Topical Issue Debate

Bank Branch Closures

Deputy Patrick O'Donovan

I thank the Ceann Comhairle for selecting this matter for debate. As we have known for a while, Allied Irish Banks is going through a restructuring programme. For a while, it has flagged the fact that the programme would involve some branch closures. However, the number of branch closures announced on 27 July in a press statement, which was really about the fact that the bank was putting up its variable rates for mortgages, came as a major shock to very many communities. Sixty-seven branches and sub-offices are to close. The counties facing the largest number of closures are Donegal and Limerick. In my area, outside Limerick city, Glin, Foynes, Dromcolliher, Hospital, Doon and Croom are affected. For a number of years, Allied Irish Banks has serviced those communities, both through the old Munster and Leinster Bank and, more recently, under Allied Irish Banks plc. Throughout the bad days of the recent past, the customers in the communities, which are predominantly rural, have remained extremely loyal to Allied Irish Banks.

I understand from having spoken to the Department of Finance during the summer that the Minister is prohibited from getting involved in commercial day-to-day decisions. However, the Government and the Oireachtas in particular are obliged to represent the people who elected them, particularly in respect of decisions made by banks that are essentially being kept open courtesy of the taxpayer.

It has been stated that the closure of a bank branch will not make that much difference. On the day of the announcement, Allied Irish Banks referred to the banks in Stoneybatter and Capel Street, implying that one bank was around the corner from the other. In the area that I represent, a return journey to and from a bank in order to carry out commercial activities may be up to 40 miles. This is in the absence of night safes, automated teller machines and a commercial agreement between Allied Irish Banks and An Post, which has been flagged as the body to provide a banking facility in the future. I understand the Government's predicament and position on this matter but An Post is a semi-State company and Allied Irish Banks has still not concluded an agreement in respect of the individual communities affected.

We do not know whether the post office network will be logistically capable of providing banking facilities or whether postmasters, AIB staff or, most importantly, AIB customers have been negotiated with. As the Minister of State knows, carrying out any kind of commercial activity in rural communities, be it a shop or manufacturing business, is difficult. This includes pensioners who are constantly being told to lodge their payments directly into their banks. AIB is pulling out of tracts of rural Ireland without any regard to geographical impediments or the level of service remaining behind. Communities will be left picking up the pieces with their local post offices.

The manner in which the announcement was made left much to be desired. It did not say much. I was disappointed for local bank staff who were left to deal with the likes of myself and others in the communities. It was announced in the middle of the summer when the Dáil was in recess in the middle of a press release that focused primarily on a mortgage interest hike so that the national media would latch onto that issue and forget about the rural bank network.

Minister of State at the Department of Finance (Deputy Brian Hayes)

As the Deputy will be aware and notwithstanding the fact that the State is a significant shareholder in AIB, the Government must ensure that the bank is run on a commercial, cost-effective and independent basis to ensure the value of the bank as an asset to the State, as per the memorandum on economic and financial policies agreed with the European Commission, the European Central Bank and the International Monetary Fund. The Deputy recognised this fact in the course of his contribution. A relationship framework has been specified that defines the nature of the relationship between the Minister for Finance and the bank. This framework stipulates that the Minister has no role in the commercial decisions of the bank, with these decisions remaining the responsibility of the board and management of the institution.

As the Government has stated previously, the Deputy will appreciate that it is an inevitable but unfortunate consequence of the necessary restructuring and return to viability of the banking system that branches in certain towns and villages across the country will be closed. The Government appreciates that the branch closures will have an impact on certain towns and villages, but the Department has been informed by AIB that the latter is working closely with its customers to ensure that the disruption is minimised and to provide a range of alternative banking options, such as the use of local post offices and mobile banking facilities, to affected customers.

As part of AIB's restructuring plan to return itself to profitability and reduce dependence on State support, significant cost reductions will be required in the coming years. In this regard, AIB announced its branch rationalisation programme in July of this year. The bank's branch overhaul will include a combination of six amalgamations, 16 full branch closures and 45 sub-office closures across the country. In total, 67 locations will be impacted, equating to approximately 27% of the bank's branch network. It is worth noting that AIB will still have approximately 200 branches in Ireland post rationalisation, coupled with an additional 80 EBS outlets.

Nevertheless, to mitigate the impact of the branch closures on customers, AIB intends to strengthen its long-standing relationship with An Post. It is also launching a new mobile bank service to provide certain banking services to customers in remote locations. The mobile service will allow customers to make lodgements and withdrawals, pay bills and order foreign currency.

