COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 26 Jan 2006

Vote 26 — Office of the Minister for Education and Science.

Ms B. McManus (Secretary General of the Department of Education and Science) called and examined.

Chairman

We are now in public session to consider the 2004 Annual Report of the Comptroller and Auditor General and Appropriation Accounts, Vote 26, Office of the Minister for Education and Science, chapter 7.1, superannuation schemes. There is relevant correspondence dealing with the Residential Institutions Redress Board issue.

Witnesses should be aware that they do not enjoy absolute privilege when giving evidence before the committee. Members' and witnesses' attention is drawn to the fact that as and from 2 August 1998, section 10 of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act 1997 grants certain rights to persons who are identified in the course of the committee's proceedings. These include the right to give evidence, the right to produce or send documents to the committee, to appear before the committee either in person or through a representative, to make a written and oral submission, to request the committee to direct the attendance of witnesses and the production of documents and to cross-examine witnesses. For the most part these rights may be exercised only with the consent of the committee. Persons invited before the committee are made aware of these rights and any persons identified in the course of proceedings who are not present may have to be made aware of them and provided with the transcript of the relevant part of the committee's proceedings if the committee considers this appropriate in the interests of justice.

Notwithstanding this provision in the legislation, I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House, or an official, either by name or in such a manner as to make him or her identifiable. Members are also reminded of the provision under Standing Order 156 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies.

I now call on Ms McManus to introduce the officials from the Department of Education and Science.

Ms Brigid McManus

I am accompanied by Mr. John Feeney from our pensions unit, Mr. Tim Cullinane who deals with third level pensions, Mr. Martin Hanevy, Mr. Brian Duggan and Ms Bláithín Dowling from the finance area of the Department, and Mr. John Fanning who deals with the Residential Institutions Redress Board.

Chairman

Will Ms Nolan introduce the officials from the Department of Finance?

Ms Ann Nolan

I am accompanied by Mr. Dave Denny and Ms Breda Byrne from the pay and remuneration division and Mr. Niall O'Sullivan, who like myself, is from the public expenditure division.

Chairman

Will Mr. Purcell introduce chapter 7.1, Vote 26, and the relevant correspondence on the Residential Institutions Redress Board?

Paragraph 7.1 of the report of the Comptroller and Auditor General reads:

7.1 Superannuation Schemes

Introduction

Superannuation schemes may be statutory or non-statutory.

A statutory scheme is one which is provided for in an Act of the Oireachtas. The provision usually takes the form of an enabling section in the Act giving authority for the making of Regulations (i.e. Statutory Instruments) setting out the details of the relevant superannuation scheme. Changes to the statutory schemes are intended to be carried out through the making of amending Regulations. The main superannuation schemes for teachers are statutory.

A non-statutory scheme is one which has no legislative foundation but is made, with the consent of the Department of Finance, to implement agreements entered into between the Department of Education and Science (or one of its agencies, with the Department's approval) and the appropriate staff representatives. Non-statutory schemes established over the last 20 years or so will comply with the model superannuation scheme devised by the Department of Finance for state-sponsored bodies. Changes to the non-statutory schemes are implemented with the sanction of the Department of Finance. Most such changes arise out of claims by the public service unions for improvements in superannuation provision.

Non-statutory schemes are regularly operated throughout the public service. Apart from those for which the Department is responsible, the superannuation benefits for non-established civil servants are, for example, provided for by means of a non-statutory scheme.

Audit Issue

I have previously reported to Dáil Éireann on the failure of the Department to ensure that there was up to date legislative authority for amendments to the statutory superannuation schemes of teachers. These reports were subsequently discussed at the Public Accounts Committee where the then Accounting Officers confirmed that steps were being taken to comply with the legislative requirements.

During recent audits by my staff, it became apparent that despite these assurances, amendments made to statutory schemes operated by or under the authority of the Department have not been given the necessary legislative authority.

Accounting Officer's Response

Changing and Consolidating Schemes

The Accounting Officer provided details of the improvements and changes made to the schemes over the years. She pointed out that many have common application but some apply only to particular schemes.

She agreed that formal updating of the statutory schemes, by means of statutory instruments, is necessary in order to meet legal requirements. Apart from this, she accepted that it was most desirable, from the point of view of facilitating administration, to formally update all schemes, statutory and non-statutory, as changes and new provisions come on stream.

She stated that in recent decades, taking into account the pace of change in the area of superannuation, and the fact that industrial relations agreements are regularly implemented with retrospective effect, it has become common practice throughout the public service to implement changes to statutory superannuation schemes administratively, usually through the issue of circular letters, and to make the appropriate statutory instruments at a later date.

She also informed me that a number of initiatives to bring the schemes up to date have been undertaken over the years but have faltered along the way. The most recent of these was in the case of the Secondary Teachers' Superannuation Scheme where, in 2000, a barrister was assigned to the task of drafting a consolidated scheme, including all amendments. The barrister provided the Department with a draft consolidated scheme in Spring 2001 but it has not been possible to address the necessary task of verifying the work of the barrister because relevant staff of Pensions Unit have been occupied by other work, including work which has arisen in connection with the consideration and implementation of the Part-time Work and Fixed-term Work Acts and the consideration and implementation of the recommendations of the Commission on Public Service Pensions. The immediate priority, when work recommences, will be to carry out the required verification in connection with the Secondary Teachers' Scheme.

She added that she expected that the Universities, as required by the Universities Act 1997, would have their new public service model schemes ready for approval by autumn 2005. It would be desirable that other schemes should also be formally updated when the model scheme is available but this will be dependent on resources being made available. In this regard, her Department is not aware that the absence of statutory amendments to schemes has caused any particular difficulties for the Universities, Institutes of Technology, Vocational Education Committees and other external education institutions and bodies. She accepted that a consolidated scheme in each case, including all amendments, would be the optimum in terms of ease of administration and in terms of transparency.

Difficulties to be Overcome

The Accounting Officer said that the main difficulties to be overcome to bring the work of formally updating the Schemes to a successful conclusion include

·The availability of skilled staff to deal with the complex and technical nature of drafting the schemes

·The competing demands for staff resources within the Department

·The rapidly changing superannuation environment.

Given the substantial work involved, addressing this issue is a multi-annual project.

In relation to the allocation of staff for specific projects the Department must prioritise the many demands it faces. The Department must also operate within its approved staffing numbers and is bound by the Government policy on staffing numbers in the public service. Therefore the scope to apply additional resources to the task of bringing the superannuation schemes legislatively up to date is limited. That said, the Department intends exploring other options including contracting the work to appropriately qualified outside experts if such can be found.

Consequences of Schemes not being updated

The Accounting Officer informed me that in the absence of a statutory instrument underpinning a change in a statutory superannuation scheme, the change would be open to the challenge that it is ultra vires the Minister for Education and Science.

On the other hand, the changes which have been implemented on an administrative basis are in effect part of the terms of employment of teachers and other staff, negotiated generally through industrial relations machinery. As such they are legally binding agreements related to superannuation. Furthermore, the changes have at all times been subject to the approval of the Minister for Finance.

Mr. John Purcell

I will try to touch on all those matters. In chapter 7.1, I return to a subject which I last raised in my report on the 1995 appropriation accounts, namely, the need to put changes to pension schemes in the education sector on a proper legal footing. The main superannuation schemes are those governing national and secondary teachers and these are legally underpinned by the 1928 Act. Under that Act, as amended, changes to the schemes are to be made by statutory orders, which must be laid before the Oireachtas. In practice, changes to the schemes since 1972, usually made on foot of agreements with teachers' unions under the conciliation process, are incorporated into circulars and the like and are applied administratively on that basis. This is not in accordance with the legislation and may prove to be problematic if it were to be challenged in the courts for whatever reason. The Accounting Officer, while accepting that this is the case, makes the point that the changes are subject to legally binding agreements with the unions and have been approved by the Minister for Finance, which lessens the risk associated with any such potential challenge.

The other point made in the chapter is the desirability of formally updating all superannuation schemes, both statutory and non-statutory, under the care of the Department, as changes and new provisions come on stream. The Accounting Officer accepts that a consolidated scheme in each case would be the optimum in terms of ease in administration and transparency, but points to the difficulties that would have to be overcome before that desired state could be achieved.

Principal among these difficulties is the availability of the appropriate resources to do the work. Some effort was made at different stages in the past, including the engagement of a barrister to do the drafting. Ultimately, other aspects of pensions work requiring more urgent attention took priority. This is all very well, but it does not take away from the importance of bringing all the schemes up to date and in the prescribed statutory manner, where required. Recent developments in the pensions area, including the advent of the Pensions Ombudsman and the right of pensioners to a copy of the pension scheme that applies to them, make it all the more important that the Department meets its obligations in this respect.

