JOINT COMMITTEE ON EDUCATION AND SCIENCE debate

Union of Students in Ireland: Presentation.

Chairman

We are meeting with Mr. Colm Jordan, president of the Union of Students in Ireland, Mr. Will Priestly, president of the TCD students union and USI president designate and Mr. Hugh Doogan. Mr. Pat Dowling and Mr. John McCarthy from the Department of Education and Science are also in attendance. I remind our guests that while members of the committee are covered by parliamentary privilege, unfortunately our visitors are not. I remind members that there is a long-standing parliamentary practice whereby we do not refer to individuals outside the House by name or in a way that they might be recognised.

Mr. Colm Jordan

I thank the committee for affording us the opportunity to meet with it. I am accompanied by Will Priestly, president of the Trinity College Dublin students union. Will is also president elect of the USI and will replace me on 1 July. Also in the delegation is Hugh Doogan, the general manager with the USI.

Funding of higher education is an issue of paramount importance for all stakeholders in the education system. The decisions made regarding funding of third level in the next few months will have significant ramifications for students currently studying in higher education and those studying at second level. Undoubtedly the future of third level education hangs in the balance. As the Department of Education and Science reviews the current system of funding for third level education, USI, without seeking to pre-empt the findings, wishes to highlight the main reasons why we consider the reintroduction of fees to be a retrograde step and one that will have profound implications for the future of the education system and society as a whole. In the course of my presentation, I will address the issue of funding third level and challenge the assertion that the re-introduction of fees will create a more egalitarian, equitable and quality enhanced education system.

Although the USI welcomes the process of reviewing the current system of third level funding, we wish to criticise the Department for the delay in the production of the review. According to a Department official, the report was due for completion two weeks ago, but here we are still eagerly awaiting its findings.

The debate on fees has reached a state of paralysis of analysis. Nothing new is being suggested as a way forward and, after numerous research reports on third level funding, some of which have yet to be implemented, it is somewhat ironic that we are awaiting yet another report. The arguments to reintroduce third level fees are deeply flawed for a number of reasons, the most significant being that if the Government wants to claw back the cost of third level education from high income earners, it only has to utilise the tax system to achieve this objective.

The argument that the Government is espousing to support the reintroduction of fees in order to make higher education more equitable and enhance the level of quality assurance is transparent and lacks any real zeal when one considers the recent cut backs in the back to education allowance, BTEA. Of the 69% increase in the registration fee, announced in August 2002, which was intended to enhance the value of the students' services and cover inflationary costs, only 6% was allocated to student services, while the remaining 63% was allocated to secure Exchequer savings.

I wish to highlight the benefits of a free education system. In a society that espouses to be equal in all things, every individual should have the opportunity to achieve their full potential. Education is the primary means to achieving that goal. Free education is an important mechanism for promoting social inclusion in society and ensuring that everyone, irrespective of their background, has the opportunity to learn. Education is fundamentally important in terms of the contribution it makes to "the quality and well being of Irish society" and plays an integral part in the "social, intellectual, cultural, economic and political" life of the State, according to the action group in 2001.

USI contends that the primary method to achieving an open and fully accessible education system is to maintain a third level education that is free to all. Just as primary education and secondary education are free, so third level education should be free. To argue that the re-introduction of fees will in some way be progressive is nonsense. As countless studies have shown - Clancy, 1999; Clancy and Wall, 2000; Osbourne and Leith, 2000; the reports of the action group, 2001; and the USI, 2000, 2001 and 2002 - the mere existence of a fee for participation in third level will be a disincentive to go to college.

The Australian Government has argued that the shift to user pays has had little impact on equity because of the deferred nature of the income contingent loans scheme - study now, pay later - although recently it has started to concede that there may be a study debt impact as some equity groups such as mature students, rural students, working class seem to be less willing to get themselves into debt of tens of thousands of dollars, particularly when the repayment threshold is so low that it is only just above the top rate for the single mother pension. Although it is true that since the introduction of the HECS in Australia the total number of students has expanded by 40%, the user pays system has only led to a slight decline in equity. As a percentage, there has been no improvement in participation by equity groups and a number has declined. The introduction of user pays has not improved access to higher education in Australia, nor has it led to more funding for universities because the Government there has dropped its funding as the fees have increased.

The administrative cost of loans, including the costs arising from defaulting on repayment, enormously reduces the savings that were meant to be made. In Australia, there is evidence that people with loan debts were less likely to buy houses, take out loans and have children because of the fear of further debt. That is one of the most serious points about that system. In Australia, students from equity groups remain under-represented in the university sector. In 2000, some 14.7% of domestic students at Australian universities were from lower socio-economic backgrounds, well below the population reference value used by DEST of 25%. Effectively, this means that Australians from lower socio-economic backgrounds have approximately half the opportunity to attend university compared with Australians from medium or higher socio-economic backgrounds.

Students from rural and isolated backgrounds are also under-represented in higher education. Individuals from rural and isolated areas make up 28.8% of Australia's population, but represent less than 20% of university students. Interestingly, these students have been identified by the Australian Government as a target group for a decade, yet their participation shows no signs of improvement. The main reasons for such under-representation are due to increasing HECS debt and costs of study plus low levels of income support payments in Australia. We have shown that an Australian loans system is not the one we should emulate if we are looking for a truly equitable third level education system.

There has been a great deal of conversation about the UK system in reference to loans. The USI has much experience in this area, working, as we do, on a 32-county basis with institutions such as the Queen's University of Belfast, the University of Ulster and the further education institutions. In the UK, research conducted by Universities UK, a group representing heads of UK universities, found the fear of debt to be a significant factor deterring school leavers from furthering their education. The research examined attitudes to debt among school leavers and further education students and its impact on participation in higher education. The study found that although respondents held positive attitudes towards higher education, the fear of debt is a major factor deterring potential students, particularly those from lower socio-economic backgrounds, from entering higher education. The examples of the Australian and UK systems would suggest that far from creating a more equitable and accessible education system, fees have served to further marginalise those from lower socio-economic backgrounds from participating in higher education.

I will outline some of the disadvantages of introducing a loans system. The USI is against the introduction of a loans system similar to the UK and Australian models. The long and short of it is that loan systems result in students incurring large debts during college which they spend the rest of their adult lives trying to pay off. Such debts have consequences for any future investments they may make such as pensions or mortgages. An article in the London Independent highlighted the real danger that any loan or fee system presents to people trying to take out pensions as they leave third level education and move into employment.

As the Australian model has shown loans do not work. In Australia, free education was abolished at the end of the 1980s and replaced with an income contingent loans scheme called HECS, set at 20% of average course cost. Since then, the HECS7 rates have increased significantly to about 34% of course costs. An income contingent loans scheme for postgraduates was introduced this year which is aimed at 100% cost recovery. The liberal, or conservative, government has allowed people who do not qualify academically for a place at university to buy their way into university by paying full fees. As part of the current Nelson review of higher education, the Liberal Government wants to introduce a loans scheme for these students. The government proportion of university funding is now lower than it was in 1939 and Australian students are paying more than is the case at many US public universities. That is an important point because we are also looking at a funding crisis in Irish universities. There is no country in which the loans system has been introduced where the levels of funding to universities increased.

Loans represent an unfair system. The loans proposition may be perceived with equanimity for those from well-to-do backgrounds. Those young adults whose parents have been to third level can see at first-hand the economic benefits which it brings, namely, the direct personal gain that a higher education can reward. These individuals may look at their parents incomes and consider a loan a reasonable proposition, in the expectation that their own incomes will be similarly high. However, individuals who are the first generation to access higher education have a different experience. These individuals will not have that direct experience vis-à-vis their parents' experience and will not be as confident. The loan system presents greater concerns for those from lower socio-economic backgrounds. Those from lower-income backgrounds face a difficult enough prospect of three or more years of full-time study post secondary education rather than entering the work force without the further prospect of major loans to repay after it.

Do loans promote or discourage lifelong learning? As stated earlier, lifelong learning is becoming increasingly important as Ireland enters into a change in its demographics. Mature students are becoming an integral component of higher education as the number of school leavers entering third level begins to decline. A key question to consider in the debate around loans is how are we to encourage people who are already working, who may have a family, a mortgage and other commitments, to take-up a third level course when the family budget will be directly squeezed afterwards, again with no guarantee that they will see a pay-back in economic terms?

Before fees were abolished, the annual fee for most colleges for an arts course would have been in the region of €2,000. However, we are not naively thinking that is the level of fee which will be payable if the Government has its way. The full economic cost of third level courses is, of course, significantly higher. The fees charged for non-EU students in Trinity College Dublin for this academic year range from €10,309 for an Arts course to €13,508 for a science course and more than €20,000 in the health sciences area. Those are annual fees, payable each year for at least four years.

There are also the additional problems of ensuring that there is consistency across the board in terms of the fees charged for different courses. In particular, the cost of science and engineering courses will be significantly higher than the cost of arts courses. This has very dangerous consequences in an economy which depends for its prosperity on having skilled technologists and scientists ready to go into the workplace and where we are already seeing problems with numbers choosing to study science and engineering. Add to this the new disincentive of cost, and we are facing some very serious challenges.