Currently, AIB banking services are available in 1,100 An Post outlets nationwide. The current services at any An Post outlet allows personal and business AIB customers to make cash lodgements, avail of cash withdrawals of up to €600 per day, pay their credit cards bill and use any of An Post's own-brand services, including bill payments, postal drafts and foreign currency. In addition, AIB plans to build on this successful relationship with An Post and has arranged for additional banking facilities to be available in more than 90 selected outlets. AIB and An Post management are working closely together at local, regional and national level to ensure the successful launch of this enhanced service and An Post staff will be fully trained to offer the new service in advance of the branch closure dates.

As part of the closure process, the bank is engaging extensively with customers, businesses and community groups in affected areas to ensure an adequate understanding of the rationalisation process and is endeavouring to keep all stakeholders fully informed to minimise any inconvenience.

Deputy Patrick O'Donovan

I thank the Minister of State and appreciate his reply. Limerick has been disproportionately affected by this decision. No other county that AIB has left has a comparable geographical make-up. I must pay tribute to local management and staff, which have been engaging with people.

It is a pity that AIB did not consider the implications before making its announcement. There was no engagement with An Post at local level. To my knowledge, most of the post offices had not been visited by AIB prior to the announcement. The announcement was made without examining logistical tolerances or determining whether the decision would be manageable. The affected communities saw no engagement.

As the Minister of State knows, the region from Limerick to Listowel on the Shannon Estuary, an area that includes the country's largest deep water port, has been deprived of an AIB presence. South-west Limerick from Newcastle West to Mallow and the area from Doon to Tipperary are large regions with isolated communities and have been representative of loyal AIB customers, given the fact that AIB was the only bank with a presence therein. With the exception of Croom, the bank is not closing branches in any town where it must face competition. Both this decision and the manner in which the closures were announced were cynical. It is a pity that the bank is fixated on maintaining its timeframe without engaging with communities properly despite the fact that those communities remained loyal to it at a time when it was going to the wall.

The State is the bank's largest shareholder and I understand the commercial sensitivities and the fact that the Minister's hands are tied. However, it behoves the Oireachtas to tell AIB that its loyal customers and staff of many years were shabbily treated by the manner in which the announcement was made. Will the Department of Finance let the bank's chief executive officer know of the considerable dissatisfaction within political circles regarding how the bank has dealt with this matter? Were it not for the taxpayers keeping AIB and the other banks' doors open, we would not have a banking system. That AIB is closing the door and turning the key, in some cases after more than 100 years, says a great deal about the type of service it will provide loyal customers in future.

Deputy Brian Hayes

The Deputy made a number of valid points. Having raised the matter in public, it falls on AIB to reply to him directly, as it has responsibility for the rationalisation programme that has been announced. The Deputy expressed forcefully the local opinion of some of the decisions that have been taken. I understand that where it has been decided to close a branch or part of a branch, a branch in another location will take on that business. Given the fact that the Deputy has expressed in public his opinion that this has been done in a ham-fisted way, the AIB has a responsibility to reply.

I wish to raise two points. If there is to be a smaller banking system, it is inevitable that branches will be closed. Our banking system grew too large and, as I am sure Deputy O'Donovan agrees, relied on a dysfunctional model. Many of the people paying the price for that in the form of rationalisations are loyal customers and workers.

As I am sure the Deputy appreciates, the banking industry has changed dramatically. My understanding is that only one in ten customer transactions are completed over branch counters. The remaining 90% of transactions are conducted online or via mobile telephones.

I know AIB sub-office locations carry out an average of 20% of transactions carried out in AIB branches, so although it is not a major amount, I appreciate it is significant in the relevant areas. My understanding is that the bank now has 700,000 customers actively using Internet and telephone banking, with approximately 6.5 million log-ins per month. The banking industry has changed dramatically and it is inevitable in such circumstances that there will be rationalisation. How that is managed is a matter for the bank and I agree that the dialogue it has with customers, stakeholders and communities is absolutely crucial.

If something has happened that is untoward, it is in the first instance a matter for AIB management. If a more comprehensive reply can be given in terms of a better configuration of service in the counties where there is a specific need, it is a matter for the bank. If the Department is to indicate anything to the bank in public, it would be that the stakeholders must be understood in the configuration of a new service.

We are entering a totally new world with the banking system arising from the Government's actions regarding bank recapitalisation and the pillar bank structure. That requires a smaller banking system, and the Deputy is aware this was mentioned in our election manifesto. It is inevitable that events such as this will happen but they must be managed and done in a sensitive way. I agree with the Deputy in that the bank has a responsibility to those communities and the taxpayer to do this.

