended a number of reforms to the Department. If I am not mistaken, there were three recommendations, two of which have been fully implemented, according to the C and AG, while one is outstanding. The C and AG has made a further recommendation, which I understand the Department has taken on board and is now going to implement. Will he elaborate on that last remaining recommendation due to be implemented by the Department? What kind of timeframe is proposed?
Mr. Seamus McCarthy
There were actually 14 recommendations in total but they were in four broad areas. The recommendations in three of the areas have been substantially completed. The one that was outstanding had regard to recommended improvements in monitoring and evaluation of the National Training Fund. There are three there and there is a programme in place in that regard.
Dr. Colm O'Reardon
On evaluation generally, we have to have a programme of evaluations for what we do. We have to manage the resources that we have and we have to assess where our resources should be deployed as regards evaluations. We have accepted the Comptroller and Auditor General's recommendations. We believe we need to do some semi-methodological research to figure out the right way to evaluate expenditure under the National Training Fund so that we can apply that methodology consistently across future evaluations. The plan is to engage with the ESRI to get a piece of work done there.
Is there a timeframe for that? If the Department is here next year, will that work have been completed or nearly completed?
Mr. William Beausang
As the Secretary General has said, evaluation is really important to us. It is important to say that we have had two major pieces of work done, one by Indecon and LE Europe and the other by the OECD, looking at the overall delivery of our skills system. The OECD report was published in May 2023 and the Indecon-LE Europe report was published in May 2021. These looked at the totality of the spend but the NTF is an important part of that. As the Secretary General said, the issue is really getting a methodology that captures the outcomes of investment in the NTF at a higher or meta level. We have talked about the expenditure ceiling. The NTF funding is going out with significant Exchequer funding and delivering our skills system. We do not want to find ourselves looking at only part of the expenditure, just the NTF spend. There is important work to be done with the ESRI to develop a methodology that gives us a means of demonstrating what our skills system is delivering in our discussions with our colleagues in the Department of Public Expenditure, NDP Delivery and Reform and with the committee in the context of our accountability to the committee, the Minister and the Government. I will make the point that we have a lot of intelligence from the OECD review and the work of Indecon-LE Europe that tells us how we are doing and where we have to do better.
Is it possible to furnish those two reports from May 2023 and May 2021, the Indecon report and the OECD report, to the committee? My interest with the National Training Fund specifically relates to SOLAS. We have had a lot of engagement with the various stakeholders in the national training sphere here in the PAC and, at times, there seems to be a lack of joined-up thinking between certain agencies, particularly between the ETBs and SOLAS. What specifically does the Department have in place with SOLAS? Is there an SLA in place? Has the Department set targets for SOLAS to reach or is it purely for SOLAS to set its own targets? Are the targets ultimately being reached?
Mr. William Beausang
We have an overarching oversight agreement that sets the framework for how we work with SOLAS. This informs the delivery agreement every year, which reflects the targets and objectives in its business plan. On the question the Deputy is posing, since 2022, SOLAS has put in place frameworks called strategic performance agreements with each ETB. When consolidated, these give us a set of metrics, setting out what the ETB system is committed to deliver on the basis of the very significant funding it receives. That relates to all the different dimensions of SOLAS's activities. It is activity-based and Ministers, the Government, parliamentarians and TDs are always interested in activity.
However, we also need to strengthen, in line with what the Comptroller and Auditor General has recommended, our understanding of outcomes from that spending, not just our understanding regarding the people who have gone through the system.
I agree it is not just about throughput.
Could Mr. Beausang send us on a little more information about the strategic performance agreement? Specifically, does it covers issues like recruitment of lecturers and teachers within SOLAS, or is there autonomy for SOLAS in that regard?
Mr. William Beausang
There is a structure for approvals and sanctions of the appointment of staff in ETBs that has to be worked though because, ultimately, approval is required from the Department for those staff. That is not part of the strategic performance agreement but there is a parallel system that works to determine staffing numbers and the recruitment of staff to ETBs.
Will Mr. Beausang furnish the committee with a note specifically on that?
In regard to SOLAS's process for apprenticeships, there seems to be a mismatch as between taking on those who want to do an apprenticeship and a lack of industry support for those apprentices. I am quite familiar with the wonderful SOLAS training centre in Loughlinstown. My understanding is that a lot of local individuals have applied to do apprenticeships, having heard the advertising on the radio, but there is not a sufficient level of buy-in from industry. Applicants, therefore, can do one element of the apprenticeship but not the practical element. That needs to be addressed. I ask the Department officials to take that away from the meeting and to engage with SOLAS on it in order to achieve improvements.
I turn now to the underspend on student support and related expenses. Dr. O'Reardon responded to Deputy O'Connor on this issue with a reference to a figure of €50 million. Was the underspend specifically related to student support only? Could that money have been put back into the Department for further education provision, say, or is it purposely earmarked for student support under the Vote?
Dr. Colm O'Reardon
In the course of any year, if there is an underspend in one part of the Department, it can, subject to a conversation with the Department of Public Expenditure, National Development Plan Delivery and Reform at the time of the Supplementary Estimate, be moved to meet pressures elsewhere.
Was such a conversation had in this instance?
Dr. Colm O'Reardon
Yes, there was a Supplementary Estimate. In the context of that Supplementary Estimate, we would have been looking at returning money under that heading and looking for additional moneys elsewhere. That went to the Oireachtas last year at the time of the Supplementary Estimate.
The officials provided us with a note on PPP costs. It states that the reduction of €5 million relative to the Estimate provision was primarily due to delays in higher education infrastructure public private partnerships. How is that process operating now on the whole? Looking at a number of campuses across the country, some of them have strategic plans dating back a number of years, and there is a carryover. Now that there is investment in place, not only for higher education directly but also through the PPP process, what uplift are we seeing in terms of campuses being renovated, remodelled or expanded?
Dr. Colm O'Reardon
Before asking Mr. Lemass to answer that in more detail, I will make a couple of points. There are two bundles of PPPs, one of which is under construction at the moment and, as far as we can tell, progressing well. There have been the same problems of cost increases in higher education as there have been in other parts of the construction sector. We have been addressing those problems. I ask Mr. Lemass to provide more detail.
Mr. Paul Lemass
To begin with, we already have a number of PPPs up and running. The Grangegorman central and east quads are subject to a PPP. The MTU Cork School of Music is in a PPP since 2007. The National Maritime College of Ireland is also being delivered through a PPP. That activity is up and running and is part of the unitary payments process for the moment. There is a decent number of PPPs already up and running.
In addition to those projects, as the Secretary General has set out, we have two bundles of PPPs in the higher education sector focused exclusively on the TUs and institutes of technology. Bundle one contracts were agreed and sites were exchanged last year. Many of those projects are at what is called the topping out stage, which means they have got to the roof. In terms of construction, therefore, they are progressing extremely well. PPP bundle 1 includes MTU in Kerry, which is a STEM project, and MTU in Cork, which is a learning resource project. There are two projects at TU Dublin, one in Tallaght and the other in Blanchardstown. TUS in Athlone has a STEM project as part of the bundle and, in addition, the IADT digital media building is included in the bundle.
