I spoke to the Minister since I raised the point about student representation on the governing board. I take it the situation to which I referred will not arise again and I accept that. On the first point I raised about County Meath VEC, section 5(14) covers the representation of additional vocational education committees, but it is important that the Minister ensures that County Meath VEC is one of those represented on the governing body. At a later stage Dún Laoghaire VEC, County Kildare VEC or another VEC may be represented also depending on the number of students from those areas who attend the college. As the institute we are discussing is on the Meath border, Meath VEC is entitled to representation on the board. I urge the Minister to ensure that is done.
Regional Technical Colleges (Amendment) Bill, 1999: Committee Stage (Resumed).
On the model being established for the governing body, the Minister will say it is important to maintain continuity with preceding models. How successful has this structure been? Section 5(4)(b) proposes the nomination of a representative of the Irish Congress of Trade Unions. The modern concept of social partnership recognises that both employers and employees should be represented. It seems that at a minimum, we should ensure representation from both IBEC and ICTU if we are to have a balanced governing body. That would reflect current thinking and I would be interested to hear why the Minister is taking this approach.
One must also ask why the governing body of a new institute should be structured in this way, with representation comprising a large number of VEC nominations and reflecting some organisations which the Minister identifies. It strikes me that this is an unwieldy type of board for any body, that modern legislation should provide for a smaller, effective and purpose-built governing body. Most recent bodies established under legislation have opted for boards with smaller numbers, with selection based on proven competence and the striking of a balance.
The Minister has chosen to change the present regional technical college governing body structure in just one respect. That is the only innovation the Minister is making in this section. Heretofore, the vocational education committees recommended board membership for the governing bodies of institutes of technology. The Minister is dropping that provision. He not only drops it in the formulation of section 5 – section 5(7) states that if it is not already clear, vocational education committees are being explicitly ruled out from making recommendations. There seems to be a certain degree of imbalance in the Minister's actions. He is maintaining the existing structure of the governing body with representation for the vocational education committees, but he has decided to prevent vocational education committees recommending representatives. That is a not altogether a frivolous point.
The Minister is proposing that nominations from organisations be representative of industry, agriculture, commerce, the professions and the local community. It seems that a local VEC would be better equipped than the Minister to make such recommendations. It puzzles me that the Minister feels it is necessary to change the existing structure of the governing body in only one respect. He should either be consistent and not make any changes to a successful model or he should consider the model afresh. In the latter instance, I would have expected to see a smaller, more effective and purposeful governing body. Neither approach seems to be adopted here. The Minister is making a small change but is doing nothing radical which would suggest he envisages a dramatically different approach to the structure of governing bodies. I would welcome the Minister's comments on those elements of the Bill.
I was of the understanding that we had previously discussed all the generalities of this section. Members have obviously reflected very earnestly on the section and have come up with fresh insights into the composition of governing bodies. Suffice to say that existing institutes of technology governing bodies have worked very well. Section 5(4)(c) covers the issue of representation from industry and other areas of economic life such as agriculture and commerce. That is well covered in the 1992 Regional Technical College legislation and in this section.
All existing institutes of technology were originally established by vocational education committees. The 1992 Act represented a movement away from regional technical colleges' jurisdiction under the vocational education committees to self-governance. For practical purposes, we would significantly delay placing Blanchardstown on a statutory footing if we were to require a VEC to recommend membership of the governing body over the next three to four months.
That is not a very credible explanation. In regard to the original governing bodies, the legislation provided that an interim body would be appointed on the recommendation of the VEC. That constitutes the first element of the original section 6(3). Not only that, but VEC recommendation is also built into section 6(4) which provides for the establishment of permanent governing bodies. The recommendation of vocational education committees was included even where a fast track approach was required to get a body up and running and provision was also made for that in the longer term. If the Minister feels that vocational education committees have particular insights, which I can certainly see would be the case in regard to recommendations from local organisations which might validly represent the interests of industry, agriculture, commerce and so on, it would seem they are in a far better position than him to recommend appropriate people for the governing bodies.
The vocational education committees do not do that in practice.
They do under section 6 of the Act. The Minister has made an explicit change in regard to VEC recommendations. He has not directly transposed the provisions of section 6 of the Act into section 5 of this Bill. It is understandable that he has made provision for the fact that students and the academic body are not fully established. However, he has also made an explicit provision to remove the scope of the vocational education committees to make recommendations on the composition of the board from this legislation. I do not understand that. The Minister seems to be saying that he is doing it because he is fearful the vocational education committees might delay the process. I would argue that the vocational education committees are closer to the action and would be in a position to come up with recommendations more quickly than the Minister.
The Minister did not address the reason ICTU and not IBEC should be represented on the governing bodies. It would seem that in order to strike a balance in terms of social partnership, both organisations should be represented.
I have said all I have to say on the section.
I have asked legitimate questions.
I have already answered them.
The Minister has not answered them. He is making provision in section 5(7) to remove provisions in the Regional Technical Colleges Act in regard to the appointment of governing bodies. He has not offered justification as to why he is doing that in respect of this institute when it does not equally apply to other institutes. The Minister has consistently maintained that he does not want to change the existing Act because he wants to ensure continuity. Yet, he is providing for changes in this section which clearly breach continuity.
I have explained the matter to the Deputy. I was a member of a VEC when the new governing bodies were being formed. Existing institutes of technology formerly operated under the vocational education committees. The previous hue and cry was that vocational education committees were very angry that institutes of technology were becoming self-governing. In order to maintain linkage, these provisions were put in place. There was also a very strong carryover in terms of institutes having been historically initiated under the vocational education committees.
We are talking here about the first governing body of the Blanchardstown Institute of Technology. In terms of the representation of industry and business and agriculture, it is not the case that the VEC plucks names out of the air. There is a genuine consultation process. In cities the chamber of commerce tends to represent industry and business on the governing body. We are entering an era when governing bodies will want a greater say in terms of who is represented but there is no big deal about this. It does not have profound significance.
While I accept the Minister's point, all day we have been struggling with the fact that he does not want to establish an institute under a Bill which sets out the objectives that we want to see achieved and which provides for the appropriate structure and functions. He is insisting on continuity. It is not surprising, therefore, that eyebrows are raised when one discovers that there is continuity in some respects only. Per haps there is a need to look at the development of governing bodies at a later stage. The structure proposed is anachronistic. It may have been a reasonable compromise at the time because of political pressures. I would prefer to see a different structure if we were starting from a green field.