Child Protection Issues

Deputy Derek Nolan

I wish to raise the matter of the report produced this week by the Irish Refugee Council, entitled State Sanctioned Child Poverty and Exclusion, which deals with children of asylum seekers in direct provision centres. The report was written by Samantha Arnold and is valuable because it provides an analysis of the difficulties faced by these children and their families. It is particularly appropriate that the report should issue on the day of the decision to hold a children's rights referendum and that we should discuss it in this House the day the wording of the constitutional amendment is published.

Of the 5,098 residents in direct provision centres, over a third are children who spend a significant proportion of their childhood in direct provision accommodation. I have raised the issue of direct provision accommodation in the House before and on that occasion I instanced the experiences of those whom I personally know and some of whom I would consider friends. This report is more focused, and in many cases, shocking. It details reports of poor accommodation, overcrowding, malnutrition, poverty and educational exclusion, among others, amounting to a breach of these children's human rights. Alongside this report, the special rapporteur on children, Mr. Geoffrey Shannon, in his 2012 report highlighted the real risk of child abuse in direct provision centres, where single parents are required to share with strangers and where families with teenage children of opposite gender are required to share one room.

Many of the recommendations in this report are practical and achievable. I will read some of them into the record as it would be a wise exercise. One recommendation is to ensure that accommodation centres are in a good condition, with heating, hot water and cleanliness guaranteed. Other recommendations include children having access to private toilet facilities, families having adequate space and parents having rooms separate from their children; the provision of play and homework space for children; and that cultural and religious needs should be considered in consultation with families before they are dispersed throughout the country.

These recommendations are an indication that the basic and fundamental standards must be adhered to in order to protect children. With regard to dispersal, there is a direct accommodation centre in my constituency of Galway West - Lisbrook House - which received notice approximately two weeks ago by means of letter that the accommodation centre would close and the families would be moved by the end of the month. The correspondence took no cognisance of the fact that the children had started school, parents had bought books and uniforms and the children were integrating into the classes. There was no idea of doing this during the summer, when the children could have easily integrated in a new classroom. One resident told me a child had spent four days in their first week of school crying and on the day the child stopped crying, the parents were told the child would have to move anyway. This is an example of how, sometimes, the system treats people as numbers rather than individuals with rights or families with obligations.

In reading the report I can only imagine what would be said if we were looking at these conditions in any other setting. What would happen if we were seeking a guarantee of clean facilities and hot water in homeless services or private toilet facilities for children in our youth services? In direct provision and with the class of people which the system treats as "not Irish", there is a different view. This is wrong and reminiscent of the last vestiges of institutionalisation and institutionalism. As a country, we have a very poor record in that regard.

When I last spoke on this, I argued that we could be looking at the genesis of the next Cloyne or Ryan report. This report calls for an independent inquiry alongside practical recommendations. This is a wise move. We have been warned with this report and we must use it to prevent abuse right now.

Minister of State at the Department of Arts, Heritage and the Gaeltacht (Deputy Dinny McGinley)

I thank the Deputy for raising this matter in the House. I am speaking on behalf of my colleague, the Minister for Justice and Equality, Deputy Alan Shatter. The Reception and Integration Agency, RIA, of the Department of Justice and Equality is responsible for the accommodation of asylum seekers in accordance with the Government policy of direct provision. This year a budget of €63.5 million has been provided for this service.

It should be noted that RIA is working through the report and any issues which need to be addressed by RIA will be. In saying that, the suggestion that there is widespread State-sponsored neglect of the needs of asylum seekers' children is completely wide of the mark. Any suggestion that children are malnourished or that there is inadequate provision of food would be regarded with the utmost seriousness and would, if proven, lead to the immediate termination of contracts. It would also seem unlikely that such instances would escape the attention of the independent external assessors engaged by RIA who have expertise in food preparation and who conduct comprehensive unannounced inspections of all centres at least once a year. In any event, the Minister has directed that the report be comprehensively examined and that any significant issues identified in it be addressed. In particular, he has directed that any issues relating to the welfare of children be dealt with without delay.

The State provides levels of support in addition to full board accommodation to asylum seekers with all costs covered and no costs charged to the asylum seekers. Asylum seekers avail of free primary and post-primary education on the same basis as any other child in the State. Asylum seekers qualify for medical cards and avail of a wide range of supports such as public health nurses, adult English language supports and assistance from community welfare services to allow children to engage in activities and events within schools and through extra-curricular activities and sports clubs. Taking this broad range of supports and services into consideration, asylum seekers and their children are very well supported by the State.

Although it is not possible to address all the recommendations in the report in detail in the time available, I will attempt to address the keys issues raised. The report recommends that there should be a review of the direct provision system. Direct provision ensures that a suitable standard of accommodation and ancillary services is provided to asylum seekers. The treatment of asylum seekers in this country is at least on a par with any other country and the direct provision system delivers a high standard of service and value for money to the taxpayer through co-ordinated service delivery to asylum seekers.

