Dáil Éireann debate -
Thursday, 26 Jun 2014

Vol. 845 No. 3

Topical Issue Debate

An Ceann Comhairle

Before we begin, I wish to let it be known how disappointing it is that, week in, week out for the past number of weeks, there have been requests for the deferral of Topical Issue debates because Ministers are unavailable. Today alone, I received 19 requests for debates, but I could only select four matters. If someone does not take up that slot because a Minister is not present, it means that only three issues are taken. It is wrong that people are being disappointed and that, because the issue is being deferred to a day next week, I can only select three other issues at that point. This is a double loss.

If we are to take these matters seriously, I ask that arrangements be made so that Ministers can be available for Topical Issue debates on a daily basis. If the main Minister is not available, Ministers of State should be. We cannot continue with deferrals being sought, particularly on a Thursday. For practically the past three Thursdays, deferrals have been requested. It is just not good enough, as it will diminish the importance of Topical Issues.

Having said that, and before I call Deputy Feighan, I understand that Deputy Naughten wishes to seek a deferral.

Deputy Denis Naughten

Sadly, I wish to seek a deferral, with the agreement of the House. The Minister is not available to discuss this complex issue. He is aware of much of what is involved. In fairness to the Minister of State, Deputy Costello, there is not much point in his trying to respond to the concerns that have been raised by patients.

An Ceann Comhairle

Okay.

School Staffing

Deputy Frank Feighan

There is a fear that the two-teacher Drumboylan national school in the parish of Ardcarne in north County Roscommon will lose a teacher. Eighteen or 19 pupils will attend it in September 2014. Under the September 2013 review, the requirement is for 20 pupils on the roll. Drumboylan had 17 at the time. In March, the school appealed its staffing schedule in the hope that it would have 20 pupils this September. Currently, there have been 18 enrolments, with strong interest from another family and even further afield, meaning that the school should have 20 enrolments by the end of September. The school has been notified that its appeal was successful, but it needs 20 pupils. It has done a great deal of work in this regard and while it will definitely have 18 or 19 pupils in September, there is considerable anxiety and fear among the teachers, the board of management, parents and the local community that a threat is hanging over it. The parents are finding it very difficult to remain positive as they face into a new school year.

We need to be cognisant of that. The threat hanging over the school is causing huge anxiety in the community and it could undermine interest and confidence in the school unless there is certainty in this respect. Parents have already indicated that they are not interested in sending children to a one-teacher school. From a health and safety point of view, if an incident were to occur in the schoolyard or a teacher were to suddenly become ill, what would happen to the young children in the classrooms?

Unfortunately, in the past two years there has been a dip in enrolment in the school, but it is obvious from the number of births and the number of families and couples moving into the area that there will be 20 to 25 pupils enrolled in the school within a few years. I ask for some leeway and personal intervention to ensure that this case is thoroughly investigated and everything possible is done to facilitate the teachers, parents and students in this close-knit rural area.

As many people will know, Drumboylan national school is the backbone of the local community in the area. It has a great track record. On this occasion we need some certainty. We need some flexibility to ensure that parents, teachers and the community reach their goal, which they are happy to do, and keep the school functioning in the area. I hope the Minister of State will be able to look favourably on this request.

Minister of State at the Department of Foreign Affairs and Trade (Deputy Joe Costello)

I thank the Deputy for giving me the opportunity to outline to the House the position with regard to staffing in primary schools. The criteria used for the allocation of teachers to schools are published annually on the website of the Department of Education and Skills. The key factor in determining the level of staffing resources provided at individual schools is the staffing schedule for the relevant school year and pupil enrolments on the previous 30 September, as I am sure the Deputy is well aware. The staffing schedule is the mechanism used for allocating mainstream teaching posts to all schools. It operates in a clear and transparent manner and treats all similar types of schools equally irrespective of location. It currently operates on the basis of a general average of one classroom teacher for every 28 pupils, with lower thresholds for DEIS band 1 schools. The staffing schedule also includes an appeals mechanism for schools to submit an appeal under certain criteria to an independent appeals board.

As part of the budget 2012 decisions, there is a phased increase in the number of pupils required to gain and retain a classroom teaching post in small primary schools with four teachers or fewer. The first phase of the budget measure took effect from September 2012. The final phase of the budget measure takes effect from September 2014. The Department has expanded the existing appeals process so that it is accessible to the schools that are affected by the budget measure. In this regard, small schools will not lose their classroom post if they are projecting sustainable increased enrolments in September 2014 that would be sufficient to allow them to retain their existing classroom posts over the longer term.

