I received notice from Senator Brian O'Shea that on the Motion for the Adjournment of the House today he proposes to raise the following matter: the proposal to withdraw school transport contracts from Bus Éireann. I call on Senator Brian O'Shea; he has 20 minutes.
Adjournment Matter. - Privatisation of School Transport.
An Leas-Chathaoirleach
I would like to welcome the Minister to the Seanad and thank you, a Leas-Chathaoirligh, for giving me this opportunity to raise this issue which we in the Labour Party feel very strongly about. The whole question of the privatisation of school transport needs to be put in its broadest context. Bus Éireann, because of the provisions of the 1986 Transport Act, must be in profit by the end of 1989. All the present indications are that Bus Éireann are well on target to attaining this objective. Some special offers which were run by Bus Éireann in the latter part of last year and the early part of this year have brought in an extra £250,000 in revenue. The organisation are showing a degree of entrepreneurial endeavour and this is both very commendable and very important in terms of achieving the objective of being in profit by the end of 1989. However, much depends on Bus Éireann's involvement with the school transport scheme.
Forty-eight per cent of Bus Éireann's revenue comes from their school transport activities. The knock-on effect for Bus Éireann generally if privatisation was implemented countrywide would obviously be huge. To illustrate what I mean by this I will outline the position in my own area, Waterford. Bus Éireann operate a garage in Waterford which employ 33 people. There are 76 school buses and 39 ordinary buses operating out of Waterford. If the 76 school buses were to be withdrawn there is no way that the garage overheads could be absorbed by the 39 ordinary buses on a viable basis.
Bus Éireann employs 120 people full time and 67 part time bus drivers in Waterford. Obviously, the Bus Éireann schools' office in Waterford would close. The garage would also close with further jobs being lost. The Waterford offices, the regional capital, would be further downgraded as the management would obviously be withdrawn to other centres.
Let us examine the present position. Ninety-six part-time drivers in Counties Clare, Laois, Cavan and Sligo have been issued with redundancy notices, some of which are to expire at the end of this month with the remainder to expire in mid-July because of the terms of the contracts of service and the particular operations the part-time drivers are involved in. These drivers, some of whom have been working for CIE since the inception of the school transport scheme in 1967, are being offered statutory redundancy terms — a half week's pay for each year of service before the age of 40 and a week's pay for each year of service after the age of 40. There is however a voluntary service scheme operating in Bus Éireann which provides for two and a half week's pay for each year of service. This amounts to blatant discrimination against the part-time drivers and another unsavoury element of these proposed pilot schemes. Including the part-time drivers, there are 130 jobs at risk.
Another interesting point is that the yellow buses used in the school transport scheme cannot be used outside school hours and are the property of the Minister for Education. I would like the Minister to tell us what she is going to do with these 130 buses which will revert back to her as soon as these private schemes are implemented.
Let me now refer to the newly-constructed Bus Éireann garage in Cavan recently completed at a cost of £200,000. I understand that the Minister for Tourism and Transport, Deputy John Wilson, was to perform the official opening in May or June of this year. Will the Minister now be called on to perform the official closure of the garage? Interestingly enough, when Deputy Wilson met with shop stewards of the Federated Workers' Union of Ireland in Cavan on 18 May he informed them that he was not aware of any Cabinet decision, or of any pilot project, on the privatisation of school buses in County Cavan.
The confusion goes still further with the Minister for Education claiming that it would cost £80 million to replace the school transport fleet, the Minister for Finance claiming that it would cost £50 million and finally Bus Éireann claiming that it would cost £20 million. If we take the middle figure, £50 million, the cost averages out at £100,000 per bus, which is the price of a superbus, which, as the Minister will agree, are a lot more expensive than school buses. My information is that there are 850 buses in the Bus Éireann fleet and that all but 141 of these are over age. Trade union sources contend that the fleet could be replaced over six years at a cost of £1 million per year. I understand that the Ministry for Defence in Britain have offered Bus Éireann 35 buses, compatible with existing Bus Éireann stock, at an all in cost of £248,500 sterling. The estimated cost of each bus is £7,100. Trade union sources contend that such buses could be obtained from the English service over a period to replace the Irish school transport fleet. These buses would have a high standard of maintenance and repair and a good working lifespan ahead of them.
The trade union movement strongly contend that a national bus building industry is essential but that in the present economic climate the finance is just not going to be provided to buy new buses and that the short term remedy, as I have outlined, is the only real solution at the moment. It is estimated that the exercise in the Counties of Laois, Cavan, Clare and Sligo will bring about a saving of £348,000 per annum. We must balance this against the estimated £421,000 per annum which would be paid in unemployment benefit together with the loss of £27,000 in PRSI contributions and £21,000 in PAYE payments. The total cost to the State would be £469,000. Let me repeat that the Minister would also find herself with 130 redundant yellow buses which would have limited use. I do not envy the Minister that one.
I am going to enjoy having all of these buses.
Trade union sources also inform me that the transport liaison officers are the CEOs of the county vocational education committees, and I understand that the Minister is going to abolish quite a number of these in the near future, that she intends reducing the number of VECs from 38 down to 20——
The Senator's own party, when in Government, were going to abolish them.