A number of recommendations relate to maintaining standards across the accommodation centres. The RIA sets out standards of service in its contracts, including legislative standards, and it engages internal and expert external inspectors to review its accommodation standards. As indicated earlier, RIA engages independent external assessors with expertise in fire safety and food preparation to conduct comprehensive unannounced inspections of all centres at least once a year. The inspectors look at all aspects of the accommodation centre, taking in the proprietor's obligations under the contract. Any diminution in standards which comes to the attention of RIA is immediately followed up.

In cases where standards stipulated in the contract have not been met and the proprietor has not made sufficient efforts to remedy the situation, the contract may be terminated.

A number of recommendations relate to the safety of children and child protection concerns. The safety of all asylum seekers, especially children, is of critical importance to RIA. All complaints concerning the safety of residents are taken very seriously by RIA and centre managers. RIA's child protection policy ensures child welfare concerns are referred to the HSE and the Garda.

All accommodation units within the RIA accommodation portfolio are measured to ensure they conform to legislative requirements. In some cases, growing families refuse to avail of more suitable accommodation alternatives being offered to them.

The ninth recommendation is to allow asylum seekers who have been in Ireland for more than 12 months to work to enable parents to provide for their children. Under the law, asylum seekers cannot work. In light of experience in 1999, when asylum seekers were given the right to work and application numbers trebled, it is not proposed to change the policy in this regard.

Other recommendations are on financial and other supports for asylum seekers in direct provision. All accommodation costs, together with the costs of meals, heat, light, laundry and maintenance are paid directly by the State. In addition to direct provision allowance payments, community welfare officers provide assistance through exceptional needs payments, including back-to-school payments, as well as payments for life events such as school trips, sports and other extra-curricular activities.

Deputy Derek Nolan

I thank the Minister of State for his reply. I welcome the commitment to examine the report comprehensively and to deal immediately with issues relating to children. To follow on from my initial statement, I thank the Minister for his intervention in the case to which I referred to suspend the transfer of families from the accommodation centre in Galway.

With regard to the first recommendation with regard to direct provision and the need for a review of the system, with no disrespect to the Minister of State I wish the Minister were here because the programme for Government specifically outlines this as something to be achieved and it is a target of the Government. In his life as an Opposition spokesperson on children and justice the Minister spoke about the need for this so I would hate to think something would be said in opposition but not carried into government and that a view could change so dramatically. I am sure we will have an opportunity to discuss it with the Minister. As a member of a Government party I would not be happy to think the Government is completely satisfied with the direct provision system and that it does not see it requires reform because this is not what we stated previously.

I accept the reception and integration agency's system is not a complete failure in terms of its treatment of asylum seekers and those resident in the centres. It is not the case that the examples I have outlined are widespread. However, the report highlights specific examples of such occurrences and when we are discussing children, one occurrence is too many and two are unforgivable, particularly if we have been warned about them and we know they are happening.

The broader issue of asylum and those in the centres is to do with the immigration system and how long it takes. Many people in the centres have been there for six or seven years and the entire system urgently needs root and branch reform. It is not something that can be kicked down the line continuously.

Deputy Dinny McGinley

The direct provision system operated by the Reception and Integration Agency of the Department of Justice and Equality is only one element of the State's response to its international obligations in the area of asylum. As well as educational, health and welfare costs, there is the asylum determination system itself as well as the downstream judicial and policing costs. As one might imagine, meeting our international obligations to asylum seekers on such a scale does not come cheaply, with considerable public moneys having been expanded in the area in recent years. For instance, in 2011 the total estimated cost to the Exchequer of providing all of the services was approximately €150 million inclusive of RIA costs. Ireland is not unique in this respect. All countries which take their responsibility in this area seriously are faced with similar calls on their financial resources.

There are no cheaper alternatives to the direct provision system. If we were operating a system which facilitated asylum seekers living independent lives in individual housing with social welfare supports and payments, the cost to the Exchequer would be double what is currently paid under the direct provision system, even discounting the additional pull factor this would entail. This was a key finding in the value for money report in 2010 on the direct provision system, a copy of which is in the Oireachtas Library. The direct provision system itself provides security for asylum seekers by meeting their basic needs for food and shelter. In addition to meeting these basic needs, asylum seeker children benefit from a range of free services from the State, including educational and health services. These services are maintained and provided on the same basis as they are provided to Irish citizens. The overall package of services and the asylum and related processes available to asylum seekers in Ireland ensure the needs of all are addressed.