What is included in the second bundle?
Mr. Paul Lemass
The second bundle is still in the process of contract negotiation at the moment. The projects included in that bundle are: SETU Waterford's architecture, engineering and construction building; SETU Carlow's health and science building; two ATU projects - education at Letterkenny and STEM in Galway; and the TUS campus in Limerick. Those projects are at an advanced stage in negotiations but are not agreed at this stage.
Looking forward to the years ahead, will another round of applications from campuses across the country be accepted? How does that process work?
Mr. Paul Lemass
The first step is to get HEA bundle two concluded, which we hope to do during the course of next year, subject to negotiations. It is also important to recognise that there is a range of other programmes, both up and running and about to be kicked off. When the Department was established, we already had the higher education strategic infrastructure fund No. 1 up and running. We also had the infrastructure upgrade and refurbishment fund, with 16 projects across universities. Since our establishment, we have set up a technological sector strategic projects fund and we now have six projects at preliminary business case stage under that fund. In addition, the higher education strategic infrastructure fund No. 2 has also kicked off, with four projects being considered as part of that. Crucially, for further education and training, we have a FET college of the future programme-----
I am familiar with that.
Mr. Paul Lemass
-----to which ten projects are applying, as well as there being two legacy projects working their way through. There are also four legacy projects working through the higher education strategic infrastructure fund No. 1. It is important that they do not get lost. Finally, under the strategic infrastructure upgrade fund, we have 19 projects at a cost of between €500,000 and €5 million being addressed across the ETBs. They are largely at the stage where the design team has been appointed or is about to be appointed.
They are well on their way. I thank Mr. Lemass for that information. Will he send a further update to the committee on those projects? There is a lot of information there, particularly in respect of the new unit that has been developed in the Department.
We will suspend now for a short break.
Sitting suspended at 11.08 a.m and resumed at 11.17 a.m.
We are back in public session. There are some questions concerning student accommodation. There is a shortage and what is available is very expensive. Added to that is the housing crisis. The shortage of accommodation adjacent to third level institutions is compounding this situation. The cost is escalating. On-campus accommodation in UCD costs more than €11,500 a year and €10,000 in Trinity College Dublin. For DCU, the cost is €900 a month. The University of Galway has just opened a 674-bed facility, as I understand it, and places there cost from €672 monthly. In terms of student income, this cost is very high.
Costs are key to getting people from low- or middle-income households to go to third level. The funding of approximately €430 million announced for student accommodation is very welcome. Some funding was announced before that as well, including €31 million for 560 student accommodation places at the universities in Maynooth, Limerick and Galway. As I recall, a further €41 million was provided for a 405-bed on-campus accommodation facility at DCU. If we put all this together in terms of student accommodation units on site, the figure is 3,665 places. The total budget announced in this regard, if we were to add the whole lot together on top of the more recent €434 million, is €506 million. This is very important for the midlands, where I come from. There are no third level colleges there, so students generally live where they study. What has been happening to gear up the delivery of this new student accommodation? It is an important aspect of the third level sector.
Dr. Colm O'Reardon
The Cathaoirleach is absolutely correct.
It is a very important piece, and I acknowledge the point just made. I was in the region recently and noted this is a very important issue. We are coming at it from a number of different directions. There is a process under way to try to find or support projects that can be developed out because there is planning in place or because there is a viable project that, with State support, could be given the go-ahead. A number of the projects mentioned are in that bracket, including those in Maynooth and DCU. There is a wave of projects being progressed based on the call-out from about a year ago to identify projects that could be moved forward quickly.
There is a second piece of work, which is to try to develop a longer term policy on this. This involves determining what the demand is, where it is and the kind of accommodation specifications we should be providing or supporting. That is a sort of second wave.
The third piece, which has been really significant, has been support in terms of student digs and trying to get more supply into that area. A number of tax measures have come online in that space. The Department ran an advertising campaign over the summer to try to encourage people to provide accommodation for students, and this seems to have had an impact. I have not been able to carry out a formal valuation of it but it seems to have had a significant impact. Frankly, the more accommodation that can be delivered, the better, particularly at this point.
The position on old-fashioned digs is welcome. There is a tax initiative on it worth up to €14,000. It is the same as for renting a room. I am not too sure how it is working out in the areas around the colleges. I hope, based on Dr. O'Reardon's response, that there is a take-up. That would be welcome in terms of using a lot of empty space, especially that owned by those whose families may have moved out and who may have two or three spare bedrooms that can be used.
I want to focus specifically on the issue of new accommodation. Dr. O'Reardon mentioned the effort to ascertain where accommodation is needed. Students where I am living are encountering huge problems in Galway and Waterford and with the three main universities in Dublin, namely, DCU, Trinity and UCD. There is a problem everywhere and there is demand everywhere. While the other initiatives are welcome, we have to fund. I would like to see a bigger fund. We have €506 million, which is welcome. According to Government figures, that would provide 3,665 units. These would make a big impact in the areas around universities.
A number of things are happening in tandem with what I have described. We do have some vacant office space. Although I cannot say for certain, there may be opportunities to rework some vacant spaces, using the capital funding. What I am trying to get at from a public accounts point of view is the question of how we can, if we have the money, get the biggest return from it. Are there opportunities? New builds are fine but they are expensive and can be hard to get up and running, but if it has be done, it has to be done. What work is being done on remodelling or repurposing vacant office space close to universities? What work is being done to obtain expressions of interest in the development of this accommodation? The Government supplies the money. We have argued with Governments on this subject and over the shortage of accommodation. There is money available now. If there is more, bring it on. The more, the better. What exactly has the Department been doing since the announcements? Delivery is critical to increasing participation and sustaining participation for middle- and low-income households, particularly from my neck of the woods and other places, including the Border and midlands region, where you do not have a university on your doorstep or within commuting distance.
Dr. Colm O'Reardon
It is a problem. I might ask Mr. Lemass to list the particular projects. There was a call-out to the sector. We probably have to differentiate between the traditional universities and the technological universities. The traditional universities have some track record in this area and the capacity to build the accommodation. When the call-out was made, a number of the universities had projects that were capable of being brought forward with a certain amount of funding support. Those are the ones the Cathaoirleach mentioned, and they include Maynooth and DCU. He also mentioned Galway but I am not sure if Galway falls into the same bracket. A number of projects were capable of being accelerated.
Galway has just opened its accommodation.
Dr. Colm O'Reardon
Yes. I believe there might be another one in development there. Where there was scope to accelerate projects, the Department was engaging on what it could do quickly.
There is a second round, which involves thinking about the future in the longer term. There is work required on that. There is also the digs aspect. Does Mr. Lemass want to elaborate on some of the details?
Mr. Paul Lemass
Absolutely. The short-term activation scheme was essentially an immediate response to ask any HEI with a ready-to-go site with planning permission, or a ready-to-go site with planning permission that it would like to acquire, to talk to us about it. The Minister engaged with the HEIs, including the TUs, on this in 2022 and 2023. In November 2022, we brought a memo to the Government to get approval for the State to start getting involved in funding. The projects the Chair mentioned were part of that.
