I welcome the Minister of State at the Department of Education and Science, Deputy Haughey, and his officials. I understand the Minister for Education and Science, Deputy Batt O'Keeffe, will be here shortly. We meet to consider the 2009 Revised Estimate for the Department of Education and Science — Vote 26 — and the annual output statement. A proposed timetable has been circulated. It allows for opening statements by the Minister or the Minister of State and Opposition spokespersons and a discussion of the 2009 Revised Estimate and annual output statement by way of comments and questions on each programme or subhead.
Estimates for Public Services 2009.
Vote 26 — Department of Education and Science (Revised).
2009 Annual Output Statement for Department of Education and Science.
Until the Minister arrives, I am happy to deliver his address.
I welcome the opportunity to discuss the Estimates for the Department of Education and Science for 2009, together with my Department's annual output statement for 2009. In terms of changes in the way the Revised Book of Estimates is presented, I advise the committee that my Department's Estimates for 2009 reflect the transfer of various functions relating to youth organisations and youth activities from the Department to the Office of the Minister for Children and Youth Affairs from 1 January.
I will refer initially to the Department's annual output statement for 2009. The output statement is complementary to the book of Estimates and sets out the key outputs to be delivered in 2009 from the investments provided in the Estimates as well as reporting on the targets set for 2008. It is based on the high level goals and objectives set out in my Department's strategy statement.
Committee members will be aware that 2009 will be the third year for which Departments have produced annual output statements as part of a process of improving accountability and the reporting of public spending. My Department continues to work with the Department of Finance and other Departments to further develop the output statement process as a means of ensuring more efficient and effective use of public resources.
When reviewing the annual output statement, it is important to acknowledge that the ultimate goal in education is to improve outcomes. While the statement indicates key outputs from investment in education in 2009, additional mechanisms such as the Pisa international studies provide valuable information on educational outcomes.
I will now address the Estimates for 2009. Members will be aware that the economic background to the formulation of the 2009 Estimates has been difficult and uncertain. The economy grew by 6% in 2007 but this year we are facing a contraction of almost 8%, the sharpest decline we have ever experienced. Addressing the situation has required the Government to take tough and often unpopular decisions in the Estimates process which affect the education sector among other areas. These measures are necessary to securing the viability of our country and enabling us to fund public services in a sustainable manner. The gross allocation for my Department for 2009 as set out in the revised book of Estimates is just under €9.492 billion, which represents an increase of approximately 3% on the outturn for 2008. My Department and the Department of Social and Family Affairs are the only Departments to receive increased allocations for 2009, reflecting the priority attached by the Government to investing in education. Such investments must be sustained if we are to develop and maintain a well educated workforce or be in a position to benefit from the economic upturn when it occurs.
Gross voted current expenditure on education in 2009 is almost €8.642 billion, or 15% of total current expenditure. This is the highest proportion of spending after social welfare and health. At €850 million, the allocation for capital expenditure on education represents 12% of total voted capital expenditure. This allocation compares with an outturn for 2008 of €830 million. Approximately €613 million of it will fund a significant capital programme in schools, including €423 million at primary level and €190 million at post-primary level. A further €9 million will be invested at post-primary level under the public private partnership programme. Through careful management of this allocation and in light of the competitive environment in the construction market, I expect good progress will be made in advancing the school capital programme during the year.
I have begun a review of rented temporary school accommodation and my representatives are meeting suppliers to negotiate reductions in rental costs. The Minister for Education and Science expects to make significant savings this year. Where temporary accommodation is required for longer than three years, the Department will offer the school a grant to purchase rather than rent the accommodation. The Minister also introduced a measure whereby schools can build permanent classrooms rather than purchase prefabs. More than 40 schools have thus far opted for this approach. We want to provide high-quality, permanent accommodation for schools and, to that end, a new pilot project has been introduced which aims to replace rented prefab accommodation with permanent modular buildings. This project will be targeted at schools that have older rented prefabs and need long-term additional accommodation.
The capital allocation for the higher education sector amounts to €200 million. This level of investment is higher than has been the case at any point in recent years and when account is taken of the better value being achieved due to reduced prices and tenders, it will deliver significantly greater buying power in real terms. Of the total, €75 million will be spent on contractual commitments on undergraduate project provision and €65 million will be allocated in respect of contractual commitments on research, including projects under the programme for research at third level. Almost €43 million will be spent on refurbishment schemes and improvement works, while €12 million will go towards implementation of reforms of medical education.
The €8.642 billion allocation for total gross current expenditure on the education Vote in 2009 compares with an outturn of €8.412 billion for 2008. The biggest component of this expenditure is, of course, pay. In excess of 95,000 people work across the education sector. Pay and pensions will account for almost €6 billion in total capital expenditure, including the full year costs of the Towards 2016 pay increases awarded in 2008. The pay bill for teachers will be approximately €4.1 billion in 2009 and, in addition to the Towards 2016 increases, takes account of increases due to demographics, the one point increase in the staffing schedule, restrictions related to substitution cover and the employment of language support teachers at primary level and non-classroom teacher allocations at post-primary level. The 5% increase in the allocation for salaries of non-teaching staff in national schools includes provision for the full year cost of extra special needs assistants appointed since September 2008. At second level an increase in allocation of 14% also provides for increased numbers of special needs assistants in 2008 and 2009.