Loans will present a challenge in terms of brain-drain by enhancing the number of graduates emigrating post-graduation. If loans are introduced, graduates are likely to opt to work abroad after graduation to avoid making loan repayments. I have known people who studied in the UK and are now living abroad so that they can avoid being searched out by the loan company, which is based in Scotland. Ireland will experience an era similar to the 1980s when students were forced to leave Ireland to seek work in other countries due to high unemployment rates. Such emigration will have a knock-on effect for the economy and revenue.

The Minister for Education and Science said recently at USI's annual congress that he was considering re-introducing fees in order to make the education system more equitable and to enhance the quality of the education provided. USI would like to refute these claims. The Government's proposals to re-introduce fees and move away from the free fees initiative are not about equity and they are not about targeting. They are about revenue-raising. To suggest that the abolition of fees would in some way afford the Exchequer the money to adequately address educational disadvantage is ludicrous. The Government has no intention of addressing educational disadvantage. If it is really concerned about educational disadvantage and inclusion, why did the Minister cut funding for access programmes, school retention schemes and back to education programmes since taking office? Why is there no focus on expanding Breaking the Cycle, the school completion programme, special schools and programmes for children who drop out or are thrown out of regular schools?

The report of the action group on access to third level education was published in May 2001. It contained 78 recommendations aimed at increasing access to college for students from lower socio-economic backgrounds, students with disabilities and mature students. To date, very few of these recommendations have been implemented. One of the key recommendations was the establishment of a national office for equity of access to higher education within three months of the report's publication. Despite the Minister's reassurance that the creation of this office has been approved, it has not yet been established. The access report also called for the appointment of staff to formulate policy proposals and oversee the implementation of the national programme within three months of the report's publication; again, this recommendation has yet to be acted upon. USI regards the failure of the Department of Education the Science to implement these recommendations and the other recommendations of the action group as testament to its commitment to access to higher education.

In response to the argument that abolishing fees has done nothing to expand participation in third level among people from low-income backgrounds, USI would be the first to contend that the differences on participation rates are of concern. We believe, however, that this problem is not something that will be solved instantly. It will take time to redress the imbalance. It is important to emphasise that the existence of free fees over the past seven years has resulted in an increase, albeit slight, in the number of students from disadvantaged backgrounds attending higher education. The Minister, Deputy Dempsey, acknowledged this point on 2 September 2002 when he stated:

In terms of admission rates by socio-economic groups, the report [on access to college] shows that there has been a significant improvement in the proportion of persons from the lowest socio-economic groups entering higher education. In 1980, only 3% of persons from unskilled manual workers groups entered higher education and that increased to 12% in 1992 and 21% in 1998. In 1980, only 9% of persons coming from semi-skilled manual workers groups entered higher education and that increased to 19% in 1992 and 23% in 1998.

It is worth considering that this report was produced in 1998 and fees were only abolished in 1996. How can we judge a longitudinal policy measure to tackle disadvantage within two years of its introduction when the average course is three years long?

It is important to point out that around the world, systems with free fees result in an increase in representation of disadvantaged groups. Again and again around the world, postgraduate tax, loan systems and fees have resulted in a decrease in the representation of disadvantaged groups in colleges. The increase in representation resulting from free fees has not been huge - the numbers have not trebled or quadrupled - but there has been an increase.

It may seem as though we are against everything. What does USI want? We would like to see reform of the third level grants system. We feel the current system is inadequate and that there needs to be more realistic levels of grant payment. I know the Department will go to great lengths to give the numbers involved overall, but if these numbers are broken down the situation is different. A student whose parents earn a combined income of below about €20,000 can receive as little as €14 per week. This is the amount he or she is expected to live on. This goes up to about €70 per week, the top rate of the standard maintenance grant. Rents are about €100 per week, so this will not even provide housing. We are not asking for luxury but a roof over people's heads.

We have been concerned about the inadequacy of distribution and the late payments of grants to many recipients. The Government needs to address this problem by transferring the assessment and administering of grants from the Department of Education and Science to the Department of Social and Family Affairs. Lastly, independent assessment needs to be addressed forthwith. The Government needs to address the reality that students under 23 years of age are not financially dependent on their parents and consequently the assessment of their eligibility for the student maintenance grant should not be based on their parents' income. If a student of 22 is married, has two children and is living away from home he will still be asked what his father earns when he is assessed for means. This does not happen in other countries.

Many false arguments have emerged in this debate. It has been argued by serious commentators that those who do not go to college should not have to pay for those who do. The logical extension of that is that nobody should get anything from the State for free. We should charge for everything. The State is simply a business. There is no public sphere, and no conception of the common good. This is an argument which fails to recognise the reality that in our common endeavours we achieve so much more than we can ever achieve as individuals. If we demand that everyone pay for their own college education, we will have fewer graduates, fewer doctors, fewer nurses and fewer social workers and an even worse quality of life than we have now. I would like the Chairman to imagine his own constituents asking why part of their taxes should go to fund Dublin Bus. They do not use the buses every day. If people could avoid paying for these essential services, society would fall apart.

Regardless of the fact that there are finite resources available for student support, if fees are re-introduced it is not those in the highest income bracket who will suffer. It will be those on low and modest incomes who will be excluded from the third level sector. We are being told that the money is not there so we should tighten our belts. USI disagrees with this. We believe that the best way to redress the imbalance between the less well off and the well off in society is through the tax system. The Government should review the current tax system and ensure that it is fair and equitable. The Government can recoup a fair share from the better off through its fiscal policy. If the Government is serious about investing in education, there are plenty of places it can find the money. Those in the horse-breeding industry, for example, are exempt from tax. These people could make a useful contribution to the education budget. Certainly, if we could put a stop to made-to-order tax breaks and other similar schemes, we would be able to provide the funding to alleviate educational disadvantage.

This Government has no interest in asking the well off to pay their fair share. If fees were brought back, it is not the rich who would suffer but those on modest and lower incomes.

A prominent Deputy stated recently:

The basic intention of raising money through fees is in keeping with a wider Government policy of increasing indirect taxes and user charges wherever they can. Having splurged on spending for 18 months before the general election, they are now engaged in the process of retrenchment. This will cover the hole they have created in the public finances and help to build up the war-chest for the next election.

In summary, I shall point out what the USI is looking for the Government to do. We call for the development of a co-ordinated national access framework; the implementation all of recommendations contained in the report of the Action Group on Access to Third Level Education, specifically the immediate establishment of the national access office and the appointment of the required staff to implement the national access framework; a review of the current student maintenance grant to ensure it is more efficient and adequate; a review of the current levels of the grant, the process of application, the system of means-testing and administration of the grant; the introduction of independent assessment; and a comprehensive review the tax system to ensure the Government can recoup revenue from higher income groups to contribute to the education budget.

In conclusion, I urge committee members to consider the points raised in this presentation. I also thank members for their attention, and I would be happy to answer any questions. I know the Department officials will go into lengthy detail about levels of investment, but before I finish I offer the committee a small example. Yesterday I bought a bike for €900. That was a 79% increase on the previous amount I spent on my bike pre-1997. I also bought shoes, a cycling helmet and so on and made a considerable investment in that bike. It has two punctured tyres. Regardless of the investment I have made it is not functioning the way that it should.

I thank committee members again for their attention and look forward to questions, maybe even some hard and searching ones, so we may tease out the issues further.

Chairman

We will now have the views of the Department. I call upon Mr. Dowling to introduce his colleagues and let us have the Department's view.

Mr. Pat Dowling

I am accompanied by Kevin McCarthy, principal officer on the higher education-university side of the Department, John Moloney, assistant principal officer in the student support unit, and Mr. O'Connor. We were pleased to accept the committee's invitation to attend this session and are obviously pleased to hear more of the constructive way in which the USI has addressed this issue of funding for institutions of higher education.

I do not propose to get into any detailed consideration of the likely outcome of the ongoing review to which Mr. Jordan has referred, despite his very elegant, eloquent and colourful presentation in relation to the delays which have taken place in this regard. The Minister has indicated and will, I think, indicate again in the Dáil today that the ongoing review is near completion and will be submitted to the Minister in the near future. It will be for the Government to consider how the process is taken forward thereafter. It would not be appropriate for me to enter into speculation in relation to some of the critical issues to which Mr. Jordan has referred in terms of the nature of any future arrangements for student support.

It is my intention obviously to assist the committee by providing information relevant to what is happening to date in relation to funding of higher education and, more particularly, in relation to the issue of student support. To some extent at least I will, regretfully perhaps, have to repeat some of the material that by colleague, Mr. McDonagh, provided to the committee at the end of February in relation to access issues.

I will address some of the points Mr. Jordan made in relation to the access report itself. I have addressed some of those issues in the document I have provided for the committee but maybe I should embellish them somewhat in the light of his comments. In the document I have presented in the form of slides, I have effectively sought to identify what is happening in terms of expenditure on and participation in higher education in the last decade. It is interesting and instructive, in the light of what Mr. Jordan has said, to look at the level of expenditure on higher education. In the ten-year period since 1994, including the provision for 2003, the increase in Exchequer expenditure on higher education is in the region of 150%. Participation in full-time higher education in the period from 1995-96 has increased by about 29%.