Specifically on the four projects listed, those at DCU and Maynooth are at an advanced stage, and we hope to go to tender on both of them quite soon.
New builds.
Mr. Paul Lemass
Correct. Those are new builds. There are 405 units in DCU and 116 in Maynooth. Those concerned are plagued by the cost increases we have all seen. In 2015, the average cost of a student bedroom was €100,000. We are now hearing quotations of up to €200,000.
I saw that in the briefing notes.
Mr. Paul Lemass
There is an horrendous inflationary environment.
Mr. Seamus McCarthy
To anticipate this afternoon, let me state that UCD's financial statements for the period 2021 to 2022 are being presented. One of the things I am drawing attention to is a write-off in impairment costs in respect of two projects that were cancelled. The total is €29.5 million. It relates to a phase 2 residence project and a centre for creativity. In those cases, the authorities wrote off €11.5 million because they had to halt the residences project. That is an example of a situation.
Mr. Paul Lemass
Absolutely. We do recognise that UCD has proposals in development. We are working with UCD as well. It has an overall scheme for about 1,250 beds, which can be provided in two to three phases, and we are working with it to see if we can support the first phase, which would result in 493 beds in the short term. We have not worked that through just yet but it is in the process.
On the repurposing of office space, there may be opportunities. Will the Department examine that?
Mr. Paul Lemass
Absolutely. In the long-term strategy, we are very mindful of other Government policies, such as town centre first, in addition to balanced regional development and the need to use vacant property. The long-term strategy will set out the range of options. Digs comprises a real possibility, too. To back up the statistics of the Secretary General, in July there were 1,225 units available with digs accommodation. We ran a campaign over the summer to promote room rental, specifically for students, and at the end of October there were 2,339 beds being advertised on Studentpad and other websites like that. That figure does not include the beds that were advertised but removed when taken up, so there is still capacity.
The Chair referred to the investment capacity of approximately €400 million that has been agreed. That is a funding capacity, which the HFA has put in place. It is a useful funding capability. We would like to nail out the long-term policy and methodology, which includes demand projections and assesses the full range of options for accommodating people.
On affordability, if they are coming in at €200,000 each, what can be done to make sure the rents on them are affordable? When it comes to spreading the payment period over a certain amount of time, how long will it take to pay for itself, so you would not be trying to do it over 15 or 20 years? If looked at as a longer-term project, it may be recouped over a period of 40 or 50 years.
Mr. Paul Lemass
It is central to the activation programme going on at the moment. Aside from any other reason, state aid rules restrict our ability to invest, so there is only so much investment we can do. That investment is 100% targeted at affordability. In practice, for the units I have called out in Maynooth University and DCU, it means 30% of those will be ring-fenced for students. We can identify students through the national access plan or through SUSI.
What range is it in terms of rents, because I know the rents of some of the existing ones?
Mr. Paul Lemass
We are looking at rents that would be at a 30% discount from the market. That is we are at, broadly speaking. We will not know that, in final terms, until the tenders come in and we see how much.
Is that across the board, and not just on a percentage of the accommodation?
Mr. Paul Lemass
No, it is 30% of the units at 30% discount. They will be targeted at SUSI applicants, or other national access plan-type applicants.
Will Mr. Lemass furnish the committee with a note on the current situation with regard to funding of the various projects? That is just on the capital works, be they new build, renovation, remodelling or repurposing of buildings.
In Cork city, we now have more than 8,000 purpose-built student units. They have all come onstream over the past ten years. Between the last six months, and in the coming 12 months at least 1,500 more spaces will come onstream. The problem is that the ownership and control of a lot of the student accommodation is with a small number of companies. The rent, therefore, that students are paying is extremely high. Is there any way that can be controlled? I hear of people paying up to €250 per week per bed unit. Can that be controlled in any way, or does the Department have plans to look at that? I know that student accommodation is costly to build, but these are units built over a number of years and still the cost being charged to the student is extremely high. The second issue I want to touch on relates to people who go back to college after getting a primary degree. They have a BA or BComm, for example, and decide to go back to study medicine. They have to pay full fees. I accept that the fees have to be paid, but they are not entitled to write off the cost of that against tax once they come out of college. If I, for instance, were to set up a business in the morning and spent €100,000 investing in that business, I am entitled to write off the cost tax wise of establishing that business. If I were to come along and spent €15,000 or €16,000 per year over five years, which I think is the fee to study medicine, that is a lot of money. However, when I qualify I am not entitled to write off that expense against income tax. Has there been any engagement with the Department of Finance on that issue? We need to get more people into a number of different areas, and one of those is medicine. There is now also the challenge of people trying to borrow money to do postgraduate courses. A number of financial institutions have walked away from providing that finance. Is that area being looked at?
Dr. Colm O'Reardon
I am aware of it but I have not given it some thought. I have not made a formal approach to the Department of Finance on it. It is a tricky space and we are obviously not responsible for tax policy.
Does Dr. O'Reardon accept that if I set up a business in the morning and spend €100,000 setting it up, I can write that off against tax? If I am investing in a future career I am not entitled to do that. I am not asking that the Department pay the cost of college fees. I am saying there is an incentive there to deal with it. A number of people involved in that area presented a detailed submission to the Department of Finance approximately four or five years ago. We could not make any progress on it. It showed there would be a net benefit to the State in what we were talking about.
Dr. Colm O'Reardon
Whatever trouble I get into arguing with John McCarthy, I will definitely get into trouble if I start talking about tax policy, which is very much the reserve of the Minister for Finance. I am anxious to see if we can explore that problem in more detail. As far as I know, there is a tax relief available on fees paid over a certain level in a given year. The Deputy's suggestion is that this would be extended over a period of time after graduation.
A period of time after they have qualified. In a lot of cases, as with someone doing medicine or dentistry, they are doing placements during the summer months so they are not really earning. They are not given the opportunity to earn. They are paying fees and accommodation. They do not have any income. When they finish and have spent all of this money, there is no benefit there for them. I think it is something we really need to look at.
Dr. Colm O'Reardon
The best way to say this is that we need to have a fresh look at the whole graduate entry medicine funding situation. The Deputy has mentioned a couple of possibilities. It is not something I have had a chance to get to, but it seems we need to look at it now. I cannot commit a Minister-----
I accept that.
Dr. Colm O'Reardon
-----but it is something we need to examine in more detail, including why it is that private sector funding product was withdrawn. Do we understand why that was withdrawn? That is certainly worthy of further examination.
The other question was on control of rents where there is now a small group controlling between 70% and 80% of the student accommodation. As a result they can dictate high prices for student accommodation.
Mr. Paul Lemass
Since 2016, under the Residential Tenancies Act, the Government has put restrictions on residential tenancies through rent pressure zones. A couple of years later, those protections were extended to students. That means if a student is renting a property, the annual increase in rent is restricted. It started off at 4% and is now 2%. The annual increase in rent on a property is restricted to 2% in a rent pressure zone. I would imagine that almost all of the higher education institutes are in rent pressure zones. That would be my sense at the moment, although I can double check that.
