Apologies have been received from Deputy Quinn. On behalf of the select committee, I welcome the Minister for Education and Science, Deputy Batt O'Keeffe, the Minister of State at the Department of Education and Science, Deputy Seán Haughey, and their officials. We are meeting to discuss the Supplementary Estimate for the Department of Education and Science, Vote 26. A proposed timetable has been circulated which allows for opening statements by the Minister and the Opposition spokespersons; Deputy Sherlock has been nominated to substitute for Deputy Quinn. There will then be an open discussion. Is that agreed? Agreed. I ask the Minister to make his opening statement.
Vote 26 — Department of Education and Science (Supplementary).
I thank the Chairman and welcome the opportunity to meet the members of the select committee to discuss my Department's requirement for a Supplementary Estimate of €15.5 million this year. Although I am seeking a Supplementary Estimate, I should make it clear that approval is not being sought for substantial additional expenditure. Rather, the Supplementary Estimate is sought to mainly cover a potential delay in obtaining some European Social Fund, ESF, receipts that were due to be paid this year but which may not now be paid until 2009. The value of the receipts in question is in excess of the €15.5 million required in the Supplementary Estimate. In overall terms, therefore, I am pleased to report that expenditure this year will be managed within the voted provision. While this is the case, there are many subheads under which demand-led costs have led to significant pressures and excesses. While these demand-led costs have created significant pressures on the Vote, they have been offset by the successful achievement of significant savings during the year elsewhere across the Vote. I will outline the main details for the information of the committee.
The additional demand-led costs that have arisen on the Vote are mainly in the areas of teachers' and special needs assistants' pay and pensions. There are also additional costs in the school transport area and specific pay award costs arising in the higher education area. Mindful of the wider pressures on Exchequer funding, in all cases I have ensured current spending pressures on the overall Vote have been addressed by restricting or reducing expenditure in other areas to the greatest extent possible. In the area of capital spending additional spending requirements in the primary building sector that arose from the demands of demographics have been offset by reductions in expenditure on the other parts of the capital programme.
In overall terms, an additional requirement of €230.57 million across the Vote is offset by compensating savings of €215.07 million. The net additional requirement of €15.5 million is sought by way of a Supplementary Estimate. As I stated, this net additional provision is necessary to cover a possible shortfall in ESF receipts, which is outside the control of my Department. Within this overall position, I am also using the Supplementary Estimate to obtain Dáil approval, in line with long-standing practice, for the additional expenditure that has arisen under certain subheads.
I would like to explain in some more detail the reasons additional funding is required for some subheads and also outline the savings made to compensate. I will begin by explaining briefly the additional cost pressures arising on the relevant subheads.
Subhead B2 deals with the school transport scheme which is administered by Bus Éireann on behalf of the Department. In the region of 135,000 children are transported each day to primary and post-primary schools. The original allocation for 2008 amounted to €175.206 million. However, there are significant additional cost pressures on the service. A sum of €10.5 million is required to meet these additional cost pressures, including an increasing demand for school transport services associated with the diversity of school provision and continuing growth in transport services associated with special needs requirements.
Subhead C1 provides for the salary costs of primary school teachers. An additional €40 million is required to meet the costs associated with increased enrolments, additional special needs and language support commitments and consequent increases in substitution, supervision and employer's PRSI costs. Although the sum involved is significant, it amounts to less than 2% of the overall primary teachers payroll bill of approximately €2 billion.
Subhead C4 provides for the salaries of certain non-teaching staff in primary schools, including, in particular, special needs assistants. The additional requirement of €10 million is necessary to meet the costs of additional numbers of special needs assistants in excess of the level anticipated. This is an essential means of enabling us to continue to honour our commitment to children with special educational needs.
Subhead D6 provides funding for the vocational education committees to carry out their duties in regard to the provision of a wide range of education services. An additional funding demand arises from increased pay requirements in the sector. A supplementary allocation of €48 million is being sought to allow my Department meet the projected additional pay expenditure in the VEC sector in 2008. The additional demand arises primarily from increases in teaching and SNA posts in VEC schools, increased supervision and substitution costs and pay pressures due to the implementation of part-time worker legislation.
Subhead D7 provides for payments to local authorities under the Local Government (Superannuation) Act 1956 in respect of retired staff of vocational education committees and institutes of technology. These requirements are demand led and an additional €15 million is needed due to higher than anticipated numbers retiring in 2008.