The year 2004 is the first full year in which all State expenditure on education is included in one Vote. Up until then, there were four separate Votes, covering general education matters under the Minister for Education and Science, as well as first, second and third level education. The committee approved of the proposal to amalgamate the four Votes into one. The Vote accounts for gross expenditure of nearly €6.6 billion in 2004. The surplus for the year was €145 million. With €50 million of this deferred under the new arrangements for capital expenditure in the following year, €95 million fell to be surrendered to the Exchequer.

There were problems in balancing the 2003 Education appropriation account. This led me to qualify my audit certificate accordingly. The corrected account for 2003 is included in pages 211 to 214, as note 21 to the accounts under consideration. Note 15 covers the contingent liabilities arising from the Commission to Inquire into Child Abuse and the redress board. The tentative estimate given for the redress board in note 15 seems to be on the low side, in light of the 14,768 applications received by the board by the 15 December 2005 deadline. About 6,000 of these were received in the period after 1 November 2005.

I would like to read a statement relating to information contained in chapter 7.1 of my report on the appropriation accounts for 2002, which dealt with the estimated cost of a redress scheme and, in particular, the agreement entered into by the State with the religious congregations on the making of a contribution towards the cost of a redress scheme.

In chapter 7.1 of that report, I recorded the results of my examination of the residential institutions redress scheme. On page 84, I stated that during the early stages of negotiations, the congregations had estimated their financial exposure in litigation at between €21 million and €106 million if cases were taken by claimants through the courts, with the probable exposure working out at €54 million. This is substantially repeated on page 92 of the report.

These references were based on a document on the files of the Department of Education and Science which the Department stated had emanated from the congregations. Following representations by the legal representative for the congregations, I reverted to the Department, which again confirmed that the document had come from the congregations. Notwithstanding these confirmations, the legal representative for the congregations requested me to make further inquiries of the parties on the State side of the negotiations. In response to these further inquires, the Department informed me that the document in question was in fact prepared by a former official of the Department in early 2001. This had not come to light at any stage of my earlier inquiries due to the faulty recollection on the part of the former official at the time. I am pleased to be able to correct the record in this respect and regret any inconvenience caused to the congregations.

Chairman

I thank Mr. Purcell. Did he state that the number of applications to the redress board on 16 December was 14,768?

Mr. Purcell

Yes that is correct.

Chairman

Has he any indication of the average payment at present?

Mr. Purcell

The average award was €76,000 by November 2005.

Chairman

What is the mark up for legal fees?

Mr. Purcell

It is hard to tell, but it seems to average around 15% to meet the claimant's cost. If the administrative and legal costs of the board itself are included, another 5% would be added, so 20% seems to be the current figure.

Chairman

On that basis and on the assumption that the average award does not decrease, am I right in saying that the State's exposure is around €1.3 billion?

Mr. Purcell

In the past, we had discussions about the estimates and so on. There are still many imponderables. A total of 6,000 applications were received in the six weeks before the closing deadline and they may be of a different category, but we just do not know at this stage. It is not unreasonable to say that the more severe cases of abuse would probably have been the subject of a claim before then. It is hard to say whether that average will stay the same.

In my report on the 2002 account, I stated that the Canadian experience was that the more claims there are, the lower the average claim. What is clear is that the original and the revised estimates on the part of both the redress board and the Department were severely undercooked. It is not possible to be dogmatic on this, but if we take the legal costs of the claimants and the costs of the board to be at 20%, it looks as if we are looking at a minimum of €1 billion. The probable maximum, taking the Chairman's scenario of the average award staying at approximately the same amount and if all of the applications were taken to be valid applications — to date there has been a very low rejection rate of claims on the basis of them being invalid — would be approximately €1.35 billion.

Chairman

Of the 6,000 claims that came in at the very end of the process, just before 16 December, have we any indication what proportion came from overseas, particularly from the UK?

Mr. Purcell

No, I have no indication of that. The Chairman will appreciate that the redress board works under tight confidentiality rules, for very good reason. Procedure is laid down in the scheme whereby information will be communicated in response to specific requests by the Minister for Education and Science. Anything I have said today is in the public domain and is listed on the redress board's website. Without going in and carrying out the kind of analysis to which the Chairman refers, I would not be able to enlighten the committee as to the origin or source in national terms of the late claimants, if the Chair wishes to call them that.

Chairman

If a significant proportion of claimants are from overseas, the assumption that the severest cases have already been dealt with is not valid. It was late in the day when victims in the UK came to realise that a compensation scheme was in place through the redress board. It is important to find out, when we are estimating potential total liabilities, whether a significant proportion came from overseas. Very severe cases could be in the pipeline from the UK and elsewhere simply because people were not previously aware of the scheme and then had to access solicitors in London, Manchester, Coventry and various places. Many applications came in at the very end.

I thank Mr. Purcell. Will Ms McManus make her opening statement?

Ms McManus

I thank the committee for the opportunity to make an opening statement and, in particular, to address chapter 7.1 of the report of the Comptroller and Auditor General in regard to superannuation schemes. There are 32 statutory and non-statutory schemes which fall within the responsibility of my Department to some degree, either because the Department is responsible in full for the scheme or because it approves or consents to the schemes. Some of the schemes have only a small number of members, such as the scheme for the staff of the Higher Education Authority. Some, such as the various teachers' schemes, have tens of thousands of members.

The report of the Comptroller and Auditor General deals with the issue that amendments to the statutory schemes, in particular the teachers' schemes, have been operated on an administrative basis for many years without the formal updating of the statutory schemes by means of statutory instruments. While accepting fully the need to update formally the statutory basis of the schemes and the desirability of having all schemes, statutory and non-statutory, on an updated consolidated basis, the lack of updating has not affected the payment of pensions to beneficiaries, nor is the Department aware that it has caused any particular difficulties for the various bodies concerned.

I would like to place the current position in context for the committee. In recent decades, taking into account the pace of change in the area of superannuation and the fact that industrial relations agreements are regularly implemented with retrospective effect, it has become common practice throughout the public service to implement changes to statutory superannuation schemes administratively, usually through the issue of circulars, and to make the appropriate statutory instruments at a later date.

As stated in the Comptroller and Auditor General's report, there were a number of initiatives to address the statutory updating of the teachers' schemes, most recently in 2000-01, but these were not successful. Much of the difficulty in addressing these issues arises from the rapidly changing superannuation environment, the complex and technical nature of the work and the pressures in the pensions area in ensuring that changes to pensions arising from legislative changes are delivered administratively as quickly as possible to ensure that those with pension entitlements are not disadvantaged in any way.

To address the issue, the Department has now assigned an additional member of staff to the pensions area, whose sole task is to update the relevant statutory pension schemes. He commenced work last September on drafting the consolidated scheme for secondary teachers. Good progress has been made and I expect that the draft will be finished by April and ready to be sent to the Department of Finance for its consent, which is required, and to the Parliamentary Counsel. I hope that it will be laid before the Houses of the Oireachtas in the autumn.

The consolidated scheme for secondary teachers is being structured on the same lines as the general model scheme approved by the Department of Finance and it is intended that this structure will be the template for, and will facilitate the updating of, the remaining schemes for which the Department is responsible. Once the draft secondary teachers' scheme has been completed in April, the next task will be the updating of the national teachers' superannuation scheme.

The Comptroller and Auditor General's report also referred to the university pension schemes. The universities are preparing statutory schemes for submission to the Higher Education Authority for approval. These will then be submitted to the Department for the consent of the Minister and, in turn, the Minister for Finance. In the meantime, new schemes which are in conformity with the model schemes approved by the Department of Finance are being operated on an administrative basis from February 2005. The work under way currently on updating the schemes is intended to address, over the next few years, the concerns raised in the Comptroller and Auditor General's report.

With regard to correspondence referred to by the Comptroller and Auditor General, I add my regret that the incorrect assumption made by the Department as to the document's provenance in the redress board caused the misunderstanding it did.

Chairman

May we publish your statement?

Ms McManus

Yes.

Deputy Hayes

This is the third time the Department of Education and Science has come before the committee in regard to superannuation schemes, it having also come before the committee in 1984 and 1995. I would like to establish why the Department has consistently failed to ensure changes to superannuation schemes and why it dragged its feet in this regard.

Ms McManus

I fully accept that undertakings were given to the committee which were not delivered on. Various attempts were made which foundered fundamentally because, as the Comptroller and Auditor General stated, at a certain point in the process other pressures took over and staff were diverted to deal with what were seen at the time to be higher priority issues in the pensions area. We have not been able to establish what happened with regard to the original scheme of 1984 other than what was stated in 1995 as the reason it could not be delivered.

In 1997, the then Secretary General hoped that the new legal unit would manage to do the work on updating. This was a period during which we had introduced a considerable amount of legislation in the education area and the legal unit was not able to deal with the pensions work. Subsequently, in 2000, a barrister was employed to draft a scheme, given the pressures on the legal unit. However, when he had finalised the scheme, checks by pension experts were required to make sure that all the circulars were carried through. At the time, the staff in the pensions area who knew the scheme were tied up administering the schemes and dealing with the considerable work that arose from issues such as the legislation dealing with fixed-time and part-time workers, expansion, new grades and special needs assistants.