If I were to rent some place in Cork now, I will be charged somewhere around €250 per bed per week. I am saying that is extremely high. It is the same in Dublin. These units are purpose-built student accommodation. I do not think any restriction is being imposed on rent.
Mr. Paul Lemass
The legislation as it relates to new property is that once it is a new-build property, or a property new to the market, it can be set at the market rent and whatever the market will bear.
If you are a new student on 1 September, the rent can be dictated to you because you are starting off as a tenant.
Mr. Paul Lemass
Only if it is a property new to the market. The Deputy has given examples of student accommodation that has been around for some time. If somebody was charging a rent in 2020 they could only have increased that rent by 2% or 4% between 2020 and now, depending on the year.
My understanding is that if you are a new tenant, they can increase the price to what they want, rather than it being controlled, because you are a new tenant.
Mr. Paul Lemass
That is not my understanding. My understanding is that the restriction is on the property, not the tenant.
Students have come to me about this. Could I have clarification?
Mr. Paul Lemass
I will provide clarification. This matter is for the Department of housing, but my understanding is that the restriction applies to the property regardless of how many tenants move in or out of it. I will follow up on the issue.
I thank Mr. Lemass.
As a follow-on to that, I revert to my point on affordability, which was further developed by Deputy Burke. Where accommodation is built using this funding, who controls it and who sets the rent? Is it the case that the money is handed to a company, which builds the accommodation and then sets the rents, manages the property and so on? How does it work?
Mr. Paul Lemass
The detailed allocation process for the accommodation at DCU and Maynooth needs to be worked out. Essentially, for the 30% that will be supported for reduced rents, they-----
I heard that part. Is the funding for that provided through PPPs or are those accommodation units provided as straightforward design and build projects?
Mr. Paul Lemass
The tenders are going out on a straight design-and-build basis. There are no PPPs involved in those two cases.
Who will manage those? Presumably, the universities will bring in management agents. In terms of policy, will the universities or the agents set the rents?
Mr. Paul Lemass
I would have to confirm the detail, but the approval we have given to the universities and the business models we have worked through and done due diligence on with the universities are based on their projected rents, which are only increased in line with RPZ restrictions.
I know about those restrictions, which are applied under the overall private rented sector guidelines, but I am asking a different question about what would happen if we invested over €500 million in building student accommodation. Given the picture Deputy Burke paints, it seems that what I often describe as the Wild West now obtains. There are private commercial interests. They do not pay the piper, but they are calling the tune and setting the rents. Are we going to finish up in a situation where public money, which is welcome, is invested only for students to find themselves paying large rents that provide private companies with large profit margins? Private companies have their place – I am not arguing that – but this money is being utilised for the public good. Where the public domain is concerned, we need to ensure a level of management and control so that rents do not take off as if this were the Wild West.
Dr. Colm O'Reardon
My understanding is that the universities are responsible for this. We are only partially funding some of these projects. The universities-----
The universities, as public institutions, will call the tune.
Dr. Colm O'Reardon
Correct.
That is okay. I just wanted clarification.
Mr. Seamus McCarthy
Most of the universities have subsidiary companies that effectively operate their campus accommodation.
The witnesses know my concern.
Dr. Colm O'Reardon
Yes.
We need the rents to be affordable after we have spent good money.
I apologise to Dr. O’Reardon. I was at another committee, so I am in great danger of asking him questions someone has already asked. It will just give him the opportunity to answer them better the second time.
I wish Dr. O’Reardon well in the Department. The establishment of a Department of higher education was a key demand in our negotiations on the programme for Government, founded in the Tánaiste’s belief that higher education was not best served by being included among all the other elements of education. Our competitiveness on the world stage is dependent on the talent pool available in Ireland, and higher education is the key driver of that. The work the Department has undertaken is important and I wish everyone in it well. This is not in any way meant to discredit or undermine the work of the Department of Education. I say that mostly because the two Departments share a building and I would not want Dr. O’Reardon going back to lunch after anyone said otherwise. It is just that there is a slightly different focus, and higher and further education is well served by being placed in this Department. A range of ETB services and apprenticeship programmes are getting a different level of focus now than they would have otherwise.
At the LinkedIn campus yesterday, I attended a fantastic event about the Inspire Mentoring programme, which takes HEAR students from disadvantaged areas who have great talent and ability. It is not a programme that keeps people from falling between the cracks. Rather, it gives them the opportunity to elevate and inspire. The students there are in their final year. The programme gives them the opportunity to link in with mentors from their own areas or from similar backgrounds. Mentors can connect those young people through their little black books and give them opportunities to access networks that may be more readily available to others because of their economic backgrounds. It is a great programme that shows the opportunity that further education provides.
One of the institutions that has gone on that journey has been TU Dublin. We have seen it develop from the vocational colleges into the institutes of technology in Dublin and now into a technological university. Obviously, there were concerns about the stories that emerged about an accounting error of €7 million. What engagement has the Department had with the HEA and TU Dublin, not only on that matter, but also on the broader issue of developing a deficit? If I am correct, borrowing or creating deficits was not the idea in the legislation.
Dr. Colm O'Reardon
That is correct. Before I begin, I thank the Deputy for his comments. They are appreciated and I agree with what he said.
Regarding TU Dublin specifically, I will rehearse the issue a little. I believe it arose in April when there was a meeting between TU Dublin and the HEA where it became clear that there was an accounting issue. There was also the issue of the university projecting a deficit of approximately €10 million. As the Deputy pointed out, TUs are not expected to have extensive borrowings, certainly not at this stage in their development.
There has been engagement between the HEA and TU Dublin on this issue under the terms of the new Act. Section 142 has been invoked, which means that the HEA is providing assistance to TU Dublin on the matter. The HEA commissioned a firm of accountants to look into it. The firm has produced a report. That report has gone to the HEA’s board, which has examined it, and will shortly go to the board of TU Dublin. I expect there will then be a restatement of the accounts. That is where the-----
That would deal with the accounting error.
Dr. Colm O'Reardon
Yes.
My concern is that there is an emerging deficit, one that might in some way be linked to student numbers. If so, it would be worrying. One would have thought that the amalgamation of several bodies would lead to some degree of cost savings and to them using one another’s resources. However, it now appears that we have an increased number of staff and reduced student numbers.
Dr. Colm O'Reardon
I do not have a definitive read on that. Part of the work involved figuring out why the projected deficit arose and to what extent there was an adequate flow of information within the university about student numbers. The latest information I have is that the HEA is continuing to engage with the university on the subject. It is a work in progress. Part of the report examined the proper flow of information within the university about student numbers.
That is an ongoing piece of work in which the HEA is heavily involved.