Subhead E4 is a grant-in-aid subhead that provides funding to the Higher Education Authority for disbursement to universities, institutes of technology and designated institutes of higher education in respect of current expenses. The additional €8.8 million is required mainly to cover costs associated with pay awards to certain staff which were not provided for in the original Estimate and to meet certain additional superannuation costs.
Committee members will be aware that Dáil approval is required for any increase in a grant-in-aid subhead, regardless of how small the sum involved may be. For this reason I am also including two further subheads which relate to pay awards in the higher education sector in this Supplementary Estimate, even though the sums involved are quite small. Subhead E7 is a grant-in-aid subhead providing for the cost of salaries of teaching staff at the Dublin Dental Hospital. It also provides for 50% of the running costs of the hospital. The balance is provided by the Department of Health and Children. An additional €700,000 is required to provide moneys due to staff under the new academic consultants' pay award. Subhead E8 is also a grant-in-aid subhead. It provides for costs associated with the Dublin Institute for Advanced Studies, which assists in the funding of fundamental research in specialised branches of knowledge and trains advanced students in methods of original research. An additional €70,000 is required for payments due under the O'Brien pay award to senior professors.
Subhead F1 funds the provision of accommodation for primary schools through the construction of new schools as well as refurbishing or extending existing school buildings. Committee members are familiar with the pressures facing the primary school building programme in 2008 arising in particular from the needs of developing areas. Some €75 million is required to provide additional funding for the primary school building programme in order to prioritise major capital projects in response to demographic trends and to maintain the impetus of the Department's ongoing programme of modernisation of existing primary school accommodation.
Subhead G involves a reducing supplementary of €22.5 million in appropriations-in-aid. This is mainly to provide for the probability that the full amount of receipts due to be received from the European Social Fund at year end will not be received in the current year. The same situation will apply to a number of other Departments. A range of new obligations are being placed upon member states under the new round of ESF aid for 2007 to 2013. These include the development by each member state of a suitable information technology system for preparing and uploading claims to the EU Commission. The new system for Ireland came on-stream in August. Following this, it was necessary under EU requirements for the ESF audit authority in Ireland to prepare and submit to the Commission reports on the systems to be used in Ireland for ESF part-financed programmes and the related ESF aid, together with an audit strategy report. The approval process in respect of these reports is, I understand, in its latter stages. Following its approval of the reports, the Commission will commence an examination of Ireland's claims for ESF aid uploaded from the new information technology system. My Department's claims are fully prepared and ready to go. However, given the technical processes that have to be completed, we must operate for the moment on the basis that payment of the aid due will not be received before the end of this year. Accordingly, I am seeking a reducing supplementary of €22.5 million on the appropriations-in-aid subhead.
The additional mainly demand-led cost pressures that I have outlined required an urgent consideration of the available options for reducing and restricting expenditure elsewhere in the Vote during 2008 in order to manage the overall impact on the Exchequer in these difficult times. As a result, I am declaring a significant level of savings which have been made possible by prudent management of the Vote during the year. I will outline the subheads with the largest levels of savings but I will be happy to answer any questions members may have on other savings at the conclusion of my statement.
Subhead B6 provides for the in-career development and training of teachers and school management training at first and second levels. It also contributes towards the running costs of education centres. A saving of €6.22 million has been achieved due to reprioritisation, rescheduling and amalgamation of programmes and services in order to contribute to the costs of additional demands elsewhere in the Vote.
Subhead B18 provides funding for the Department's policy of integrating information and communications technology into first and second level education. A saving of €24 million in 2008 results from a delay in the full commencement of the new information and communications technology in schools strategy.
Subhead B24 provides for the payment of awards under the redress scheme and related expenses of the redress board. The main reason for the identified saving of €25 million is a decline in the value of individual awards as well as reduced third party legal costs. By the end of October 2008, 12,280 applications had been finalised at an average cost per award of €64,892. This cumulative average cost of award had fallen from €76,000 at the end of December 2005, €71,000 at the end of December 2006, and €67,000 at the end of December 2007.
Subhead E13 provides for recurrent funding of research and development to support the development of a world-class research environment in higher education institutions. A saving of €27 million is now being declared in 2008. This arises mainly due to a slower than profiled rate of progress by institutions on PRTLI 4 projects which were announced in August 2007.
