Amendments Nos. 250 to 253, inclusive, are related to amendment No. 239 and may be discussed together.
SECTION 33.
I move amendment No. 239:
In page 26, subsection (1), line 16, after "year" to insert "save that the governing authority shall not be obliged to include in such statement monies donated or paid by individuals or corporations where such monies do not relate to fees".
This amendment refers to budgets. We should distinguish between public funds and private income.
Private university trusts and funds would come under public scrutiny and, under the Bill, the Higher Education Authority would not have access to that information. I propose amendments Nos. 251 and 252 to ensure it is the case. I assure Deputies that their concerns will be dealt with.
Where will our concerns be dealt with?
In my amendments. They take on the Deputy's concerns that private funding would not be subject to public scrutiny.
There seem to be certain anomalies in terms of contributions made by individuals in this country and their tax treatment as opposed to what happens in other countries. In the United States, for example, the process of claiming tax relief on donations to universities is simple in that a person is issued with a tax certificate. However, it is more regulated here and it relates mostly to the natural sciences. If we allowed individuals and companies to claim tax relief on donations to universities, it would encourage greater private sector contributions to third level education.
That is not relevant to this legislation; that would be more appropriate for the Finance Bill, although I accept the Deputy's point.
I know it is a matter for the Finance Bill but the Minister for Finance may not be inclined to consider it unless he receives representations from the Minister for Education. We must encourage the private sector to do more in this regard. It has given significant funds to third level education but we must encourage it to do more in terms of equipping universities and regional technical colleges. The State needs to make a return because the Exchequer does not have limitless resources and it is not always in a position to fund everything in third level education.
I will take the Deputy's comments on board.
I agree with the Minister's point about private money. In America trusts are established on college campuses. Perhaps the Minister would discuss this matter with the Minister for Finance.
I wholeheartedly support the Deputy's point.
Amendment, by leave, withdrawn.
Amendments Nos. 240, 241, 243 and 249 are related and amendment No. 242 is an alternative to amendment No. 241. Amendments Nos. 240 to 243, inclusive, and amendment No. 249 may be discussed together.
I move amendment No. 240:
In page 26, lines 25 to 27, to delete subsection (3).
Subsection (3) states: "When the budget of a university has been determined, it shall be a function of the chief officer, acting on the authority of the governing authority, to carry it into effect.". Amendment No. 241 seeks to delete subsection (5), which states that "A university shall not, without the consent of the Minister given with the concurrence of the Minister for Finance, increase its budget by resort to borrowing.".
Amendment No. 243 seeks to delete subsection (7), which states that "Where a governing authority, despite being informed as required by Bsubsection (6)B, decides to proceed with its course of action, the chief officer shall, unless satisfied that a material departure from the budget will not occur, as soon as practicable, inform An tÚdarás of the decision of the governing authority.". Subsection (6) states that "a proposed course of action of the governing authority will or is likely to result in expenditure in excess of the budget which has not been increased in accordance with Bsubsection (4)B, .... the chief officer shall so inform the governing authority".
I am anxious not to draw too rigid a demarcation line between a chief officer and a governing authority and not to give a dictatorial role to the chief officer. If a budget is agreed, it should also be the function of the governing authority to carry it into effect. A chief officer must make decisions but he must also monitor the budget and ensure it is applied in accordance with the policies agreed by the governing authority. This subsection is not required. I want to ensure the governing authority also has a role in implementing budgetary decisions made by the governing authority. We do not want a rift to develop between the chief officer and the governing authority because they should work in harmony. If a city manager, for example, informs the Minister for the Environment that the local authority has produced an estimate which he believes is not consistent with incoming revenue, the Minister can take action. There should be a responsibility on the governing authority to stay within its budget.
It is extremely restrictive to refuse to allow a university to increase its budget without the consent of two Ministers. It should be allowed to borrow within limits agreed with An tÚdarás. Universities already operate under Higher Education Authority constraints which prohibit spending so this subsection is unnecessary. I ask the Minister to accept these amendments.