I understand. As Dr. O'Reardon says, it is an ongoing piece of work and something to which we, as a committee, will return more directly with the HEA. For a Department that is promoting higher education, a reduction in numbers of students would be disappointing, particularly in an institution that was more than well placed to take advantage of the technical universities legislation at a campus that has transformed a big chunk of the city that was underdeveloped. What about the need to work with Technological University Dublin, TUD, to try to improve the offering or enhance the attendance to get the benefits of the capital money we are putting in?
Dr. Colm O'Reardon
There is a bit of information to play out first. To be fair, there have been fluctuations in the numbers of students attending all third level institutions. Mr. Moynes made a point earlier when we were talking about SUSI and enrolments.
I heard that point.
Dr. Colm O'Reardon
Enrolments have been fluctuating somewhat and were fluctuating particularly during the Covid-19 pandemic. To be fair to the university, we might want to hold off before arriving at a conclusion about its enrolments. It has clearly had difficulty in tracking enrolment numbers.
The broader point is absolutely correct. There is big investment there and on the Department's side, there is no lack of commitment to the development of the sector. I endorse what the Deputy has said about the investment in the campus. We need to work with the university to understand what is going on.
There is a key role in trying to promote apprenticeships. As a spokesperson on housing, I can say we absolutely need more availability in that pool. Given there is such a vocational base in that college, it might be that it experiences a reduction if there is a greater flow of people into the apprenticeship pool. That is something for us to keep an eye on. I know TUD has a pre-apprenticeship programme but I understand it is on pause at the moment, despite funding having been made available. That is not something I expect Dr. O'Reardon to answer.
I welcome Dr. O'Reardon's words, and hope they were chosen wisely, about the university not expecting to borrow at this stage. An institution such as TUD would, over time, need to be able to borrow, particularly to address the need for student accommodation that was referred to earlier. All of the universities are trying to solve the puzzle of how much they can borrow and how to do it. TUD is right in the middle of the city. It has land and there are plans in that regard. Over time, borrowing for housing purposes is something we should try to facilitate. Would that need to be dealt with through the variation and amendment of legislation or could it be done within the current legislative framework?
Dr. Colm O'Reardon
The Technological Universities Act permits borrowing by the technological universities, TUs, subject to permission from the Government, the Minister for public expenditure and the Minister for Finance. It is not a legislative issue, per se.
Okay.
Dr. Colm O'Reardon
The money is on the State's balance sheet so it would require a Government decision to allow balance sheet borrowing. That is about TUs' own capability to develop income streams and all of that. It is certainly an ambition for the Department, particularly around student accommodation in the first instance.
I apologise if I double back on information that has already been provided but I had other committee commitments. I will ask a general question but I have an obvious interest in the South East Technological University, SETU. I am going to ask about the second bundle of the public private partnership, PPP. We heard details about the first bundle. When is the second bundle likely to land? I ask that from the perspective of the engineering building for which the Waterford campus of the SETU has been crying out. Is there any timeline for that?
Dr. Colm O'Reardon
I will ask Mr. Lemass. On the second bundle, we are moving towards the final tender stage. I do not have a date for when I expect that to happen. The Minister has approved us moving to the final tender stage. That is the next jump we need to make. I will ask Mr. Lemass to come back to the Deputy on the land issues. The committee will have seen announcements on various things.
Mr. Paul Lemass
I endorse what the Secretary General has said about moving to the final tender stage. That is the next stage in the process for the second PPP bundle. We are working towards getting to that. If it happens reasonably quickly, we hope to be in a position to do a final close at the back end of next year. That is all subject to negotiations that are still very much in play.
As regards land, there have been significant developments in the SETU in Waterford and Wexford. Agreement has already closed on the Waterford Crystal site.
That has been officially signed.
Mr. Paul Lemass
That is going to form part of the overall master plan for the campus. There are aspirations around some academic buildings and life science buildings, but student accommodation can also come into that now that it is right beside the other parts of the university. I note for Wexford that the SETU has approved or endorsed the local authority issuing a compulsory purchase order, CPO, for 48 acres in Wexford. That would be a shared campus, part of which would be for the SETU Wexford facility.
That was excellent news about the Waterford Crystal site. We are all measuring acquiring the site against the capital investment that is needed for the existing site. I mentioned the engineering building. It is slightly unfair to ask a prospective question at a PAC meeting when we are supposed to be retrospective. However, I wanted to take the opportunity to ask.
I will return to the National Training Fund, NTF, particularly around the issue of lifelong learning. The Department will know that we do an awful lot in education very well. We are at the top of the charts in quite a few aspects of our educational provision. However, for lifelong learning, we are decidedly mid-table. Skillnet and Solas are doing a good job in this space but I do not want it to be the case that somebody has to become redundant before we move to the kind of upskilling or transition we need. Our guests have talked about the digital and green transitions. Those are twin pressures. I really want upskilling to happen while people are in place and in work. I have spoken previously about the frustration of employers around retaining employees. They want to invest in their employees when they have the chance but there is a block in the road in terms of the NTF. Ms Hughes-Elders pointed to the fact that we might need legislative change to unlock the NTF. We have spoken a lot about how much is in the fund and is left sitting there. For future casting, how are we going to resolve the issue? Do we need legislation? Is the Department looking at the issue?
Dr. Colm O'Reardon
I would not imagine we need legislation to expand the sorts of programmes we currently have. The issue is-----
The issue is how it is counted.
Dr. Colm O'Reardon
It is counted as part of Government expenditure and, therefore, is part of the overall fiscal rules. It is, therefore, a matter for the Minister for public expenditure and reform to find a way to create more fiscal space for the NTF to be used. That is the kernel of it. We certainly have looked at the question of in-work training. Mr. Beausang may wish to say something about that.
Mr. William Beausang
The Deputy asks a good question. The OECD review I mentioned earlier highlights an issue that we, as a Department, are anxious to get across. We are at total employment of approximately 2.4 million or 2.5 million people. The way the world is changing with digitisation, artificial intelligence, AI, and decarbonisation means that everyone needs reskilling and upskilling. The Deputy talked about our mixed performance. We are mid-table in Europe, well behind countries such as Sweden and Finland.
The metric that is used is whether someone has engaged in further education-----
Mr. William Beausang
Within the past four weeks.
----within the past six weeks. Is it six weeks or four weeks?
Mr. William Beausang
The Deputy may be right. I had four weeks in my mind. It is that kind of timeframe. The OECD did a deep dive into this issue in a work that was published last May. It highlighted the issue as one of the priorities we need to focus on, going forward, for the very reason that everyone is going to need it. There is clearly an appetite for lifelong training, which is borne out by survey evidence. The question is whether there is provision that suits people's lifestyles. People still go off and do two-year master's courses part time, and I have great admiration for them. However, for the scale of reskilling and upskilling that is required, we need short, focused and flexible courses that can align with people's lives.