I have a difficulty with subsection (2) which reads:
All moneys, stocks, shares and securities transferred to the College by this section that, immediately before the establishment day, are standing in the name of the Company shall, upon request of the College, be transferred into its name.
Have stocks, shares and securities been donated to the institute in question or is this just standard verbiage which has no relevance?
This is the standard legal text in all Bills.
Have stocks, shares and securities ever been donated to an institute of technology or regional technical college?
I do not know the answer to that question but this is the standard provision in legislation. I will not delete it.
Deputy Gilmore said they should be advised to buy shares in Telecom Éireann.
That could well happen given the egalitarian nature of the Minister for Public Enterprise.
Much of the verbiage in legislation has no relevance and every effort should be made to cut down on it. Legislation should be as brief as possible.
I accept that.
This section deals with pending legal proceedings. Is this the standard legal text in legislation or is it the case that legal proceedings are pending against the company involved which will become known as Blanchardstown Institute of Technology?
There are no proceedings pending that we are aware of. This is the standard provision.
I move amendment No. 7:
In page 8, between lines 6 and 7, to insert the following subsections:
"(5) Subject to subsection (6), the Local Government (Superannuation) Act, 1980, shall apply to the College and its officers and servants (including the Director) as if it were a local authority and they were officers and servants of a local authority.
(6) The functions conferred on the Minister for the Environment and Local Government by the Local Government (Superannuation) Act, 1980, or any instrument made thereunder, shall, for the purposes of that Act as applied to the College by subsection (5), be performable by the Minister and not by the said Minister of the Government.
(7) Schemes and regulations made before the commencement of this section under the Local Government (Superannuation) Act, 1980 (including modifications to such schemes and regulations made under section 11(8) of the Principal Act) shall, subject to any modifications which the Minister may, with the consent of the Minister for Finance, specify by order, apply to the officers and servants (including the Director) of the College.
(8) Subsection (8) of section 11 of the Principal Act shall not apply to the College.".
The superannuation schemes relating to the staff of institutes of technology are currently administered by the Department of the Environment and Local Government under the Local Government (Superannuation) Act, 1980. It is an objective of my Department and the Department of the Environment and Local Government to transfer the functions under the Act to the Minister for Education and Science. There remain issues to be resolved, not least issues to do with resources. As the Blanchardstown Institute of Technology is a greenfield project, it is proposed to provide for this arrangement from the outset. The effect of the provision is that the Minister for Education and Science will make amendments to the existing superannuation schemes rather than negotiate such amendments with the people concerned and then request the Minister for the Environment and Local Government to make the necessary changes.
This amendment appears to alter the basis on which negotiations will take place between pensioners and the State. The Minister is separating categories of employees of one institute of technology from another. Will different approaches to the industrial relations approach be adopted by the Department? Will separate dealings be opened with the unions representing retired persons?
Up until now all negotiations took place with the Department of Education and Science.
Am I correct in stating that there will now be two schemes in operation – a superannuation scheme under the auspices of the local authorities for existing colleges and another under the auspices of the Department of Education and Science? Are there cast iron guarantees that no one in the new institute will lose out? In the 1980s local authorities did not accumulate a pension fund to meet future pension liabilities. To the best of my knowledge, the Department of the Environment and Local Government assumed responsibility for these liabilities.
Cast iron guarantees can be given to those who work in Blanchardstown Institute of Technology. Historically, the superannuation schemes have been administered by the Department of the Environment and Local Government. Discussions are ongoing between officials of my Department and the Department of the Environment and Local Government to place them within the remit of the Department of Education and Science. The implications of this are being discussed. It is hoped to bring these discussions to a conclusion shortly.
Can cast iron guarantees be given that the terms that will apply to those who work in the new institute will not be less advantageous?
The same scheme will apply.
Does the Minister have any proposals relating to the future funding of superannuation schemes in terms of the necessary changes needed? The funding of pensions in the public service comes from day to day spending. This issue is causing great concern throughout Europe in terms of meeting euro targets and so on. The time may come when our overall debt is calculated on the basis of outstanding pension liabilities.
This matter has been left in abeyance throughout the public service for many years. When new legislation is being introduced, those employed because of this change are entitled to the same benefits as their counterparts. No one is suggesting that people should be disadvantaged in terms of their future pensions or remuneration. However, as a general principle, no attempt has been made to put any of these matters on a proper funding basis. I am not solely blaming this Minister as this applies across the public and Civil Service.
There are pensioners who, because of changes in the way matters are structured due to national agreements and social partnership, find that they are not receiving the pension they thought they would receive. For example, productivity payments in the public service will not be subject to an increase in pensions. It is unfair on those who spend their working lives in the public service to find that the rules could change midway through their retirement. This is another example of what can happen when one is dealing with day to day spending and the funding of pensions.
Does the Minister foresee a situation whereby, through the NTMA, moneys from Departments could be put into a fund which would make proper investments with guarantees for existing office holders that they will receive the pensions to which they are entitled? If these matters were properly funded we would not face the situation which will arise in the future. For example, what if an agreement is reached similar to those in the private sector whereby productivity bonuses are paid through the refund of a tax lump sum where targets are exceeded? If once-off payments are made to public servants as part of that national agreement no provision will be made for pensions. This will cause a serious problem in terms of recruiting people into the public and Civil Service on the basis of job security, job satisfaction and, particularly, guaranteed pensions.
This matter applies overall and not just to this legislation. Departments must face up to the reality that we will have to build up a fund for the payment of future pensions with guarantees of certain benefits. The position of the past few years will multiply and there will be many disgruntled civil and public servants who find that they left their employment on the understanding that, if those who followed them received salary increases by upgrading or whatever, their pensions would also be increased. That cannot be guaranteed in the future, given the new structures on productivity and once-off bonuses. Does the Minister have proposals in this regard?
This issue is a matter for the Minister for Finance, as Minister with responsibility for the public service, and he is dealing with it on an ongoing basis. This issue is of concern to successive Governments and that is where the matter rests. The Minister for Finance has raised this matter with Ministers and he is dealing with it. However, the matter is not of immediate concern to this amendment.
It is relevant to those who will be employed.
Is it the case that those who retired before the last pay agreement receive less in their pensions than those who retired since the agreement? I am talking about those working in the institute of technology sector. Are there dif ferences in the levels of pensions paid and, if so, will those differences be resolved?