I fully appreciate that I come before the committee saying, yet again, that the Department has done something and asking the committee to trust me when I tell it that the Department will manage to deliver. What we have tried to do this time — I hope it will work — is that, rather than using an outsider whose work would have to be checked, the person assigned to the task is a staff member working in the pensions area. The work is being checked as it goes along. This means we will not have the difficulty of having to check everything when it is done. There is, in addition, a consent and legal checking process in the Office of the Parliamentary Counsel. By having a dedicated resource in the pensions area, that is, a person with knowledge and background who will not be diverted on to other tasks and who will undertake this checking process as the work is processed, we hope to overcome the problems that hindered delivery on the previous occasion. I fully accept this is something members will want to see before they believe it.

Deputy Hayes

I understand there could be a legal challenge in respect of the Department's superannuation scheme. Was Ms McManus aware there may have been a problem in this regard in recent years? Was it discussed at any stage? It seems to be the most serious aspect of this delay.

Ms McManus

The legal advice was that while it could potentially be argued that it was an ultra vires question, effectively — and this was the initial internal legal advice at the time, in 2000 or 2001, and repeated since — in respect of a potential legal challenge, teachers or beneficiaries of any of the schemes would have a legal right to the benefits and we, therefore, had an obligation to pay. We have since, subsequent to when I wrote to the Comptroller and Auditor General, got advice from the Office of the Attorney General which confirms this. The advice is that while it is technically ultra vires in that there is a technical legal problem that should be addressed and put on a statutory basis, the Attorney General’s office is satisfied that the beneficiaries’ right to the payment, and therefore our obligation to pay, exists despite the lack of statutory updating.

Deputy Hayes

Is Ms McManus now confident the Department will be able to put everything in place?

Ms McManus

It will take time and the first scheme has the longest timeframe. I am confident the latter will be dealt with by April, giving a timeframe of six months. The national teachers scheme is similar to the secondary teachers scheme and should be completed in a much shorter period because it will follow the same format. The third major statutory scheme for which the Department is responsible, the vocational teachers scheme, includes the institutes of technology. I understand this scheme has been updated more recently than the other two.

The other schemes in respect of which there is a statutory issue are those where the Minister gives consent, for example, the university schemes. Mercers consultants are working on updating those schemes and our job will involve a checking process. As already stated, we must consolidate the non-statutory schemes. We envisage this will begin when work is completed on the statutory schemes. It is the same process except there is no requirement to lay them before the Oireachtas.

Deputy Hayes

In regard to the Vote, the Department returned €95 million to the Exchequer in 2004. Will Ms McManus explain this further? How did this saving come about, what are the implications for the projections and why was the money not required?

Ms McManus

Of that €95 million, €62 million represents additional appropriations-in-aid. We have a difficulty each year in terms of the European Social Fund receipts because they tend to be received very late in the year. It is standard for the cheque to arrive on 30 or 31 December. This means we can never be certain the money will arrive on time to be taken in as a receipt. We have had a practice for several years, with the agreement of the Department of Finance — it is usually mentioned at the time the Vote is being taken — of taking precautionary Supplementary Estimates in this instance. We operate on the appropriations-in-aid side as if the receipts will not be received, in case they do not arrive. The arrangement — not unreasonably from the perspective of the Department of Finance — is that if they do arrive, they must be surrendered to the Exchequer. We cannot use them even if they arrive on time.

One must consider what I call the real level of surrender in the year which, at €33 million, is approximately 0.5% of the net allocation of €7 billion. In terms of forecasting cheques, I cannot err on the side of an excess without breaching various cannons. One will always find there is something of a surplus to be handed over. Given the size of the allocation, that level of surplus, spread across a number of headings, is not very significant. There was a similar issue this year with the ESF receipts.

Deputy Hayes

Such a sum may not be significant to the Department but it is highly significant to many schools throughout the State. Members are inundated every year with queries from schools requiring refurbishment and repairs. The list is long in every constituency. There is a significant delay in the summer works scheme and many applications were rejected this year because of a lack of funding. Many school boards of management have been informed that no funding is available this year in response to queries and requests. It is difficult to understand that the Department would return that amount of money when there is such a level of need.

In regard to the schools building programme, how much money is needed for new projects and refurbishment of existing buildings? There is a school in my constituency which still has an outdoor toilet. The list of such deficiencies is endless. I fail to understand how this considerable amount of funding could be returned.

Ms McManus

I will deal separately with capital and current allocations. No capital money was handed back. As the capital budget is done on a multi-annual basis, there was a €50 million carryover at the end of 2004 into 2005. In respect of the capital heading on refurbishment to which Deputy Hayes referred, not only did we spend that €50 million as well as our allocation this year, we spent some €11 million more from current savings. There is no question that money, which could have been used for refurbishment of schools, was returned from the capital allocation.

On the current side, I do not contend that €33 million is an insignificant amount in absolute terms. We must often fight with our colleagues in the Department of Finance for €500,000 or €1 million at Estimates time. I am saying that over a range of subheads, in terms of spending a budget, it is not possible to forecast with complete accuracy. If each subhead varies somewhat, for example, one will end up with an overall saving of 0.5%. Hence, for example, if each subhead varies to a small degree, one might end up with an overall saving of half a percentage point. As the overall budget is very large, a small variation in a large number of areas will yield such a sum of money.

Some areas can be difficult to estimate. To take an example of the savings experienced by the Department in 2005, the Residential Institutions Redress Board provided us with a forecast of the payments it expected to have processed. Speaking from memory, I understand that the figure turned out to be €6 million less. While there will be reasons for savings in individual cases, even if forecasts are exactly correct and there is no specific reason, given the way in which receipts come in for normal payments, it is not possible to estimate to the last detail.

Moreover, given the manner in which capital projects such as refurbishments operate, even if one becomes aware late in the year that there will be savings of €1 million or €2 million on the current side, one cannot then decide in December to carry out a school building project. This is because it would not be possible to spend the money before the end of the year. As we can only pay on mature liabilities, even the summer work schemes, which are probably the smallest capital projects undertaken by the Department, require a number of months' lead-in time in terms of project approval to ensure the money is spent.

Deputy Hayes

Ms McManus should provide some information on the summer work scheme. How many applications has the Department received for the scheme?

Ms McManus

We carried out 740 projects in 2005. Is the Deputy interested in the number of applications?

Deputy Hayes

Yes. How many applications are received in a year?

Ms McManus

I will ask Mr. Martin Hanevy to deal with the question.

Mr. Martin Hanevy

Off the top of my head, I believe the figure is probably in the order of 1,110 or 1,200 applications. This has been a significantly successful scheme, both administratively and in providing advance certainty to schools early in the year. I understand that the Minister plans to make the announcement pertaining to this year's scheme in the coming days so that plans can be made. As the Deputy is aware, the scheme is organised in a number of categories which are ordered by priority. Given the level of applications, we meet approximately two thirds of them. Some applications fall because they do not meet some conditions. Schools are required to submit applications which have been teed up with some rigour by a professional person from the disciplines of architecture or engineering.

Deputy Hayes

This has proved to be a successful scheme locally. Has the Department any discretion in respect of these funds? Who, if anyone, has discretion to move money into the summer works scheme from other areas, such as some of the returned funds? I use that scheme as an example.

Mr. Hanevy

It is now January, and the summer works scheme for 2006 will be announced this month. It takes that length of time for schools to become ready to undertake the works while the school is on vacation in terms of drawing down the money and sending in the bills. On the building side, this is the only scheme where, fundamentally, we manage to spend the funds within the calendar year. With larger projects, a secondary school might incur payments for building work over anything up to a three-year period.

To answer the Deputy's direct question, to add more to the summer works scheme, we would need to know about savings now and with certainty. We must make a best guess. As the Secretary General noted, on the current side one discovers that something is going soft as the year progresses. This year, for example, we encountered issues on the pay side pertaining to commitments relating to the part-time workers Acts which were held up because they were before an arbiter. We were obliged to wait for an arbiter's interpretation before figuring out what we would pay. However, after eight months of the year, we thought we would have such a determination. Capital expenditure is not conducive to moving money across, as putting more money into a summer works scheme in September will not enable a school to get a project delivered with the money drawn down before the end of the year.

Deputy Hayes

However, the Department has 1,200 applications, of which only 740 qualify and it knows this early in the year. Is there any way to fund such applications which total almost 500? As Mr. Hanevy noted, it is an extremely good scheme which has proved its worth in several respects. I cannot understand——

Mr. Hanevy

It is within the capital expenditure envelope, which runs on a five-year rolling multi-annual basis. The summer works scheme really competes with the other aspects of the capital programme such as the Department's liabilities for total schools building, new building projects, its liabilities for the remediation of asbestos, site purchases, third level issues, computers and equipment in schools. The capital programme has a range of dimensions and one must decide the allocation to the summer works scheme at the beginning of the year within that context. In the first year we allocated €30 million. Building on that success, I understand it was close to €67 million last year. The Minister will make an announcement shortly in respect of this year's allocation. Last year we doubled it and, critically, we also increased the nature of the projects to include roofs and significant window alterations. Previously, it had tended to be smaller projects, which can have an impact on the number of projects. A school might be awarded one significant project which might be of more value to it.