Subhead E15 funds the strategic innovation fund, which was established as a catalyst for bringing about substantial change and quality improvement in higher education institutions. A saving of €23 million will arise as spending by institutions under the first cycle of the fund has been much slower than predicted. Full levels of activity on cycle one projects are not now expected until 2009. In addition, cycle two projects which were approved in February 2008 were progressed more slowly to take account of the impact of wider budgetary constraints.
Subhead F2 funds the provision of appropriate accommodation for post-primary schools through building new schools and refurbishing and extending existing school buildings, as well as through the provision of furniture and equipment. A saving of €45 million has been achieved on this subhead due to the need to prioritise funding for 2008 on major capital projects at primary level in response to overall demographic trends and demands.
Subhead F3 provides for the building grants and capital costs for universities and colleges, institutes of technology, designated institutions of higher education and research and development. A saving of €29 million has been achieved due to the need to manage policy priorities within the overall capital envelope available to the Department. As a consequence, prudent management of capital spending was achieved within the higher education sector without compromising spending on research and development.
I hope that I have clearly explained the reasoning behind the Supplementary Estimate I am seeking for this year. This has been an extraordinary year in terms of the scale of demand-led cost pressures on the education Vote, allied to the very significant deterioration of the wider economic picture. As a consequence, I have been conscious of the responsibility to minimise the impact of unavoidable cost pressures on the Exchequer in these difficult times. I am pleased to be able to report to the committee that this has been achieved as a result of prudent management of the overall Vote allocation throughout the year. Taking account of the issue relating to ESF receipts, I am satisfied that the Supplementary Estimate I am now seeking does not involve a substantial additional demand on the Exchequer in the circumstances.
I will be happy to respond to any questions members may have.
I invite opening statements and questions from the Fine Gael and Labour Party spokespersons. We will then proceed to questions from other members.
I welcome the Minister, the Minister of State and senior officials from the Department. The Minister is seeking an additional €10.5 million for transport services related to additional costs for the school transport system and special needs requirements. Can he give a breakdown of the figure? How much is related to the school transport system and how much to special needs? This is a runaway train in terms of expenditure and, in a time of cutbacks, I would like to have a breakdown of the €10.5 million under subhead B2.
Subhead C4 relates to salaries of non-teaching staff in national schools, including special needs assistants, caretakers and clerical officers. What is the breakdown for that subhead? The requirements under special needs, in particular for special needs assistants, are another runaway train in terms of the cost to the Exchequer. How do we compare to last year in terms of the number of SNAs?
Subhead E4 concerns general current grants to universities and colleges. The Minister says the additional €8.8 million is required mainly to cover the additional costs associated with pay awards to certain staff which were not originally provided for and additional superannuation costs. To which staff does he refer?
Can the Deputy refer me to the section in question?
I refer to subhead E4. Subhead G relates to appropriations-in-aid. The Minister is looking for a shortfall of €22.5 million for that subhead and is expecting the ESF to cough up an additional €22.5 million next year. Is the Minister telling the committee the reason for the late payment of ESF funding this year, meaning we have to make a provision in the Estimate, is the failure to get an IT system up and running in good time? If that is so it is an extraordinary indictment of the way we draw down funds from the European Social Fund. We are being asked to sanction an additional €22.5 million in moneys that will come to the State next year from the ESF because of a late payment brought about by our inability to get an IT system up and running in good time.
The Minister says there is a saving of €6.2 million in subhead B6 which relates to in-career development. Does some of that saving arise because of the fact that we will lose IT advisers in all the education centres throughout the country? That decision was not taken by the Minister but by his predecessor.
What are the savings in subhead B16, which covers school information and communication technology? He is making savings of €24 million which he says result from a delay in the commencement of the new ICT services in the schools strategy, in light of the current economic position. What are the savings to which he refers? What curtailment of services or facilities will there be for students around the country as a result of these savings?
I was interested in the Minister's comments on B24, relating to the Residential Institutions Redress Board. He said there is a saving of €25 million in this respect because, if I understood what he said, the average payment by the board has gone down in comparison to what was expected at the end of 2007, which is something we would all welcome. The last time I tabled a parliamentary question on the subject I was told the average payment was approximately €64,000 but the average payment at the latter end of last year was €67,000.
Subhead E15 relates to the strategic innovation fund, SIF, which represents a huge sum in the Estimates on an annual basis. The Minister says a saving of €23 million will arise from spending by institutions under the first cycle, which has been slower than profiled by the institutions. What are the problems with institutions bringing forward good ideas so that SIF can provide this money for research projects? In subhead F2 the Department appears to be taking €45 million from the capital budget of second level schools and handing it to the capital budget for primary level. Is that the case?