Drumboylan national school has two classroom teachers in the current school year based on an enrolment of 17 pupils at 30 September 2012. The enrolment at 30 September 2013 was 17 pupils, which entitles the school to one classroom teacher for the coming school year. The school is projecting an enrolment of 20 pupils for 30 September 2014.

The school submitted an appeal to the February 2014 meeting of the primary staffing appeals board under the small school criterion, seeking the retention of its second classroom post for the 2014-15 school year based on the projected enrolment of 20 pupils at 30 September 2014. A projected enrolment of at least 20 pupils at that date is required for the school to remain as a two-teacher school. Given that it projected 20 pupils, the appeal was provisionally upheld by the primary staffing appeals board. This retention of the second teacher in Drumboylan national school is conditional on the school achieving the projected 30 September 2014 enrolment figures. The board of management of the school has been notified of this decision. The appeals board operates independently of the Department and its decision is final.

The Government recognises that small schools are an important part of the social fabric of rural communities. They will continue to be a feature of our education landscape. In these extremely challenging times, all public servants are being asked to deliver our public services on a reduced level of resources, and teachers in small schools cannot be immune from this requirement. The Minister is mindful of the concerns of smaller schools and rural schools. Our overall primary school enrolment has been growing rapidly in recent years and this is going to continue. In managing the resource consequences of this, it is important that decisions on school provision and organisation are based on a rigorous evaluation of requirements and needs, not just at a local level but also at both regional and national levels.

Our current configuration of small primary schools has been examined by the Department in a value for money review. This review took account of the ethos of schools and the locations of small schools relative to other schools of a similar type. The Minister is currently considering the report of the value for money review of small primary schools and he is doing this in consultation with his Government colleagues. His intention is to publish the report on completion of this consideration process. I am not in a position to give a precise publication date at this time.

Deputy Frank Feighan

We need to recognise that small schools are an important part of the social fabric of rural communities. I recognise that, as, I believe, does the Minister. I understand that value for money must be secured across the board. On this occasion, I ask that deadlines not be written in stone and that flexibility be shown to the parents, teachers and the community, who are trying to ensure that the school will have more pupils to bring the number up to 20. The school needs only one more pupil to bring it up to that number. I hope that over the summer the school will be in a position to reach the required enrolment of 20 pupils. We are seeking some flexibility and understanding. We will continue to work with the Minister now and in coming few months to achieve that goal. I think the Minister of State for taking this topical issue.

Deputy Joe Costello

The projected number of pupils for Drumboylan national school, as I have outlined, is 20. If those numbers are maintained, the school will retain its second teacher. The school has a projected enrolment of 20, which is the minimum that is required for the retention of a second teacher post. Hopefully, that will remain the position, and if it does, the school will retain the second teacher post.

A value for money review has been carried out and the report of that review has been submitted to the Minister, Deputy Quinn, who is currently studying it. That review could have a bearing on the final outcome with regard to decisions. Therefore, it is important keep an eye on matters as they move along.

Pupil-Teacher Ratio

Deputy Shane Ross

This is the third time I have raised this subject in recent years. I do not do so on an ideological basis, although there is an ideology among those who for some reason wish to see the pupil-teacher ratio in fee-paying schools increase. There is a large body of opinion that the Government has simply got this wrong, because it sees private schools and fee-paying schools as an elite body who are determined to stay elite and somehow above other forms of education. That is not the case. What is wanted here is a degree of choice among people who save the State a large amount of money and who in many cases, although not all, make huge sacrifices to send their children to fee-paying schools. While some people spend their money on other luxuries, some of those parents who send their children to fee-paying schools are not able to do that because they have made a decision, which they are quite entitled to do, to send their children to fee-paying schools for all sorts of different reasons.

What I am looking for today is an assurance from the Minister of State that the pupil-teacher ratio in private schools will be reduced to ensure equality between fee-paying and non-fee-paying schools. This is a particularly sensitive issue among minority and Protestant schools. The Minister of State will be aware that parents wishing to have their children educated in the Protestant ethos or another ethos often have to send their children to boarding schools at great cost to themselves, in terms of the fees payable at those schools, and to the children, in terms of the pupil-teacher ratio therein, because often when the pupil-teacher ratio increases something has to give, and it is the children who suffer through a loss of facilities and so on, including extra-curricular facilities.

