I move: "That the Bill be now read a Second Time."
I thank the Opposition spokespersons and the Whips for facilitating the passage of the Bill today.
Its essential purpose is the amendment and extension of the Scientific and Technological Education (Investment) Fund Act, 1997. It increases payments into the fund for the year 1998 and extends the areas of research and development for which payments out of the fund may be made.
The Bill represents an important route map for future investment in high level research in the third level sector. In many ways it is a logical development to the provisions of the Scientific and Technological Education (Investment) Fund Bill passed by the House this time last year. I say logical but not inevitable because while change is inevitable, progress is not. Progress must be planned and it is the planned approach to investment underlined by the investment fund and other important initiatives which has made this initiative feasible. The original fund was a dramatic statement of the Government's commitment to look outside the normal paradigms for solutions to the ever present problem of funding for major initiatives in the third level sector. It was a bold step which worked.
The investment fund was underpinned by three key objectives. First, we wanted to renew and modernise the infrastructure of third level institutions, particularly in the technological sector and guarantee that they would continue to produce high quality graduates. Second, we wanted to develop new areas of activities in our institutions, especially where emerging skills needs had already been identified. Third, we wanted to invest in promoting the innovation which continues to be so crucial in maintaining and expanding our recent growth.
A key supporting element in all this was the decision to invest in developing the technology and skills base of our first and second level schools. At £250 million, the investment fund continues to represent the largest single capital investment programme ever introduced by a Government. The sectoral allocations alone provide graphic evidence of the scope of the fund. These include £60 million for completion of the programme of skills development announced shortly after the Government took up office; £20 million towards a sustained programme of investment in the provision of hotel and tourism training facilities in the institutes of technology; £20 million for the vocational education sector, particularly post-leaving certificate courses and apprenticeships; £80 million for infrastructural developments, particularly the renewal and rein-vigoration of the technological sector as a crucial and distinct element of our binary system; £30 million for third level equipment renewal grants, which will tackle in a serious and sustained way equipment renewal in our third level colleges; £15 million for research and development and £25 million for the schools IT 2000 project, which affects both primary and second level schools. Deputies will be aware that the fund has already begun to have a major impact on institutions throughout the country. At present, the largest building programme in the history of higher education is under way and facilities are being transformed. The institutes of technology are at various stages of the planning and design of projects which will address infrastructural deficiencies, provide facilities to meet skills needs and increase the provision of hotel and tourism training facilities in line with a programme of investment agreed with CERT.
Projects involving capital expenditure of almost £90 million have already received sanction to proceed in Carlow, Cork, Dún Laoghaire, Limerick, Tallaght, Waterford and Blanchardstown Institutes of Technology. Some £70 million of the cost will be met by the fund, with the balance coming from European Regional Development Fund and Exchequer sources. Project evaluation and consultation with interested parties is continuing and as further proposals are approved, the institutions will be authorised to proceed without delay with the implementation of the project. The ongoing support of the Minister for Finance in this has facilitated the smooth operation of the programme and is greatly appreciated.
In the university sector, during the summer I was delighted to be in a position to allocate £30 million towards the creation of 3,900 additional undergraduate places to meet the skills needs of high technology industry. This was a direct response to the skills needs identified as part of the Government's Action Plan for Skills and involved £4.5 million for phase II of the microcomputer building at UCD, £5 million for the extension to the O'Rahilly building at UCC, £4.5 million for an information technology building at UCG, £3 million for an extension to the Callan science building at St. Patrick's, Maynooth, £5 million for an informatics building at the University of Limerick, £5 million for an information technology building at Trinity College and £3 million towards the new computer science building and library at Dublin City University.
The investment fund is unique because of the sheer scale of the investment and the fact that it has been aimed at skills needs in the science and technology area. It is also unique in that it is parallel and in addition to the normal Estimates process. The £250 million initially envisaged for the fund is subject to Oireachtas control, and my Department will report to both Houses of the Oireachtas in detail before the end of March 1999 on the operation of the fund during the 1998 financial year. However, the insecurity surrounding medium-term investment which comes from the often fraught Estimates process was avoided in this case by establishing the fund over a three year period with £250 million guaranteed. This has underlined the Government's clear commitment to this type of investment and has sent a powerful message to private contributors that private donations to third level institutes would not be a substitute for public moneys but rather additional to an existing State investment which is substantial, visible and secure. This is fundamental to fostering a climate of collaboration between the public sector and private industry in the area of education.
The link between education and the material and social well-being of our people has never been stronger. Private sector business and industry is set to benefit greatly from educational investment. The continued success of the economy we have created is intimately bound up with our capacity to maintain a first class education system. The education level of the national work-force represents the single most important factor in the development of the enterprise sector and in achieving ambitious targets for increases in employment and living standards, together with continued reductions in unemployment.
The Government is determined that Ireland will maintain its place at the forefront of technological and business developments world-wide. It would be wrong for anyone to understate the enormity of this challenge. It would also be wrong to even think that we cannot do it because we have proven that we can. The unprecedented growth in the economy in recent years has made Ireland quite simply the most dynamic economy in the most dynamic economic region in the world. Deputies will know this phenomenon is the subject of admiration and even awe in respected business journals all over the world. What we must now do is prove that we can sustain and build on what we have achieved.