School Transport Provision

Deputy Pat Deering

I thank the Ceann Comhairle for accepting this topic for debate. I welcome the Minister for Education and Skills. Since the beginning of this school year this issue has caused much consternation in Carlow, which is the county I represent. It is as a result of the announcement made by the previous Government as part of the budget for 2011 following the value for money report by the Department on the school transport scheme. I welcome the value for money report and it is important that we get as much value for money as possible from every Department. However, students must now go to their nearest school and not the school of their choice, and this is a cause for much concern.

This decision may make economic sense but from a practical point of view it does not make much sense. A number of issues should be taken into consideration. A school bus may be passing outside the door which would take a pupil to the school of his or her choice but will not pick up him or her and that pupil may have to walk a number of miles to be collected by the bus going to the school he or she is attending. In this day and age this is very dangerous and is very concerning from a health and safety point of view.

I have been made aware that although school principals were made aware of this decision last January or February, the information was not passed on to the parents of pupils beginning school this academic year. The mothers and fathers of these students enrolled their children in the school of their choice and paid for books and uniforms at considerable cost and are now not being allowed to attend the particular school. This issue needs to be addressed. Students decide to go to a school for particular reasons, most likely because the subject choice is suitable from a practical or other point of view. This decision has now been taken out of their hands because of the new arrangements.

If one does not meet the means test requirements with regard to the medical card, one must pay €350 in two instalments of €175 every six months. This needs to be addressed. It would be quite helpful if a concession were made to allow monthly payments, especially once the academic year begins with all the expense involved.

I welcome the five-year school building programme announced by the Minister earlier this year. Has consideration being given to the fact that schools will lose a number of pupils from particular areas who would have enrolled otherwise? The national school in Rathvilly in north Carlow has always been a feeder school for Tullow community school which has been granted a considerable extension to commence in 2014, and I welcome this wholeheartedly. The new arrangements mean, however, that Tullow community school may lose 20 new students every year because these 20 students will now have to cross the county border to Baltinglass in Wicklow which may not be able to cater for the extra numbers.

We in rural Ireland are quite parochial about where we go and are quite proud of our county colours. Carlow is a small county and we like to stay within our county boundaries whether from a school, GAA or soccer point of view. We must go to Wicklow in the case I mentioned. In the southern part of Carlow, the same issue arises. The school in Myshall would traditionally have been a feeder school for Bagnelstown but pupils must now go across the border to Bunclody in Wexford which is a big concern and even though there is less than 0.5 km of a distance between the two schools. The school in Bunclody is now considered the nearest school even though there is only 0.5 km between it and the original school.

Could some kind of concessionary arrangement be put in place at this stage to cater for those students who have started in their new school, the school of their choice? They are not being given the opportunity to go on the bus even though it may pass by their door have full. Could an arrangement be put in place where they could pay so much per month which would be a better arrangement than exists currently? As I asked previously, will the schools be able to cater for the larger numbers in the years to come?

Minister for Education and Skills (Deputy Ruairí Quinn)

I thank the Deputy for raising this matter which is of concern to a number of Deputies. School transport is a very significant operation managed by Bus Éireann on the Department's behalf and covers more than 82 million km annually. Currently, 110,000 children, including more than 8,000 children with special needs, are transported in approximately 4,000 vehicles on a daily basis to primary and post-primary schools throughout the country. I take it the Deputy is referring to the changes regarding school transport eligibility for children attending post-primary schools, which took effect from the beginning of the this school year.

At the outset, I would like to explain that the main objective of my Department's school transport scheme is to support the safe transport to and from school of children who would have difficulty travelling for reasons of distance to nearest school if transport is not supported. Changes in the post-primary school transport scheme were announced in last year's budget. One of the changes which took effect from the commencement of this school year means that the use of the catchment area system as a means of determining eligibility ceased for all pupils newly entering a post-primary school.

From the commencement of this school year, school transport eligibility for all new pupils entering a post-primary school will be determined by reference to the distance they reside from their nearest post-primary education centre having regard to ethos and language. This eligibility criterion will be applied equitably on a national basis. In general, children who were eligible under the former catchment boundary area system will retain their transport eligibility for the duration of their post primary education cycle provided there is no change to their current circumstances. Siblings of these children and other children who are not attending their nearest school may apply for school transport on a concessionary basis only in accordance with the terms of the updated post-primary school transport scheme.

The charge for children who are eligible for school transport under the terms of my Department's post-primary school transport scheme remains at €350 per annum this school year. The charge for children availing of transport on a concessionary basis will also remain at €350 per annum this school year. The overall family maximum for children availing of school transport services remains at €650 per annum. Eligible children with valid medical cards under the GMS scheme are exempt from these charges. There is no provision within the scheme to waive charges for pupils who are not eligible for school transport. As with last year, charges may be paid in two instalments in July and in December. It is important to note that school transport charges represent a contribution towards the cost of providing school transport services and do not reflect the actual cost which is almost €1,000 per annum for a post-primary school pupil.