I understand the Minister is under time constraints. For clarification, there were queries on B2, C4, E4, G, B6, B18, B24, E15 and F2.
Deputy Brian Hayes has covered the questions fairly comprehensively. My first question is on subhead B2. If the charge for the school transport scheme has increased from €75 to €300 per pupil, with a maximum of €650 per family, how much does the Department hope to yield? Is the amount over and above the increase of €10.5 million which the Department seeks for costs associated with increasing demand?
Is the Department seeking an increase under C4 for special needs assistants alone? There are major problems for caretakers and secretaries with pension provision and I understand the Department of Finance dragged its feet on the issue as it waited for the latest social partnership agreement to be ratified. Now that the agreement has been ratified, will any of this increase be used to solve some of those problems?
My second question relates to the strategic innovation fund, subhead E5, and research and development, E13. Is the Minister saying there has been a decline in applications for the strategic innovation fund? He says an amount of €27 million is not required in 2008, mainly due to the slower than profiled progress on the part of institutions. I do not know what that phrase means in layman's terms but I would guess the amount allocated was not taken up or is being stretched from 2008 into 2009. The Minister might clarify that.
Deputy Sherlock has asked about subheads B2, C4, E5 and E13. I hope the Minister and the Minister of State will be able to answer all the questions asked.
Deputy Brian Hayes's first question related to the school transport scheme. We are requesting a Supplementary Estimate of €10.5 million. I share the Deputy's concern about the escalating cost of the school transport scheme. He raised that matter at a previous meeting of this committee. Additional expenditure is needed in this area for several reasons. The rates paid to private contractors increased by 6% in September 2007. The impact of that increase has been felt this year. Deputy Hayes has previously raised the cost of engaging extra vehicles, including taxis, to transport the expanding number of children identified as having special educational needs. The rates paid to escorts increased by 5% in September 2007 and by a further 2.5% in March 2008. Additional escorts have had to be employed to accompany children with special needs, whose care requirements necessitate continuous support, on their journeys to school. Revised pay rates have been paid to part-time Bus Éireann school bus drivers, on foot of a Labour Court recommendation, since September 2008. I assure the Deputy that a review of the schools' transport scheme will be announced before the Christmas recess. We are considering measures to reduce the costs associated with children with special needs. Announcements will be made in that regard before the Dáil adjourns for Christmas.
School transport charges did not increase for ten years until three increases were announced recently. The increases mentioned by Deputy Hayes relate to next year. They do not arise in the context of the 2008 Supplementary Estimate. The charges imposed on parents meet a small part of the overall cost of the school transport scheme. I appreciate the concerns of parents about the annual family charge of €650. We are looking at ways of providing for that to be paid in three instalments, rather than on a once-off basis.
I will begin by responding to Deputy Brian Hayes's remarks on special needs. The 2008 Estimate was based on a projection that the number of posts would increase by 200 in September 2008. An additional 337 posts were sanctioned by special educational needs organisers, on foot of applications from schools for additional resources, between January and June 2008. Such an increase in the number of posts had not been anticipated when the 2008 Estimate was being compiled.
What is the total number of special needs assistants in the system?
There are just over 10,000 special needs assistants here. The number may be decreasing.
I thank the Minister.
Despite the fact that provision had been made for 200 posts, there has been no net increase in the number of posts since June 2008. The overall increase in the number of posts, beyond that anticipated in the Estimates, stands at 137. We have calculated that expenditure will exceed the Estimate by €6 million as a result. The additional €2.6 million being provided for covers the cost of substitution within the sector.
The Deputy also asked me about the European Social Fund. The operation of the fund is outside the control of the Department of Education and Science. We have prepared our claim and it is ready to go. It is being undertaken by the Department of Enterprise, Trade and Employment. The European Commission requires us to allow it to sign off on the information technology system that is put in place. It needs to be satisfied that the system is adequate. I understand the Commission has been notified of the details of the system. The Commission is in the latter stages of completing and agreeing the system. It is outside our control. We are ready——
The shortfall of €22.5 million will be made up next year.