Deputy Barrett made an important point. Some people feel short-changed in terms of their pensions following the last pay round and there is a great sense of betrayal. We are talking about people who devoted their careers to the public service, in education, health, Departments and so on. No Government can welcome a situation in which those who have been good and loyal servants of the State feel betrayed in terms of pension parity. I agree that this matter is not directly relevant to this amendment. However, can such a situation arise in the future?
The Minister may say that this is a matter for the Minister for Finance, but there is an obligation to those who work in the remit of the Minister's budget that they do not have to fear a situation which may arise in which, because of agreements, those who become pensioners after the agreements leave the service better off than those who left before them.
There is an ongoing injustice in the context of index-linked pensions.
We are branching into an area of discussion not intended by the amendment.
It is intended by the section.
Acting Chairman
It is on the section but we are opening a debate on superannuation and pensions.
I accept your ruling, Acting Chairman, but in discussing this Bill we have an obligation to consider the rights of those who will receive pensions in the future. In so far as we can, we should seek to safeguard their position in terms of pension parity. I will not argue the issue but Deputy Barrett made a fundamental and important point. One could read from the Bill that the present difficulties could arise in the future. The Minister should consider whether we can guard against such an eventuality by perhaps introducing a Report Stage amendment. Other Members cannot do so because of the implications of a charge on the Exchequer.
This section deals with provisions relating to staff. One of the issues which will have to be addressed – the Minister did not address it on Second or Committee Stage – is that if Blanchardstown Institute of Technology is to cater for students from more disadvantaged backgrounds than has been the rule, it is important that there be programmes to support the students after they arrive in the college. There should also be foundation courses to support their recruitment to the college and to sustain them through their first year.
The conventional ratios applied by the higher education sector to staffing for certain courses will have to be modified to make allowance for the fact that more intensive support will be required for certain students if they are to survive and successfully complete courses in the Blanchardstown institute. How will that be provided for? The Bill appears to assert that Blanchardstown institute is on a par with every other institute. The Minister said earlier, in the context of the discussion about Dublin, Waterford and Athlone, that no one college can steal a march and that the rules sanctioned by the Department of Finance and other bodies are applied relentlessly to all institutes. That approach cannot be applied to Blanchardstown if we genuinely want it to break new ground. It is important that the Minister outlines his thinking on this issue.
There is another issue in relation to staffing. There appears to be ongoing tension within this sector between permanent staff, who establish strong rights of permanency when they become permanent, and temporary staff who retain yellow pack status, as it were. How can a strong educational sector be developed with the encumbrance of that twin approach of permanent status which is almost beyond any interference and temporary status that does not allow people to develop their skills properly? A middle way will have to be developed whereby people of quality can be attracted into the regional technical colleges or institutes of technology without them being locked in with their rights only secured if they become permanent. They then become a fixture and it is difficult to maintain their freshness in terms of research and so forth. How will the Minister approach that problem?
We have, unwittingly, created a strange dichotomy between staff who have permanent status and temporary staff. It is creating friction in the system. As a result, many institutes try to expand on the basis of temporary staff and avoid giving permanency. That hampers their development. A way must be developed to facilitate the free movement of staff from the institutes of technology into jobs in the private sector without eroding their rights and which permits their return to the institutes. The pension issue is not irrelevant in that context.
Carriage of pension rights will be important if the way of the future will be, as I suspect, to attract people from industry into institutes of technology and to allow institute staff to leave the institutes and spend time in the industrial sector, perhaps returning later in their careers. It is necessary to develop salary and pension arrangements to facilitate that. That will be the way of the future. Existing arrangements for employment contracts for people within the sector are not sufficient for the type of dynamic education sector we are attempting to develop.
I am anxious to hear the Minister's response to these points.
With regard to funding and the remit of the college with regard to disadvantage, the budget provided additional funding for the first time for institutes of technology to deal with retention and the prevention of drop outs. That funding is available for Blanchardstown. It could take the form of the appointment of additional tutors, mentoring and so forth for the first year intake of students.
There is also flexibility in the Department's funding to apply certain projects or measures to given institutes if they are in a particular niche or if they have a specific remit. From the outset, we acknowledged that there will be a need for foundation courses and that there must be a strong link with the post-leaving certificate colleges in the hinterland. That is why the post-leaving certificate sector is represented on the acting board.
Considerable progress has been made with regard to permanent and temporary staff as a result of the implementation of the PCW agreement. The permanency versus temporary ratio is now 80 per cent – 80 per cent of the staff are permanent – which is a significant improvement on that which pertained heretofore. However, it is important that institutes retain flexibility in relation to part-time staff. In the colleges of the future there will be a greater percentage of modular and part-time programmes and we must not impair the capacity of institutes to respond to that evolving situation.
It is important that there be career paths for part-time and temporary staff in institutes of technology and that they can, if they wish, progress into permanent positions. The PCW has improved the situation dramatically. Unfortunately, however, as a result of the complexity of the PCW generally, the discussions on it have only been brought to a conclusion in the third level sector in the past year. It is now feeding into the process.
I welcome the fact that the PCW has resulted in progress with regard to the permanent temporary ratio. However, we need to develop a new model. The Minister is correct that a career path for temporary staff must be developed. That career path would mix teaching roles with industrial roles. If the only model is either being permanent or temporary, it is insufficient.
The Department has to be more creative in developing systems whereby institute staff can develop certain rights which they can carry with them into industry and back into the institutes if they return. The distance between the rights of temporary staff and those of permanent staff is too wide in the present arrangement. As well as increasing the rights of one and reducing the rights of the other, the development of some type of model that spans them must occur. There is no doubt that as time passes people who become career institute staff will not have the dynamism that will be required. The Department will have to require people to be involved in other activities in order to maintain their freshness.
I accept that there is financial flexibility to deal with this new concept of retention. The Minister has set aside £3 million for this purpose. However, that sum is a drop in the ocean given the size of the institutes involved. What is needed is an agreement by the Department of Finance that Blanchardstown institute will be different. There will have to be a break from the traditional models or ratios.