As the Minister of State will be aware, the pupil-teacher ratio in fee-paying schools was increased to 23:1 while that in the free education sector is 19:1. Parents are seeking an assurance that this trend has stopped and that it may well be possible in the next budget, given that times, we are told, are now more prosperous, to reverse it in order that the ethos of the Protestant schools and the rights of those who want to send their children to private schools are preserved. There is no reason there should be any difference between one type of school and another. Those who send their children to private schools, who may be misguided and should be allowed to be so misguided if they wish, are doing the State a favour in terms of the amount of money they save taxpayers. The result of the measures recently taken by the Government has been, as the Minister of State will be aware, the moving of several schools from the private to the public sector, again at great cost to the State. As a result of the increase in the pupil-teacher ratio, many schools, including Kilkenny College and St. Patrick's Cathedral grammar school, have moved against their will from one sector to the other at great cost to the State and great inconvenience to themselves.

Deputy Joe Costello

I thank the Deputy for the opportunity to outline to the House the position with regard to the pupil-teacher ratio in fee-charging schools. At post-primary level, the State pays the salary of one teacher for every 23 pupils in fee-paying schools, compared with one teacher for every 19 pupils in schools in the free education scheme. A ratio of 18.25 pupils to one teacher applies in DEIS schools.

Currently, 52 of 723 post-primary schools charge fees, ranging from €2,550 to €10,065 for day pupils. Fee-charging schools have the resources, through fees charged, to employ teachers privately, an option which is not available to schools in the free education scheme. A departmental report analysing the tuition income of fee-charging schools which was published last year showed that the schools in question have available to them €81 million in discretionary income which is not available to schools in the free scheme.

I am aware that there are some concerns within the Church of Ireland community about the pupil-teacher ratio affecting fee-charging schools. The Government recognises the importance of ensuring that students from a Protestant or reformed church background can attend a school that reflects their denominational ethos, while at the same time ensuring that funding arrangements are in accordance with the provisions of the Constitution. How best to sustain education provision for widely dispersed and small local communities presents a particular challenge, especially in a locality where enrolment is declining to single figures. The Government is intent on fostering pluralism in school provision. Supporting small communities, including minorities, in maintaining their schools forms part of that policy.

With regard to the fee-charging Protestant schools, an arrangement exists whereby funding is provided by the Department to the Secondary Education Committee, SEC, an organisation run by the churches involved in managing the Protestant secondary schools. The SEC then disburses funds to the Protestant fee-charging schools on behalf of pupils who would otherwise have difficulty with the cost of fees and who, in the absence of such financial support, would be unable to attend a second-level school of a reformed church or Protestant ethos. Funding in this regard amounts to €6.5 million annually. This fund ensures that necessitous Protestant children can attend a school of their choice. I can confirm that Minister, Deputy Quinn, and relevant Department officials will continue to engage with the relevant education sector stakeholders, including the Church of Ireland and boards of education, in relation to education provision for all areas.

The budget for education, including the number of teaching posts that we can afford to fund in schools, is a matter that the Minister, with his colleagues in Cabinet, will have to consider in the context of the forthcoming budget. The Government will endeavour to protect front-line education services as best as possible. However, this must be done within the context of bringing our overall public expenditure into line with what we can afford as a country. The challenge will be to ensure that the resources that can be provided are used to maximum effect to achieve the best possible outcome for pupils.

Deputy Shane Ross

I thank the Minister of State for his reply. I am sure he will understand when I say that sympathy is not enough. It is easy to say that one is well aware of the problem but that everything has to be considered within the context of overall cuts in public expenditure.

These private schools, including those of a non-Protestant or minority ethos, which have a special case to make, are fed up with the increases in the pupil-teacher ratio and are seeking an assurance that their choices will not be subject to any further attacks. At this stage they have had enough, and they contest vigorously the assertion that somehow there is an awful lot of money in their kitties. The Minister of State referred in his reply to the availability of €81 million in discretionary funding. There is no question of this money being available on a discretionary basis because no such basis exists in the context of hard-pressed education, where the money is being spent on necessities for pupils that would otherwise be provided by the State. It may be that that money is being earmarked for capital projects, but that is a compelling reason for its being available. That schools have a hoard of cash that they can use for any purpose is not true.