Then we are into very real-world issues about time off, childcare and transport costs so just to get to-----
I hear a real appetite among employers to provide it as in-work training. It is about employee retention and if an employee is not feeling valued in whatever way in his or her current employment, there are currently loads of opportunities within the labour market and people are mobile. People are moving. It is a balance of frustration on behalf of employers because they are paying into the NTF and on the other hand, a willingness to actually engage in this in terms of in-work training saying, "You have your two hours or three hours a week to engage in these modules because we know you want to progress within the organisation." It is the place we can probably make the most progress over the shortest time. It is difficult to improve on excellence and there are a lot of parameters where we are performing excellently education. It is not so difficult to improve on mediocre, which is kind of where we are sitting in respect of lifelong learning.
Mr. William Beausang
It is important to mention that a positive outcome we achieved in the Estimates was the allocation of €1 million to develop a pilot or pathfinder incentivisation scheme for participation in lifelong learning that will be very much focused on SMEs. We are engaging with Skillnet in terms of moving into the design of that pilot. The assessment in the OECD report, which is also an assessment of our Department and will be subject to Government consideration and decision-making down the line, is that financial incentives play an important role in allowing and facilitating greater lifelong learning. That is the international experience. I attended an event in the OECD last week and other OECD members are talking about the need for support for employers and individuals to achieve the step change in lifelong learning that will be required.
I have a final question. There will be pressure from the likes of me and everybody on this committee. Nobody likes to see €1.5 billion sitting around and not working for the taxpayer. The State is a long time in responding to the external review that was in 2018, notwithstanding the fact a new Department has been formed, and I accept it takes longer to respond. The fourth recommendation related to outcome-based performance metric on the spending, and particularly, with the Department, what metrics it applies to the money that is paid out from the NTF and how to assess the grantee bodies that get the money paid out from the NTF. There will be pressure from politicians, including the likes of myself, who will say, "Here is money, go spend it." There is a temptation there to spend it badly if the Department is under that pressure. What types of gateways and performance metrics are there? This is the one area of the recommendations that apparently the Department has not come back on strongly enough as yet, even if there is work ongoing. Will Mr. Beausang elaborate on the work the Department is doing to ensure the money being spent is being spent well?
Dr. Colm O'Reardon
There are a couple of issues. First, there has been a rapid pace of additional spending so we have to worry when spending is ramping up quickly. We need to do a piece of work, which we hope to do with the ESRI, on a kind of overarching piece of how we properly assess NTF-type expenditure, including what is the right way to evaluate expenditure on training and whether it is different from any other type of expenditure, such as expenditure on people who are seeking employment versus people who are in employment. We need to do a piece of metalogical work on that. We have provided deadlines for meeting the recommendations in the Comptroller and Auditor General's report. We talked a little about performance metrics that are put into annual performance agreements with our agencies. There are metrics in the SOLAS performance framework that represent national policy. on the one hand. but also represent our reflection of the performance frameworks that SOLAS has with ETBs on the other. That is reflected in the performance agreement we have with SOLAS but we are happy to look at those again and see if they are adequate.
Mr. William Beausang
We are absolutely committed to having a better evaluation framework. In terms of our engagement with the Department of Public Expenditure, National Development Plan Delivery and Reform it is very important that we can demonstrate the investments made are effective. I would not describe this as anecdotal evidence but we get a very strong consensus view back from industry that the spend that is happening under the NTF is generating good quality graduates, whether it is from further education and training, FET, from higher education, HE, or apprenticeships, who are meeting our labour demand needs as much as they can do in a full employment economy. There is obviously, in the environment we are in, sometimes a confusion between skills requirements and labour force or workforce issues that play out. It is important to distinguish between them. I agree with the Deputy's contribution that we need a stronger framework to reinforce what we already know, that investment in education and training yields very high returns but we need to demonstrate what those returns are.
With regard to the NFT, the Act it was set up under provides that: "...information on the existing and likely future skills requirement of the economy ... The Act requires that any surplus funding remains in the NTF account to provide for reinvestment in eligible training activities". We have covered that ground fairly well. Obviously the money is there and it is good to have the money but it is frustrating, which has been expressed this morning, that we are not able to utilise it.
My questions are in the context of people not being able to get a plumber or a mechanic, the national car test, NCT, centres cannot get technicians or mechanics and garages cannot get them. To get a plumber, an electrician, a carpenter - I could go on - or a lot of the traditional tradesmen, the issue is trying to find what is happening there and what can be done to address this. The Act is clear in what the purpose of the NTF is, and the Department has a research remit to find out where there are gaps in the labour force. This is not a gap; it is as wide as Croke Park. The gap that is there is huge.
We have to do something about it because we are talking about building student accommodation and repurposing buildings. We have a housing crisis. There is a huge block in terms of the construction sector. There is retrofitting and energy conservation. I acknowledge that good work is being done by the ETBs, particularly in the Mount Lucas Construction Training Centre. When I first highlighted it on the floor of the Dáil nearly 12 years ago, 16 people had gone through it in the previous year. It is a huge facility and I raised it because of the fact that almost nothing was happening there. That is a very busy place today, as is the Laois and Offaly ETB. The Department has a role in it through SOLAS and what is happening there is fantastic in terms of skilling people for retrofitting and some of the other skills that will be required. There are clearly huge gaps and I want to try to figure out what is going on here. We have the funding for this and the National Training Fund. How can the problem be addressed?
I am told that one of the big problems is that employers traditionally took on an apprentice. The apprentice would go off for 12 weeks or so every year to one of the regional training colleges or somewhere else, and would come back and do the remaining nine months with the employer. A lot of employers do not want that. Is that the problem? What is happening in this regard because in terms of the utilisation of the NTF, is it being put it into the right places? Can more be done? Can we do more with this fund to entice employers? Are there other opportunities? If employers in the private sector are not doing it, there are 31 local authorities and all of those local authorities need to get trades. Apprentices can be of enormous benefit. If a plumber has an apprentice with him, they might not get twice as much work done but they might increase their output by 50% or 60%. There is the Office of Public Works, various other bodies and universities. Can apprentices be trained within a lot of public bodies? Traditionally, a lot of apprentices were trained through the semi-State sector.
We have sold off a lot of the family silver, but we still have the ESB, Bord na Móna, which was successfully resurrected, and many other semi-State companies. Can we develop apprenticeships in them? We have to fix the problem. When people come through the apprenticeships, they may not want to stay in those companies. They may want to work in the private sector or become self-employed. There is a yawning gap in apprenticeship in the traditional trades. We can train people at university, but the people who are trying to have work done in businesses or private work on their homes often say to me that they cannot get tradespeople. It is a major problem in the economy and society and we need to be innovative in how we address it. What is the problem and what is being done to solve it?
Dr. Colm O'Reardon
There is a quite a bit in that so let me pick off a few pieces.
On the research side we did some work we call the McGrath report last year, in which we carried out a fairly detailed analysis of what skills are needed in the construction sector in particular. It is designed to try to identify the skills we need to meet the national targets for housing and for retrofitting. They are big numbers. Approximately 50,000 people are needed up to 2030 to replace people who are retiring from the construction sector and to meet the additional targets for housing. We are refreshing the analysis and will update the McGrath report, but nonetheless there is a demand.
To activate the findings
Dr. Colm O'Reardon
I will come to that. There has been a big increase in the number of people registering to do an apprenticeship.
