I thank the Chairman for the opportunity to come before the committee and have a debate on the third level sector in particular, as well as other aspects of the education budget. The scale of the challenges we face and the speed with which the economic environment has changed made the supplementary budget one of the most critical in the history of this country.
Savings had to be found and the burden of these adjustments has been spread across Departments. An adjustment of €81 million has been made to the education Vote. This is made up of a reduction of €27 million in current expenditure across a number of programme areas and a €54 million reduction in capital expenditure. This adjustment brings the gross allocation for the education Vote in 2009 to €9.49 billion. This represents a total reduction of €134 million on the allocation in the October budget. The difference between the overall reduction of €134 million and the adjustment of €81 million in the latest budget is largely due to the transfer of funding for youth services to the Department of Health and Children, and adjustments for general savings agreed by the Government in February.
The revised allocation still represents an increase of just over 2.5% on the 2008 outturn. The details of the €27 million reduction in current expenditure are set out in the executive summary provided to the committee. I do not intend to go into detail on every element of the reductions, but I am happy to deal with these in the discussion afterwards.
Turning to capital expenditure, my overall capital allocation for 2009 is being reduced by €54 million to €850 million, compared to a total expenditure of €830 million in 2008. The capital allocation for schools has been reduced by €30 million. The allocation now in place for the 2009 school capital programme is €613.8 million, which is almost 5% greater than the allocation available at the beginning of the 2008 financial year. The reduction of €30 million will be applied to large-scale school building projects. I am pleased to say that all the school projects I have already announced will go to tender this year will proceed. The capital available for investment in the higher education sector this year amounts to €200 million, which equates to a reduction of €24 million. The impact of the reductions on my capital budget will be mitigated, primarily, because of the keen tender prices available in the construction market. This substantial allocation will also sustain employment in the construction sector.
To achieve long-term reductions in the public sector pay bill, the Government has introduced a series of measures aimed at reducing the number of people employed in the public sector. This includes a ban on recruitment and promotion. The Government decided that the employment of teachers and special needs assistants, SNAs, should be governed by a ceiling that will be determined this autumn, rather than an embargo on filling individual vacancies as in other parts of the public sector. The allocation of teacher and SNA resources to schools and VECs will be governed by this ceiling. This applies to teachers or teacher equivalents who are directly providing tuition to pupils in schools, special programmes or adult and further education settings. The Government also decided on a moratorium on promotions, which applies across schools, special programmes and adult and further education settings. An exception is being made in respect of the positions of principal or deputy principal. A concession also applies to the first allocation of post of responsibility allowances for new schools. These arrangements illustrate the Government's commitment to maintaining front-line services in schools.
A priority for the Government is to support those who have lost their jobs through retraining and further education. A range of measures are now being targeted at keeping people in employment, teaching new skills and facilitating better access to allowances. The higher and further education sectors have a key role to play in providing the type of skills improvement that will help unemployed people develop their workforce skills and avail of more sustainable employment opportunities as the economy recovers. As part of the budget measures, almost 7,000 additional education places are being made available for unemployed people.
From September 2009, an additional 1,500 post-leaving certificate places will be made available nationwide. This will bring the total number of PLC places to nearly 32,000. In the higher education sector, it is expected that at least 2,000 unemployed will be accommodated on full-time third level courses starting this autumn. A number of institutes of technology are providing unemployed people with the opportunity for direct entry on to newly developed accelerated level 6 certificate programmes. Under this initiative, participants will be able to complete the first year of a standard two-year programme in an accelerated manner so that they can move to the second year of the programme in September 2009. Just under 300 places have been provided under this pilot initiative, which started in February. Institutes of technology across the country are also utilising spare capacity to provide more than 900 places on a range of newly developed part-time transition programmes. It is hoped that having undertaken these courses, a significant number of participants will be encouraged to apply on a direct entry basis for a range of third level certificate and degree programmes commencing in September 2009. Participation in the accelerated programmes and the third level transition courses is free of charge and participants continue to be eligible for social welfare payments.
A total of 1,500 places will be provided to enable persons who are unemployed or on short-time working to pursue third level certificate or degree programmes on a part-time basis. The institutes of technology have been working closely with FÁS to ensure that apprentices are given every opportunity to complete their apprenticeships. Extra classes are being provided for apprentices who must re-sit exams, and a number of additional term blocks will be provided throughout the summer to facilitate more than 300 apprentices in completing the education phases of their apprenticeship. In addition, a new 11-week certified education programme has been developed specifically for redundant apprentices. The programme, which will be delivered by the institutes of technology, will commence in September 2009 and will cater for up to 700 redundant apprentices per annum. The programme will focus on developing core skills in maths, ICT and business in order to facilitate students progressing to other higher education programmes or completing their apprenticeships at a later stage.
The reductions in current and capital expenditure in education and across all Departments are necessary as part of the Government's efforts to reduce overall public expenditure and stabilise the public finances. Our overall goal is to return Ireland to sustainable economic growth, and this would not be possible without corrective action now. These necessary adjustments will secure the long-term viability of funding public services, including education.
I now turn to the issue of future funding for higher education. In contributing to the achievement of national policy goals for social and economic development, continuing significant resource needs can be anticipated for the sector. However, I wish to ensure that existing levels of funding for higher education and research are being targeted effectively and efficiently. That is why I have sought to make progress in examining the use of existing resources. The strategy group on higher education is examining the overall operational, governance and resourcing framework in the sector. The group will also consider the need for reorganisation and reconfiguration of roles within the system, including rationalisation. I have also requested the HEA to lead an urgent and comprehensive efficiency drive across the higher education sector. Work has already commenced in this regard. Areas such as shared procurement, shared services and greater efficiencies in course provision will be considered.
With regard to funding in the future, the sector relies disproportionately on Exchequer sources of funding and it is appropriate to look to wider means of meeting future additional resource requirements, having particular regard to the difficult budgetary and economic climate that is in prospect in the medium term. Individual higher education institutions have done some commendable work in raising funding through philanthropy. This is an area I wish to support, and I have asked the strategy group to examine how this might be achieved. Leading higher education systems internationally are characterised by wide revenue sources which in many cases include a form of direct student contribution. Higher education confers a clear lifetime earnings advantage on those who complete it. There are strong equity-based arguments, therefore, that those who benefit from higher education and who can afford to contribute to the costs of their higher education should be asked to do so.
There are many complex and competing considerations when considering the issue of student contributions, including institutional funding, family affordability, equity, participation and value for money for the taxpayer. However, it is an issue that merits consideration at this important juncture in the development of higher education and also given the current economic circumstances. My officials are finalising a technical report on the various options available. This will examine available models, drawing on experience of those that have operated internationally. It will assess the potential policy, cost and revenue impact of various available approaches in an Irish context. As a Government, we want to continue to increase opportunities for everyone to participate in higher education. To do that, we need to ensure access is available on an equitable and affordable basis and that funding of the sector itself is put on a sustainable footing. These objectives will be at the forefront of any consideration of the options available. I will provide the completed technical report to my Cabinet colleagues for consideration in the near future.
