Thursday, 17 October 2019

Questions (1)

Thomas Byrne

Question:

1. Deputy Thomas Byrne asked the Minister for Education and Skills if he will conduct a review of the costs of school building projects in view of the rapid increase in the cost per square metre of school construction projects in the context of a reduced capital budget in education; his plans to ensure that value is achieved; and if increases in cost have led to delays in tendering under the school building programme. [42699/19]

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Oral answers (11 contributions) (Question to Education)

For the past year or more, I have had serious concerns about the Department of Education and Skills's capital budget ranging from the number of major projects currently out to tender, which is at a record low, to the cost of each school place increasing by 50% and the number of school places being delivered decreasing. It is clear that the education budget is not providing the same outputs as previously. Despite that, a Minister has accepted for the first time ever a reduction in the education capital budget. How does the Minister intend to deliver the projects around the country that he keeps announcing and to meet his previous commitments?

My Department monitors the cost of school building projects on an ongoing basis. School building costs, as reflected in the Department’s published basic building cost limit, fell significantly during the period of the economic downturn and took a number of years to return to a standard level. The Society of Chartered Surveyors Ireland tender index also tracks tender levels in the industry.

The basic building cost reduced from €1,230 per sq. m in June 2006 to €930 per sq. m in January 2011 and increased gradually from April 2014 to December 2018 and now stands at €1,490 per sq. m, an increase of €260 over the peak levels in 2006. The bulk of the increase reflects tender prices returning to more sustainable levels compared with those during the period of the economic downturn and improvements in building standards for schools over the period. Improvements in standards include new standards for acoustics and sanitary facilities introduced in 2014, improved costs allowances for standards for roof finishes introduced in December 2018, and changes in Part L of the 2017 national building regulations to reflect the EU directive on the energy performance of buildings, that is, near zero energy buildings, NZEBs, which were also introduced in December 2018.

NZEBs are buildings that have a very high energy performance. The nearly zero or very low amount of energy required should be covered to a significant extent by energy from renewable sources, including sources produced on site or nearby. The NZEB standard will apply to all new buildings occupied after 31 December 2020. For public sector bodies, the standard applies to all new buildings owned and occupied since 31 December 2018. As with previous building regulations, there are transitional arrangements in place where buildings are occupied after these dates but work commenced prior to 31 December 2018.

My Department continues to have a strong roll-out of projects to tender and construction under the national development plan. This will continue to be the case up to 2027, with a ring-fenced capital budget of €12 billion to be spent on school buildings during that period.

The Minister should not insult the intelligence of the Dáil by saying that the capital budget is ring-fenced. At the first opportunity, he cut it. At the very first fence on the racecourse, he fell and let education down by agreeing a cut in the capital budget. I want to know how that happened and how the Minister plans to deliver school buildings. The figure for the capital budget was set out in Government documents, the national development plan and negotiations with my party in October, yet the Minister at some point late on agreed with the Minister for Finance, Deputy Donohoe, to reduce the capital programme of the Department of Education and Skills.

I cannot see how the Minister, Deputy McHugh, can deliver projects. Recall the WBS fiasco, which I presume the Department is still funding despite having a smaller budget. Consider the demand for school places and other issues that have arisen. For example, the Dunboyne College of Further Education in my constituency has been told that work on a new building will not now proceed. The reason given was a review, but I have no doubt that it is because of the reduced capital budget. As regards the price of sites, the Department continually pays over the odds instead of parking at the dog track and DIT.

Let us be clear about the exact mathematics. In 2016, capital expenditure on the school buildings programme was €530 million. In 2017, it was €532 million. In 2018, it was €547 million. In 2019, it was €622 million, a 14% increase on 2018. Next year, it will be €620 million, some €2 million less. I have publicly stated what my first line of defence in the budget was. As the Deputy knows, it is a no-deal Brexit budget and I wanted to ring-fence special education provision. I did that.

The pressures coming off the capital budget relate to the sale of a property on Kevin Street. The sale closed in August and means that the Department no longer needs to set aside a significant funding element for the Grangegorman development.

This is important, so I will make it my last point. The Kevin Street property sold for €140 million, approximately €60 million above the guide price.

The Minister will have a further minute.

This has reduced the pressure on the 2020 capital budget.

I am glad to see that the Department of Education and Skills is not the only organisation buying above the guide price. Unfortunately, the Department has paid as much as double the guide price several times. That is my problem with this. The Minister has admitted that the budget has decreased by €2 million, but the overall capital budget has decreased by €19 million. During the summer, we in Fianna Fáil tried to shame the Government into action on special education. In truth, however, that action has been a failure already, given that one of the largest single component increases of next year's budget is that of transport for special needs education, which is meant to bring people to schools that are many miles away from their homes. That policy has failed and must end. Instead, the policy must be for children to attend schools in their local areas and for suitable places to be available for them. We cannot keep raising the special needs transport budget year on year when we are not able to provide those children with places in their local areas.

Will the Minister commit to a review of capital spending and identify why these costs are constantly increasing? Just as I asked the previous Minister, Deputy Bruton, will this Minister ask the Minister for Finance, Deputy Donohoe, for more money for the capital budget? The Minister, Deputy McHugh, does not have enough.

Since 2016, we have invested €3 billion in the school building programme. We will continue with that. Prior to this budget, I sat down with a dedicated team of my officials in Tullamore. They wanted to continue delivering on the programme. We agreed on rolling out 60 new schools in 2020. That was before the budget. The budget has passed. After the budget, we will still be rolling out 60 new buildings in 2020. Nothing has changed. The €2 million will make no difference to our material plans for next year, under which 30,000 extra places will be provided through permanent and additional accommodation.

I will continue to do that. If we are still standing in 2020, which probably will be the case, we will ensure that we deliver those buildings.