Those two statistics are instructive and useful. Without wishing to get into a debate on statistics, the reality is that there has been a clear and consistent increase in investment in higher education in the last ten years. When one looks as well at the context of overall participation in higher level education one finds that in the 20-odd years since 1980, the percentage of 17 and 18 year olds who have entered higher education has more than doubled. While this increase is due in part to the retention rates at second level, it has also been contributed to by a significant rise in the transfer rate of Leaving Certificate students into higher education. This transfer rate was about one third in 1980 and is estimated at about 57% for 2000.

In terms of overall participation, we have probably one of the highest levels of transfer in the European Union at this stage. We recognise, and it is a matter of record, that in certain areas and socio-economic groups the transfer rates are lower than they should be. Talking about transfer rates by geographical area, it is clear when one looks at the data that the regions of Connacht and west Munster display the highest levels of participation, while the poorest participation levels are found in the east midlands and south east, with Dublin recording the lowest levels of participation at third level. Herein is a problem that all policy makers, Ministers and political parties no doubt wish to see addressed but it has been an intractable problem and goes deeper into the education system than just the higher education system. Low participation rates are, to some extent at least, a manifestation of difficulties at earlier stages in the education system, including drop out from or lack of retention in second level education, particularly upper second level.

Within Dublin, the proportion going to higher education ranges from over 77% in Foxrock and Glencullen to less than 10% in Ballyfermot, Chapelizod, Darndale, Priorswood and the north inner city. Therein lies the challenge facing all policy makers and Governments.

In terms of expenditure I wish to make one comment and to enlighten the committee on what was spent in 2002. As the graph shows, the estimated out-turn was approximately, €1.4 billion. In effect, the recurrent grants through the higher education system amounted to approximately €840 million. Over €180 million was spent on capital expenditure and over €382 million on student supports, including tuition fees, maintenance grants and so on. I will come back to that in more detail later.

It is important - Mr. Jordan referred to this earlier - to see how Ireland is performing in terms of output from our higher education system. In so far as the OECD mean is concerned, we are doing particularly well in the area of certificates, diplomas, primary degrees and masters degrees. We are significantly losing out in terms of the OECD mean in relation to the output of PhDs - we are 24th of 25 OECD countries measured. That is an issue to which we will return because it is central to the whole issue of the contribution which higher education makes to the development of the Irish economy, particularly in the knowledge society on which we are all focused.

The key challenges facing higher education - my colleagues will address any questions in this regard later if the committee wishes - are the demographic changes and the impact that has in terms of client groups. The changed economic climate and funding constraints are challenges which face both the institutions and Government.

I referred earlier to the development of a knowledge economy. In so far as Ireland will seek to achieve a well established and successful knowledge based economy, the universities and successive Governments have recognised this fact. The universities have a key role in ensuring they provide the resources to the economy which are critical in this regard. That is why investment at the upper end of the higher education spectrum is particularly important as well. In that regard, the committee will be aware that in the national development plan there was a very substantial commitment to investment in the area of research and development both within the context of research and development being funded by the Department of Education and Science and also by the Department of Enterprise, Trade and Employment.

The changing profile of new interest higher education is also going to be a major challenge to the higher education system. This is something that the institutions have to address in terms of their existing systems of instruction, lecturing and so on. As we perceive it, there is no doubt that the institutions will have to ensure that individuals have more readily available access to higher education in a manner which is user friendly for them. The system has to be more responsive to the needs and availability of individuals.

I will deal now with the issue Mr. Jordan raised, which is the point of this whole discussion, that is participation and the widening of access. Without wishing in any way to get into the issues raised by Mr. Jordan in relation to a loan system or the reintroduction of fees, one has to be mindful of the fact - no doubt this will be taken account in the review currently being undertaken by the Department - that participation rates are very skewed indeed. My handout illustrates an estimated percentage of age cohort entering full-time higher education by socio-economic group, which will not be news to anyone here. It bears some embellishment. My handout also illustrates changes over time in participation by the SES group as well. The outcomes from our surveys on access are relevant. Everyone in the Department acknowledges, and the Minister has said, that equitable access is foremost among the key policy priorities. Participation in higher education must be broadened. That fact is demonstrated by the figures I have here before me. Even though there has been a very significant increase in enrolments in higher education since 1980 from 40,000 to 123,000 and the rate of admission has doubled in a short time, we are still faced with a situation where only one person in five from an unskilled manual background enters higher education where almost 100% enter from the higher professional group.

I am quoting from the report. It states that those who have the means to do so should contribute towards the cost of their higher education.

Deputy Gogarty

Can you comment on methods and so on?

Mr. Dowling

No, I do not intend to go into the issue of fees - I made that point in introducing this - other than to quote the statement in this document that the report of the McNamara action group stated that the mere existence of a fee for participation would be a disincentive to go to college. It is not the full picture. I will not go any further than that.

To come back to my presentation, it is important to put on record that from the Department of Education and Science's point of view our key priority at this moment in so far as participation in higher education is concerned is to improve access for disadvantaged groups, mature second-chance students and students with disabilities. We would be totally ad idem with Mr. Jordan and the USI in that regard. The issue is speed of implementation rather than any issue of substance. It is equally important to target resources, as the Minister made clear, to areas of greatest need. The terms of reference which the Minister has given to the review group clearly state that he wants to explore all options to enhance equity and widening of participation.

In regard to implementation of the McNamara report, expenditure on student support has substantially increased since 1998. More particularly the specific funding which we have in place for third level access measures has increased exponentially. For 1994-2000 the spend on third level access measures was €0.3 million, last year the out-turn was €24 million while the provision for this year is in the region of €26 million.

The National Development Plan 2000-2006 committed the Government to a third level access fund of €121 million for the period, which would be EU social fund aided, with the intent of promoting participation of students from disadvantaged backgrounds, mature second chance students and students with disabilities. Mr. Jordan referred to the 78 recommendations but I will not refer to those for a moment. Among the key recommendations from the McNamara report was the setting up a national office for equity of access to higher education, distribution of funding over the period 2000-06, setting targets for participation, prioritising the reform of student supports, intervention at pre-school, first and second levels and specific recommendations in relation to disadvantaged students, students with disabilities and mature students. Where have we got to date? I do not quibble with Mr. Jordan's concern about the delay in establishing the national office for equity of access to higher education. Mr. Jordan equally knows that at the end of last year the Minister for Education and Science authorised the Higher Education Authority to proceed with the establishment of the office. Earlier this year the Higher Education Authority advertised for staff for the office. It is my understanding from the Higher Education Authority that it expects to recruit staff within the next number of weeks. Equally, we are in discussion with the Higher Education Authority in regard to the date of formal establishment and the hand over by us of certain of our activities and functions to it. We would expect that the national office would be effective, certainly from the summer. I do not want to give a precise date at the moment but our discussions with the Higher Education Authority, which are ongoing, have as an objective the early formal active establishment of the office from the summer. Obviously there are issues to be addressed but that is our objective.

We have increased significantly the special rates of maintenance grant, known as top-up grants. When my colleague was before the joint committee in February, he identified the major investment which has taken place in this area and the fact that initially there was a slower take up of the top-up grant than anticipated, but with a review of the arrangements for the top-up grant and the easing of the conditions we expect that the target of €7,000 will be achieved if not exceeded in the near future. We are heading rapidly in that direction. The millennium partnership fund for disadvantage was established and the national office for equity of access to higher education will come under the remit of the Higher Education Authority.

I commend Mr. Jordan on his excellent presentation. I do not wish to get into any argument about the content, much of which I might disagree with if I chose to do so. At present it would be inappropriate for me to comment on some of the issues in relation to loans etc. because that is an issue which is being addressed by the review group. The fact that I am not challenging some of the presumptions in relation to that area does not mean I accept them. It just means I am restricted in making comments on them because I would be anticipating the outcome of the review and speculating about it.

Chairman

Thank you, Mr. Dowling. We have had two lengthy presentations. Some of my colleagues thought I should have been less liberal in the allocation of time to both delegations - one continued for 24 minutes and the other for 22 minutes, including a minute for interruptions. I have spoken to the working group about having a different order of speakers in situations where we have guests of this nature but I had not agreed it before the meeting. I shall call Deputy Enright first. There are 11 members present and assuming they all need time I suggest four minutes each.

Deputy Enright

I shall start with a few brief points. Without being critical of the Minister and his Department, from my reading of the entire situation, your eye is off the ball in terms of what is being done. While the Minister refers consistently to improving access to third level, all that is being examined is money and the entire discussion since last August has centred around the possible reintroduction of third level fees. Little seems to have been done in the meantime in regard to examining the reasons students are not taking up third level. I have asked the Minister questions on this matter on a number of occasions, as have other members. The review which is being done will cover a range of topics relating to the schemes of student support, including the level of maintenance grants, eligibility and income limits with respect to the grants and the free fees initiative. If access is to be improved the reasons for lack of access have to be examined. That this issue does not appear to get the required level of concentration is extremely disappointing.

