Dáil Éireann díospóireacht -
Tuesday, 15 Nov 2016

Vol. 929 No. 1

Leaders' Questions

Deputy Micheál Martin

Going back to 1962 in that seminal document, Investment in Education, and the opening of the first regional technical colleges in 1970, our institutes of technology, ITs, have been a linchpin of Ireland's economic and social development. They have provided thousands of graduates to industries across the regions and in Dublin in the life sciences, medical technology, pharmaceuticals, retail management, culinary skills, tourism, technology and the professions. A recent comprehensive and substantive report by the Higher Education Authority, HEA, into the financial capacity of the institutes provides very stark reading. The report highlights the necessity and imperative of investing in third level education, a critical aspect of our infrastructure which is key to future jobs and, especially, attracting inward investment and creating raw material in graduates for our indigenous enterprises. The HEA is saying the sector is on its knees financially.

Since 2008, there has been a 34% reduction in State funding and a 24% increase in the number of students. Since 2012, capital funding has decreased by 49%. These are extraordinary figures. Staffing levels are down 12%. There is an immediate cashflow crisis. Ten out of the 14 colleges are experiencing particular challenges, according to the report. In aggregate, the sector is in deficit and will remain in deficit for the next five years. There is a continuing ongoing major deficit in capital maintenance and renewal. What is striking is that, by the HEA's own admission, science and engineering, the STEM subjects in the institutes, have been disincentivised by the funding model. This has been going on for years and people have been asleep at the wheel regarding the sector and its capacity to contribute to our economy.

The report states that substantial capital investment is required immediately to meet the additional quality physical space needs. It particularly identified ICT and science as areas where inroads could be made if the necessary funding were provided, and it would reinforce the technological mission of the colleges. The budget was a missed opportunity. Peter Cassells reported on the university and IT sector. For the future of the country, it is crucial that the Government gets to grips with it.

What is the Government's plan to deal with the crippling financial situation in which our ITs find themselves? How does the Taoiseach propose to create a new pathway for these institutes in the months ahead?

The Taoiseach

The third level sector has been a central plank of all Governments over the years. We have always prided ourselves on the quality of the young people who emerge from universities and ITs. This is in the context of the case Ireland continually makes for continued foreign direct investment. ITs have always been a little more flexible than universities in how they can lead and react to changing demographics and the need for new kinds of skills.

However, the Deputy has put his finger on a question that is broader than this particular problem because the need for capital investment spreads across a series of sectors and, given the perilous state of the finances for a number of years and the fact that we are now in a somewhat better place than previously but face a whole series of challenges, including the need for capital expenditure to build infrastructure across the country, the House will have to face this and discuss it in the period ahead.

There will be an investment of €36.5 million in the third level sector next year and €160 million over the next three years. That is the first significant investment in the sector in nine years, a period in which State investment in higher education fell by €463 million or 33%. The allocation being made by the Minister for Education and Skills will allow us for the first time to keep pace with demographic increases and to introduce targeted initiatives, in particular, in disadvantaged areas, skills research and flexible learning with thousands of students benefitting under each heading.

Second, to build on that initial investment, work has started on a new mechanism aimed at allowing Government to put in place a comprehensive multi-annual spending plan for the sector. The Ministers for Public Expenditure and Reform and Education and Skills are working on putting in place an appropriate multi-annual funding model for higher education and further education from 2018, in respect of which all the beneficiaries of the third-level sector can play a role. I expect the Minster for Education and Skills to bring that proposition to Government by the middle of next year.

Third, proposals need to be examined that can add to those two elements and put in place a sustainable plan for funding that can deliver a third-level system that can be world class for both the medium and long term. Earlier this year, the Minister published the Cassells report - I have said that we need to debate it in the House - and, as committed to the in the programme for Government, that report is now currently with the Oireachtas committee. Broad consensus is needed on the future direction and the Minister is working to build that consensus.

It is accepted, of course, that there is a need for investment in capital infrastructure. Some IoTs have managed, even with the difficulties they have had while others have not, and the deficit is there for all to see in the reports they have published. I can give the Deputy the details of how it is proposed to spend the €36.5 million in 2017. I reiterate that is the first significant investment in the third-level sector in nine years.

Deputy Micheál Martin

I am not convinced at all by the Taoiseach's reply. This is about strategic direction and how we should take the country back. In the 1960s, the likes of Donogh O'Malley, Paddy Hillery and Seán Lemass had a vision about how to take the country forward and that is why they set up the regional technical colleges. Their impact was extraordinary for the time. I attended an event last week hosted by the Dublin Chamber of Commerce and Cork Chamber of Commerce at which they were honouring Dick Lehane, who was one of the first employees of EMC in Cork. He invited personnel from the old Cork Regional Technical College, including Larry Poland, and Professor Noel Mulcahy from the University of Limerick as his guests, underlining their central importance in the growth of EMC, which now employs thousands of people in the country and has done for many years.