I cannot speak about something I was not involved with but we are talking about the present and what the Minister intends to do. The transport liaison officers in each of the four counties mentioned are, according to my information, to recruit three people to assist them in operating this scheme. It has been alleged that retired employees of CIE who availed of the voluntary redundancy package in the public service have already been approached to become involved in the scheme. It is not clear to trade union sources whether these people are to be remunerated by way of expenses which would be tax free or by way of a salary which would be subject to PAYE and PRSI deductions. I ask the Minister to clarify that point for me.
I do not have to respond.
I take it from what the Minister has said that she is denying that this is the case.
An Leas-Chathaoirleach
The Chair is anxious that the Senator should make his contribution without interruption or inviting interruptions. Would the Senator please continue.
I did not start the interruptions.
The Senator invited them.
This whole exercise is in breach of the agreement contained in the Programme for National Recovery and the provisions of the Road Transport Act, 1986. These compulsory redundancies were announced without consultation. The future of Bus Éireann is being put at risk. The computer system, which cost £200,000 and which Bus Éireann use in the operation of the school transport scheme, could very well become redundant. This exercise makes no sense in terms of efficient administration and cost effectiveness. It grossly offends the spirit and the letter of the agreement contained in the Programme for National Recovery. It resembles the decisions which have already been made and which have given rise to such chaos in the health services. The exercise appears to be based on misinformation and confusion. I earnestly request the Minister to withdraw the redundancy notices before irreparable harm is done not alone to the school transport scheme but to Bus Éireann. Following this, immediate discussions should take place between the company and the unions on the replacing of the fleet.
Let me first of all say, lest my non-reply be taken to indicate that I am in agreement with the charges the Senator has made, that I do not intend in public, in this House or in any other forum to reply to allegations made about certain persons and certain areas. That is not my function. What the Senator may say is his business; what I may say is another matter.
I thank Senator O'Shea for bringing this matter to the attention of this House. In respect of the school transport pilot projects and the consequences as the Senator sees them, for Bus Éireann and their staff, the Senator asked me to withdraw the redundancy notices issued. I have never issued a redundancy notice to a person in CIE. Let me make it quite clear that it is not my function to issue redundancy notices to the employees of Bus Éireann. That is their function, not mine.
I did not make that allegation.
The Senator asked if I would now withdraw redundancy notices issued to Bus Éireann staff. It is not my function to issue redundancy notices to Bus Éireann staff. That is their own business. I have no hand, act or part to play in the issuing of redundancy notices. I have to make it quite clear that it is not my function to do so. The second point which I want to make is that when I went to investigate this matter I was amazed to find that the Department of Education are paying 48 per cent of school transport costs. The Senator also referred to that fact. That places an enormous burden on any Minister for Education who receives no subsidy from any other Department towards the running of this service.
It is an important service.
I should put the issues into perspective by outlining the background to the school transport service. Quite obviously, Senator O'Shea's information is not up-to-date and I cannot blame him for that. Perhaps his union sources did not have it. But, as he is aware, I have had some meetings with them recently on the role of Bus Éireann in providing such a service.
The Department of Education have the responsibility to ensure the satisfactory delivery of transport services to approximately 160,000 primary and post-primary students throughout the length and breadth of this land. They also have the responsibility to ensure that the State gets the best possible value for the money it expends on the provision of this service. This is particularly so in the current economic circumstances, for all services have to be rigorously examined in regard to cost effectiveness. This scheme will cost approximately £36 million in the current year.
Concern has been expressed over many years and from many quarters at this level of expenditure, and indeed the last Government made very advanced plans for these pilot projects. They did not put them into operation but I know from a perusal of the records that very advanced plans, far more advanced than the ones I have now made, were made by the previous Government of which the Senator's party was a part. Concern has been expressed over many years from many quarters at this level of expenditure and I consider it our responsibility to explore all possible means of reducing the drain on our financial resources while continuing to give a satisfactory level of service to our children.
As the Senator is aware, the day to day operations of the school transport scheme are carried out by Bus Éireann as the agent for the Minister for Education; and again I repeat I do not issue redundancy notices to the employees of Bus Éireann. This function has been discharged efficiently by Córas Iompar Éireann, as it then was, and by Bus Éireann since the inception of the scheme in 1967-68. In the intervening 20 years generations of children have benefitted from the scheme, many of whom would otherwise have had extreme difficulty in ever getting to a school or getting to it on a regular basis. Great care is exercised in all aspects of the operation and the expertise and the good work of the company is worthy of appreciation. I have constantly said in public that our first concern is the safety of the children. All other factors come after that. In this respect Bus Éireann have a record unparalleled in Europe for the safe transport of children. Nonetheless, it is essential to explore all possible means of reducing expenditure and, as part of the ongoing review of the operation of the scheme, the Government have had under consideration the possibility of introducing a system based on local arrangements.
