Dáil Éireann Debate, Tuesday - 21 March 2023
1007. Deputy Matt Shanahan asked the Minister for Further and Higher Education, Research, Innovation and Science if he will detail the impact of rising interest rates on the borrowing of our university sector; and if he will make a statement on the matter. [12719/23]
View answerIrish universities have autonomy to borrow within a framework agreed with the Higher Education Authority (HEA), the Department of Finance and Department of Public Expenditure and Reform. Based on data provided to the HEA, total university borrowings at 30 September 2022 were €977m (2021: €942m).
An analysis of university borrowings as at 30 September 2021 (the latest date for which such analysis is currently available to my Department), showed that the majority of borrowings, c.85%, were at fixed rates with c.15% at variable rates. The impact of rising interest rates is a matter for each university, as autonomous bodies, to review and manage. There is no State guarantee or underwriting provided for university borrowings.
As in other sectors, the impact of increased interest rates is impacting on the viability of infrastructure projects in the university sector and must be factored into project planning and associated value for money assessments.
For example, the Deputy will be aware that both increased construction costs and the higher cost of finance are significantly contributing to the overall cost of new student accommodation projects. A number of universities had to pause their student accommodation projects as a result of these challenges. To assist in restarting university projects, on 29 November 2022, I secured Government approval to develop both short and medium term policy responses to activate supply of affordable student accommodation.
To date our Government has approved funding support to develop nearly 1,100 additional state supported accommodation for students across a number of universities. In parallel, longer term policy development is being advanced to examine a broader range of methods to increase supply of student accommodation.