Has the Minister secured agreement from the Department of Finance, which ultimately has the power to block this arrangement, that the type of programmes and support to be provided in Blanchardstown will require different staffing ratios from conventional institutes? It will not be a case of one-off projects for niche operations. The Minister's description sounded nice but in the cold light of day that means little real sanction of additional support for Blanchardstown compared to other institutes which are not trying to do something as novel and important. Has he receceived any undertakings that the Department of Finance will accept different pupil-teacher ratios, for want of a better phrase, in relation to the programmes being developed in Blanchardstown?
The Government has accepted it and that is why in the budget, for the first time, specific funding was set aside for—
That is for everyone.
It gives us flexibility to deal with Blanchardstown, and other institutes of technology also need it. There is £1.5 million for retention and £1.5 million for disadvantage and there is linkage between the two in respect of Blanchardstown. To a certain extent we are entering a greenfield situation because we have asked the institutes to come forward with proposals as to how—
We are talking about £400 million worth.
The quality of the intervention is as important as the amount of money spent on it. This is not an issue of throwing money at the problem. We must be clear that the strategies with which the institutes come forward will work.
There is some evidence that increased tutoring in first year in smaller groups, in addition to lectures, could have a significant impact on helping students to stay on in college. Additional funding for counselling services in colleges could also have that impact and that would be a factor in Blanchardstown. Many students in first year in colleges may need a helping hand because of suddenly being thrown into an independent context in third level from a situation of dependency in second level. I am satisfied I have the financial flexibility to deal with those issues in Blanchardstown.
If Blanchardstown Institute of Technology devises strategies which support recruiting people from disadvantaged backgrounds, retaining them in college and making them a success, is the only pot from which it can draw the necessary funding for such strategies this £1.5 million fund? If that is the case and it is competing with institutes of technology throughout the country for that money, all of which will have equally ambitious plans which will run far beyond the capacity of the fund, Blanchardstown will not receive anything extra and the model the Minister is trying to develop will not come about. It is necessary to obtain acknowledgement from the outset from the paymasters in the Department of Finance that this is a different case and that the ratios which apply must be different from those to which the Department has become accustomed and which have become encrusted in precedence, which its officials are so good at citing.
There is a great deal of flexibility with the third level budget in terms of dealing with institutes of technology. Earlier in the debate we spoke of one college not receiving as much because of its being in competition for funding with other institutes. That does not apply in this case. The same pupil-teacher ratio does not apply as at primary level. There is general funding in terms of places, numbers in colleges, salaries of staff etc.
I am satisfied we have the sanction – for example, if the Blanchardstown Institute of Technology comes forward with innovative programmes to deal with disadvantage, it will be supported and the sanction exists for that. It took a Government decision to sanction the building of the college. The setting aside of £20 million from the technology fund also required Government sanction. In giving that sanction there was a requirement that up to 30 per cent of students would be mature and second chance students. That was part of the Government decision so the Government has already decided that. I am satisfied all the mechanisms are in place to meet the issues the Deputy raised.
Acting Chairman
We are spending an inordinate amount of time on this section.
This is very important legislation.
It is phenomenal. I did not realise its significance.
Can I infer from what the Minister said that, if other institutes of technology come forward with similar innovative projects, funding will be made available? If that is so, does the Minister envisage that some of the institutes of technology, when they see what is happening in Blanchardstown, will try to jump on the bandwagon, so to speak, causing a huge rise in demand for this type of funding and possibly resulting in resources not being available to satisfy the demand?
Acting Chairman
I see potential for going off on tangents.
I would have no problem with a replication of the best model of practice if Blanchardstown established one. It is not jumping on the bandwagon.
The tuition in institutes such as Blanchardstown, which can develop courses to give people skills for employment, often involves people from the private sector, as mentioned by my colleague, Deputy Richard Bruton. Full-time staff are needed, as is administrative back-up. One aspect of our system – there is nothing in the section to suggest it is different – is that everything is geared towards the assumption that people involved in teaching—
There is misunderstanding about the purpose of the section. It is not concerned with the staffing of the institute as such. We have established a company to run the college in the interim. Staff for Blanchardstown are employed under the auspices of the Institute of Technology, Tallaght. The section provides that when they transfer to Blanchardstown they will have the same pension rights and other rights. That is the purpose of the section, it is not concerned with anything else.
My point is related to staffing. It may be necessary to employ people in the private sector with certain skills which are deemed necessary to be passed on to students in third level colleges such as Blanchardstown, but these people may not be interested in a permanent position. The world is changing and people in future may work in different places on different days of the week. These people are employed in a temporary capacity. To ensure they continue to apply their skills, they need secure pensions, for example. There is no provision whereby an institute of technology can pay such a person for a certain number of hours' lecturing and, in addition, contribute to that person's pension fund. While that person will devote a certain number of hours, they must think of their future. There is no flexibility to make it worth their while to continue lecturing one or two days per week, passing on their essential skills to students, by ensuring they receive remuneration which includes contributions to their pension.
That is not provided for at present.
No, and neither is anything provided in this section.
No.
That is a terrible shame. The Minister should consider the matter. I see this happening in universities and it is now advancing into diploma courses.
Acting Chairman
The Deputy is successfully broadening the debate.
Students in diploma courses find that lecturers employed to deal with specific aspects of the course can leave after two months. Another person is then employed, with the result that there is no continuity and students become frustrated. In many cases that is because the tuition is of a bad quality, but also because lecturers are changing. These are not permanent academic staff but people employed because they have various skills, be it in sports management, psychology or whatever, which form part of the course. Such people lecture for a while but then drift away because it is a hobby. Good people are needed.We will be more successful if we can find a way to include in the remuneration package offered to them, a means to fund their personal pensions.
Section 10 provides for an exemption from capital gains tax. I wish to clarify what is being provided. Do I take it that the previous company will be solely exempt from capital gains tax? How stands the institute in respect of the commercial exploitation of some of its research work? Will the gains from the commercialisation of research ideas, which are part of the remit of the institutes of technology, also enjoy the exemption from capital gains tax?
This section is designed to deal with what will happen in the immediate future. It involves the transfer of the assets and properties of the existing company to the institute.
Will the activities of the institute be taxable in respect of the commercialisation of its research work?
The institute can apply in its own time for charitable status. I will send a note to the Deputy on that matter.
Despite the Minister's statement, I am baffled by the necessity for this section. I take it this is merely a measure to end the affairs of the existing company. Provision was made in the 1992 Act in respect of the establishment of campus companies where liability for projects that go awry will not rest with the governing body but with the company involved. I understood the company in this instance is a non-profit making organisation and was merely doing an interim job in terms of ensuring that the institute gets up and running. How can an organisation of that sort be liable for capital gains tax?