In regard to the planning of school infrastructure, the general approach of the Department is to plan on the basis of attendance of pupils at their nearest primary schools and that those primary schools then feed into attendance at the nearest post-primary schools or the nearest post-primary centre generally. The changes announced in post-primary school transport services are in line with this approach and will result in a more efficient and cost effective scheme. While it is the prerogative of parents to send their children to the school of their choice, eligibility for school transport is to the nearest school, having regard for ethos and language.

Deputy Pat Deering

I am well aware of and understand the cost of school transport which is considerable and needs to be addressed. To go back to the original points I made, the practicalities of the situation also need to be addressed where a half empty school bus passes by a person's house but that person is not picked and may have to walk a considerable distance to reach to a pick up point for the school to which he or she must go. There are considerable health and safety issues involved when school children of 12 to 15 years of age must walk along country roads in the dark and on wet mornings and evenings. This is a concern for people in rural Ireland, in particular.

A student may now not be able to go to the school of his or her choice. Subject choices may not be available in his or her nearest school and it could impact on what he or she wishes to do in the future. The issue of siblings is not addressed. The second child in a family may want to go to the same school as the first child but he or she may not be able to go down that particular road. He or she will not be able to use the same books, which will involve extra costs, and uniforms might also have to be purchased.

While I understand the rationale and the economics behind this, perhaps we should deal with the practicalities of it. In regard to the concessionary situation, I understand hundreds of students are affected. We are now three or four weeks into the school year and something should be done to address their concerns.

Deputy Ruairí Quinn

I thank the Deputy again for bringing some additional information to the table in regard to this matter. I had a meeting this morning with the Deputy's party colleague, the Minister of State, Deputy Cannon, and two senior civil servants dealing with this issue. We have agreed to wait until after the mid-term break, which is in a couple of weeks time, to review and get as much information in regard to the situation and to see what changes, if any, can be introduced.

If I heard the Deputy correctly, I was interested in what he said that even though the decision to change the system was communicated to principals last January, the parents of children applying to enrol in the school last spring were not informed of those changes. If they had been informed, they might very well have made different arrangements or different choices. The Deputy also said there is capacity and that the bus passes the houses in these places. We will put that on the agenda for discussion and we will probably come back to the Deputy and the House generally after the mid-term break.

Public Sector Allowances Review

Deputy Charlie McConalogue

I thank the Ceann Comhairle for agreeing to put this issue on the agenda and the Minister for Education and Skills for coming to the House to discuss it. Yesterday there was an announcement from the Minister's colleague, the Minister for Public Expenditure and Reform, Deputy Howlin, in regard to the issue of allowances in the public sector. He rowed back on previous commitments to find savings of €75 million this year and €150 million next year in allowances in the public sector pay bill. However, despite the Minister bottling it on those commitments - undoubtedly some allowances are from a different era - he had no problem targeting those who have yet to enter the public service and who are not in a position to stand up for themselves.

I speak in particular about new entrants to teaching. Yesterday the Minister announced that new entrants will not be entitled to the €4,500 qualification allowance which was an acknowledgment of higher education achievements and higher qualifications among entrants into teaching and to ensure we had a very highly qualified teaching team.

How does the Minister plan to operate an education system which will need 3,000 new teachers at primary level in the coming years to deal with population growth? How will he operate a system which pays these 3,000 teachers salaries which are far lower than what their colleagues receive? What assessment has he done on the impact it will have on the education system and how will he ensure highly qualified individuals will continue to become teachers in this country?

Deputy Mary Lou McDonald

This review of allowances is seven months late and we have not been given an opportunity in the Dáil to debate the issues arising even though we were promised a debate on them. The Minister for Public Expenditure and Reform has looked into his heart, de Valera style, and made this decision in secrecy. Despite extensive commentary on the matter there is very little concrete financial information in the public domain in terms of a breakdown of the allowances into individualised costings and, critically, who receives them and in what grades. In the absence of that information and a full debate in the Dáil, we will not have a full and fair decision-making process.

I have raised the issue of teachers because the Minister, Deputy Howlin, has been especially vindictive towards new entrants to the teaching profession. A young teacher who is lucky enough to start his or her career this month will earn just over €27,000, which is almost €12,000 less than a teacher recruited in 2010. Decisions that target the profession of teaching make no sense on any level. They will clearly dissuade the best and brightest from entering the profession, and for a Government which claims it will base economic regeneration on the education sector and a knowledge society, it is clearly not taking a joined-up approach in deliberately punishing young teachers in this manner.

