Pádraic McCormack
Question:6 Mr. McCormack asked the Minister for Education and Science his views on the cost of insurance for primary and secondary schools; and if he will make a statement on the matter. [5212/04]
View answerThursday, 19 February 2004
Questions (6)
Oral answers (15 contributions)
Responsibility for arranging insurance cover on school property and against public liability is a matter for the managerial authorities of primary and secondary schools, which are privately owned. It would not be reasonable to expect the State to meet the full insurance costs of privately owned buildings.
Funding is provided to primary and secondary schools by way of per capita grants which afford schools considerable flexibility in the use of these resources to cater for the needs of their pupils. This is, in general, a preferable approach to putting in place grants for specific cost items such as insurance. I also hold the view that moving to a position where the Government covers the insurance costs of primary and secondary schools might encourage the insurance sector to keep increasing premia on the basis that the State, that is, the taxpayer, would meet the cost. Such an approach would also reduce the incentive for school management to reduce risks.
I am committed to improving the funding position of primary and secondary schools in the light of available resources. At a time of increased financial constraints, the recent announcement of further significant increases in the funding of primary and secondary schools is a clear demonstration of my commitment to prioritise available resources to address the needs of schools. In the case of primary schools the standard rate of capitation grant has been increased from €57 in 1997 to €121.58 per pupil from 1 January last, an increase of almost 113%. A measure of the increase in overall funding for secondary schools is that, by comparison with 1997, a secondary school with 500 pupils now receives extra annual funding of up to €108,000 per annum.
Perhaps I should have done my homework and brought the figures on how much schools' insurance has increased since 1997 as well. I do not disagree with the Minister's comments on the capitation grant but schools have little flexibility when faced with rising insurance costs. One school is spending €60,000 which is a doubling of its insurance premium in just one year. Does the Minister have proposals to deal with this issue? The Tánaiste has responsibility for dealing with insurance costs but the schools are the Minister's responsibility. Has he approached the insurance companies about this or looked at a possible scheme which a number of schools could use?
It is unfair to say that schools would not concentrate on reducing risks if the Department paid their insurance. I doubt that any school principal wishes to have unnecessary risks in his or her school. Does the Minister agree that the capitation grant, given what it has to be used for in addition to the cost of insurance, leaves no money available to schools to reduce those risks where they occur?
Every school tries to reduce risk as much as possible, but there would be no incentive to do so if the Department were to meet all the costs. The increase in insurance premia for the period 1998 to 2002 was 70% while the capitation grant increased by 113%.
Many of them doubled last year.
Figures available in the Department indicate that the average increase last year in the cost of insurance premia in the secondary sector was 10%. There have been variations in individual schools where there were difficulties because of incidents and so forth, but the general increase is 10%.
The Deputy asked whether we had made any contact with insurance companies etc. Not many companies quote for this business, or perhaps they are not asked to quote. Most of the business is done by Allianz. We have been in contact with the company about insurance premia and got a lot of information on the issue. We tried, in so far as we could, to get it to ensure the levels of increase were not exorbitant. We got as much information as we could in our effort to assist schools as much as possible in the area of insurance. The company is also running a business.
Whether it is primary or second level schools — I think it is second level — in fairness to the company, it operates and charges its premia on a portfolio basis. Except in rare exceptions where a school has had a number of incidents or claims, it treats all schools the same based on a per capita basis. This is how it arrives at its premia. It is a little like the community charge in the VHI, there is a balance and a check. The insurers try to respond to schools in as fair a manner as possible. I would love to see insurance premia being reduced. The Tánaiste is engaged in trying to achieve this on a wider front. I am assured by the insurance companies that the average level of increase was about 10% last year.
As the Minister is aware, I raised the issue of insurance within the constituency on a wider basis some time ago. He said that between 1998 and 2002 capitation grants increased by 113% while the cost of insurance increased by 70%. He must be aware that capitation grants needed to be increased by 113% because the amount available to schools to cater for the work such as that we read about in the newspapers every week falls far short of what is needed. Given that the cost of insurance has risen well beyond the rate of inflation, the increase in capitation grants should be significantly higher unless the Minister can work with the Tánaiste to come up with some scheme which will enable schools, primary schools in particular, to pay some sort of levy via the State. Otherwise he is giving carte blanche to the insurance companies to set unreasonable rates.
I have a supplementary question on the cost of insurance for primary and secondary schools. Is the Minister really aware of the crisis in regard to the cost of insurance? Having heard his response, I have some concerns.
The crisis particularly relates to small schools for which two and a half years ago insurance bills were between €7,000 and €15,000. Now they range from €15,000 to €20,000 and we have heard of some that are higher. In the past week I heard of a school with an insurance bill of €24,000. Figures for larger schools have gone as high as €60,000. That is a major dent in the board of management funds for the year for the principal of those schools who has to write the cheque. Will the Minister respond to this crisis and try to do something about it? I have listened to the Tánaiste for the past two years talking about how she will deal with the insurance issue. We are still waiting for a comprehensive response. I ask the Minister to work seriously on this issue.
Does the Minister accept that it is the parents who bear the brunt of many of these increases? There is increased pressure on them to raise funds, whether through cake sales or, as in the Minister's constituency, the raffle of a horse. We are told the issue of insurance is a priority for Government but the reality is that the cost of insurance has increased. House, motor, school and commercial zone insurance premia have risen, not come down.
The cost of school insurance is affecting the education of children. Will the Minister accept that this is a responsibility for his Department? Can he outline some new initiative in order that we can go back to our constituents and tell them he understands their plight? We do not want the response that his hands are tied or there is nothing he can do. We want initiatives.
Will the Minister engage in discussions with the managerial bodies which represent the schools? They have indicated that they will be willing to look at some kind of flexible approach to the issue. We need discussion in order to find a solution.
We are always willing to talk to the joint managerial bodies. To talk about a crisis makes for easy headlines.
That is the reality.
The per capita element of insurance in schools, set on the portfolio basis, is about €5 per pupil. I am told by the insurance companies, with which we engaged to try to see if there was anything that could be done to keep the levels of insurance down, that at second level it was anticipated there would be no increases in premia in 2004 and that the average increase for primary schools would be somewhat less than 10%. I include the caveat that where schools have a particular claims history, it will affect their premium and there will be a loading.
If Deputies know of schools where insurance premia have increased by €24,000 or €25,000 or where the increase is exorbitant for no reason and they provide individual examples, I will be pleased to ask my officials to re-engage with the insurance companies to try to find the reason.
I will get back to the Minister.
However, I will not take responsibility for the taxpayer for the insurance costs of private property. There has been much talk over the past 24 hours on the issue of tribunals etc. I do not wish to be involved in one in a few years time or to have somebody asking me why I took this road.
I find it necessary to remind the House of the time limit on questions, particularly supplementaries. Time is limited to one minute for the question and one minute for the reply.