I appreciate no decision has been made on the loan issue and in a sense we are all talking in the dark. I agree with what Mr. Jordan said in regard to the Australian evidence and the problems that have been caused when students graduate for house purchase and so on. Graduates who wish to live in any city in Ireland, find it extremely difficult to purchase a house. If they have a loan of up to €30,000 on their backs they will not be able to go into a bank to negotiate for any kind of additional loan, be it a car loan to set up in business, a home loan, or a loan to lease an office. What exactly has the Department examined in terms of the loan? How will the Department assess the actual income? Will it look at the income of the parents of the students at their time of entry into college, their estimated earning potential depending on the course, or the actual postgraduate real earnings? They are three totally different things. A son or daughter of wealthy parents could go to college and do a course but not one that would allow one to get a good standard job. Technically, if one is no longer subsidised by ones parents one may have a very low income and have to contend with a loan. Likewise one could come from a very disadvantaged background and end up in a fabulous job after college and be extremely wealthy. How is that going to be looked at and assessed because there are many contradictions here?

How will the courses which students choose be assessed? Mr. Jordan made some points in relation to this matter but the cost of running a course is certainly not equal to the actual earning potential afterwards. For example, I did a BCL and one's subsequent earning potential is quite good. It is not an expensive course; all one needs is a lecturer, the books and the library. However, one's earning potential following completion of an agri-science course, which is much more expensive, is far less. There are many questions that need to be answered in that regard.

Like Mr. Jordan and many of my colleagues, I do not believe the equity argument. It is no coincidence that this argument was not made in the past five years and that now, following last summer's election and the fact that the economy is more constrained, we are considering the issue. People can see that for what it is. If the equity argument was as strong as the Minister claims, funding for many programmes would not have been cut. I heard of a cut this week in the Giving Children an Even Break programme, where three teachers were taken from a junior school. We may as well not even talk about third level because those children will not get a chance to get there.

I am sure Mr. Dowling heard the comments Seán Dorgan, the chief executive of IDA Ireland, made recently at a winter school. Mr. Dowling alluded to it in his presentation in terms of the low take-up of PhDs, Masters degrees and so on here. Mr. Dorgan is seriously concerned about the impact of that on our economy. If we stop people going on to third level by reintroducing fees, how will we ensure there is a flow of people from third to fourth level? If someone has the burden of a €30,000 or €40,000 loan after third level, they will not be inclined to go on to do a Masters degree or a Ph.D. That matter needs to be addressed.

I take serious issue with the comments about the commitment to research and development. The cut in the Estimates for those programmes was severe. We are treating the research area in universities on a stop-go basis. Money is given one year but taken away the next. Research in programmes does not work like that. If the funding is not provided by the State, there will not be any matching funding from companies and researchers, scientists, etc., will not see Ireland as a place in which to invest because there will not be a consistent flow of funding. They will not set up a project if they think their funding will be taken from them the following year.

With regard to the setting up of the national office for equity of access to higher education, in a reply to me on 14 November, the Minister said he gave approval for that within the past week. Mr. Dowling referred to that and said it would be up and running by the summer but two years is a long time to get something like that in train.

Last October, my colleague, Deputy Naughten, asked the Minister about the cost in today's terms of administering the third level fees scheme. The Department does not have that information. It is unbelievable that such information is not available and that we are discussing the reintroduction of fees when we cannot even say what the cost was to the State seven years ago. I would like an explanation as to the reason such information is not available because if we are to reintroduce fees, we should know what it cost to administer the scheme previously. Serious decisions will be made here and we need to be able to assess the cost aspect of those decisions.

The Minister has said that those in the higher income brackets will pay fees, but I still see it as a right. What higher income bracket is the Minister referring to? His idea of what constitutes wealth and mine might be somewhat different. Has an assessment been done of the cost of administration versus the amount of money that will be taken in? Will the proposal be viable in that respect? I understand that when the issue was discussed by a committee prior to the decision being taken to abolish fees, the point was made that it would not be cost-effective to make the very wealthy pay the fees because of the cost of administering the scheme. I have not seen that in writing, but I have heard from those who were members of the committee at the time that it was discussed. I would like some comments on that also.

Deputy O’Sullivan

I also welcome the two delegations. I agree with Deputy Enright that this is not about equity but about helping to fill the holes in the economy created by the way Government has been run in recent years. I also agree with the first point made by Colm Jordan. Equity in the education system needs to be addressed through the taxation system. Charging fees to people at the very top level would not bother them half as much as closing loopholes in the taxation system. A report from the Revenue Commissioners for the years 1999-2000 stated that 18% of the top 400 earners in the country paid less than 15% of their total income in tax and 29 individuals in the top 400 did not pay any tax in that year. If a serious attempt was made to close the tax loopholes which benefit the top earners to whom we are referring, it would bring in far more money that will be brought in under the proposals currently under consideration.

I wish to refer to figures provided by the Higher Education Authority on the last occasion it appeared before the committee. Finland, in particular, was striking in that the rate of participation in third level education was 93%. In terms of the ratio of students of fathers from working class backgrounds relative to their proportion in the national population, they participate in third level almost at the same level as their numbers in the population. In other words, a country like Finland, which uses the taxation system to pay for areas such as education, has almost eliminated the inequality of access to third level for people from working class backgrounds. That is a good example of the way to go forward. The way that is proposed, even though we do not yet have the report, will take us backwards.

If we look at the fancy figures on the graph provided, in so far as we have them, they show that some important sectors were experiencing a decline in terms of participation just before fees were abolished. That is included under salaries, employees and lower professionals.

We also received a graph from the Department today on the increase in expenditure. On the previous occasion on which representatives of the Department came before the committee, they supplied us with another graph on the increase in participation which looks very like the graph on the increase in expenditure. We can all use statistics to argue a case and I would like to use those particular ones today.

I want to address the issues raised by Colm Jordan, particularly fear of debt and emigration, which he has detected. I commend him on the detail of his presentation and any further information he might have would be useful, particularly on the issue of emigration because if there is a problem with emigration in Australia in terms of students fearing debt, there will be a much bigger problem here because we are so near many other countries.

In that regard, I want to ask a question of the Department. From replies to parliamentary questions, it appears that the terms of reference of the study are quite narrow. Will there be any consultation with Departments such as Enterprise, Trade and Employment and Health and Children? Will the necessary people in the economy be available, including scientists, engineers and so on? Will we have enough doctors, nurses, speech therapists, physiotherapists, etc., which are currently in short supply? If students fear having to pay a graduate tax in Ireland, they will not be able to afford a house or be in a position to deal with the other issues that arise in terms of their incomes.

Many students who travel abroad for a year or two after graduation do not return. I would be interested to hear the officials views on that because this is a much wider issue than simply balancing accounts in the Department of Education and Science. It can have a huge effect on society and the economy if we change the participation rate, which has been growing steadily since Donogh O'Malley introduced free second level education in the 1960s, of which I was a beneficiary. It is important that we widen this issue because it is not just about balancing books in the Department of Education and Science.

Fear of debt is a huge issue for students. Can Mr. Jordan and his colleagues provide us with any more information on that? Will the investigation address the issue of the inadequate level of the grant for students in the lower income brackets? That is a deterrent for students at that level. Will it address the question of the earlier stages of education? From statistics in other countries and from information available to us, we know the main deterrent for people in low socio-economic groups going on to third level is not contained at third level but much earlier in the system.

Having regard to what appears to be a narrow term of reference for this study, the Minister may get the result for which he is looking and he seems to know the result he wants. However, it seems that the study will not address the issue of equity of access to education and, equally important at the other end of the scale, the effects such a reversing of the trends might have on society and the economy.

I have an objection, in principle, to reversing the progress made in terms of free tuition at primary, second and currently at third level. There are other broader issues about access with regard to part-time students and the freeing up access to third level in other ways. I understand that my colleague, Senator Tuffy, will speak on those issues.

Chairman

The next speaker is Deputy Gogarty, who will be followed by Deputy Andrews, Senator Minihan, Deputies Hoctor and Stanton and Senators Tuffy and Ulick Burke. I call Deputy Gogarty.

Deputy Gogarty

I thank the representatives for attending this meeting and giving us this information in as forthright a manner as possible. I acknowledge that the USI is able to be more forthright than Mr. Dowling and his team, which is understandable.

Deputy O'Sullivan took the Chair.

Deputy Gogarty

I will not hold back on being forthright in response and I hope that when Mr. Dowling prepares a report he will pass it on to his superior, the Minister, Deputy Noel Dempsey, who will hopefully pass it on to his superior, the Minister for Finance, Deputy McCreevy. Mr. Dowling made an interesting comment. He said that, of course, if more funding was available, we could implement the recommendations more quickly. That is the crux of the matter because, ultimately, many recommendations can be made, but unless the necessary finance is forthcoming, nothing will happen. That is a key issue in terms of funding higher level education and in regard to other aspects of education.