Deputy Hayes

The Department's psychological services returned more than €1 million. As the country is crying out for psychological services, how could that amount of money have been returned? What is the current demand for the service and is the Department satisfied with the psychological services?

Ms McManus

While we check whether there is a precise reason to explain the figure of €1 million, I wish to note that as far as the psychological service is concerned, we are recruiting more psychologists. A competition was held last year and at present I understand that ten posts are on call from the Public Appointments Commission. Obviously, because such individuals work with children, a Garda clearance procedure is required, which takes somewhat longer than is the norm. However, we hope they will be appointed at the beginning of March.

I understand that some of the savings related to a delay in the assignment of some administrative staff rather than of psychologists. Moreover, expenditure on the scheme whereby the Department gives money to schools to commission private assessments was less than we had anticipated. In addition, there were a number of savings in respect of accommodation, whereby new National Educational Psychological Service offices which were supposed to come into operation did not so do.

Deputy McGuinness

I will return to the superannuation schemes and the reference in the Comptroller and Auditor General's report to skilled staff. At one point it states that the required skilled staff were not available, hence the delay occurred during that time, from 1984 to date. Are the appropriate skilled staff now in place so that the matter should be resolved? Will the Department ensure that the events of 1984, 1995 and so on will be substantively dealt with?

As far as the superannuation schemes were concerned, did the Department expect the knock-on effect of benchmarking? There appears to have been an enormous exodus of teachers who took early retirement from the primary and secondary level sectors. Did the Department expect this? It seems that the Department sought further funding to pay retirement moneys to such teachers after the benchmarking increases took effect last year.

Ms McManus

There is an issue with skilled staff in this respect, which is an issue concerning knowledge as much as specific skills. It is a fairly specialist area in terms of people knowing the history of the scheme, its details and how pension schemes work. I am happy that we now have somebody in place who will deliver what we committed ourselves to do. It will take some time as the person in question works through the different schemes but I am happy that the process, person and resources are in place to carry out the task.

Deputy McGuinness

Normally, an issue highlighted by the Comptroller and Auditor General is dealt with afterwards. This issue has been highlighted in reports going back as far as 1994 but seems to have been overlooked. An issue that has been highlighted by the Comptroller and Auditor General should be dealt with. Having highlighted the issue again today, I hope there will be a continuation of appropriate skilled staff within the Department, regardless of whether they are experienced in the area, to deal with this issue and that we will not revisit this problem. Will Ms McManus comment on benchmarking?

Ms McManus

I fully accept that, normally, one would expect this issue to have been dealt with previously. All I can say is that I am happy, as Secretary General, to commit myself to ensuring that the staff resources are put in place to deliver what we have committed to deliver. Deputy McGuinness is correct in saying that, over the years, the issue became a lesser priority at times and was not followed up on when efforts failed.

With regard to retirement numbers, the issue that arose in terms of benchmarking and the numbers may have been related to the timing of its effect on retirements. Did Deputy McGuinness ask whether we anticipated the number of people who retired in 2004?

Deputy McGuinness

My question related to the fact that the matter had to be returned to the Department of Finance for a further €51 million in respect of the payment of pensions in December and that a considerable number of teachers appeared to have retired. I think it was reported that 766 primary teachers and 485 post-primary teachers departed their jobs after the increases and benchmarking kicked in. Did the Department factor in this development? It appears that it did not factor in this development and was forced to return for more money to pay pensions.

Ms McManus

The increase was factored in but it was larger than anticipated. There was a range of assumptions as to the appropriate provision for pensions. There was probably a degree of discussion between ourselves and the Department of Finance. As it transpired, the figure was higher than forecast. It jumped from 771 in 2003 to 1,254 in 2004, an increase that included both the national and secondary teachers scheme. It would have been the largest number of retirements we had experienced at any point.

Deputy McGuinness

Has the matter been sorted out?

Ms McManus

The number did not decrease by as much as might have been expected because 1,230 teachers retired in 2005, which is very close to the figure for 2004. The outturn on our pensions subhead in 2005 was higher than the amount in the original Estimate. The numbers have not decreased by as much as we might have expected. I will ask my colleague, Mr. John Feeney, whether there is anything we can add to this.

Mr. John Feeney

The number of teachers retiring has fluctuated over the years. Up to 2004, the number varied between approximately 700 and approximately 900. In 2004, many people had delayed a decision to retire in 2003. Consequently, there was a decrease in 2003 from the 900 retiring in 2002 and a very large increase in 2004. After this large increase, we expected that there would have been a significant drop back to approximately 900 or 1,000 in 2005. However, this did not happen.

A pilot early retirement scheme for teachers has been in place for the past ten years. An annual quota of 400 retirements was agreed ten years ago. The numbers retiring under this scheme have never reached 50% of the quota. The number came to more than 200 for the first time in 2005. I understand that the highest number prior to 2005 was approximately 190. It is difficult to predict numbers but I cannot envisage how a figure of more than 1,200 can be maintained.

Deputy McGuinness

With regard to the Vote, I am concerned about the court cases taken by individuals who are attempting to get the required level of education for their children. I will not discuss individual cases but some of them have been highlighted very publicly in recent years. It appears that with better management and a better approach, the educational requirements of these children could have been met. The legal cost to the Department appears to be substantial. I will highlight three cases which have been mentioned in the report. The legal costs accruing to cases concerning educational adequacy were €381,451, while legal costs in the other cases were €4,730,000 and €29,000, respectively.

These are substantial amounts of money, aside from the money paid in settlements in each case. Could the Department take measures to avoid this? Some cases are inevitable but many of the cases I have encountered and some cases pending involve parents attempting to secure the proper education for their children. An analysis of either individual cases or collective cases might have led the Department to deliver the education without having to pay the considerable costs involved. The Department should deal with this issue in a more constructive fashion, thrash matters out and deliver the required level of education before it is forced to go to court.

How are the legal costs determined? We know from witnessing the tribunals that when legal costs are challenged, they can be greatly reduced. What is the Department doing in respect of delivering adequate education to those who believe their children's education is inadequate? This is particularly relevant to cases involving children with autism. A number of such cases in my constituency are pending. All these parents want is adequate education for their children. In addition, what is the Department doing to reduce legal costs because they appear to be substantial? There are other legal costs under different subheads relative to other claims which would occur anyway in business or a Department.

Ms McManus

A considerable number of measures are being pursued to address some of the issues that gave rise to these cases. Taking the area of special education and autism in particular, we did not have the type of supports in place a number of years ago that we do now. Quite a number of cases now being settled are those wherein issues probably arose three, four or five years ago. For example, the special education council has been established with a special needs organiser in every county and there are 5,000 teachers in primary schools working with children with special needs, whereas there were only 1,500 in 1998. We now have 6,000 whole-time equivalent posts as special needs assistants.

The area of special education was one of historic underprovision. No one on this side of the table would argue that what was done a number of years ago was adequate. Ensuring that resources are in place in schools, such as funding some pre-school provision, special classes attached to schools or applied behavioural analysis, ABA, units, is an area in which we could be doing much more. The latter is a particular issue in terms of autism. When we examine the court cases, to a certain extent we are examining a legacy of past underprovision. This is being addressed. If there are specific cases the Deputy wishes to deal with, we can inquire about them.

In general, there will be an attempt before a matter comes to court to try to deal with the parents' individual issues and determine whether they can be resolved. That said, there will always be cases. I hope that there will be as few as possible in which there is a difference between the State's view of what is an appropriate or adequate education and what a parent or family would see as the appropriate education. Some of those cases may be difficult to resolve. Even with increased resources and an approach to dealing with these issues, there will always be a subset of difficult cases. It is our experience that more of the cases involving younger children whose problems have not had the same duration are being sorted, as it were, but there are still many cases.

Legal costs are an issue on which we are in discussion and closely liaising with the Attorney General's office and the Chief State Solicitor's office. Ultimately, if we get into the legal costs that are paid, often as part of a settlement, we must pay the costs of the other side if we settle a case before it goes to court. If we have a problem with costs in those cases, there are the normal appeals to the Taxing Master. In some cases there are concerns that the legal costs are high but, if one examines normal court cases, we must address legal costs through the usual system. It is not a separate tribunal issue. They are civil cases settled in the normal civil way. It is an issue that we keep under review.