It is 26,000.
Dr. Colm O'Reardon
Yes, from memory, it is up 34% from the period before the Covid-19 pandemic. Two things happened. There has been a big increase in interest in and demand for apprenticeships, which is good, and during the pandemic, much of the capacity to train apprentices was lost so there is a backlog in taking people through their training. It is a strong area of focus in the Department. It is close to the top of our agenda.
My question is whether there is a problem getting employers to take on apprentices, not only in the traditional trades. For example, in Germany there are apprentice accountants and apprentices across a whole range of areas.
Dr. Colm O'Reardon
I will ask Mr. Beausang to come in on that.
We are putting in place a public sector apprenticeship programme to try to expand apprenticeships in the public sector. It is wide-ranging. For example, it covers the Office of Public Works, OPW and the Defence Forces, which have an apprenticeship in cybersecurity. It is quite different. As the Cathaoirleach said, it goes beyond the range of the traditional craft apprenticeship areas. There are IT apprenticeships and cybersecurity apprenticeships. It is a much expanded concept. Our target is to get to 750 apprentices in the public sector.
Are the local authorities part of the 750?
Dr. Colm O'Reardon
I do not think they are included in that.
Mr. William Beausang
The Minister is very keen to ensure the public service shows leadership in apprenticeships. The Minister talks a lot about and promotes apprenticeship to private sector employers. The question is what is happening in the public sector. As the Chair said, over time for reasons that are not pertinent to our discussion - they relate to the responsibilities of the Departments - there has been a falling away of apprenticeship in local authorities. For that reason, the Minister was keen-----
Did you say falling away of?
Mr. William Beausang
I do not have any expertise in it, but it is in the sense that the services that crafts that were carried out directly by local authorities are now carried out under contract - they are contracted out.
Some local authorities are increasing their maintenance staff because the contracts are too expensive.
Mr. William Beausang
On that point, there is an action in the public service apprenticeship plan that every local authority should recruit five additional craft apprentices to start the process of rebuilding or enhancing the role of directly provided crafts and trades in local authorities. It is a first step, but it is an important first step.
More generally, apprenticeship is an employer driven system, because they employ apprentices and we want them to have - and they do - a strong voice in the way the apprenticeship system is run.
A process is under way under the action plan for apprenticeship, which runs from 2021 to 2025, to establish a new single system of apprenticeship. At the moment, as the Secretary General said, there is the traditional craft apprenticeship system and the new post-2016 consortium apprenticeship system. We are hoping, through that reform, to secure a new system of national apprenticeship which is much more agile, flexible and responsive, while maintaining the quality of our apprenticeships and ensuring they stand up to international best practice standards. While holding to that, we want to create a national system that can respond to the kinds of needs we just spoke about, such as construction retrofit and beyond. That is an important part of the work the Department is involved in, working with social partners.
From Mr. Beausang's answer, it is clear there is a push to develop apprenticeships, not only in the traditional craft trades, but also in other areas.
Mr. William Beausang
Yes, there are 48 non-craft apprenticeships.
Does that include the world of finance?
Mr. William Beausang
There are apprenticeships in property services, logistics, hospitality, ICT and finance, such as for accounting technicians and insurance practitioners. There is a whole range. Almost 50 new apprenticeships are now in place.
There is a chronic need in the construction, maintenance and retrofitting sectors. There is a huge gap. Employers and contractors I know say they cannot get people who are skilled. There is a gap. I am told there is a reluctance by many employers to get into the game of apprenticeships. There is a separate problem that many people want their children to go to third level education. That is good but there is a huge enticement for young people coming out of school to do apprenticeships because they earn in training. They can start earning much earlier. They get educated as they go. Their skills improve each year and their employment also improves in that their wages go up each year. On diversification, I understand there are some moves to shorten the length of time of the apprenticeship for some of the traditional trades. For example, it has been mentioned to me that moves are afoot to reduce apprenticeships for painters and plasterers to three or four year apprenticeships. Is that correct?
Mr. William Beausang
The consensus view is that a four-year apprenticeship for painting and decorating is too long. The programme can be delivered successfully in two years. Early stage work is under way to test and put in place a two-year painting and decorating apprenticeship.
Is anything being done in the area of mechanics and technicians? Every dealership needs them.
Mr. William Beausang
Is the Deputy asking in the context of the growth in electric vehicles and so on?
For electric vehicles and internal combustion engines.
Mr. William Beausang
I am scanning the list of apprenticeships that are in place. I am not clear which one relates directly to that requirement. The Minister recently announced the establishment of an electric vehicle centre of expertise, which is a training centre to be located in Mullingar. We are conscious of the issue, given the goals in the climate action plan to increase the number of electric vehicles.
On the C and AG's chapter, surpluses have been accumulating each year on the fund. A graph shows huge gaps between the forecast surplus and the actual surplus, and the actual income and actual expenditure, last year. It can be seen that not just the amount but the percentage gap is increasing massively. In that context and that of the conversation we just had regarding training for people in employment, I am mindful of the fact that there is talk of us being in full employment. We are not in full employment. Approximately 5% of the population are still unemployed.
On National Training Fund spending by grantees, we have had a discussion on the need for greater monitoring of outcomes. It is not just about the numbers going in and going through but what we are actually getting out of that. A couple of figures jumped out of that. The table at annexe 19A, National Training Fund spending by grantee 2015 to 2022, indicates a number of significant reductions. Enterprise-focused higher education provision is at €152 million, which is okay and welcome, but Springboard is down from €22 million to €10 million. Training people for employment has gone from €216 million down to €130 million, a lot of which I believe relates to SOLAS. On community employment, training support grants have reduced from €3.2 million to €2.3 million, while community employment training, which was at €4.2 million in 2015, the year I am referencing for all this, is now down to €3.6 million. In that context, many of the streams of funding for those areas relate directly to people who are not in employment, or not in full-time employment, yet these figures show the amount of activity in that sector, despite the fact it is obviously getting more costly because staff and centres to provide the training have become more expensive. However, the funds seem to be reducing rapidly as regards what we are putting into them. Will Mr. Beausang address that? I am particularly concerned about that use of public funds.
Mr. William Beausang
A trend will always be evident as regards spend from the National Training Fund, depending on where we are in the economic cycle, in comparing spending on training for those in employment and those seeking employment, who are obviously people who are currently unemployed. I take the point there is still a significant number, but that is what economists would probably describe as the level of unemployment you would always see, even when the economy is at full employment.
I understand we have to accept there will always be people who are between jobs, probably at the level of 3%. I am saying that, within those figures, there are people who are long- or medium-term unemployed. The training element in the community employment schemes, in particular, is minimal enough, yet there is this huge reduction in the amount of money spent on training within those schemes. That is an opportunity to get people, who are a captive audience so to speak, from unemployment into employment or better skilled. There has been a reduction in the fund for training people for employment, from €212 million to €130 million, and Springboard funding has gone from €22 million down to €10 million. Again, are opportunities being lost there? Is there a kind of acceptance that we are okay because 5% are unemployed so we have full employment? Are we just accepting that?