I was not born 38 years ago, but I read that the investment in education report of 1965 was the first of its kind to outline the idea of education as an economic investment in Ireland's future. The authors of that report were well ahead of their time because it was not until the early to mid-1980s that the then IDA and industrialists took the idea on board and recognised the concept of knowledge based capital. As an added value to the economy, knowledge is increasingly more important. I presume that no one here would deny the fact that if it was not for our pool of educational resources the economic boom from 1995 to 2001 would not have happened.

I put it to Mr. Dowling and his colleagues that having blazed a trail initially, the Department of Education and Children - or certain people driving that Department - is now reversing the system. It seems that the Department was pushed in this regard by the Minister, Deputy Noel Dempsey, who was pushed by Minster for Finance, Deputy McCreevy, and, no doubt, by the Tánaiste, Deputy Harney. Their ideologically driven voodoo economics are putting the Thatcherite principle before the principle of free education for all and before the principle upheld by the Department that investment in education is a good investment that will reap rewards far in excess of the financial amounts concerned.

By cutting costs here, putting forward the idea that there may be a loan scheme and the reintroduction of fees, instead of increasing investment in education, a certain element will be taken out of the equation. As other Members stated, it is more likely that middle to lower income earners, as opposed to those in receipt of social welfare payments or the rich, who can afford to pay, will suffer from this proposal. It would result in a transference of the money from what the State is paying out of its tax coffers to what people will be pay in addition; it will not result in additional investment in education.

From the response to the freedom of information request submitted by Mr. Jordan and his colleagues, it seems that 63% of the registration fees increase went back into the coffers. That is a joke and hopefully the freedom of information legislation changes will not prevent more of that information coming to light because it highlights the key issue. The Department is cutting back because the Minister for Finance, Deputy McCreevy, has told the Minister for Education and Science, Deputy Noel Dempsey, that the allocation provided is all he is getting, that he will have to cut back, forget about investment and that the bottom line is money. I have no problem saying that this money is being squandered through SSIAs, through the stock market and through being given hand over fist to horse breeders. This is not an issue on which the representatives can focus, but they are dealing with the parameters of it.

At previous meetings, departmental officials have said that a major problem is the certainty of funding. If Mr. Dowling had a window of three or four years in respect of funding, would he be able to project investment requirements more efficiently? With regard to the recommendations of the access report, why do interventions at pre-school and first and second levels seem to come last? I would have thought that there would be a need for urgency in this regard because, as Deputy O'Sullivan said, it is at the very start that the access problem begins, not further up the chain.

I also wish to allude to the reasoning behind the Minister's kite-flying in respect of equity. Again, the equity arguments have been used to the effect that if there was a loan scheme, it would open up access to those form more disadvantaged areas. I would like Mr. Dowling's opinion on this, if he can give it. The Australian model has shown that significant increases have not occurred in terms of access for people from less advantaged backgrounds. The USI case is correct. That is the evidence I have received from the Australian Green Party. If Mr. Dowling cannot answer this, I will understand, but I ask him to pass on this question to his colleagues. I put it to him that the only way to raise additional funding for third level education is to increase taxes directly. There is no other way around it with the possible exception of borrowing. However, this Government has an ideological problem with borrowing or raising taxes. That is the crux of the matter and this proposal is merely playing around with the issue. The Green Party's suggestion in this regard would be to borrow or increase income tax in the same way as was done under the Finnish model - the Greens were in government in Finland for a number of years - and we rebut the argument that such an increase in taxes would act as a disincentive to workers. We would reduce employers' PRSI correspondingly because that is a tax against job creation and we would impose taxes on waste production and energy. That would be a Green way, but it would also be a way of gaining the revenue from those who are earning the most while not penalising them too much. A reduction in employers' PRSI would encourage employers to raise wages slightly. I would say that we should increase taxes or borrow, but there should be not be a reintroduction of fees.

Deputy Andrews

Mr. Jordan said that he would welcome rigorous questioning from the committee, which he has not received. We have so far heard everybody agreeing with him. I am not sure he came to this meeting to hear everybody agreeing with him.

The abolition of fees in 1996 was a missed opportunity and it is economically and politically extremely difficult to row back on that decision. I want to focus on the issue of taxation. The view expressed is that the abolition of fees led to an increase in spending on access to the third level and that has led to a corresponding increase in numbers. That is not apparent from figures we have; it is speculation. Decreases in taxation do not necessarily mean a decrease in revenue. In the past decade, decreases in tax and the creation of a tax credit system have resulted in a greater tax intake and, correspondingly, to the increases to which Mr. Dowling referred. The percentage tax increase will not necessarily lead to the benefits all of us hope to achieve. Some speakers have said it is not about access, however it is all about access. The only issue here is access to third level. How we achieve that is either through leaving fees out of the equation, the access proposals that have been made by the action group or in some other way, but access has to be the only issue. If one's view is that the Minister does not have that as his focus, that is fair enough.

We have heard a fair amount of left wing dogma in the course of today's meeting about horses, the horse breeding industry and so-called made-to-order tax breaks. I do not wish to be confrontational but the Minister closed 12 loopholes in the budget and another afterwards when he became aware of it. He is requiring people in the horse breeding industry to provide figures so it will be possible to assess the cost and benefit of the tax breaks for that industry.

This is just left wing dogma and it is not contributing to the debate. Mr. Jordan has total faith in the tax system to deliver benefits to the educational sector, specifically with regard to access, if there is an increase in taxation. However, his own FOI reveals that this does not appear to be the case and that the Government will not spend it or ring fence it for education. It will be used for secure Exchequer savings. It does not make sense to say that an increase in taxation will be ring-fenced for access to third level education. That is difficult to understand.

Senator Minihan

It is difficult to speak about an issue when we are anticipating and second guessing a report. I prefer to reserve many of my comments until I have the report. However, I wish to pose some questions to Mr. Dowling.

It is disturbing that although a report was published in May 2001 with regard to the establishment of an office for equity in access to higher education, we still have not reached the end game on it. If private companies were to operate in that manner, they would not be able to continue in business. It does not give one great confidence in the process. Mr. Dowling is hopeful that it will be established by the summer but that is a full two years after it was agreed. It is most disturbing that it has taken so long. With regard to the report on funding, can Mr. Dowling give a specific date for its publication? We have heard many projected dates.

I am delighted with the economic lesson I have been given at this meeting, that the way forward is tax and borrow. At last we know the Green Party economic policy. I am equally delighted that the other parties have stated clearly that they support increasing taxes. I am sure the public is delighted to hear it too.

Senator U. Burke

Will the Senator be saying that tomorrow?

Senator Minihan

I will make a good stab at it. It is on Saturday, actually. The fees issue is becoming confused with regard to what it costs to educate a person at third level and what it costs to maintain them in third level. Both issues are continually being confused.

I have serious questions about the maintenance grants and how they are distributed. There are interesting statistics in this regard. One striking statistic is that of the 6,000 grants given out by 26 local authorities, 1,000 were given to students from farming backgrounds, 400 were given to students of self employed parents and 137 were given to students from homes of unskilled manual workers. The self employed and the farming community, who assess their own incomes or have them assessed, have a decided advantage in arriving at their net income by writing off certain capital expenditures during the years while their children are in college.

The reality is that the burden of fee paying is put on the PAYE worker. I welcome the move towards having this assessed by the Department of Social and Family Affairs, which is in a better position to do so. There is room for huge improvement in this area to ensure that maintenance grants are directed at the people who require them. We also have to give serious consideration, in the context of maintenance grants, to the cost of living. It varies according to whether one is in college in Dublin, Galway, Cork or Limerick and should be examined.

I also wish to refer to the staffing and administration of third level educational facilities and the responsibility to ensure we are getting value for money from them, particularly given the vast number of people employed in providing third level education. Are we getting value for money or has it become, in certain areas, a platform for academics to hide and further their careers in academia while in receipt of salaries purportedly for educating students?

I have serious questions on the issue of fees and the principle of reintroducing them. I also have serious questions as to whether they should have been abolished in the first place. However, in fairness to everybody, I prefer to wait until I have the report before discussing the specifics. I thank the delegation and I compliment Mr. Jordan on the presentation. I do not agree with it all but I compliment him on how he delivered it and the work put into it. I also thank Mr. Dowling for the information he provided for the committee.

Deputy Hoctor

I welcome the principal officer at the Department and his colleagues as well as Mr. Jordan, whom we met previously, and his colleagues from the USI. We have had an interesting debate. In a way we are speaking in a vacuum because the review group is still working on the proposals submitted from, among others, colleagues in my party and other interested bodies. They can provide the valuable information necessary to devise a clear future for access to third level education.

The country has changed hugely in the last 20 years. I did my leaving certificate in the 1980s. The students in my class who got into college would have been obliged to go abroad because there were no jobs. Thankfully, that has changed and many of our graduates can stay in this country. We have to address the current problems. The removal of fees in 1996 has clearly not had the expected impact on the disadvantaged in society. The Department's most recent statistics, which are for 2001, show that less than 10% of this group is availing of third level education. This applies even in areas of Dublin where there is easy access to the physical buildings of the colleges. People pass the gates of the colleges every day but do not have access to the education. At the same time, there is a significant cost on the person from the country who wishes to go to college in Dublin.