The Minister for Education and Skills and his colleagues have repeated ad nauseam they are the ones for the tough decisions. As the Minister with a duty of care for teachers in the system and the new entrants who will join the profession, I challenge him to take the tough decision of deploying clause 1.28 of the Croke Park agreement for the specific task of addressing the issue of high pay in the public sector. It is a small proportion of the service but none the less almost 7,000 people earn salaries of more than €100,000. If he is prepared for tough decisions, he should address that issue but he should not allow his Cabinet colleague to attack and undermine the teaching profession and, by extension, the quality of education offered to our children and young people.

Deputy Mick Wallace

This is a poor direction for the Government to take. The decision that new teachers will earn 20% less than teachers who started in 2010 will have a disproportionate impact on new entrants to the profession and will create a two-tier system in our schools. A new teacher who starts on a salary of approximately €30,000 after training for four years could earn more by pushing a wheelbarrow on a building site. The Minister for Expenditure and Reform has stated that business cases for the retention of payments were submitted on more than 800 of the 1,100 allowances notified to his Department. Perhaps he should consider the social and educational investment in the future of our children in addition to these business cases. Considerable social benefit can be gained from investing in education and, in the context of our current difficulties, most people would agree that education must be our top priority.

The decision will also have enormous consequences in terms of attracting individuals to the profession. Given our increasing population and the importance of providing a high quality education system, it is imperative we attract the best candidates. The teaching profession has been an easy target in recent years. The salaries paid in 2007 and 2008 appeared inflated but the salaries our teachers now receive compare favourably with their counterparts in other OECD countries. It is not the case that they are dramatically overpaid and the job has become more difficult over the years. Discipline is an increasing challenge and we will pay a high price in the future if we do not attract the best people.

Deputy Ruairí Quinn

Yesterday the Government approved a number of measures relating to public service allowances for new beneficiaries. This follows a public service review of allowances and premium payments conducted by the Minister for Public Expenditure and Reform. The main measure impacting teachers is the withdrawal of qualification allowances for new entrant teachers.

The Government has decided that the payment of allowances for the basic qualifications required for entry to the teaching profession is no longer appropriate or necessary. This allowance goes back many years to the time when a distinction was made between teaching colleges and university qualifications. It is not considered justifiable to incur a permanent cost to the public service pay and pensions bill where a public servant acquires an additional qualification. The payment of allowances, such as the Gaeltacht and island allowances, are being withdrawn or altered for all new beneficiaries in the public service, including new teachers. These allowances are no longer considered the most appropriate way to meet the business needs of public service employers or the service delivery needs of Irish language speakers. Other allowances were withdrawn because they were no longer considered appropriate or necessary, such as the allowance for principals who act as secretaries to the boards of management of their schools and the allowances for principals of certain community schools for management roles in sports complexes.

The view put forward by this Department, which was accepted by the Government, was that allowances held by serving staff are clearly part of pay and simply to withdraw them in the case of serving teachers would be a breach of the Croke Park agreement. Accordingly, the impact of the measures in so far as they apply to teachers will he confined to new entrants only.

The Government was mindful of the impact of the abolition of the qualifications allowance on new teachers given that the allowances have come to be viewed as an element of basic pay. We therefore sought to ensure broad consistency of impact across sectors. In this context, it has been agreed that new entrant teachers will no longer receive qualification allowances but will start on a salary of €30,702, which is equivalent to the fourth point of the existing scale. They will also have the option of being paid a pensionable allowance of €1,592 for supervision and substitution, thereby bringing their starting salary to €32,294.

Deputy Charlie McConalogue

I asked the Minister to explain how he proposes to manage a teaching workforce which is paid according to two different salary scales. New entrants will be paid at one scale while those who started as recently as 18 months ago will earn much more. A new entrant in 2010 could have received as much as €39,000, but salaries for new entrants have decreased to €32,000 this year when the supervision allowance is included.

The 2011 OECD report, Education at a Glance, showed that in Ireland, those in the teaching profession earn 12% less than their colleagues with similar educational experience in other sectors. That issue already exists within the workforce. By withdrawing a system where there is recognition of higher qualifications and of the highly skilled and trained people coming into the education system and encouragement of that, the Minister is setting up a system in which it will be more difficult to attract the top level graduates we need. He is also damaging morale in a workforce where new entrants must work next to colleagues who may be earning 25% more than them although their experience and qualifications are similar. Will the Minister address that issue and say how intends to manage it?

Deputy Mary Lou McDonald

Notwithstanding the crumbs from his table for new entrant teachers, the Minister seems pretty nonplussed by this issue. He seems to accept that he will have a two-tier workforce in the education system and that a variety of allowances - I have not seen the individual figures - will be taken from support for Gaeilge and the Gaeltacht. The Minister needs to reconsider that. I am alarmed by the fact that he seems terribly laid back about this.