I do not believe the Minister of State has given me the assurance that the minority community is seeking. As recently as last month, the parents' spokeswoman for Protestant schools, Ms Eleanor Petrie, said:

Some of our schools are on a knife edge now. If the pupil teacher ratio goes up one more point more of them will go into the free scheme and that will end up costing the Department more money.

It will also probably lead to the dilution of an ethos which they value very dearly.

Deputy Joe Costello

I thank the Deputy for his supplementary remarks. There is no question of the State discriminating or seeking to discriminate against Protestant schools. Private schools are not only Protestant or reformed church schools; there are also private Catholic schools.

The current pupil-teacher ratio, despite having been increased in recent years, is still 23:1, as compared to 19:1 in the free secondary education sector. The gap is not an enormous one when one considers that all the private schools charge fees and have available to them an income stream in that regard, as well as from the discretionary income source of €81 million, although it may not all be discretionary income.

Some second level schools, such as Kilkenny College and, previously, Wilson's Hospital School, have demonstrated that they can maintain and promote their Church of Ireland ethos through the free second level scheme. There are five Protestant comprehensive schools that do not charge fees at all. Therefore, the position is not absolutely black and white. Every school has the option of entering the free second level scheme at any point in time. Many fee-paying schools have done so over the years. This option will be available in the future. The Department is always available to speak to and advise any school that wants to transition to the scheme. At present, I am not in a position to give any assurances on what may happen in the forthcoming budget.

Credit Unions Services

Deputy Eamonn Maloney

We are very fortunate to have a very strong credit union tradition. Credit unions are located throughout the country, both in urban centres and elsewhere. The Irish have a very strong attachment to the movement and my constituency is no exception.

I recently met representatives of four local credit union branches, namely Kilnamanagh Credit Union, Firhouse Credit Union, Tallaght and District Credit Union and Tallaght West Credit Union. They are very dedicated people who provide an excellent service. The credit union is traditionally described as the bank of the working classes. The movement has gone from strength to strength over the years and it has been very beneficial and sympathetic in the communities in which its branches operate. However, the credit union movement has not escaped the fallout of the collapse of the Celtic tiger. Recent legislation on credit unions has obviously resulted in changes. The movement and local branches argue that they are not happy with some of the restrictions placed on them. The credit union officers I met recently are perplexed and, in some cases, angry, especially consequent to recent comments by the Minister for Finance to the effect that they should start lending. This is exactly what the credit union movement and its local branches want to do. I am informed they would be only too happy to lend to their members but are precluded from doing so due to the restrictions imposed by the Central Bank under recent legislation.

The Central Bank has imposed lending restrictions on a large number of credit unions. In some cases, this is for a very good reason. I am not here to argue about that. Restrictions include a maximum loan to which a member is entitled and a maximum in loans that can be issued in a month, for example, €100,000. In many cases, there is a complete ban on commercial business loans. The latter does not apply to all but applies in most cases. This is a real issue for branches.

When one considers that the credit unions in this jurisdiction have in excess of €7 billion in funds, one can understand the desire of local branches to provide funding to local SMEs. Given the current climate, in which the economy is growing, albeit not fast enough for all of us, there is a desire to lend. Credit unions are prepared to step into this area, albeit with certain restrictions. The movement and I are asking the Minister to examine this matter and allow SMEs to avail of credit union loans.

Deputy Joe Costello

I thank the Deputy for raising this important issue. I would like to confirm the Minister's view that credit unions have an important role to play in providing credit in local communities around the country. The Minister is supportive of safe and responsible lending by credit unions.

The Government established the Commission on Credit Unions in May 2011. The commission was asked to make recommendations in relation to the most effective regulatory structure for credit unions, taking into account their not-for-profit mandate, volunteer ethos and community focus while paying due regard to the need to protect fully members' savings and financial stability. Membership of the commission included members of the credit union representative bodies.

The commission published its final report in March 2012 and it was agreed by all members. The Government has accepted fully the commission's recommendations, over 60 of which are currently being rolled out under the Credit Union and Co-operation with Overseas Regulators Act 2012.

One recommendation by the commission is the introduction of a tiered approach to regulation for credit unions. This tiered regulatory approach will see some credit unions taking on a more sophisticated business model. Such credit unions will be subject to increased regulatory requirements. This will offer a flexible approach to the regulation of credit unions and will assist credit unions in determining the business model they wish to adopt. This approach could include some credit unions lending to SMEs, as referred to in the Deputy's question. It is not by any means ruled out.