Deputies Coughlan and Martin propose to delete section 33 (3) where the chief officer is given the responsibility to ensure the budget is carried into effect. I cannot support this amendment because it is essential that the person who is assigned the responsibility in the Bill, the chief officer, is the accounting officer for the university. It is, therefore, in the public interest as well as in the interests of the chief officer and the governing authority, which would monitor the activities of the chief officer, that there is a statutory duty to carry the budget into effect. There should not be any difficulty in that regard.
Deputies Martin and Coughlan further propose to delete section 33 (7) where the chief officer is required to report to the Higher Education Authority when a university has decided to depart from the budget. I cannot accept this amendment because it is essential that a mechanism is put in place to ensure the budgets are not ignored. Where difficulties are foreseen, there is a statutory obligation on the HEA, which is the funding authority, to allow it. There should be a normal interaction between the funding authority and the individual governing authorities.
Section 34 provides a framework for the borrowing practices of universities. We are placing existing practice on a statutory footing. While we seek to balance the autonomy of the colleges, it is important not to give effect to a situation where additional unplanned public finances are needed as a result of this activity. It is acceptable to place existing practice on a statutory footing. I want to ensure that universities are in a position to respond to a development which might involve borrowings. I am not putting a cap on that activity.
Following the publication of the Bill, it was pointed out to me that sections 33(5) and 34 could be misinterpreted and could lead to inflexibility and a lost opportunity. We have agreed opportunities for sourcing funding. I tabled amendment No. 249 to avoid such difficulties. The universities and the Higher Education Authority can, after consulting with the Minister for Finance, agree a framework for borrowing, guaranteeing and underwriting within which the universities will operate.
Parameters will be set out and it will be acknowledged that the institution can borrow to guarantee the repayments and the underwriting. That can be done in advance and not on the basis of an individual case. A university will be allowed to partake in these arrangements as long as it does not pose any threat to the public purse. This will meet our obligations while allowing the universities to plan for the future.
I do not support the proposal that section 4 (34) be deleted. I am proposing to delete section 33 (5) in amendment No. 241. Given that a number of safeguards are in place in section 33 and any borrowing will be covered under section 34, this section is no longer necessary. Amendment No. 242 is no longer necessary.
I support this amendment which involves the deletion of the section. The Minister is doing this but she is including a new section. This is important as it creates a framework which the universities can follow. Many universities are engaged in considerable financial activity, such as the provision of on campus accommodation. This involves contracts with private developers.
What does the Minister mean by the chief officer will carry into effect? I have no difficulty with the chief officer being responsible.
We spoke about the rules and I know that the Deputy brings his own experience to this discussion and feels it is important to give board members an active role. There is also the description of the chief officer and their statutory obligations. The chief officer is the accounting officer for the university and has to have clear statutory responsibility for the budget.
Amendment, by leave, withdrawn.
I move amendment No. 241:
In page 26, lines 31 to 33, to delete subsection (5).
Amendment agreed to.
Amendments Nos. 242 and 243 not moved.
I move amendment No. 244:
In page 27, lines 1 to 21, to delete subsections (9) to (12), inclusive.
Amendment agreed to.
Amendments Nos. 245 to 248, inclusive, not moved.
Section 33, as amended, agreed to.
NEW SECTION.
I move amendment No. 249:
In page 27, before section 34, to insert the following new section:
"34.—(1) A university may borrow money by means of bank overdraft or otherwise and may guarantee or underwrite a loan taken or borrowing undertaken by a person or a body of persons.
(2) Borrowing, guaranteeing and underwriting under Bsubsection (1)B shall be in accordance with a framework which shall be agreed from time to time between the universities and An tÚdarás, following consultation by An tÚdarás with the Minister and the Minister for Finance.".
Amendment agreed to.
Question: "That the section 34 be deleted" put and agreed to.