Technological advancement is driving change in all sectors of the global economy at so fast a rate that to a large extent we must plan to cope with the unknowable. This presents us with many challenges but also with enormous opportunities. Education is the key to realising those opportunities but let no one doubt that it will require mobilisation of all resources available to us and applying them together on a partnership basis to put in place the physical and personnel infrastructure necessary for continued success. The successes of the recent past derive in no small way from the support given to the education system by private industry. I appreciate the response of the private sector in supporting and developing this link with the State in providing the most modem facilities in our universities and colleges.
Already it is clear that the issues to be confronted in further developing our education system for the next century will also have to be directly factored into our economic development plans. In such circumstances partnership with the private sector moves beyond the realm of the desirable and becomes a strategic imperative for both parties.
This dimension of partnership is an integral part of the investment fund and the Bill for the fund, as Deputies will know, provides for private contributions. While contributions directly to the fund have not yet been received there is no doubt that the State's investment through the fund has stimulated interest and commitment. It is worth noting that under the provisions of sections 489 and 843 of the Taxes Consolidation Act, 1997, private funds in the order of £50 million have been attracted into the third level system either through projects already sanctioned under the terms of the scheme or currently being processed.
This new Bill amending the terms of the investment fund aims to marry the concept of public/private partnership with the largest ever investment in advanced research in Ireland.
Why focus on advanced research? Here, again, the answer is straightforward. Maintaining and building on our recent success depends on our capacity to stay ahead of the competition. This means Ireland's current attractiveness as a base for high-tech industry must be developed to include a high degree of strategic innovation. It is essential that future graduates and post-graduates can continue to meet and even surpass international research standards. High quality research provides the environment for high quality teaching. It also provides a catalyst for the type of innovation which an economy must have to sustain and expand economic growth. It is not enough for us to exploit technologies developed elsewhere, we need to generate these technologies here and this cannot be done without a strong culture of research in higher education. We simply cannot have a cutting-edge economy without cutting-edge research.
In the course of discussions with a wide range of people on this issue the essential point which kept coming through was that the most important thing Government can do is create an environment which enables institutions to develop and implement research strategies. I was particularly impressed by the idea put to me that if Government demonstrated its commitment to significantly developing this area, institutions would be willing and eager to match our contribution. Three core principles arose from these discussions: existing current and capital provisions should be given certainty within a set programme; significant additional funding should be added; and transparent procedures should be established for allocating the funding which will guarantee that quality and strategic planning will be the only bases for decisions. These principles provide the framework for the Bill before the House today.
Under this programme, a total of £180 million will be provided over the next three years on research initiatives in third level institutions. This integrated programme will be made up of £150 million for capital projects and £30 million for current expenditure. The capital component of the programme will in the first instance involve £75 million of State funding to be generated by a mixture of dedicated funding from the investment fund, additional Exchequer funding to be transferred into the fund and tax reliefs. Added to this will be £75 million which will be raised by the third level institutions themselves through donations and gifts relating to individual projects. The current funding side of the programme will include £15 million from the existing allocation for research within my Department's budget. Added to this will be a further £7.5 million direct Exchequer funding and a further £7.5 million to be raised by the universities.
As demonstrated with the research funding programme run earlier this year, my only interest is the quality and strategic importance of research. That is why I am putting in place an objective process for deciding on funding. The assessment process will be carried out by an international group whose membership will reflect the full range of scholarly activity in science, technology, the humanities and the social sciences. To be chaired by the Chairman of the Higher Education Authority, the panel will evaluate proposals on the basis of a rigorous evaluation framework. Particular emphasis will be put on the contribution which the proposals made to promoting the goals and objectives of the research strategy of the institution. The other criteria will be research merit and the contribution of the proposals to the quality of teaching at all levels. The assessment panel will be provided with the additional expert support needed.
The administration of the programme will be carried out by the Higher Education Authority and, to ensure its smooth running, I have agreed to arrange the devolution of various key procedures to the authority. These arrangements are in line with the Government's strategic management approach to capital projects and will be finalised before the end of January.
The amendment Bill before the House contains only two sections. Section 1 provides for an increase in payments into the fund from £100 million to £130 million for the 1998 financial year. This is clear evidence of the State's commitment to a substantial, visible and secure investment in the initiative. The additional £30 million, together with £20 million already in the fund related to research and development and equipment, will provide the State's capital investment in the research initiative and will be supported by tax reliefs and £75 million in private funding. Section 1 also broadens the scope of the Bill to include research in areas other than science and technology while maintaining the focus on these critical areas. The humanities and social sciences fit within the broad approach of this initiative. An intellectual culture, which encourages and supports critical inquiry across a wide diversity of fields, has clear benefits which reach well beyond narrow academic confines, especially in an era when prediction and uniformity are no longer possible. Section 2 provides for an appropriate change in the short title of the Act.
I recommend the terms of this amendment Bill. The necessity for the Bill is testament to our recent successes, but excellence is a journey and not a destination. There is no standing still. We must keep moving forward. The initiative to develop research in higher education, as brought about through this amendment Bill, is the right direction.