I hesitate to interrupt the Minister of State but we have copies of his presentation and a division will be called shortly. Rather than have us all return to the meeting, I ask that we be facilitated in making our contributions now.
I was about to propose that we take the continuation of the speech as read into the record. Is that agreed? Agreed.
I hope that is no reflection on me.
It is no reflection whatsoever.
We can understand the Minister of State's accent better than the alternative.
I call on the Fine Gael and Labour Party spokespersons to make their opening statements. Normally I would invite questions afterwards but I ask members to make their statements and ask questions at the same time so that we do not interrupt the vote. The meeting will proceed until five minutes after the bell starts ringing.
I will be brief. I welcome the Minister of State's comments on capital allocations for building and tendering prices for construction projects. Is it possible to indicate the reduction in price per unit area? How many extensions and new schools will be provided with the available allocation? I want to know what the allocation will translate into in terms of physical buildings and improvements on the ground. Some of the schools which have appealed their allocations to the Department have had successful outcomes.
When it was discussed on the ground with the management and principals of the schools there was a very welcome change and improved allocation, which satisfied many of them and that is welcome. In September, the many schools that have lost a series of supports, particularly in disadvantaged areas, should be re-examined to eliminate the crisis that will occur. I refer particularly to VECs which receive their allocation as a scheme. Because it is a scheme, the detail on specific schools that have different needs seems to be hammered. I hope the Minister will examine that in particular.
There is very little anybody can do about the pay demands. From the debate in the Dáil last night and today, there is a clear indication that there must be a re-investigation and review of the psychological services in many of those schools. We fully understand the idea that mainstream school would be the ideal situation but for many of the children involved, not necessarily in the schools that were mentioned on last night's programme but in many schools throughout the country, there must be a re-evaluation of the proposals.
I will be brief. We are all remiss in not congratulating the Minister on his first anniversary as Minister for Education and Science. If this was a review of his performance in the mocks we would have said he was a pupil of which much was expected, that he is capable of doing much better and that we hope when he does his junior certificate in due course the results will be better than the first try.
Maybe he was writing with his left hand and the other one tied behind his back.
On subhead E13, the massive increase in third level research and development underpins the concerns we have about primary and applied research. On subhead E14, the Grangegorman Development Agency, where the figure drops from €6 million to €1.4 million, I hope that is initial costs that have been achieved and it does not signal some undermining of that project, which we discussed. I will ask my main question and if we do not have time I would be happy to receive the answer by letter from the Department subsequently. A €4 million consultancy fee is being paid under subhead F5, public private partnerships, PPPs, to the National Development Finance Agency for consultancy. I thought PPPs meant the fees were rolled up into the private provider and all the customer, us, had to do was pay the annual bill. I thought one got an up-front service. We do not have time to get into it.
I will examine it.
It is 10% of the capital spend, which has increased from €29 million to €42 million. I do not understand why it is there and why VAT is shown as an additional cost. I find that somewhat unusual.
I have an issue on school transport. We cannot vote on this, but sometimes people want the Government to be honest. The Government says it is saving €2 million on the fuel rebate. When this was first discussed last October, the Government said a mechanism would be put in place to deal with it. All the contractors were taken in by this. The Minister has been less than up-front about this. While I appreciate fuel has decreased in price, it should have been dealt with in a different way.
School transport costs for junior cycle students has increased by 203% in the last year and a half. This is anti-family and anti-rural. Can the Minister give me an undertaking today that there will be no more increases in school transport costs? This is petty and it is not value for money.
We do not have time for comments.
The National Development Finance Agency, NDFA, is responsible for the procurement of PPP projects on behalf of this Department. As part of the NDFA's brief it may buy in expertise to advise on the system. The Department of Finance has decided that the sponsoring Department is liable to reimburse the NDFA for any costs for consultants so engaged.
Was any thought given to hiring people from the OPW? This is nonsense.
It merits examination. Deputy Burke asked about tendering. The early indications were 15% to 20% less. In one instance we were so concerned at the disparity between the second lowest tender and the lowest that we had to send in quantity surveyors to look at the lowest tender to ensure the company could do the job. There is a thirst for work.
The fuel rebate scheme ended in October 2008. In good faith we provided €2 million as a compensatory allowance in the October 2008 budget for 2009. However, because of the tightening financial situation we had to cut back on that €2 million in the supplementary budget. I appreciate that the private contractors have taken a hit but my Department has ongoing consultation and intends to have further consultation with the representative groups of the private contractors to address their overall concerns and try to work them through. They have many concerns, not just this one.
There were no increases in charges in ten years since 1998. There have been three increases since. The charges represent only 7% of the allocation. It is still good value for money. It will put pressure on families but in the private sector the cost would be from €668 to €835 to provide these services. The review is under way and all these cost pressures will be examined.
Are members satisfied with that answer?
Not really.
The Deputies have heard the answer. The word "satisfied" should be struck out.