I move:
That a supplementary sum not exceeding £1,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1987, for Post-Primary Education.
This token Supplementary Estimate is needed to allow for the payment of an additional sum of £12.707 million out of subhead A2 of the Vote — Grants to Vocational Education Committees — arising from the deferral by the European Social Fund from 1986 to 1987 of the payment of aid which has been approved for courses run by VECs.
It will be easier for Deputies to understand the need for this Supplementary Estimate if I give some background information. European Social Fund aid towards the cost of certain programmes offered by schools and colleges administered by vocational education committees is now an important source of funding. This is brought to account as appropriations-in-aid of the Post-Primary Vote and is shown in the Estimates volume under Part III of the Post-Primary Vote as subsection (4) of subhead L.
Application for aid is made annually in advance on the basis of the estimated cost of the programmes concerned. Normally, an advance payment of 50 per cent is received from the ESF following approval of applications and the balance is received after final accounts have been submitted and approved. As a result, the aid which is received in any one financial year comprises advance payments in respect of the current year and final payments in respect of previous years.
When the Estimates for 1986 were formulated, it was expected that ESF aid would amount to £44.5 million. The actual receipts in 1986 amounted to £31.294 million only. Some of this shortfall arose because the take-up of places on ESF-aided courses was less than anticipated but the main reason was that final payments in respect of 1985, which normally have been brought to account in 1986, were not received, even though they had been approved for payment. This deferral was mentioned in the House on 5 December last by my predecessor, Deputy Cooney, when moving Supplementary Estimates for 1986. It was expected at that time that aid relating to 1984 as well as 1985 and amounting to £13.489 million in all would be deferred. However, the aid relating to 1984 was received later in December 1986.
I would like to stress that this deferral was not, of course, a loss of aid and the reason for the deferral was quite outside the control of my Department. It was due, I understand, to cash constraints on the ESF budget resulting from the impact of the extended ESF-aided operations following the 1983-84 review of the fund.
This shortfall could have been met by a Supplementary Estimate in 1986. However, this would have transferred the charge from the ESF funding to the Exchequer. As the aid had been approved and constituted a good debt, it was considered more appropriate to avail of the facility provided by the Vocational Education Act, 1930, which provides for short-term borrowing by VECs for the purposes of their schemes, and to reduce the total amount of the Department's grant out of subhead A2 accordingly. The reduction in the grants paid out of subhead A2 amounted to £12.6 million.
The deferred aid was received in 1987. Indeed, Deputies will be glad to know that we now expect ESF aid in 1987 to come to almost £53 million in all, some £18 million more than provided for, and some £8 million extra over and above the deferred payment. The short-term borrowing incurred at the end of 1986 has been repaid in 1987 out of the grants issued to date and the additional amount now sought is to make up for the reduction in the grant in 1986 and for interest on the borrowing. As this is more than offset by the additional receipts, no additional Exchequer funding is required.
ESF aid is received for a large number of individual programmes but most of the aid is accounted for by just two programmes. These are the vocational preparation and training programme and the middle level technician programme. These two programmes currently cater for 19,129 and 11,856 participants respectively. These figures represent a decrease of 4 per cent over last year's total of participants in the case of the vocational preparation and training programme but an increase of 6.5 per cent in the case of the middle level technician programme.
I commend the Supplementary Estimate to the House.