Deputy McGuinness

I agree that a number of the cases have historical reasons, that services are now better and so on, but Deputy Hayes highlighted an issue in respect of psychological services. Some of the cases I know of nationally are reasonably current. Our guests' settlement in dealing with them and the payment of legal fees far outweigh what it might have cost to deal with the issue with the parents in the first place. Behind every case, such as those relating to autism, there are stressed parents trying to make ends meet with no money. The Department is spending what parents would consider to be a small fortune on court cases that need not have arisen were there a structure in the Department to deal with the matter.

Regarding the vocational education committees and the ongoing departmental reports concerning a school in my constituency, is the State exposed, what might happen and what type of resources will the Department apply to resolving the overall issues in the context of saving a school that has many pupils and is central to the educational infrastructure of Kilkenny city?

Ms McManus

Is the Deputy referring to the Kilkenny city vocational school issue?

Deputy McGuinness

Yes.

Ms McManus

I assume the Deputy is aware of the process. The latest position on the issue is that the VEC has effectively requested a statutory inquiry by the Minister, which is the process when there is to be an investigation into difficulties. The Minister has agreed to an inquiry and the draft terms of reference are being finalised in consultation with the Office of the Attorney General.

Deputy McGuinness

Is Ms McManus aware of other reports? Will the report be on the educational, structural and financial needs of that school?

Ms McManus

No. That is an inquiry under section 7 of the Vocational Education (Amendment) Act 1944, which is effectively an inquiry into the principal and relates to the issue of suspension of the principal. A VEC can request an inquiry by the Minister into any member of staff. A whole-school evaluation was carried out that examined some of the wider issues, which would have been the general whole-school evaluation carried out of any school to examine how the school is performing.

Deputy McGuinness

In the overall context, is the Department taking an interest in saving the school from closure? Will the Department take a hands-on approach? It examined the matter from a distance but the matter has gone so far that it needs closer examination. There are implications for education and so on.

Ms McManus

If one examines the structure of our education system, that responsibility is the VEC's, which is statutorily charged with the education in VEC schools in its area. In the case of secondary schools, the manager-patron has responsibility. The whole-school evaluation would have made recommendations but it is a matter for the VEC.

Deputy Deasy

Ms McManus mentioned special needs. I could not help but notice an underspend of approximately €1.1 million in the National Education Psychological Service. Could Ms McManus develop this point?

Ms McManus

It was a matter I addressed earlier. The psychological service saving was a mix of a number of issues, including assigning administrative staff and office accommodation that did not come through as quickly as expected. We have a system whereby schools can directly commission assessments which we fund by grants. Expenditure on this was less than we had forecast. Some saving may have been made in this respect in staff recruitment as there were delays in recruiting psychologists. I do not have a breakdown between those headings.

Deputy Deasy

I will discuss psychologists and special needs presently. Notwithstanding the point made by Deputy McGuinness, with which I might agree, two areas repeatedly raised in politics are the building programme and special needs. The service has improved dramatically in the past three to four years. The Minister made an announcement last year on providing more psychologists. What is the current situation concerning recruiting levels? What targets have been set by the Department for special needs teachers?

Ms McManus

I will respond to the psychologist issue first. The Public Appointments Service ran a competition on our behalf and we are awaiting the appointment of ten psychologists resulting from that. There will be four appointed in the mid-west, two for the south-west area of the eastern region, one for the north-west region and one for the south-east region. Two further appointments will be made but the area of assignment has not yet been decided. We have requested these psychologists from the public appointments commission and I understand the candidates are going through the Garda clearance process.

Regarding special needs resources, a general allocation model exists for the teaching division, as announced last year. Resources are assigned according to higher incidence in the population, which tends to be the less serious special needs. These are assigned to schools according to a general allocation model. The number of appointments will probably increase with demographics. The number of pupils in primary schools is increasing and the general allocation model responds to this.

Low incidence special needs are administered by the special education council and various special needs organisers on a case-by-case basis. I do not have any forecasts but the pattern for this has been for resources to increase.

Deputy Deasy

How is the model of each county having its own special needs co-ordinators working?

Ms McManus

It is very early to assess this model because last year was the first year it was used. On the ground, the general impression is that the situation has improved a great deal compared to what it was. The feedback I am receiving is that responses are quicker and issues are being dealt with. Difficulties exist but these are typical of any new organisation where one has a localised system in which co-ordinators interact with schools and deal with individual allocations.

An area we wish to focus on is how the resources are used in schools. An inspector's report published last year highlighted that the way in which resources are used in schools is as important as the allocation of resources. For schools, it is a new experience to have such levels of staff in special needs in primary and, increasingly, in post-primary.

Deputy Deasy

Is an analysis being carried out on how the money is being used as well as the allocation? Does this apply specifically to special needs?

Ms McManus

There is an ongoing evaluation and part of the remit of the special education council is to provide policy advice and evaluation. The council is in the process of recruiting a research staff member within the special education council to assist in that role. This is an area on which the inspectorate will focus in the whole-school evaluation.

Deputy Deasy

Ms McManus is giving the impression she is satisfied an improvement has been made although the situation is not ideal.

Ms McManus

There is quite a way to go in the area of special education. We started from quite a low base and areas such as pre-school, which I mentioned in response to Deputy McGuinness, where we work with the HSE, must be addressed. We must address the appropriate treatment for autism, the applied behavioural analysis, ABA, units in schools and special classes. Coverage throughout the country in terms of specials classes and other specialist provision is somewhat patchy. The situation is improving but much work remains to be done.

Deputy Deasy

I am involved in a committee in Dungarvan for pre-school children with severe disabilities that is seeking a new facility. An application has been made to the health board but it is a tortuous process. It would be helpful if the Department of Education and Science would become involved because we have hit a brick wall on a number of occasions. I wish to forward some details to the Department to encourage some involvement.

Chairman

What provision is being made for compensation from the redress board?

Ms McManus

That issue would have to be considered in the context of the accounts for this year, which I will be signing off in March. We have a sum for contingency purposes and, now that we know the number of claims, one of the crucial issues will be deciding an appropriate level of award. That will have to be dealt with before I sign off on the accounts at the end of March.

Chairman

What is the average amount awarded?

Ms McManus

The average sum is €76,000.

Chairman

What is the estimate for the total amount? Would Ms McManus agree in general with what Mr. Purcell has outlined, namely, a sum of €1.3 billion, dropping to €1 billion if the average award is reduced?

Ms McManus

One would have to be quite tentative for the reasons raised by the Comptroller and Auditor General. We do not know if the average award will increase or decrease or if there will be an increase in the number of claims designated as outside the scope of the scheme. Of those processed so far, some 100 claims received no award. Bearing these factors in mind, it is difficult to estimate what will be the final figure but I have no reason to disagree with the Comptroller and Auditor General.

Chairman

With regard to the contributions being made by the religious orders, how much money has the Department received, what is the value of the property that has been transferred and what is the value of the services provided by the religious, which is taken into account in the package?

Ms McManus

The total moneys received, which includes the education fund of €12.7 million, is €49.4 million. A further cash payment, perhaps the balance, which was €2.4 million when the committee last considered it, is imminent. The total value of accepted properties is €66.2 million and the counselling services for victims amount to €10 million. All property issues have been resolved but the legal procedures and paperwork involved in transfer of title are under way. I could provide the breakdown in cash for schedule A and schedule B properties.

Chairman

That will not be necessary. Perhaps Ms McManus could comment on the education fund of €12.5 million. How is that being administered? Has it reached the victims and their families yet?

Ms McManus

An education finance board was established. The chairperson-designate had one informal pre-meeting of the members of the board. A further meeting is scheduled for January 2006. The money is managed by the National Treasury Management Agency. I will call on Mr. Fanning, who has more detailed knowledge, to speak on this matter.

Mr. John Fanning

I thank the Chairman. The Commission to Inquire into Child Abuse (Amendment) Act 2005 provided for the establishment of a statutory education finance board, which, as the Secretary General indicated, already held a pre-establishment meeting. We are making arrangements for the formal establishment of that board by order, which will be done shortly. The fund will have at its disposal a sum of €11 million, which takes into account expenditure already incurred under the administrative scheme operated by the Department. It also makes allowance for interest of €750,000 accrued when the fund was held in an account. The money is managed by the National Treasury Management Agency on behalf of the board and the agency will provide money on an ongoing basis to the board to meet its expenditure.

Chairman

What about the beneficiaries? Is the benefit confined to those who were resident in the institutions or does it extend to their families?

Mr. Fanning

The beneficiaries will be residents and their families, which includes children, grandchildren and stepchildren.

Chairman

Will Mr. Fanning give a flavour of the type of interventions that have taken place or that it is intended will take place? Is it third-level scholarships, special education or both?

Mr. Fanning

It covers education in the broadest sense, which includes third-level education and further education. It also includes leaving certificate grinds for children of former residents. Last year the Minister indicated in the Dáil that she wants the board to consider education in a broader sense which includes crafts, artistic works and an entire range of educational courses.

Chairman

Do eligible persons access the facility on a case-by-case basis or is there an overall programme into which they automatically slot?