The Minister clarified the other point of concern to me, namely, that existing institutes of technology are not affected by capital gains tax. If one considers the recent situation in Waterford when the college purchased a piece of land, some of which had to be disposed of, do I understand that any gain from the sale would not be subject to capital gains tax and that the money is to be passed on to the Department?
Yes.
How then can a company which is effectively performing a public function at the Minister's behest be subject to capital gains tax? Is there not a need for the Minister for Education and Science to urge the Minister for Finance, by means of the next Finance Bill, to end the difficulties which may arise in this area?
Difficulties will not arise. As is the case with other Bills, this section is as a result of the parliamentary draftsman endeavouring "to be sure, to be sure".
If there is a realizable gain it will be taxable.
The answer is that the company will not be liable.
In any event, there will not be any capital gain that is taxable. It is baffling that a company performing a public function at the behest of the Minister can be liable to capital gains tax. Is it the Minister's advice that any profit made by the company on the disposal of land or any other asset could be subject to capital gains tax? If that is not the position, what is the need for the section?
It could be subject to capital gains tax.
If I make a gift to Deputy O'Shea and it is transferred to him as a gift at its market value, the difference between the price at which I acquired it and that at which I gave it to the Deputy is a taxable capital gain on my part. Therefore, the company which transfers the asset to the institute will be liable for any capital gain it realises even though that transfer was in the form of a gift. That is where the taxable gain arises and that is why the provision is necessary. However, I presume the institute will not be liable because it will qualify for charitable status.
I move amendment No. 8:
In page 8, between lines 22 and 23, to insert the following subsection:
"(4) The Dún Laoghaire Vocational Education Committee shall have an administrative area which is identical to the administrative area of the council of the county of Dún Laoghaire-Rathdown.".
Somewhat of an anomalous situation is developing in respect of vocational education committees and local authorities. The reform of local authorities in Dublin established four authorities: Dún Laoghaire-Rathdown, South Dublin, Fingal and Dublin Corporation. However, there are only three vocational education committees. One of these, Dún Laoghaire Vocational Education Committee remains but its remit continues to be confined to the traditional area of the Dún Laoghaire borough. The new Dún Laoghaire local authority has a wider geographical area which covers the Dún Laoghaire borough and Rathdown. Two of the world's leading experts on Dún Laoghaire-Rathdown are present in the Chamber and they would be better able to explain the situation.
An anomaly exists and the amendment provides a mechanism for its correction. The amendment will ensure that, in future, the functional area of Dún Laoghaire VEC will coincide with that of the Dún Laoghaire-Rathdown local authority. Amendment No. 9 in the name of Deputy O'Shea is perhaps more eloquent in that it advocates a change in the title of the VEC to "Dún Laoghaire-Rathdown Vocational Education Committee". It is time to introduce rationality to this matter because there is no point in the local authority overseeing one catchment area while two vocational education committees are obliged to operate within it. That does not make sense and the amendment offers a good opportunity resolve this matter.
Acting Chairman
I must point out that amendments Nos. 8 and 9 are related and may be taken together by agreement. Is that agreed? Agreed.
I support the amendments in the names of Deputies Bruton and O'Shea. I spoke about this matter on Second Stage. I am currently a member of Dún Laoghaire VEC. There is an AGM of Dún Laoghaire-Rathdown County Council on Friday and it remains to be seen if my tenure on the VEC will continue.
The best of luck to the Deputy.
As Deputy Bruton stated, there is an anomaly in that the existing Dún Laoghaire VEC covers only the area of the old Dún Laoghaire borough. Following the establishment of Dún Laoghaire-Rathdown County Council, it was expected that consequential legislation would be introduced to establish vocational education committees with administrative areas which coincided with those of the new local authorities in Dublin. That legislation has been long promised but it has not been introduced.
I am aware that Dún Laoghaire VEC made a case to the Minister that a Dún Laoghaire-Rathdown VEC should be appointed following this year's local elections. For a time it appeared the Minister intended to accede to the proposal for a separate VEC for Dún Laoghaire-Rathdown and that this would be appointed by Dún Laoghaire-Rathdown County Council. For some reason, that proposal appears to have disappeared.
The situation in which we now find ourselves is ridiculous. On Friday, Dún Laoghaire-Rathdown County Council will appoint a VEC to deal with half of its administrative area. The schools in Dundrum and Stillorgan, which are in the Dún Laoghaire-Rathdown county, will be outside that VEC. They will be part of the old County Dublin VEC. In addition, the areas around Dún Laoghaire, such as Cabinteely, parts of Ballybrack and Shankill, which are part of the greater Dún Laoghaire area, will remain in the County Dublin VEC area.
A student applying for a scholarship who is living in Shankill would not be entitled to apply to Dún Laoghaire VEC. He or she would have to apply to the County Dublin VEC, which is based in Tallaght. A range of anomalies are created by this legislation, but we have an ideal opportunity to address them. These vocational education committees are about to be appointed and this is an ideal opportunity for the Minister to regularise the position in relation to the Dún Laoghaire-Rathdown area and to legislate for the establishment of a Dún Laoghaire-Rathdown VEC. It would be a simple matter to do that. The area is quite well known. There are two sets of schools, the schools in Dundrum and Stillorgan, which would become part of the Dún Laoghaire-Rathdown VEC area. It would make sense if the VEC area coincided with the county area. That is the purpose of these amendments, otherwise a VEC will be appointed which will cover only half of the county area and Dún Laoghaire-Rathdown will be entitled to appoint a few members to the county VEC to look after the rest of the area.
This is the ideal time to tidy up a problem which has been outstanding for some time. I asked the Minister on Second Stage to do this on Committee Stage. I must express some disappointment that he did not table an amendment on Committee Stage to give effect to that. I ask him, therefore, to accept the amendments tabled by Deputies Bruton and O'Shea.
I support the Fine Gael amendment in the name of Deputy Bruton and the Labour Party amendment in the name of Deputy O'Shea. I had the pleasure of serving on the County Dublin VEC because I was a member of Dublin County Council, not Dún Laoghaire Borough. The boundaries in the area I represent are so crazy that they are unbelievable. I lived in Arnold Park at one stage, which has 100 houses and the estate is designed in a horseshoe shape. An imaginary line runs through it, which was the boundary between what was then Dún Laoghaire Corporation and Dublin County Council. This matter poses a problem not only for a student living in Shankill, a student living on one side of Arnold Park must traipse off to Tallaght to apply for a grant to a third level college while a student who lives two doors away must apply to Dún Laoghaire VEC for such a grant. People do not understand why that is the case.