A number of issues have to be addressed, including the competitive environment in which we live and the serious decrease in the number of students taking key subjects at third level which has resulted in the number of courses being depleted. This is particularly so in engineering and science. The Institute of Engineers recently outlined its concerns about the future of engineering in this country due to the lack of interest among young people in doing the relevant subjects at leaving certificate level. There is a deficit in speech therapy services that is only now being addressed by the Minister for Health and Children through his recent initiative. All these matters have to be addressed and positive discrimination may even have to be introduced when funding such courses to create a balance in the workforce. That would promote greater access to professionals that are so badly needed around the country.

I question whether the removal of third level fees was a good exercise. As regards the preparations being made by the review group, I am concerned mainly for the large middle-band in the workforce who cannot really afford third level education for their children, yet make enormous sacrifices to ensure their offspring can access it. I have expressed my concern for disadvantaged people who never reach third level education but middle-bracket earners, who cannot afford it either, go to great lengths, including re-mortgaging their homes in some cases, to give their children access to tertiary education of which they themselves were never able to avail. On the other hand, there are large numbers of people who have no difficulty in accessing third level education because of their financial means. No doubt their parents have worked hard to reach that level of earnings.

A number of issues have to be addressed in this regard. If certain parents can afford to send their children to private second level colleges, should the same people be able to avail of free third level education? That question is probing in nature but it will not be possible to answer it until we get the results of the review group, to which various submissions have been made. I am open to considering all the options the committee has discussed today and I look forward to the review group's report, which should have been published long ago.

If third level fees are to be reintroduced in the summer, it will prove difficult for people to budget for that eventuality at such short notice. Parents and students will need to know very soon what measures are to be undertaken regarding access to third level education and funding for the coming university college year. Realistically, people have to plan their finances and it would be unfair to announce such a measure at the end of the summer so close to the beginning of the new academic year. I will be speaking strongly to the Minister about that because due recognition must be given to ordinary household budgets.

I have a number of questions. We have a graph showing third level education expenditure by the Department, which has increased dramatically. While that is welcome, it should be the case because obviously costs have increased since then. We also have the expenditure on student support. If we take this year's estimate and subtract one from the other it appears that, roughly, some €400 million will be provided for student support. Is it possible to get a breakdown of last year's student grants and the disadvantage fund, which would leave us with the estimated cost of the free fees initiative? I would be very interested and would that information because I have not seen it anywhere, although somebody said it is not available.

The tax year has now changed and ends on 31 December. In the last year or two it has struck me as amazing that it is not possible for students and their parents to obtain application forms for maintenance support earlier. Why do they have to wait until later in the year? It would be useful if students knew before they started college whether or not they would obtain such a grant so why is it not possible for that to be done? They do not start college until September or October but the year on which they are assessed finishes the previous December, so why is it not possible for the Department to make those forms available much earlier in the year? In fact, they could be made available in January or February with a decision being made in April. Why has the Department of Education and Science not kept up with the Department of Finance on this issue and moved accordingly?

We have the estimated percentage of age cohorts entering full-time higher education by socio-economic group. Does the Department have any figures for those entering college based on parental income? Everything else seems to be calculated on parental income so is it possible to calculate those figures? Has the Central Statistics Office or anyone else done so? In some sectors, skilled manual workers earn substantially more than employers and managers. If one tries to justify the reintroduction of fees by using the access argument based on socio-economic group statistics, it is a false argument when one comes to income, which is the bottom line. I would like to see a debate on that issue because that argument cannot be justified.

I also notice that access to third level education by unskilled manual workers has virtually doubled, although it is still quite low, from 12% in 1992 to 21% in 1998. Does the Department have any information as to what impact, if any, the free fees initiative had on those figures? As regards gaining access to third level education other factors come into play, including culture and tradition as well as parental income and occupation.

While attending third level education is important, it is not the be all and end all. If everyone attended tertiary education we would not have anybody to undertake other necessary work in the economy. We must be careful not to label people who do not attend third level education as having failed somehow. There is a danger in making the erroneous argument that if one does not attend third level education one has failed.

I was particularly struck by the USI's presentation on investment in education for the common good, which is very important. I agree that the taxation system should be used to fund totally the third level sector. The Minister's argument is that the wealthy should fund the sector. Let them do so through the tax system, however, for which it exists. Otherwise we will dismantle the tax system, people will be paying for everything and we will have other costs associated with administration, which will not work.

Last year, some €24 million was spent by the Department on third level access measures. Could we have an accurate breakdown on exactly what has been done with that €24 million? Has any analysis on the impact of these initiatives been undertaken? Are they actually working? It would be useful to bring in the National Office for Equity of Access to Higher Education as soon as possible to discover what are its plans and what it is going to do.

In regard to overall participation in higher education, is it possible to define exactly what is meant by the term "higher education" as it appears on page two of the presentation? Does this include PLC courses and courses which are funded by the European Social Fund? I assume that those courses do not attract fees. It was stated that the number of 17 and 18 year olds who have entered higher education has more than doubled, which is more than welcome. To which institutions does this refer? Perhaps it would be possible to provide the committee with a list of those institutions.

Reference was made to a figure of €282 million for student support and tuition fees. I am confused about what is meant by tuition fees. Perhaps some clarity could be provided in that regard.

Senator Tuffy

I thank the representatives of the Department and those from the USI for their presentations. I am sorry I missed Colm Jordan's presentation but I was dealing with other business.

Mr. Dowling made a great case against the reintroduction of fees. He pointed out that the overall participation rate increased from 1980 to 1998, the period studied by Clancy. Deputy Hoctor is incorrect in that the figures to which she referred are not the 2001 figures, they are the 1998 figures. The report was published in 2001 and is based on the 1998 figures of those who attended college. It is important that people realise this. Mr. Dowling also made the point that participation rates overall increased in the period after fees were abolished from 36% to 44%. The Clancy tables show - Deputy O'Sullivan alluded to this - that from 1986 to 1992, participation rates among three socio-economic groups dropped. In the period 1980 to 1992, participation rates either decreased or remained static. That is particularly evident in the table on page five, which refers to intermediate non-manual, lower professional and salaried employees, or low to middle income PAYE groups. I do not think the Government parties are aware of that.

Before fees were abolished, the participation rate among three groups in society was dropping. After the abolition of fees, there was an overall increase and the participation rate among every socio-economic group increased.

Deputy Hoctor

It was very small.

Senator Tuffy

The figures are up to 1998 and available evidence shows that the situation has improved overall.

In regard to the three socio-economic groups I mentioned and the participation rate, I suggest that fees acted as a disincentive for them. That was one of the factors in the decision to abolish fees in 1995. I went to college under the fees regime and there was a low participation rate in my school, which was a middle income area. If the option of a job - for example, as a clerical officer in the ESB - came up, my friends chose the job as opposed to going to college because fees were a factor in their parents' ability to send them to college and, as a result, their overall career prospects were thereby diminished. That is a very important point to be made in regard to the decision to abolish fees.

In respect of the geographical issues which Deputy Hoctor raised, this is an important point, the 1998 figures show an overall increase in every socio-economic group in terms of the participation rate in college.

Deputy Hoctor

It was very small.

Senator Tuffy

It was an increase. I represent Clondalkin, one of the areas identified as a blackspot in terms of the participation rate in college. A point I wish to make about that, which many people have not analysed, is that the demographics in Clondalkin changed. There was a decrease in the population in old Clondalkin, a middle income area, but there was a huge increase in school leavers in areas such as Neilstown and north and south-west Clondalkin. The demographics changed, which is an important point to make in regard to geographical issues and more analysis needs to be done on that matter.

My experience in those areas is that more children are going to college. For example, one of the local schools in Neilstown sent its first ever student to study medicine at Trinity College and has sent several students to third level. Many of the people in those areas who go to college now are from the low to middle income groups to which I referred and if we reintroduce fees, we will take them out of the system. It will mean that people in those areas will not see any of their peers going to college, which is an important factor in increasing participation rates in third level. I do not know why Deputy Hoctor is tut-tutting because everything I have said is based on fact and I have studied the Clancy reports.

Deputy Hoctor

The grant is available to those on low to middle incomes.

Senator Tuffy

It is not available to them. I have identified three groups which, by and large, would not have qualified for grants. Approximately 18% of people in those groups would have received grants, compared to 41% of farmers children. The type of groups to which I refer would not, by and large, have qualified for grants.

There are other issues to be dealt with in terms of geographics. I say this because I want it to be taken on board in the Department's analysis of the situation. There are other ways to deal with access to education in the blackspots which have been identified. For example, in terms of the model of education provided. There should be a grater emphasis on providing a more flexible model of education in third level by, for example, allowing people to study part-time during the day. The task force on life-long learning suggested that there should be a free fees regime for part-time studies. They would be important initiatives in terms of access and who goes to college rather than the reintroduction of fees, which would have detrimental effect on participation rates in college. When the UK, Australia and Northern Ireland reintroduced fees, participation rates in college among certain social groups dropped. When fees were in place, evidence showed that they hit some lower to middle income groups. If they are reintroduced, the same thing will happen.