Mr. Fanning

There are criteria which have been in operation under the administrative scheme. The board is examining those criteria to see whether they need to be amended. That is an immediate task of the board. Applications will be dealt with on an individual case basis.

Chairman

I thank Mr. Fanning. I have a final question for Ms McManus. A proposal was made that to some extent entry to medical schools would be on a postgraduate basis in the future, either in traditional medical schools or in the proposed standalone postgraduate medical school at the University of Limerick. Where does that proposal stand now?

Ms McManus

The Minister announced — I apologise, I am advised I am getting ahead of myself. It was recommended in a report considered by both the Minister for Education and Science and the Tánaiste and Minister for Health and Children. The Government then considered the approach to be taken. The proposal in the relevant reports was for competitive bidding for the graduate places.

Chairman

Which report was this?

Ms McManus

It was the Fotrell report. Two areas were covered. The Fotrell report broadly covers university education and the Buttimer report deals with ongoing postgraduate type education.

Chairman

I have a concern about the University of Limerick. I understand the Fotrell report came down on the side of the traditional medical schools and stated they could have undergraduate entry as well as postgraduate entry. One of the universities, UCD, has already brought forward proposals.

When the Fotrell report was considered, the Minister or the Cabinet seemed to indicate that institutions which wanted postgraduate entry would make a submission on a competitive basis. It seems submissions would be made to a sub-committee of Fotrell. I ask Mr. Cullinane for information on this matter, as it appears that competition is effectively played out with a stacked deck. The people who have already made up their minds on the policy will evaluate the submissions.

Ms McManus

The concerns the Chairman has about the University of Limerick may have been in the context of a policy that would also affect the existing providers, namely, that the larger the school the better and that size improves the capacity to deliver. My understanding is the competitive process was envisaged to include international people as well as national people. I will ask Mr. Cullinane to give further information.

Mr. Tim Cullinane

The Fotrell report will be published shortly. It is correct to state it mentions graduate entry to medical education. However, it is envisaged to be by a bidding process. The University of Limerick may put in a bid to run a graduate school or collaborate with an existing medical school in delivering such education. The Fotrell group presented its report to the Minister for Education and Science and the Tánaiste and Minister for Health and Children and that group has now finished its work. Other structures will be put in place. The submissions would not be made to the Fotrell group.

Chairman

Will they be made to a group drawn from the membership of the Fotrell group?

Mr. Cullinane

Its composition would be drawn from certain constituencies but nothing has yet been decided on it.

Deputy Burton

I have further questions in regard to redress. I listened to the Chairman's figures and read the contingent liability note No. 15 on page 205. In terms of redress, the Department acknowledges the likely cost at the end of 2004 was €732 million, with another €100 million relating to the Commission to Inquire into Child Abuse. That amounts to €832 million.

As the Chairman stated, a significant number of final applications, 5,217, were received in December. Does the delegation agree that the estimate of a final outcome of between €1.15 billion and €1.35 billion appears highly reasonable? If so, is it correct to state that if the contribution of the religious orders is €128 million, they are likely to only contribute 10% or less of the overall cost of the scheme? It was stated they have paid or have committed to pay in cash and property approximately €128 million already.

The religious orders are not involved in the redress scheme now and have got away with paying €128 million, while the taxpayer is going to pay at least ten times that amount. Are the Secretary General and the Department happy with that situation, from an accounting point of view, in terms of estimating costs?

In that context, can Ms McManus give the committee information on the amount of compensation awarded in respect of each of the participating institutions? What is the average per institution? We have information on the average per individual, which is approximately €70,000 plus an additional 20% for legal costs. Could we get a breakdown of the awards in respect of each of the institutions taking part in the scheme, where children in their care were abused? Does the Department have an estimate of the likely outcome of the final contingency and spent amounts, broken down by institution? As Deputy Noonan has pointed out, there are some very severe cases. Are there indications that there were very severe institutions which, to date, have cost the scheme a lot of money and account for many of the cases?

Ms McManus

Perhaps I can deal with the Deputy's last question first. As was indicated by the Comptroller and Auditor General, the Residential Institutions Redress Board operates independently of the Department. There is a legislative provision whereby the Minister can request information, which is what was done, at the request of this committee, with regard to the number of cases and the average award. I am not sure if the board itself sorts records by institution as opposed to by individual because there are some people who were in more than one institution. We can make inquiries as to what way the board maintains the records and whether the type of information referred to by Deputy Burton is available. However, a formal request to the board from the Minister would be required to obtain such information.

Deputy Burton

It would be outrageous if there had been a failure to keep track of the awards made with reference to specific religious orders and children abused in their care. The Department should make every effort to obtain that information. It would be an extraordinary gap in the information available on the administration of the scheme. Everybody accepts that there were certain institutions whose regimes were severe and where abuse was rampant, widespread and dreadful, while there were other institutions where abuse was at the lower end of the scale. It would be wrong to lump all of the institutions together.

Chairman

We must understand the facts first. Persons who make claims to the Residential Institutions Redress Board do so on an individual basis and are treated as such. Perhaps Ms McManus or Mr. Hickey could find out how records are kept because we have no information on that.

Mr. Purcell

I cannot throw any light on that matter but I will reiterate that the individual awards are confidential. Any settlements made or awards granted are done on the basis of a signed confidentiality agreement.

Deputy Burton

I am referring here to the information regarding the religious orders. I understand that people are accepted into the redress scheme when they identify themselves as former residents of a particular institution run by a religious order. The Department of Education and Science then checks the records of the religious order and its own records to confirm that applicants were residents of particular institutions. In that context, it would be astonishing if information was not available on the religious orders that have had sums awarded in respect of residents in their care.

Mr. Purcell

I am not aware that there are such records. The Chairman is wise to insist that we establish their existence before we take the issue any further. I understand the point made by Deputy Burton.

Ms McManus

Apart from establishing whether such records are available, we would also need to determine if providing such information would be compatible with the terms of reference of the board and the confidentiality issues raised by the Chairman.

Deputy Burton

Recent media reports suggested that the commission, or someone associated with it, may be initiating psychological studies of applicants. I would be grateful if we could get some information on that, when the process started and so forth. There have been various media reports and commentaries on this matter and I am aware that a number of those involved with the institutions are not happy with that situation.

Ms McManus

We can make inquiries of the board and make the information available to the committee.

Deputy Burton

I believe that a significant number of people have been unwilling to come forward, either because they live abroad or have issues with the board itself. Will the Department take a compassionate view of those who make late applications? I am aware that late applications are provided for within the terms of the Act, but will the Department take a compassionate view?

Ms McManus

Is the Deputy referring to the main scheme or the education fund?

Deputy Burton

I am referring to both. With regard to the education scheme, if an individual has been in an institution and has not made a claim to the main scheme, would he or she qualify to apply to the education scheme? It is important that those who were in institutions but chose not to apply are made aware that the education scheme is open to everyone. That is one of the positive elements of the scheme but I am not sure it is widely known.

Ms McManus

To the best of my knowledge, the education fund is open to everyone, including children of deceased former residents, that is, those residents who died before the scheme came into operation. The definition of eligibility is broad under the education fund. With regard to the date, the policy position as announced by the Minister is clear, namely, that the end date is final.

Mr. Fanning

The closing date as provided for in the legislation was 15 December 2005. The board has to abide by that. However, there is provision for the board to consider late applications in exceptional circumstances, where it is demonstrated that there was a genuine reason for a person not submitting an application on time. There is no provision in the legislation to extend the closing date beyond 15 December, but the board has the option of considering exceptional cases.

Deputy Burton

It has been the practice in the Department to issue statistics on the occupation of the parents and guardians of students who qualify for third-level maintenance grants. In the past ten to 12 years, I have sought the information with regard to my area and the country on a comparative basis. I regret to say that, for the past two years, the Minister for Education and Science has been unable to make the information available to me. I have been informed that a new scheme of identifying occupation and professional classes of qualifying students is in preparation by the Department.

It is critical that we have an idea of who benefits from valuable maintenance payments to colleges. I am perpetually disappointed because relatively few of the 3,000 local authority houses in my constituency are able to benefit, whereas a HEA survey of 4,000 students in receipt of maintenance grants revealed that 17% identified themselves as coming from higher professional backgrounds and families earning more than €4,000 per month after tax, that is, €70,000 per annum before tax. In the context of the Department's overhaul of the information, when will we find out who gets college maintenance grants and their parents' occupations and income levels? What is the situation with regard to the inclusion of assets tests where parents have assets in excess of €2 million?

Ms McManus

On the socio-economic issue, we have only collected and provided data on the higher education grant scheme. The problem in collecting up-to-date data is that we are still awaiting returns for 2002 to 2003 and 2003 to 2004 but we are pursuing this matter with local authorities and the City and County Managers Association. We also introduced new arrangements in 2005 to get a more comprehensive statistical breakdown of grant holders under the schemes administered by VECs, on which we did not formerly hold data. These arrangements are along similar lines to the ones for higher education. Once we receive the data from the local authorities and VECs, we will be able to compile them.