To add insult to injury – the Minister had nothing to do with this – whoever drew up the boundary lines for the local elections reverted back in some areas to the old imaginary line of Dún Laoghaire Borough. We now have a ridiculous imaginary line running through Arnold Park and other places, where one side of a road is in the Dún Laoghaire electoral area and the other side in the Ballybrack electoral area.
The problem posed by the boundaries extends beyond students who wish to apply for grants or second level education, it also relates to adult education programmes. Dún Laoghaire VEC manages adult education programmes for people who live in houses on part of a road and people in Tallaght, who at this stage do not have a clue about where the boundary starts or finishes, manage such programmes for people who live in houses on another part of the same road.
Dún Laoghaire-Rathdown County Council has ten Dáil seats, the equivalent of two constituencies in Donegal, which has six Dáil seats—
Another example is Cork city.
It has only one VEC.
—and Sligo-Leitrim, which has four Dáil seats. Three counties have the same number of seats as Dún Laoghaire council area and we are talking about having two vocational education committees where there should be only one. Can the Minister imagine Donegal, Sligo or Leitrim not having a county VEC? Galway has nine Dáil seats, one less than Dún Laoghaire-Rathdown. We are covering a huge area; an area with ten Dáil seats.
In Deputy Gilmore's Second Stage contribution he pointed out that the chief executive of the Dún Laoghaire VEC is retiring this year. This is the ideal opportunity to clarify the situation and let the County Dublin VEC look after the South Dublin County Council and Fingal areas because they are close to the centre of the administration of that VEC, which is in Tallaght. We have the necessary structures in Dún Laoghaire. It is not a question of developing a new bureaucracy. All that needs to be done is to reallocate the activities from the County Dublin VEC to the Dún Laoghaire VEC.
If we allow this legislation to go through, we would be laughed at. We are talking about Dún Laoghaire having 14 members and the council nominating people to County Dublin VEC. That is a joke. The Minister was prepared to listen to reasonable arguments I made during Committee Stage debates on education Bills, and I ask him at this stage not to allow this foolish situation to continue.
As the Minster is aware, a great deal of good work can be done by vocational education committees. We are talking about a natural local authority area and vocational education committees providing assistance to youth clubs and sporting clubs, the development of adult education programmes and the appointment of representatives to boards of management of community schools. If this matter is not addressed, we will have a ridiculous situation where, for example, the County Dublin VEC would nominate representatives to the board of management of the Cabinteely community school. That does not make sense.
I support these amendments and I hope the Minister will accept the valid points made by Members in support of them. We are not making a special plea, what the amendments seek is common sense. I hope we can leave the Chamber this evening with the knowledge that there will be a new Dún Laoghaire-Rathdown VEC, particularly as we are about to appoint members to the Dún Laoghaire VEC in the next few days. If that cannot be done in the next few days, perhaps it could be done in the next few months. It would be good if that was provided for in the legislation and appropriate arrangements made.
I support these two amendments. If they are accepted by the Minister, that may cause a problem in terms of the negotiations that are ongoing regarding the control of Dún Laoghaire-Rathdown VEC in terms of how VEC seats will be divvied out.
I am getting worried about the Deputy, he is straying all over the country tonight.
He is one of our national politicians.
He is.
I am sure everyone accepts this is a ludicrous situation and it is making a joke of local government. If this were to apply throughout the country, I might be a member of Westmeath VEC because my part of the constituency is served by Westmeath and second level students or post leaving certificate students in that area are served by Athlone and Westmeath VEC. That would make a case for my having an opportunity to be a member of Westmeath VEC.
I hope we will debate the Youth Work (Amendment) Bill later this year and the role vocational education committees will play in relation to it. We are still awaiting that legislation. There will be a role for vocational education committees in that legislation and we will have one county council, two vocational education committees and appointments being made willy-nilly. This is the ideal opportunity to rectify this matter.
At the risk of being accused by the Minister of rambling all over the country, I will make a short contribution. As someone who is not a resident or representative of the constituency we are discussing, I think the arguments made by Deputies are sensible. Their aim is to give better and more efficient service to those availing of vocational education committees. It seems that a Dún Laoghaire-Rathdown VEC in co-existence with a county council – in other words, their functional areas would be identical – has to benefit the people living in that area. Sometimes an opportunity arises to do the right thing, something for which people have waited a long time. I do not see why the Minister cannot accept these amendments, or submit his own on Report Stage. The Minister should see the sense in accepting the principle of these amendments. Obviously, the time to act is when the new vocational education committees are appointed. I do not know what the Minister's response will be but I hope it is a sensible one. We are exhorting the Minister a little, so as to help him along. As Deputy Barrett said, the Minister can be quite constructive at times. This is his opportunity, at this late hour, to really shine.
I met with Dún Laoghaire VEC about six months ago and I wondered what it was about. The first question I was asked was whether it would continue as a VEC or was I going to abolish it. That was its main concern as it was thought it would be abolished by the last Government. I have given a new vote of confidence in the VEC structure.
That was before the rainbow coalition.
It was not.
It was before Deputy Gilmore and I arrived on the scene.
I accept the Deputy's influence was benign. The VEC is still in existence and will continue that way. The purpose of this section is to resolve a difficulty that is immediately created for the structure in the Dublin-Dún Laoghaire region by the Local Government Act, 1992. Effectively, as the law stands, while County Dublin VEC and Dún Laoghaire VEC as statutory corporate bodies were retained after the enactment of that Act, the law provides no mechanism to appoint members to the committees. To deal with this issue, the law will require amendment, as proposed in section 11.
A vocational education (amendment) Bill is in preparation in my Department and I intend to publish it before the end of this year. The wider issue of the structure of vocational education in Dublin-Dún Laoghaire will be addressed in that Bill and the issue will be resolved. Those issues have been outlined by Deputies who have articulated a great deal of common sense. However, it is important that there is consultation with the councils involved and other interested parties prior to amending legislation.