In regard to the Department's analysis, why does it not wait for the next Clancy report. The next report will be based on the 2004 figures, as Clancy carries out the studies every six years. The last report was based on the 1998 and the next one will be based on the 2004 figures. Unless the Department is going to do as good and as comprehensive a study on participation as Clancy has done, it should do nothing until the next report is published.

Mr. Dowling mentioned the changing profile of new entrants. The reintroduction of fees will not impact on higher professionals and, because of the grant system, it will not impact on the lowest socio-economic group. However, we could knock out some of the middle income groups and that would be wrong.

I listened to Deputy Stanton and took a close look at the table on third level expenditure. I do not have a calculator and was not able to work out the amount exactly, but, based on the table on page six, the percentage of expenditure on student support has not risen as a percentage of overall third level expenditure. I am not sure if it has decreased, but it has certainly not increased. Other factors relating to third level expenditure need to be analysed. Students should not be punished for the increased cost of third level education, particularly since the cost of student supports is not contributing significantly to the increase. For example, business and industry benefit greatly from the third level system. Students are punished while little is done to encourage contributions from industry even though it benefits most from the State's investment in third level education.

Many members have stated fees should be set at a level where they only hit higher income groups. I question whether that would deliver a worthwhile saving. Middle income groups will be hit if the Department is to generate money to invest in other education sectors. I question the Government's motives in that regard as it is a cutback.

Deputy Hoctor referred to students who attend private secondary schools. The vast majority of third level students do not attend fee paying schools. Newspaper articles have provided a partial analysis of this issue because 50% of the third level sector, i.e. the institutes of technology, have not been included.

The abolition of third level fees was one of many initiatives. When fees were abolished, the covenant scheme, under which the well off received significant tax breaks, was also abolished. The Minister at the time, Niamh Breathnach, also introduced Breaking the Cycle, which has proved extremely successful. Such initiatives should be introduced to improve access to third level education and fees should not be reintroduced. Measures relating to the models of education delivered by universities and colleges should also be introduced.

We believe primary education is a right and there is no fee regime for that sector. This is also the case with secondary education. However, if fees are introduced for third level, we are saying third level education is different and that it is not a right but a privilege.

Senator U. Burke

I welcome the departmental officials and the student representatives. The Minister has embarked on a ball hopping exercise regarding the reintroduction of fees, loans and whatever else he has in mind and I am not sure he is awaiting the report of the review group. Somebody has made a decision for him.

If the Minister and the Government were seriously concerned about inequity and educational disadvantage, they would target primary and secondary levels, not third level, because that is where the seeds of inequity, to which the Minister refers, have been sown. There are significant drop out rates in secondary schools in disadvantaged areas and this pattern is creeping in at primary level. This is highlighted by the need for attendance officers in primary schools to ensure children go to school. If the Minister concentrated on primary level initially, I would believe he was serious about tackling inequity and disadvantage in education as a whole.

I had the privilege of speaking to a group of 35 leaving certificate students three weeks ago during a school visit. It was absolutely frightening how many of them highlighted uncertainty over their futures as they approached the examination and their comments were not exaggerated. Their reasonable expectation was that they would participate at third level in the coming academic year and many of them said they would not do so because they had passed up on making an application through the CAO system or they had applied for specific third level programmes in which they do not have an interest.

The Minister and the Government, whether they are prepared to accept it, have reintroduced the concept of emigration in the minds of many leaving certificate students. When the examinations finish at the end of June, they will leave the country. It is frightening that the tide of emigration, which successive Governments had stemmed, will resume. The students I met felt they would obtain work abroad that they would normally expect to obtain here. If this is the result of the Minister's ball hopping exercise, it is nothing short of criminal.

What is the cost of students dropping out at primary, secondary and third level? Over the past four years, the drop out rate has increased substantially, particularly in institutes of technology. That must result in a significant cost to the Exchequer and the reason for it is clear. Reference is made to students from disadvantaged areas taking up third level places and new opportunities being opened to them. Is there a worthwhile mechanism in colleges, other than that provided by student unions, to support those in greatest need in the third level system? I made representations to an institute of technology two years ago regarding what was available to a student who was in crisis. The institute sent the student to one of his lecturers. There is no worthwhile mechanism for such students at third level under which they can avail of the support they need.

Mr. Dowling

I thank the members of the joint committee for this interesting discussion and the important points they have raised, some of which I will be unable to address because they stray into the political arena, in which I do not propose to immerse myself. Equally, there is a presumption in many of the questions regarding the nature of the system that may evolve over the coming months, about which again I cannot comment. I do not wish to add to the level of presumptuousness in that regard.

There is concern about a range of factors in relation to the higher education system, particularly access, but before I get to that, a number of questions were raised about research and development and the general financing of the higher education system. I can then come back and deal with the more substantive issues. I will ask my colleague, Mr. McCarthy to address questions members have raised on specific issues, particularly in the research and development area.

Mr. John McCarthy

I will be brief because, as Mr. Dowling said, most of the questions addressed the issue of the fees review. Deputy Enright raised the issue of investment in research and development and characterised the approach to investment in research and development as stop-go. It is important to emphasise the commitment of the Department from a policy perspective and in terms of our overall policy priorities to the research and development programmes that have been put in place over the past three or four years. From a position of no dedicated research and development funding pre-1998, our level of investment at €50 million this year is significant. This has been an important factor in our early development towards a knowledge and innovation economy, which is the Government's stated objective in terms of our next phase of economic development.

Given that the approach has been characterised as stop-go, it is important to point out that the level of current investment in research and development this year has increased year on year over 2002. It stands at €49.1 million this year as against €47 million last year. I acknowledge there has been a fall in capital expenditure, to which the Deputy probably referred, but that has been described by the Minister as a pause in funding. We can hopefully accept the ongoing investment in current expenditure as a commitment on his part and that of the Government to ongoing investment in this area. Investment of €50 million represents a significant statement of confidence in an expenditure programme.

The Minister and the Government have reiterated their commitment to the PRTLI, in particular, over time and this has given heart to people within the research community and the business sector who look to the education system, and higher education in particular, to develop skills and produce graduates, postgraduates and PhD students who will become the foundation of a knowledge-based economy.

The other issue of interest relating to my area of responsibility was raised by Senator Minihan. This relates to the staffing and administration of third level educational establishments. He asked whether we were truly getting value for money. It is a question that can be asked of sectors throughout the public service. I will outline briefly how accountability arrangements have been strengthened in the higher education sector. Pre-1997 academic freedom and institutional autonomy formed the strong ethos of the system but the 1997 Act achieved in legislative terms a strong acknowledgement of the requirement for public accountability from the university sector, in particular, and a number of functions have been delegated to the Higher Education Authority in respect of that.

The Higher Education Authority is directly accountable to the Committee of Public Accounts and the Comptroller and Auditor General has strong functions and responsibilities in regard to the sector as a whole. The Higher Education Authority also, in line with its responsibilities under the 1997 legislation, issued a framework for financial management and reporting for universities. There has been considerable strengthening of the framework that is in existence in terms of holding universities in particular to account for the effectiveness and efficiency with which they utilise public resources.

There has been considerable new investment in higher education in recent years, as was outlined by Mr. Dowling in his contribution, and the other issue in his regard is that much of the new funding has been in the form of various targeted skills initiatives, which are subject to rigorous evaluation in all cases. Accountability and evaluation within the system in terms of new funding and the overall block grant that is made available and voted by the Oireachtas to the higher education sector through the Higher Education Authority is quite robust.

Mr. Jordan

It was our understanding that we would be the second party to make a presentation to the committee. Before I get to the substantive issue, it might be worthwhile to address some of the points made. Some members referred to the terms of the review that is happening and the fact that it would be all-encompassing and examine all options. Unfortunately, we not have received formal notification of the full terms of the review. There has been anecdotal evidence of what the review is about but we do not know the full detail and we have not received official notification.

Mr. Dowling

It is in the public arena. The Minister has indicated the terms of reference in quite a number of parliamentary questions.

Mr. Jordan

Many sixth years studying for the leaving certificate and third level students do not try to access replies to parliamentary questions. However, it is good that we have that now and we will try to promulgate that throughout the system. The Department highlighted that we are scoring well with a 44% participation rate. That is good but it is important to highlight that economies at the forefront of the world economic boom, such as Japan, have participation rates of 60% and stated objectives of a participation rate of 80%.

While the participation rate is 44%, the drop out rate in the institute of technology sector is almost 40% and it is almost 20% in the university sector. Through the research carried out by the Education Research Centre in Drumcondra, it can be seen that is substantially due to financial pressures, stress and so on. There are other factors but this is clearly about choices. For example, the Government cut back on the number of career guidance counsellors. There is now one for every 500 students whereas there used to be one for every 250. Lack of career guidance has been a factor in people dropping out.