The Deputy may be thinking of one of the new schemes involving either the VEC or our work with universities and institutes of technology to introduce some kind of electronic record system which would send information directly to the HEA on the entry points of various students. I will revert to the Deputy on the assurances and information we have received from local authorities in respect of when they will let us have the outstanding forms.

On the asset test issue, legislation is intended with regard to pulling various student support schemes and the relevant issues are being considered.

Deputy Curran

I have a few straightforward and simple questions arising from subheads F1 and F3, which concern the capital side of the building programmes for national and secondary schools and which reveal a significant underspend. The two areas had an estimated combined provision of €400 million but €55 million less than this was spent. The straightforward explanation given is that savings arose due to delays in tendering processes, moving on site and planning appeals. As a public representative, I am aware of the demands for increased educational facilities and refurbishment programmes at primary and secondary level and I am concerned that moneys seem to have been allocated for projects which were not carried out.

Internally, at what point in time are allocations made? It does not seem an efficient way to spend the money when such a significant amount was left over. This happened at both levels at a time when we, as public representatives, were feeling pressure on the matter. I would be more understanding if there had been over-expenditure. In estimated spending of €388 million, €55 million is a significant amount of money. What was going on and how did this situation arise? It might be more relevant to explain how the provisions were made in the first instance.

Ms McManus

I do not know if the Deputy was here earlier when I discussed this issue in response to another question. Of the €55 million referred to by the Deputy, €5 million was spent on computer equipment or other capital expenditure. Savings of €50 million were carried into the current year and we spent our 2005 provision and that money, as well as a further €11 million which we managed to transfer from current funds. In answer to concerns that we did not spend money, it was spent in 2005 within a multi-annual context.

The broad explanation for the problem was that we were expanding a building programme from a lower base. We probably did not anticipate the length of time involved in completing some of the major projects in terms of getting schools up and running and that it can be difficult to go from project approval to spending mode. Even last year we monitored a few hundred major projects, excluding summer works. Despite a considerable push in 2004, there were times when we would not have spent our entire allocation if we had believed the aggregate spending estimated for us by quantity surveyors on behalf of schools and not assumed from our experience of the previous year that there would be a certain amount of discounting in our forecasts.

Deputy Curran

Have lessons been learned from the year?

Ms McManus

Yes. We did not kick off as quickly as we could but we caught up in 2005. We learned significant lessons in how to manage our spending. As Mr. Hanevy is in charge of the building area, I ask him to comment further on the issue.

Mr. Martin Hanevy

We now have a multi-annual framework, which contains a carry-over provision to smooth out the problem of hitting 31 December. Fundamentally, what happened in 2004 was that our profiling of spending on major projects and on some site spends was overly optimistic. After experiencing a couple of lean years, we were commissioning schools and their design teams to dust off the projects which were waiting in the queue.

We did not reckon that this would take a longer period of time in some cases. An architectural firm might have been dealing with a project which was suddenly paused or slowed and subsequently went through a month of incredulity after receiving word that the project was to be resumed. The relevant architect may have been occupied with another project in the booming construction sector. We overcalled the rate of spend in 2004 on what we call the majors. We have started to pay the bills for those projects.

Although the word "underspend" implied that the money could be apportioned to other projects, it was attached to particular projects that were approved. The catch-up continued until 2005. We have fine-tuned our schemes to allow for that. We discovered that even some of the devolved schemes — the small and rural schemes — have a lead-in time before the school receives its planning permission, commissions its design and gets on site. The management of the site acquisition programme and how it turns around the end of December can have issues because if one is negotiating and decides that the deal is bad, one still has to "play poker" and one does not go ahead. This year we went ahead of target with our site acquisitions and that contributed to our need to switch money from the current side.

Ms McManus

We had an outside study commissioned.

Mr. Hanevy

Yes, we had an outside study commissioned to take a hard look at it and to give us advice. It is still a significant programme and is at multiples of what it was. We have 200 major projects on site and they are individual teams all around the country.

Deputy Curran

The Department representatives might remember that on a previous occasion in this committee we discussed extensively how effective and efficient public-private partnerships are and that will be ongoing. I recently read that it had taken an unexpected twist in that Jarvis is no longer around. Is that correct?

Ms McManus

Yes, the Deputy may recall I told the committee that Hochtief had taken over the Cork School of Music business from Jarvis. When Jarvis experienced financial difficulties related to its transport rather than its education arm, as part of the rescue package it decided to divest itself of some of its activity. Initially it started with some of the bids and that is how the Cork School of Music came into it.

In the case of the school bundle contract, facilities management of the schools is undertaken by a subsidiary of Jarvis, a special purpose vehicle which was Jarvis and Barclays Bank. WhenHochtief examined some of Jarvis's operations it expressed an interest in buying this company. Hochtief has done the background work but it has not happened yet. If it bought that company and contract the Department would have to approve it but we could refuse only if we felt it could not deliver the services or if there was a financial soundness issue.

Given that we have already done the financial and legal due diligence on Hochtief and deemed it to have sufficient solidity for the Cork School of Music it is unlikely that it would fail any financial and legal due diligence we would do for the schools project. Unlike the Cork School of Music where there was no contract, if it bought the Jarvis FM subsidiary it would purchase only the existing contract, the terms of which would remain the same regarding both services delivered and our payment.

Deputy Curran

Is the subsidiary, Jarvis FM, a viable business? It must be if somebody wants to buy it.

Ms McManus

Yes, it is. Barclays Bank has underwritten it. I should say facetiously that even if it was not viable, not that I would want that in the context of the PPP, there is no risk to the State because if the services are not provided, we do not pay for them. This is on the facilities management side rather than on the capital contract. It is in the bank's interest to ensure services are delivered because otherwise the pay does not come in. Some of that may have arisen from a press suggestion, in the context of a report of a Labour Court hearing on one of the schools, that the company had pleaded inability to pay. The company has assured us it did not plead that. It paid the award in four of the five schools. The school that came to the Labour Court hearing was in dispute about productivity in exchange for benchmarking and the status of two staff employed after the transfer from the school to the company. In other words, they were direct employees of the company.

Deputy Curran

Is the Department satisfied that the service will continue to be delivered under a different title?

Ms McManus

We would not give our consent to the purchase of the contract if we were not happy that there was a capacity to deliver it.

Deputy Curran

Will the asset of the school revert to the State after approximately 20 years unaffected by these arrangements?

Ms McManus

Yes. This company is on the facilities management or maintenance side.

Deputy Curran

My final question is also on capital but in a slightly different area. A couple of years ago the Department embarked on the provision of sports halls to community colleges, a couple of which are in my own area, in drugs task force type areas. The sports halls are complete, probably cost €3 million or €4 million and are substantial.

One of the stipulations was that the sports halls would be available to the community outside school hours. They are not just traditional halls but are quite substantial, with many ancillary facilities. Has the Department, either alone or with other Departments or local authorities, any structures in place to manage these facilities?

Ms McManus

We are currently examining that issue. Our regional office people have met the local authorities and VECs to examine the structures one could implement to manage the community aspect. The halls are already being used by the schools. This was an unusual project in that it was tripartite between our Department and the Department of Community, Rural and Gaeltacht Affairs and the then Department of the Environment and Local Government. Within the drugs task force areas there is probably a lead role for the Department of Community, Rural and Gaeltacht Affairs as to how the community aspect of the facilities would be managed because there are existing groups.

Deputy Curran

How far advanced are the negotiations? The halls are all built and operational from the schools' point of view.

Ms McManus

It is fairly active. We hope to have decisions on it in the next month or two.

Deputy Curran

Excellent. I thank Ms McManus.

Deputy Boyle

I am learning the disadvantage of coming to school early. I will ask my question anyway. I was in and out of the meeting.

Chairman

The Deputy indicated to me and I listed him but he then said he did not want to be listed.

Deputy Boyle

I was saying there was a vote in the Dáil. The hand signals were misinterpreted.

Chairman

I did not list the Deputy. I apologise to him.

Deputy Boyle

Most of my questions have been asked already. If some of them were asked during the vote, I apologise. On residential redress, where stands the payment by the religious institutions in each of the three divisions, cash, property and the third, nebulous area of counselling and support services? Has the cash payment been made? Has all the property transfer happened? Confusion or disagreement still existed in the third area recently when the Department spoke to the committee about ongoing negotiations on how the support services and counselling services were being defined. Has this been resolved?

Chairman

That question has been answered already. Everything has been fully paid. Will the officials explain the calculation of the monetary value of the support services which were in place before the agreement, such as the counselling?

Ms McManus

We have agreed the figures for counselling services in principle and await an audit report from the congregation as the final sign-off.

Mr Fanning

The Secretary General has already given the figures for what has been delivered under the agreement. We await an audit statement from the religious congregations on its spending of moneys on counselling services.