The issues to be considered include whether to divide the existing County Dublin VEC in two to accommodate the counties of Fingal and south Dublin and the functional areas of the vocational education committees. I have an open mind on these issues. However, the effect of the Deputies' amendments would be to pre-empt the outcome of the consultations that are taking place and will take place. I propose, as provided for in the Bill, to address the immediate problem associated with the composition of County Dublin VEC and Dún Laoghaire VEC but to make no change in the status quo, pending the enactment of the vocational education (amendment) Bill. In this way the immediate problem of appointing committees can be resolved. The areas concerned will have fully functioning committees and the wider issues will be fully addressed in the next few months.
There will be wider implications if the amendments are accepted. We would be transferring staff from one employer to another and transferring schools etc., all of which necessitates considerable change. The new Bill will resolve this issue once and for all. The contributions of Deputies, particularly those from the Dún Laoghaire area, will be taken on board and we invite them to consult with us in terms of resolving the issues. They will be resolved and the new Bill is the appropriate context in which to do that. In this Bill we are endeavouring to allow for the immediate appointments of committees given the difficulties arising from the deficiencies of previous Acts.
I note what the Minister said. Unfortunately, however, we do not have a guarantee that the Minister will not be on his way to Brussels next week as a Commissioner or there could be a reshuffle and he could become Minister for Finance. When dealing with legislation those of us who feel strongly about certain issues want some guarantees. I am not suggesting that I do not accept the word of the Minister. However, circumstances change and the Minister may even be on the Opposition benches by then – that is a matter for another day.
While there may be an immediate problem, that matter can be overcome by inserting a provision in this Bill that the arrangements being put in place will only last for a period of two years, pending the setting up of a Dún Laoghaire-Rathdown VEC. That gives us a guarantee in this Bill without interfering with the immediate problem of the selection of personnel under the existing arrangements. It would also give us a legislative guarantee that this will happen.
If the Minister is saying it will be impossible to establish that VEC in the next week or month, legislative provision can be made in this section which will make it clear the arrangements being proposed by the Minister are for a period of 12 or 18 months or two years and that the establishment of Dún Laoghaire-Rathdown VEC will commence after that. This gives us a guarantee and allows the Minister expand on the nitty-gritty of the transfer of assets from one VEC to another in the vocational education (amendment) Bill. At least we could tell our constituents that the newly elected council is carrying out an interim arrangement pending the enactment of future legislation. There will be no doubt because it will be legislated for.
If it is not achieved, the Minister of the day will have to come to the House and extend the period or vote through the continuation of the two vocational education committees. At least we would leave here with the guarantee of a Dún Laoghaire-Rathdown VEC within a period of at least two years. I ask the Minister, if he cannot do it immediately, to at least give us that legislative guarantee by accepting my amendment or one similar to it on Committee or Report Stages.
With respect to the Minister, he is making a serious mistake on this matter. This has been an issue since 1993 when the new county councils were established. It was anticipated at that time – there was no secret about it – that the logic of the local government reorganisation in Dublin was that there would be vocational education committees which would correspond to the new counties. It was not done at the time in the legislation because, even back then, there was talk about a vocational education Bill being published. While the Minister now says it will be published before Christmas—
That was shelved by the last Government when the regional education boards proposal was made.
The Minister is wrong. The last Government, as I recall it, had started the process of reorganising vocational education committees.
It had not.
For example—
The Deputy means the dissolution of them, not the reorganisation of them.
—the amalgamation of the town vocational education committees with the county vocational education committees. I thought it was significant that the Minister referred in his response to the issues that would arise in the creation of two vocational education committees in Fingal and South Dublin in the old Dublin county area. The proposed amendment does not affect that; in fact, it remains silent on what should happen in Fingal and South Dublin. All we are saying is that that portion of the County Dublin VEC which serves the Dún Laoghaire-Rathdown area should become part of a wider Dún Laoghaire-Rathdown VEC. As Deputy Barrett pointed out earlier, all that is required is for that to be done. There is already a headquarters and a chief executive officer. As Deputy Barrett pointed out, the current chief executive officer is about to retire, and I repeat the tributes I paid to him on Second Stage, but a new chief executive officer is about to be appointed. It can be made quite clear that the new chief executive officer is being appointed to the Dún Laoghaire-Rathdown VEC, rather than to the Dún Laoghaire VEC.
The problem the Minister will have if he leaves this to the new legislation is that, on Friday, a new Dún Laoghaire VEC will be appointed and new members will be appointed to the County Dublin VEC. That is what is listed on our agenda for the county council meeting on Friday. If the Minister is still in office at the turn of the year, he will introduce a vocational education Bill which will provide for some possible reorganisation of the Dublin vocational education committees. If he decides at that stage to constitute a Dún Laoghaire-Rathdown VEC, he then has the problem that there is already in place a Dún Laoghaire VEC, which will have been appointed six months previously by the county council; a new chief executive officer will have been appointed to the Dún Laoghaire VEC, rather than to the Dún Laoghaire-Rathdown area; and a Dublin county VEC will have been appointed for the entire Dublin county area. He will find himself in a situation where there will automatically be interests who will work against the reorganisation he is talking about.
The reality is that it will be five years before this reorganisation will take effect because, once a Dún Laoghaire VEC and a Dublin county VEC is in place, they will remain in place for the full five year term of the local authority. It will be five years time before this long overdue—
It will not be.
—rationalisation of the VEC set-up in Dún Laoghaire will take effect. The Minister should seize the moment and do it now.
The Minister's amendment, with which we will be dealing next, appears to provide for some kind of an interregnum. It appears it is not anticipated that the new vocational education committees will be in operation straight away. The Minister's amendment is allowing for some kind of carry over of the existing committees, pending their replacement. Since there is to be some sort of interregnum anyway, why not allow that interregnum to take place and put in place the Dún Laoghaire-Rathdown arrangement for which we have argued?
I am willing to be reasonable here but some of the comments which have been made are not tenable or valid. The purpose of the next amendment is to provide that the existing vocational education committees stay in operation until the new Act is enacted. We have said consistently that once the new Act is in place, the committees that have been appointed now will cease to exist and new committees will be appointed.
I would be prepared to go along with Deputy Barrett's suggestion, if the House would agree to the following verbal amendment:
In page 8, between lines 32 and 33, to insert the following subsection:
"(7) This section shall cease to have effect two years after the commencement of this Act.".