Regarding the recommendations of the previous review group, 25 have been implemented while 19 are the responsibility of the higher education institutions, five refer to all Departments and three to the National Qualifications Authority of Ireland. Shockingly, this means 26 remain to be implemented. That is one of the most concerning points raised before the committee today. It is strange that review after review is being commissioned while the recommendations of a previous review have not been implemented. The action group goes into the some detail in saying "The action group believes it is not equitable or efficient for students from more advantaged social backgrounds to be in receipt of financial aid from the State to attend higher education." It is important for me to point out as the only person present who sat on the action group on third level access that that is under the area of the special rate of maintenance grant targeted at those most in need.

It has never, and will never be, the position of the USI to seek targeted money for the most wealthy in our society. Those who try to paint that in a different light are not representative of our position. We do not seek targeted initiatives to be introduced in a blanket fashion in terms of financial aid and student support.

Deputy O'Sullivan asked about the fear of debt and emigration. Statistics from UK universities show that 84% of people across all groups see a loan, debt or fee system as a deterrent. Interestingly, while it is easy to point out that those most in need will not be harmed, the key factor is that people who are at junior and leaving certificate level do not know the income levels. They are put off before they have applied to do honours maths, pass maths and so on. They realise that there is a barrier and they do not go for it.

On Deputy Andrews' question, it is important to point out that I did not ask for an increase in taxation in the presentation. I asked my colleagues to go through the presentation and I believe I pointed to a utilisation of the taxing system. Towards the end, I asked that the current system should be reviewed to ensure it is recouped in a fair and equitable way. As someone who studied taxation and fiscal policy, I am fully aware that a decrease in taxation does not mean a decrease in intake. That was supposed to clarify our position.

I wish to talk about left-wing dogma. Unfortunately, we have not heard a lot of left-wing dogma from the Opposition parties, or even ourselves. The only left-wing dogma I have heard has come from the Minister, who has continually asked, "Why should someone like Michael Smurfit pay fees for his school?" I have been criticised in my organisation for being right-wing. Our fundamental belief is that if an increased number of graduates go through college, there will be an increased number of people in very good jobs. This would mean an increase in taxation paid and, therefore, there would be more money in the Exchequer to spend on education, infrastructure and health and there would be a decrease in taxation. I would have been classified in our organisation as right-wing, but in terms of the dogma, it has not come into it. We have heard a lot of that from the proponents of the introduction of fees.

We have total faith in the tax system. It is strange that when a Government introduces increased spending in a particular area or intends to introduce a tax cut, it will never say from where the money to fund such measures will come. However, when a Government seeks to withdraw a service such as free fees, it is very quick to highlight where the money will be spent. We see this as spin. Unfortunately, our organisation has had to identify from where the money should come. I do not believe that any organisation should be forced to decide from where the money should come. We have been told that the tax system would be the best way to deal with the matter, which may be through lowering taxation. However, we want to talk about fiscal policy. On a broader issue, the student movement finds it strange that charities should pay tax and that it is only at the dawn of the 21st century that rich industries are being asked to supply information.

Senator Minihan and Deputy Hoctor referred to a vacuum. I seek further clarification in this regard because I do not believe that a vacuum exists. There has been a report from the task force on life-long learning. There has been a report from Osborne and Leith entitled Evaluation of the Targeted Initiative on Widening Access for Young People from Socio-Economically Disadvantaged Backgrounds. Professor Malcolm Skilbeck, an imminent Australian academic, has drawn up a substantial report for the Higher Education Authority on equality within higher education. There has been an action group on access to third level education. In 1995, there was the White Paper charting our educational future and the de Buitléir report. There have been several studies on drop-out rates from various institutions. A special project was set up in 2000 by the previous Minister, who stated in the Dáil that a report would be made to him in regard to it in March 2001. The special projects team was to evaluate all levels of student financial support. Such a report has not been forthcoming.

That is why the delay in the current review is quite surprising. Is this due to lethargy or strategy? There are other documents, including documentation from the Union of Students in Ireland regarding education policy and a document, which was published earlier, regarding equality of access in third level education. In 1997, the Union of Students in Ireland held a conference on educational disadvantage which was opened by President McAleese. There simply is no vacuum. This is why I highlighted in my presentation the fact that there is a paralysis of analysis in terms of student financial support.

Senator Minihan

We were referring to the fact that political decisions currently in the public domain are dependent on the report to the Minister. That is the vacuum to which I referred. I would prefer to have it on the table before commenting on it.

Mr. Jordan

I am interested in the term "dependent on the report". Is there information about which we are not aware?

Senator Minihan

That is what I mean by vacuum.

Mr. Jordan

There are four Clancy reports highlighting the number of people who go to college. There is an action group report, which is the route map to decreasing disadvantage access. There are no questions in this area which do not seem to have been addressed. The plethora of reports and the fact that many of them have not been implemented prior to commissioning another report is very worrying.

Senator Minihan said that he is disturbed that there appears to be no end-game. While there is absolutely no malice - we totally accept the way in which the Department is working towards the report - it is a matter of great concern that the announcement was made during the summer months when people were just about to accept their third level places. The matter again raised its head in February and there has been talk about a decision at Easter. Approximately 50,000 people sit the leaving certificate each year and they and their families are very worried. I agree with Deputy Hoctor, who spoke about clarification in terms of budgeting. I hope that she will agree with me in saying that must happen all the time. There was a 69% increase in the capitation fee literally two months before people went back to college, which was very disturbing.

The Deputy also spoke about the small increase in disadvantaged groups going to college. If we look at that in terms of the percentage increase, we will see those in the very lowest socio-economic grouping increased their representation by 75% from 1992-98. While I accept that the increase is small, we simply do not know what the increase has been from 1998 to 2002 or 2003. I suggest that it might be considerable.

Senator Minihan was concerned about the grouping which received one sixth of the grants and so on. The newspapers have been reporting that people would skew their taxes, etc., in order to benefit from the scheme. One of the broadsheets reported that people from a particular sector were spending €100,000 on machinery in order to get their child a grant. It seems strange that people would spend more than €100,000 to be classified as being in receipt of a grant in order to give their child €2,000 to get through that college year. I realise that this is anecdotal, but it seems strange that one would go to such extreme lengths in outlay to recoup an incredibly small amount of money. I was concerned when I read this in the newspapers because it was adults who suggested it. We have consistently said that if one does not qualify for a grant, one should not get it. The grant, regardless of the top-up payment, is targeted at those most in need.

Deputy Stanton referred to the cost of the free fees initiative. Am I correct in saying it would be approximately €220 million for the free fees initiative?

Mr. Dowling

I will address that question shortly.

Mr. Jordan

Let us say, in broad terms, that the free fees initiative would cost €120 million. I ask the Deputy to divide €120 million by the number of students availing of the scheme. If we were to look at this in terms of value for money, it is simply the best way of spending €1,500 this country has ever seen.

Senator Ulick Burke raised the issue of drop-out rates in universities. In previous documents, we addressed the question of attempting to fund an increase in the grant. Some years ago, we looked at the drop-out numbers in the university sector. People do not realise on their investment through drop-outs. People who do not get their degree cannot say that two years involvement in a degree course should count as a diploma. There are no exit awards. We estimated the loss to the State through drop-out in the universities at about £60 million, or €76 million. When we bear in mind that the university sector only has a drop-out rate of around 20% and the institute of technology sector has a drop-out rate of 20%, we can see that there are considerable losses as in no realisation of investment in those people. Through an increase in the amount of student support provided, we would ensure more people completed their education and that that investment was totally realised.

To return to Deputy Jan O'Sullivan's point about emigration, Australia has seen considerable emigration due to the fact that people have to pay back on the scheme. One of the problems is that in Australia they do not necessarily have free transfer of movement. An awful lot of people could go to the Philippine islands and work freely or, indeed, Indonesia or East Timor, whereas in Ireland there is a much freer situation. When I approached the Department some years ago and was talking to them about a loan system I was told the Department had spoken to colleagues in the UK and had found a level of default payments. Indeed, when we teased it out we knew that Ireland's economy was much more open than that of the United Kingdom and Northern Ireland and that, therefore, there would be an increased level of default payments. Even setting up the system would take a considerable amount of time and a considerable investment. We believe that investment would be better spent on increasing the amount of student supports and maintaining the free fees initiative. We have heard from the Department that the number of school leavers is decreasing. Surely, that means savings will be made in terms of the outlay for the free fees initiative which could be put back into different areas.

Chairman

In your presentation I presume there is a typographical error when you state:

We are not alone in our view of Government policy. All the other Opposition parties have voiced their support.

I am sure you would not wish to categorise USI as an Opposition party.

Mr. Jordan

Not yet, Chairman.

Chairman

I thank both delegations, Mr. Jordan and his colleagues and Mr. Dowling and his colleagues. We have had a long examination of the issues. I am sure we will revisit this, probably with the Minister. I thank members for their co-operation also.

The joint committee adjourned at 2.20 p.m. until 11 a.m. on Thursday, 24 April 2003.

JOINT COMMITTEE ON EDUCATION AND SCIENCE debate - Thursday, 10 Apr 2003

Union of Students in Ireland: Presentation.

Mr. Colm Jordan

Mr. Pat Dowling

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JOINT COMMITTEE ON EDUCATION AND SCIENCE debate -
Thursday, 10 Apr 2003