Deputy Boyle

They claim such services had already been provided, which was the biggest area of disagreement before.

Mr. Fanning

The audit report will cover services that were provided on and after the policy announced by the Taoiseach on 11 May.

Ms McManus

It will cover everything.

Deputy Boyle

I am not sure if this has been raised but I wish to ask about the letter sent by the Tánaiste and Minister for Health and Children to Deputy Jan O'Sullivan regarding Ms Marie Therese O'Loughlin and the Regina Coeli hostel. Ms O'Loughlin has been petitioning outside Dáil Éireann for a number of months for inclusion in the residential institutions redress scheme. The letter indicates the Tánaiste and Minister for Health and Children believes the Regina Coeli hostel should be included in the scheme. What is the Department's position, given that the deadline passed in December? Is there any chance of processing a claim for abuse she might have suffered in the past?

Ms McManus

I am not sure exactly what the letter is.

Chairman

The letter pertains to today's agenda as relevant correspondence. The key paragraph states that archive files in the Department of Health and Children reveal that it provided funding for specific services at the Regina Coeli hostel at least as far back as 1935. The first record of any inspection initiated by the Department was 1947. On the basis of this information the Department advised the Department of Education and Science in April 2005 to consider the inclusion of the hostel in the Schedule to the Residential Institutions Redress Act 2002. That advice seems to have been ignored by the Department of Education and Science.

Ms McManus

Our view is that the Regina Coeli hostel does not fall within the definition in the Act of institutions covered. Subsequently Ms O'Loughlin told our staff that the institution in question was not the Regina Coeli but the Morning Star mother and baby unit. At that point we consulted the Department of Health and Children, which advised us it had no record of such a unit being one that had an inspection function. Under section 4 of the Act it must be an industrial school, a reformatory school, an orphanage, a children's home, a special school for children with a physical or intellectual disability or a hospital providing medical or psychiatric services to people with a physical or mental disability or mental illness. Even if it is one of those, it must be one of which there is an inspection and the issue of whether inspections were carried out is only relevant if it is an institution covered by the Act, and our advice is that it does not fall within those. A degree of confusion was caused by the person referring to two different institutions.

Chairman

The Tánaiste's letter was dated 12 January 2006, so I suggest Ms McManus talks to officials in the Department of Health and Children to check if both Departments have the same information.

Deputy Boyle

There appears to be much confusion about this issue because before the Christmas recess the Taoiseach indicated in the House this was a possible avenue available to Ms O'Loughlin. The House was made aware of the difference between the Regina Coeli hostel and the Morning Star mother and baby unit. It appears the Department of Education and Science is still trying to come to a decision despite the expectation of others in the Government that a possible resolution exists.

Ms McManus

I will check the record but I believe the Taoiseach indicated that Ms O'Loughlin's scope for making a claim was based on the fact that she was also a resident of Goldenbridge. Our officials had meetings with her and both the Minister for Education and Science and the Taoiseach are on record as saying it was open to her to claim for her period there.

Deputy Boyle

I spoke to Ms O'Loughlin yesterday and she told me she was unaware of any meeting with Department officials. I put it to her that people might have approached her outside the Dáil without making her aware that they were officials from the Department of Education and Science but she was emphatic she had no formal contact.

Ms McManus

Perhaps Mr. Fanning will answer that.

Mr. Fanning

Officials have met Marie Therese O'Loughlin. She asked for a meeting.

Deputy Boyle

Was it a formal meeting?

Mr Fanning

It was.

Deputy Boyle

What was the venue?

Mr Fanning

I was not present, so I will have to check the details. A meeting certainly took place.

Chairman

I ask Mr. Fanning to take on board what has been said at this meeting and to write to the committee clarifying the many issues that have been raised.

Deputy Boyle

On an unrelated matter, I wish to follow up on Deputy Curran's question on the transfer of responsibility from Jarvis for a number of schools under the public-private partnership initiative. With particular reference to the first group of schools to be affected, have subsidiary contracts for services such as computers been allowed to lapse because a new company has not been able to take over the contract?

Ms McManus

No. The computer element of the contract was only for three years, unlike other services, which were for 20 years.

Deputy Boyle

It appears many of these schools do not have replacement computer contracts.

Ms McManus

That was the way it was designed.

Mr. Hanevy

It was deliberately designed that way in anticipation of the progression of information technology services over a 20-year period. We felt it would be unwise to look beyond a three-year horizon. An option was taken for the first three years and the Department has two options for renewal. We can go to the market or deal with the school as we deal with all schools.

Deputy Boyle

Have the services been replaced since?

Ms McManus

The three years have not elapsed yet.

Mr Hanevy

The issue is live at present.

Deputy Boyle

I understand the argument that technology changes over a short period but I find it hard to believe there are no alternative plans in place for replacement computers.

Mr Hanevy

The school has computers. It was provided with new computers three years ago as part of the deal. All other schools in the country have computers provided to them under different schemes which handle the maintenance. We have a choice either to replicate a model of extension to the programme or use the standard means of how schools handle the computer issue. We regarded this as a wise option to pursue rather than being tethered to an arrangement over 20 years, for example.

Deputy Boyle

Is that the only service on a short-term arrangement?

Mr. Hanevy

It was a deliberate action in the case of information technology.

Ms McManus

When I appeared before this committee on a previous occasion, I recall the Chairman being concerned that the computer programme was quite expensive. There was certain dissatisfaction with the schools over some aspects of the computer service.

Deputy Boyle

A loss is one issue and continuation of service is another. My final question relates to the original chapter and I am not sure if it has already been covered. To what extent has the Department sought and had actuarial advice on the superannuation schemes? Where does it seek such actuarial advice? I understand that the number of actuaries within the Civil Service is limited and there may only be three people who perform the role of actuary.

Ms McManus

To the best of my knowledge we use the actuary in the Department of Finance.

Chairman

With regard to superannuation issues, I understand that various agreements have been entered into over the years, either through conciliation and arbitration or in direct negotiations with the teaching unions. These have the force of contract law, so the Department is obliged to pay the pensions and the recipients, as individuals have a legal entitlement to receive them.

However, the issue is really a constitutional matter, as the Houses of the Oireachtas are voting moneys on the relevant Vote each year. The Dáil in particular is voting money on the Education and Science Vote and, on the face of it, there is no statutory basis for doing so. A gap exists here. Any time when statute law is in conflict with constitutional law, the constitutional law will win. This is not just a technical issue. There is the potential for the Department being found out on the wrong side of a test case and emergency legislation having to be moved very quickly. It was mentioned that the Department sought advice from the Office of the Attorney General during the discussion. Was this issue addressed?

Ms McManus

The Office of the Attorney General gave us advice, which did not specifically deal with the issue of the voted accounts other than the standard issue. Although an item is included in a Vote, the authority is not automatically there to spend the money, which is the standard public finance process. The advice did not suggest there was a constitutional issue, and it indicated that the Minister was obliged by a contractual agreement. The voting of funds and the relevant Appropriation Acts do not give formal legal sanctions, so the payment would be technically ultra vires. This does not overturn the right of a teacher to receive pension payments or the obligation of the Minister to pay them.

Chairman

I did not go to law school; I just met the lawyers on the way home. My point is that the ultra vires issue arises from a constitutional lapse, not a lapse in statute law. The Department is approaching the matter on the basis of the entitlement of the recipients and its obligation to pay these people. There is another issue coming from constitutional law. If there were a test case because of circumstances which I cannot foresee, the Department would lose. As a result it may be left with a scenario where action would have to be taken very quickly. I am simply attempting to add urgency to the Department’s commitment to remedy this. The issue has been ongoing since the Comptroller and Auditor General first brought it to this committee’s attention as far back as 1984.

I have one last question, which pertains to my constituency. The Department is evaluating the site for a gaelcholáiste in Limerick City and the Office of Public Works is awaiting instructions. What is the current state of affairs with this matter?

Ms McManus

We do not know the current state of affairs. We could check on the matter and inform the committee at a later stage.

Chairman

Does Mr. Purcell have any comments?

Mr. Purcell

It may be an opportune moment to reiterate that any estimates of the potential ultimate liabilities arising from the redress scheme are based on assumptions. From my point of view and that of the Department of Education and Science, these assumptions are impossible to validate. Going back to the debates on the issue following the 2002 report, I believe these should be dealt with in a cautionary way and always be subject to this caveat.

Chairman

May we note Vote 26 and dispose of Chapter 7.1? Agreed. There is no other business. Our next meeting on Thursday, 2 February 2006 will consider the 2004 annual report of the Comptroller and Auditor General and Appropriations Accounts, the resumption of Chapter 13.1, the West Link toll bridge. The committee will also consider Vote 32, the Department of Transport, and continue its consideration of the draft fourth interim report for 2003.

The witnesses withdrew.

The committee adjourned at 2.35 p.m until11 a.m. on Thursday, 2 February 2006.