We want to do it faster than that. However, that amendment takes on board the Deputy's valid point that we do not have any guarantees in life and would force the issue if nothing happened in the intervening period. I wish to respond to the points made by Deputy Barrett, which I thought were valid. It is not what Deputies want but I would prefer to make that verbal amendment, if that is agreed.
If it was the intention of the House to complete the Bill tonight, a verbal amendment would be the right way to proceed. However, if the House is not going to deal with Report Stage tonight, the Chair would prefer if the Minister submitted his amendment on Report Stage. However, that does not mean we cannot—
We are making very good progress on the Bill.
I do not know whether the House is aware that the Adjournment is at 10.30 p.m. However, if the House wishes to complete the Bill tonight, we can accept the following amendment:
In page 8, between lines 32 and 33, to insert the following subsection:
"(7) This section shall cease to have effect two years after the commencement of this Act.".
I want to be clear about what that means. Does it mean that, in two years' time, the VEC appointed by Dún Laoghaire-Rathdown County Council on Friday will cease to exist? Will the county VEC, which is appointed by the three local authorities, also cease to exist? I think I know where the Minister is—
The Deputy's point is valid. It means it would have to be legislated for again. Deputy Barrett's point is that this could go on forever. I am giving a commitment tonight that we will have this sorted out in six months, in that we will have a new Act. Deputy Barrett's response was that I may not be around, as there are no guarantees in life. In order to meet that valid point, this is, in essence, forcing the Oireachtas to deal with this again if it has not dealt with it within two years, as it should be. We are all agreed it should be dealt with. We are putting in this safeguard to prevent it being put on the long finger. It will act as a catalyst which will force the legislature to deal with the issue.
Does it mean we could end up without a VEC in two years' time?
No, the committee would remain in place as a statutory body but there would be no membership.
Like Deputy Gilmore, I would prefer if either amendment were accepted. However, half a loaf is better than no bread and we will have made some progress if I get a guarantee written into the legislation that this matter will be resolved, at the very latest, within two years. We can then answer those who ask what is going on here. Given that the Minister has put on the record that he hopes to have this resolved within six or 12 months, it is reasonable to allow a two year period for all the other bits and pieces that have to be done. It will force whoever is Minister for Education at that time to deal with the issue.
I move amendment No. 10:
In page 8, between lines 30 and 31, to insert the following subsections:
"(6) The persons holding office as members of the County Dublin Vocational Education Committee and the Dún Laoghaire Vocational Education Committee by virtue of section 19 of the Local Government (Dublin) Act, 1993, shall continue to hold office until the commencement of the term of office of the persons elected in accordance with this section.
(7) The term of office of the persons elected to be members of the County Dublin Vocational Education Committee in accordance with this section shall commence on the 7th day after the last day on which an election of persons for that purpose is held.
(8) The term of office of the persons elected to be members of the Dún Laoghaire Vocational Education Committee in accordance with this section shall commence on the 7th day after the day on which an election of persons for that purpose is held.".
This is a technical amendment. It seeks to address a difficulty which arises from the fact that County Dublin VEC and Dún Laoghaire VEC remain in place, although the county council which placed them has been dissolved. The VEC Acts provide that the term of office of the members of the committee ends after local elections at the first annual meeting of the council which elected them. As the council in this case no longer exists, this amendment removes any doubt about the transition from the present committees to the new committees.
The annual meeting of Dún Laoghaire-Rathdown County Council is due to take place on Friday morning next. Will it be in a position to appoint a Dún Laoghaire VEC and two members to the County Dublin VEC which is intended? What is the status of this legislation? Is this legislation going to be through before Friday?
It will not be.
It will not be, until we get this law enacted. The appointment of a Dún Laoghaire VEC is on the agenda for Friday.
It will have to be deferred.
Until when?
Until we get this Bill through.
How long does the Minister anticipate that will be?
If we get it through tonight I will have it in the Seanad next week and it will go through then.
I will not delay it any longer.
I move amendment No. 10a:
In page 8, between lines 32 and 33, to insert the following subsection:
"(7) This section shall cease to have effect two years after the commencement of this Act.".
I move amendment No. 11:
In page 8, before section 12, to insert the following new section:
12.– (i) In this section–
"the Act of 1925" means the Local Government Act, 1925;
"the relevant restriction" means the restriction on holding any office of profit or being employed for remuneration contained in section 70(1) of the Act of 1925 (as applied by section 26 of the Act of 1930) and continued in operation by section 21(5) of the Local Government Act, 1955.
(2) The relevant restriction shall have effect as if the words in section 70(1) of the Act of 1925 ", or of any other local authority whose functional area is, or is situate in, the same county or county borough as that of or within which is situate the functional area of such local authority or in any county or county borough adjoining to that county or county borough' were deleted.".
This is an amendment aimed at removing what I consider to be an excessive restriction of the freedom of employees of vocational education committees to engage in political activity in their local areas. At present an employee of a vocational education committee is statutorily debarred from being a member of that committee. He or she is also debarred from employment with another local authority or another VEC the functional area of which is situated in the same county or county borough, or in an adjoining county or county borough, as the committee. I consider this second restriction is too broad and an infringement of the democratic rights of the staff. In so far as the restriction applies to membership of and employment by the same committee, it is reasonable. However, I am satisfied that there is no compelling rationale in preventing employees of vocational education committees from becoming members of local authorities in the same or in an adjoining county or county borough. Accordingly, this amendment will allow employees of vocational education committees to become members of local authorities, including vocational education committees in the same or adjoining county or county borough. The restriction in respect of membership of and employment by the same VEC will continue to apply.
I received representations from all parties in the House on this. This is a reasonable resolution of the issues that arose.
I move amendment No. 12:
In page 8, before section 12, to insert the following new section:
"12.–Vocational Education Committees shall include in their membership representatives of parents and of teaching and non-teaching staff in accordance with regulations made by the Minister for the purpose of this section.".
I am sure the Minister will agree to this because I know he is anxious that parents and teaching and non-teaching staff would have representation on the vocational education committees.
We intend in the forthcoming Bill to make provision for this. In the meantime I have communicated with all county and city managers to put this in place.
It is not ideal, but in view of the position I will withdraw my amendment.
I move amendment No. 13:
In page 8, after line 37, to insert the following subsection:
"(3) The Vocational Education Acts, 1930 to 1993, and section 11 may be cited together as the Vocational Education Acts, 1930 to 1999, and shall be construed together as one.".