The Minister and the Government use the Croke Park agreement most cynically. I understand why many public servants see the agreement as the last line of defence. Government after Government has hammered them and there has been a haemorrhaging from the public service. I understand their attachment to the agreement. What I cannot stomach is the Government using the Croke Park agreement, on the one hand as an excuse to hammer new entrants into the civil and public service and, on the other, as a shield to protect itself from taking the tough decision to deal with the issue of high pay. We would not have to have this conversation about new entrant teachers or others in the public service who are on modest levels of pay if the Minister and the Cabinet had the bottle, the cop-on and the decency to deal with the issue of very high pay in the upper echelons of the public service. That is the fair thing to do. It is also the thing to which the public would most enthusiastically respond. What we want is fairness. It is not fair to target new entrants and new teachers in this manner.

Deputy Mick Wallace

It is said one should never waste a good recession. In this recession, a wedge has been driven between the private and public sectors. The recession was caused by the private sector, including people in my own business, but the public sector has been made a scapegoat for it. I still employ more than 50 people in the private sector and every time pay is cut to low paid public sector workers I see how it affects my business. Cutting the low paid in the public sector impacts dramatically on the private sector. Low paid workers spend all their money. They do not put it away in banks because they need every penny to live. The Government needs to think differently about this issue.

The media have helped to drive the wedge between the private and public sectors. The public sector has been demonised. More than 60% of public sector employees earn less than €50,000. I agree with cutting the inflated wages of those who are overpaid, but the bulk of public servants are not madly paid. Hitting them is hitting the domestic economy which has enough problems of its own at present.

Deputy Ruairí Quinn

I thank the Deputies for their supplementary comments.

I have to find €77 million in savings, as Deputy McConalogue will be aware since we discussed this matter earlier today in the Joint Committee on Education and Social Protection, to meet the targets set for us in the memorandum of understanding to which this Republic was committed by the previous Administration.

There are no easy answers to this matter. We looked in great detail at the allowances for teachers. There is not the same kind of career structure in the public service as in the Civil Service, where those in various grades are paid a salary with increments and, upon promotion, are paid an additional salary with increments but also have new responsibilities. The allowances in the education system are extra money for doing extra tasks. Deputies have the figures for the new starting salary for entrant teachers.

We looked at the Croke Park agreement and got advice on it. The advice was that unilaterally to change the salaries of people in higher levels, or across the teaching spectrum, would be a breach of the agreement. We want to negotiate a new agreement. We would bring to that new agreement the issue the Deputies have raised, which is the discrepancy between the starting salaries of new teachers and of those who started two or three years previously.

This is not unique to the public sector. Those young people who are lucky enough to get jobs in the private sector are getting those jobs at reduced salaries. Deputy Wallace may testify to this from his knowledge of the private sector. Starting salaries are now much lower for people doing, effectively, the same work with the same organisations. One may say the public sector has a higher moral responsibility than the private sector. Prices have fallen, we must regain our competitiveness as an exporting nation and salary costs across the entire system are part of that.

Deputy Mary Lou McDonald

Then why not cut salaries at the top?

Deputy Ruairí Quinn

Section 30 of the Teaching Council Act 2001 will be commenced later this year and will probably apply with full effect in the new year. A condition of that is that every teacher who gets paid from the public purse - some 76,000 and virtually all the teachers in the country - will have to be registered with the Teaching Council. To maintain their registration each year, they will have to do continual professional development, as is the case for doctors, lawyers and other professionals. Incentivising people to do further courses, which is a legacy going back as much as 50 years, has been replaced by an obligation on teachers, as on all professionals, to keep their professional competences up to date. It should not require the kind of incentivisation that has existed and is a legacy from the past that we do not need.

In a year and a half or less, I hope there will be a new public sector agreement on pay and conditions. The issues to which Deputies referred will be part of that. We could not touch the existing agreement without provoking a confrontation. We explored that and we got very clear messages. It took a long time. The most reluctant signatories to the Croke Park agreement were the ASTI, TUI and IFUT. One teaching union had to vote twice to get agreement to it. Informed with that information, we had to make the choices we did.

I feel neither complacent not smug about those choices. I am fully aware of their potential impact, over time, on the teaching profession. I am not a professional educationalist, but all the evidence from different education systems are ad idem on the assertion that the key factor in any education system, primary and post-primary, is the quality of the teacher. Good teachers produce good outcomes, irrespective of many of the other things. I am conscious of the potential impact down the road, when I hope we will have a different kind of agreement that will enable us to do some of the things to which the Deputies refer.

Dáil Éireann debate - Wednesday, 19 Sep 2012