Mr. William Beausang
I would not say that is the case at all. Something is playing out here that is important to mention. Part of the NTF reform process was to ensure that NTF spend was directed towards labour market uses because it was being contributed by employers. A very significant amount of the very significant spend that SOLAS and the ETBs are responsible for, which comes from the Exchequer, relates to spending on programmes for people who are at a remove from the labour market, let us say, in areas such as community education, in terms of other programmes that are out there. The Cathaoirleach asked about taking stock of investment. The investment is to support people who are socially disadvantaged and at a remove from the labour market. To assess their position, the overall spend by SOLAS and the ETBs has to be looked at, rather than focusing exclusively on the NTF, which will always have a very labour market, employment opportunity, reskilling and upskilling focus to it.
Dr. Colm O'Reardon
I will answer that. I see full employment as an opportunity to reach people who might have had a long period of unemployment. This level of labour demand is an opportunity to try to encourage people back into either work or training. I would not see it. It is quite the opposite, to my mind.
Could we have a note on apprenticeships are regards the initiatives? What initiatives are now happening? What progress has been made on them in the past 12 months in using the public sector? What efforts are being made to convince or reach employers to get them to take on apprenticeships? As regards the public sector, could the area of semi-State companies be included in that note? Have we ongoing programmes with semi-State companies to entice people in? We have a serious problem with those gaps in the workforce.
I will ask about third level debts. The committee has addressed the issue of financial governance, and governance in general, in the third level sector a number of times. I understand that each of the institutions operate somewhat independently. However, if we look at the level of debt, the Technological University of Dublin is facing a €10 million funding deficit, UCC a deficit of €2.5 million, for the University of Limerick it is €4 million annually, Galway, UCD and TCD have a combined debt of €40 million, Waterford has €6 million, Tralee has €2 million, and for NCAD it is €1 million. A letter was sent by the coalition of universities to the Minister in September, which outlined an overall funding deficit of €614 million. That is a funding deficit as opposed to debts, which is fair enough, but it highlights that within the sector there are problems with institutions trying to find funding.
As I understand it, €40 million has been provided to address those demands. We are facing a situation where some of those institutions will possibly need, for want of a better term, a bailout. Where there are institutions in debt, such as those I mentioned, especially those that have the deepest level of debt, will the Department intervene in certain situations to try to shore up and stabilise the funding situation?
Dr. Colm O'Reardon
The Cathaoirleach mentioned the €40 million. An extra €60 million in core funding has gone into next year's budget. On the specific institutions, the Higher Education Authority meets them all regularly and they have an annual budgetary meeting. If a deficit is a planned or projected deficit in a university, and a financial plan is in place, then the HEA will examine that and will look to see whether there is a sense of a plan to bring the institution through that period.
It might be reasonable to have a modest deficit projected, provided that there was a way back to dealing with it. The HEA is very active in talking to the universities regularly about what their funding position is. There is a commitment from Government to continue to increase core funding for the institutions. If any institution finds itself in serious difficulty, then of course the HEA and the Department-----
What about the University of Dublin's €10 million?
Dr. Colm O'Reardon
That is a live case. The HEA is-----
It is serious.
Dr. Colm O'Reardon
I would regard it as serious. I do not have immediate sight of what is happening there but I think it is important that the HEA works with the university to understand what has happened and to get a plan in place to stabilise its situation. I am confident that will happen.
In the case of Limerick, there is an accumulation each year of €3 million or €4 million.
Dr. Colm O'Reardon
It is a large university. Some of these are substantial bodies. There needs to be a plan in place to address it. To come back to the point, there is a commitment to increase core funding as well. There was €40 million last year.
What conditions, relating to governance and similar issues, will the Department put on those institutions to get increased funding?
Dr. Colm O'Reardon
The governance was reformed in the 2022 Act. That Act is a significant change in the Government's regime. That is being brought in. It is a work in progress. We see that as a transition from an old regime to a new regime. We are working closely with the HEA to make sure that is being brought into effect so there is stronger governance in the sector as a whole.
Will Dr. O'Reardon come back to us with a note on accommodation in the next week or fortnight?
Dr. Colm O'Reardon
Yes.
It is important. We cannot overemphasise the importance of that for families and students. It would also take the pressure off the so-called housing market in the areas around some of those third level institutions. There is a big crisis around those areas. It is pressure on top of pressure. Before we close, does Dr. O'Reardon have the report on precarious employment in third level?
Dr. Colm O'Reardon
I think the Cathaoirleach was referring to work being done by the Higher Education Authority. The HEA provided a further report to the PAC in April 2022. The message from that report was that there are issues about data collection. It would appear to be the case, based on what I have been able to find out while the meeting has been going on, that the HEA has been working to try to collect better information.
Would Dr. O'Reardon accept that nearly 40% of lecturers are on temporary, part-time, precarious contracts?
Dr. Colm O'Reardon
I do not think I know enough about this to say yes or no about that. We do not have strong enough evidence. We should have stronger evidence.
We get a lot of complaints about it. I am confident that people in Carlow-----
Dr. Colm O'Reardon
I have had personal experience of seeing how this works. It is absolutely an issue. What struck me when I started to look at it was the question of where the data is. There are differences of opinion about the scale of the problem. We need to address that data problem. I do not think we have evidence. Part of the extra funding that we are putting in will mean that universities will be in a position to increase the number of full-time posts, which will partially address this, but it is an issue.
On collecting the data, we have a certain number of third level institutions. Whoever is working in the payroll section or is in charge of HR will know quickly enough how many full-timers they have, how many part-timers, and how many are on short-term contracts for maybe a year or two. Would Dr. O'Reardon agree that people are not going to be kept in the sector if they have 11 hours a week and are trying to do what everybody else has to, including trying to get accommodation, put a roof over their heads and keep bread on the table? They cannot be kept. They are highly qualified people.
Dr. Colm O'Reardon
It is a serious issue and we need to work on that. There are a number of pieces to the puzzle. I would absolutely accept that there is an issue.
The unions have been pushing it, including the Teachers Union of Ireland. They would have some information on it. I would ask that they be consulted as part of this. It is important that the representative bodies are asked. Unfortunately, many of the people who are most severely affected by this are not actually union members, because the nature of their employment is so precarious. The public would be surprised to know that more than one third of all employees in that area do not have any kind of permanency or full-time employment. That could be addressed.
I thank Dr. O'Reardon for the information. I thank the witnesses and staff from the Department for attending. I also thank Ms Hughes-Elders from the Department of public expenditure for attending today's meeting and preparing the information for it. I also thank the Comptroller and Auditor General and Ms O'Connor for attending today and for assisting.
Is it agreed that the clerk will seek any follow-up information and carry out any agreed actions arising from the meeting? Agreed. I think it is also agreed that we note and publish the opening statements and the briefings provided for today's meeting.
The witnesses withdrew.
Sitting suspended at 12.37 p.m. and resumed at 1.32 p.m.