A proposed tiered regulatory approach was outlined by the Central Bank in its recent initial consultation paper. The deadline for submissions was extended on request by the sector. The consultation process provided an opportunity for stakeholders to set out their views across a range of issues. Interest in this topic was demonstrated by the number of submissions received by the Central Bank, which exceeded 160. An analysis of all submissions is being undertaken, and the Central Bank will communicate with credit unions and other stakeholders in regard to the proposed next steps.

In line with the introduction of the tiered regulatory approach and on foot of recommendations from the Commission on Credit Unions, section 11 of the Credit Union and Co-operation with Overseas Regulators Act 2012 amends current lending provisions. These amendments provide for new Central Bank regulations to deal with a range of lending issues including the classes of lending that a credit union may engage in, for example, business lending; the duration of loans; large exposures; and concentration limits.

Section 11 will be commenced in tandem with new Central Bank regulations on lending, which are to be introduced as part of the tiered regulatory approach. This tiered approach will address a range of areas, including lending, investments, savings, borrowings, additional services, reserves and liquidity. These changes will help bring about developments in the credit union sector, which will see an expansion in the range of services and products being offered.

It must be acknowledged that credit unions have faced a huge amount of change in recent times and continue to face more change. It is a testament to the sector that it has embraced these changes and faced up to its challenges. While some of these changes will support a number of credit unions in taking on a more sophisticated business model, which could include business lending, lending to SMEs is a specialised form of lending. This type of lending is risky and clearly requires specific skills and expertise.

The Government recognises that the credit union sector nationally plays an important role in providing financial services. However, the Registrar of Credit Unions in its recently published, Credit Union PRISM Risk Assessments: Supervisory Commentary, highlighted that the majority of credit unions visited have been required to implement actions to remediate risk and substantially improve their lending and credit risk.

Indeed, even the banking sector, which has a high level of expertise, continues to seek an appropriate mechanism for safe SME lending.

Deputy Eamonn Maloney

I thank the Minister of State. I am sure the credit union movement welcomes any steps towards resolving the difficulty I outlined at the beginning, that is, the potential for credit unions to engage with SMEs in terms of loans. I accept that not every credit union branch will want to engage in that practice or may not aspire to it, and we have no difficulty with that. However, there are credit union branches which have the wherewithal financially to engage in lending to SMEs, which is healthy and should be welcomed by all.

I want to raise a parallel issue in regard to credit union lending. The Minister of State will be aware that lending requirements as set out in section 35 of the Credit Union Act also impose a significant obstacle for credit unions hoping to get back to lending. The requirements reduce credit union ability to lend by restricting credit unions from offering further credit to members where the loan has been rescheduled. This is a real problem for many credit union members.

I do not believe any legislation should be written in stone and should not be the subject of reviews. In particular, I strongly urge the Minister of State to urge the Minister for Finance to review the section 35 restrictions. Put simply, they hamper the ability of credit unions to lend and are preventing members from taking advantage of improvements in their own economic fortunes. For example, fortunately, people are going back to work, if not in the numbers we would wish for. While they may have had difficulties in terms of being unemployed while being a member of a credit union, we need to take into consideration that if they now have a job and an income, the situation of such people should be reviewed. That is all I ask.

Deputy Joe Costello

The Government will, of course, continue to support the credit union sector, which is an essential and important sector for the entire economy, particularly for communities throughout the country. It is very much the people's bank in that respect. The Government will continue to engage with the movement to ensure there is a stable credit union sector into the future.

I will bring to the Minister's attention the Deputy's remarks in regard to the section 35 restrictions on the rescheduling of loans. I will ask him to report back to the Deputy directly.

The new regulations from the Central Bank arising out of the recommendations from the commission on the credit unions allow certain business lending to take place to SMEs, so that is a movement in the direction the Deputy has been seeking. However, the Government is also looking very closely at the whole financing landscape for SMEs and has indicated that it would be seeking reorientation in regard to the National Pensions Reserve Fund and the Ireland Strategic Investment Fund in order to support economic activity and employment, in addition to the traditional banking sector. It is an area that is of very much concern at present.

I welcome the Deputy's remarks in regard to how we might maximise and optimise the €7 billion that is available within the credit union sector in order to promote small and medium businesses.

The Dáil adjourned at 3.55 p.m. until 2 p.m. on Tuesday, 1 July 2014.