There are many issues which are relevant to the question of the devolution of the school transport operations as, for example, the matter of replacement of the school bus fleet, possible savings in administration and whether more flexibility in operations could be brought about in the system based on localised organisation. The examination of any schemes to be considered will include the determination of pupils' entitlement and the allocation of bus routes. All routes will be put out to tender and it will be open to Bus Éireann to tender in the normal way. I do not think that fact is being fully appreciated but the unions did appreciate it when we put it to them across the table. The projects will be monitored and the question of a general application of these or any similar arrangements will be considered when we see how these schemes are operating.
In regard to the consequence of these projects for Bus Éireann and their staff, these were put very forcibly to the Minister for Labour and myself at a very long and comprehensive meeting about two weeks ago which we had in this building with the unions at their request. Our primary concern, as I have said, is to provide a satisfactory school transport service at the lowest possible cost to the State. As matters stand, the Department are a major customer of Bus Éireann and will continue to be during the coming school year. In establishing the pilot projects we are, in effect, testing another model for the transport service and I consider that we are perfectly justified in so doing for the reasons already given.
I must emphasise that any pilot project would have an open tendering arrangement and the company would have the opportunity to secure substantial business as a contractor in the project areas. In general it will be a matter for the company to adjust to changed circumstances, which is an intrinsic part of everyday commercial activity and indeed which is a matter the Senator spoke about. The Senator referred to how Bus Éireann were getting their act together, justifiably so, in the economic circumstances under which we live.
I would like to take the opportunity that Senator O'Shea has given me to correct the impression that we are engaged on a sweeping scheme of privatisation. Indeed, I might mention that over 60 per cent of the school transport services already being provided are being provided by private contractors.
The kernel of the problem is the administration of the scheme.
An Leas-Chathaoirleach
Order, please.
The administration of the service in the four counties involved, which we have under consideration, is along the lines I have outlined. On the operational side, an open tendering arrangement would give Bus Éireann an opportunity to maximise their share of the contracting business for the benefit of employees, whose future is of course of concern to us in this House and indeed to Deputies in the other House.
The intention behind the pilot projects is that there should be a genuine devolution of the school transport service to local parties but I can assure the Senator, however, that the essential provisions to cover real hardship cases, such as the lack of adequate means on the part of parents or guardians, and to cater for handicapped children, will be maintained. The Senator and his party, and indeed all Members, may have had some worries in that respect. The Senator did not mention this in his remarks but I know that he shares my wish that in genuine hardship cases, such as the lack of adequate means, and in catering for the handicapped, the wide discretionary travel arrangements, which they presently enjoy, would continue to be made.
I should mention that with the Minister for Labour I met a delegation from ICTU in connection with the pilot projects and we agreed that the issue should be fully examined in the light of the information, costs and other matters which had been outlined to me in a letter from the chairman, Mr. Conlon, some days before that and also in the light of information supplied by the ICTU delegation. I shall be reporting to Government on the outcome of this examination and I shall, of course, be writing to the ICTU in connection with this matter also.
I emphasise that we are talking about pilot projects and I cannot predict what the outcome of this examination will be. I ought to say, however, that the concept of the transfer of the organisation of the school transport service to local parties has been put forward by many interests, and I referred to this earlier, over a great many years. My view and the Government's view is that we shall never know how a devolution of the service to local organisations would work unless we get around to actually trying it out on a pilot basis and I am sure all concerned would agree with me.
Let me now refer to the school transport fleet and its replacement. The figures which I have quoted were given to us over the years by Córas Iompair Éireann or Bus Éireann as it is now known. Quite simply, no matter how many millions are required, be it £20 million or £80 million, this Government or any other Government would not have that much money to spend on new buses or replacement buses. The present buses are steadily going beyond the age at which they should be replaced. They are not all going to fall down on the same day. Replacement will take place on a gradual process and we have been very mindful of the fact that it is not within our scope to provide the capital required to do so. I do not know whether it will ever be within our scope to do so but it is certainly not within the scope of the Government at present.
I am aware of the offer from the Ministry of Defence in Britain — which was sent to me a couple of days before that meeting — to sell buses to Bus Éireann. You cannot just accept offers like that straight away. The offer would have to be examined in a thorough and comprehensive way, in the light of the facts given to me in a letter I received from the ICTU. It is not a case of just waving your hand and saying we will take all of the buses being offered by the Ministry of Defence. There are all sorts of matters to be looked at.
The buses are not used for any purpose other than the carrying of children to and from school. They could be used in a number of other ways. The unions at that meeting put forward the idea that the buses could be used in other ways when not being used to take children to and from school. Many issues came up and I only wish they had come up last October. In my Estimates speech I announced the four pilot projects. However, there was a long silence after that. Many very important and interesting issues were raised at that meeting which will be of help in the formulation of the pilot projects. Talks are going on at present between the officials of Bus Éireann and the officials of my Department and when various factors and facts have been teased out, I will report back to the Government.
Let me make two facts quite clear. First, neither I nor my office issue redundancy notices to those employed in Bus Éireann. It is not our job to do so and, secondly——
Cause them to be issued.
The record will show what the Senator has said in the House and I wish to correct it. Secondly, I do not want to comment on allegations made about particular people to be employed by the CEOs.
The Seanad adjourned at 6.25 p.m. until 10.30 a.m. on Thursday, 16 June 1988.