Yes. It is a question of time. A saving of €24.6 million has been achieved under the information and communications technology in schools programme. The strategy group reported in July 2008. The programme for Government contains a commitment in this regard. The new strategy addresses issues like the upgrading and renewal of hardware, the provision of software, digital content for learning and teacher professional development. We have sent the information and communications technology broadband system to tender. On training, we have established an information and communications technology co-ordinating system. Teachers in each school are trained in information and communications technology on the basis that they will train and upgrade others within the school system. The savings mentioned by the Deputy were made possible by the decision not to implement the recommendations of the strategy group report in full. We are using that money to meet the excess costs that have appeared elsewhere within our programme.
Some 12,280 applications to the Residential Institutions Redress Board had been brought to a conclusion by the end of October 2008. The cost of the average award has dropped significantly to €64,892, from €76,000 at the end of December 2005, €77,000 at the end of December 2006 and €67,000 at the end of December 2007.
I appreciate that the Minister is still examining Mr. Justice O'Neill's ruling on the Residential Institutions Redress Board. Does he think the Government will come to a view on the matter before Christmas?
I intend to make a statement on the matter. I have promised Deputies Hayes and Quinn that I will do so as soon as a conclusion has been reached. I am now in a position to inform the members of the committee of the outcome of the consideration of Mr. Justice O'Neill's judgment by the Department of Education and Science, in consultation with the legal team in the office of the Attorney General. I can confirm that it has been decided to appeal the judgment to the Supreme Court. A stay has been put on the High Court judgment pending the outcome of that appeal. Therefore, it is not appropriate for me to comment further on the issue. We have made our decision after taking strong advice from our legal team. The office of the Attorney General has given a positive indication that the State should appeal on the basis that the judgment would have a profound impact across the sector.
Is the Minister prepared to outline to the committee the nature of the appeal to be taken?
It is a matter for the office of the Attorney General to outline the basis of the appeal. It is obvious that I am not in a position to make such a statement in this forum at this stage.
To what does the Minister attribute the significant year-on-year reductions in the average award?
I hope it can be attributed to reality, good common sense and good judgment.
Is that more aspirational than factual? There has to be a reason for the decrease. I do not mean to sound facetious.
Awards are made on the basis of the severity of the abuse and the resulting physical and psychological injury and loss of opportunity.
I appreciate that the Minister has informed the select committee first of the Government's intention to appeal the High Court judgment made by Mr. Justice O'Neill. In the fullness of time we will understand the arguments the Government will make to the Supreme Court regarding the O'Neill judgment. It is important to come to a determination in this matter as soon as possible because, as the Minister will be aware, those who were the subject of Mr. Justice O'Neill's decision, namely, people aged between the ages of 18 and 21 years at the time of their stay in residential institutions, are getting on in years. May I assume from the information supplied by the Minister that the judgment is being appealed? When will he be in a position, through his law officer, to inform the court of the formal basis on which the appeal is being made?
I understand the appeal will be lodged tomorrow.
On an issue related to the Residential Institutions Redress Board, is it fair to conclude that the reason the annual costs are declining is that the board prioritised the more severe cases?
That is a possibility.
It would make sense that those with the highest claims were the ones who suffered the most significant abuse.
Yes, that is a real possibility.
Is it correct that the latest estimate of the costs of administration of the redress board and the payments made to date is approximately €1.6 billion?
The expenditure associated with the redress board to date is some €880 million. Based on the total number of applications received, the final cost of the scheme, including all legal and administrative costs, may be in the region of €1.1 billion.
Does the figure of €1.1 billion include the €880 million figure?
While it is the total figure, it is obviously tentative, as the board has approximately 2,200 applications to process. The level of award provided in the remaining cases may vary substantially.
Irrespective of Mr. Justice O'Neill's judgment and the final decision in the matter, I understand the initial batch of applications will be finalised in late 2009 or early 2010.
The estimated timeframe for completing this work is the end of 2009. Residual work will need to be done by the board in 2010.
A number of points arose regarding the savings made under subheads E13 and E15.
What is the problem with the institutions bringing forward——
There were no problems with the institutions as such. It was a question of the Higher Education Authority's timing in processing applications. As members will be aware, there are budgetary constraints and the processing of applications is a matter of timing. All applications for projects have been received.
On subhead F2, second level building grants and capital, the Minister has carried out a straightforward raid to transfer €45 million from secondary to primary level.
Last year we experienced major pressure in developing areas. We responded by building schools to ensure an adequate number of school places would be available in these areas. It is a matter of prioritising.
It is not related to decisions already taken on the second level programme.
We have had a short but full discussion. I thank the Minister, the Minister of State and their officials for attending.
I thank the Chairman and members for their co-operation.