Strategic direction in respect of this sector is lacking and it was lacking in the budget as well. The reports are there. It is quite extraordinary that the HEA in its own report would state, "STEM provision has effectively been disincentivised in the IoT sector". That is the technology sector and it is not incentivised to provide courses in information and communications technology, engineering and science. That is an extraordinary position and a terrible indictment on the respective Ministers in charge of education in recent years to allow it to continue. It is clear that, according to the report, six of the IoTs face immediate sustainability challenges and four more are potentially at risk due to limited reserves. The HEA, a State agency, is saying that the sector is in a critical crisis situation and I get no sense that the Government grasps this or will deal with it in a comprehensive and substantive way.

The Taoiseach

The Government does get it and it understands what needs to be done here. I point out to the Deputy, as I have done before, that he was an esteemed Minister for Education and Science. The fact of the matter is that the taxpayers of this country were left with a €64 billion debt to pay back for banks after the catastrophic management of the economy. That is fact. We are emerging from that. The IoT review was based on an expectation of a static Exchequer contribution. That is not what the Minister, Deputy Richard Bruton, intends to follow through with.

I refer Deputy Martin to what the Minister for Public Expenditure and Reform, Deputy Donohoe, said in his speech on the budget:

Ensuring education remains the linchpin of our economic success requires an intensified focus on a sustainable long-term [funding] model for higher and further education. I am committed to this goal and building on the significant investment in education announced now.

He went on to say:

The Minister for Education and Skills and I are, therefore, initiating a consultation process on the design and operation of an Exchequer-employer investment mechanism to operate from 2018 onwards. This is also intended to drive continued reform, quality and performance across the sector, in line with the action plan for education.

The Government is not in a position to do everything one would like. There is almost €40 million investment this year for the first time in nine years and both the Minister for Public Expenditure and Reform and the Minister for Education and Skills have a clear plan about how this should be dealt with. We have to discuss the outcome of the Cassells report. The Minister expects to bring his proposition for longer term, sustainable funding of the entire third level sector to Government by mid-2017.

Deputy Gerry Adams

Front-line workers in health, education, justice and transport have had to deal with a system that has had its budget cut to the bone. The workload and work environment have gotten worse. Pay has decreased and conditions have deteriorated. Public sector workers have had €12 billion taken from their pay while they work an additional 15 million hours a week. New entrants since January 2011 start on a pay scale that is on average 10% less than their workmates. The Government has no plan to address these issues. There is no commitment to equal pay for equal work. The mantra that the Lansdowne Road agreement is the only game in town just does not hold. There is now a clear need for a new pay deal built upon fairness and equality for workers. What the vast majority of workers want and deserve is the fair and timely unwinding of pay cuts, and pay restoration. We know that cannot be achieved overnight but it can be timelined, which needs effective dialogue and the formation of a new pay agreement which lays out a clear, sensible path to the provision of full pay restoration. In Sinn Féin's view, this must also be a process that prioritises those on low and middle incomes. It must ensure pay equality for post-2011 entrants, beginning with the restoration of certain allowances for nurses, non-consultant doctors, teachers and gardaí. Sinn Féin, in our alternative budget, allowed for this. The Government and Fianna Fáil did not. Any new agreement must also ensure the right to access the State's industrial relations machinery to An Garda Síochána and the Defence Forces. It must also deliver a reduction in agency work and replace it with permanent public sector contracts.

There is a notion, peddled by their detractors, that public sector workers are a protected species. This may be so for some high earners but the vast majority of public sector workers are on low and middle incomes and they are absolutely crucial for the development of our public services. These ongoing cynical efforts to divide public and private sector workers must be repudiated. We need a strong, properly funded, resourced public sector because it is crucial to genuine economic and social progress. An integral step to achieving that, if the Taoiseach believes in it, which I doubt, is to ensure that those working in the public sector enjoy equitable pay, conditions and certainty. Private sector workers deserve this also. Despite the Taoiseach's resistance thus far and Deputy Micheál Martin's attempts to appear more hard line than the Taoiseach, will the Taoiseach accept the very real need for urgent dialogue with the public sector?

The Taoiseach

Deputy Adams says we need a strong and properly resourced public sector. Everyone can agree with that. However, we need to have fairness across the board for every worker in the country.

We have come through difficult times, as Deputy Adams is well aware. He should understand that the Government, made up of its different elements, will not sacrifice the hard-won gains that have been achieved by the people in recent years. We require a well-managed process that can look at the broader context of where the country is now and where we think it can be in five or ten years time. That means not only looking at individual public services but at the public service in general as well as looking throughout the country for public and private workers. There is a need to be fair in what we do.

The Government has said that we stand by the Lansdowne Road agreement. The Estimates and the associated ceilings are set. The Minister for Public Expenditure and Reform has acknowledged that the Labour Court recommendation brings added pressure to the responsibilities he must discharge.

The Government will respond in this way. It will set out a process that can be well managed, that will be in the interests of every worker in the country and that will provide for the betterment of public services generally, which is something that people need.

I put it to Deputy Adams that the public service pay demands have to be balanced against the constraints upon the Minister and the Government. There will be a collective whole-of-Government response. This has to take into account the question of productivity gains in the delivery of better public services for everyone. There must be fairness as part of this as well.

The Government will respond collectively in setting out an agenda, structure and a strategy by which we can best manage the circumstances in which we now find ourselves as a country. We must not have a situation whereby it becomes sector versus sector. There should be fairness right across the board for public and private workers. The Minister has asked his officials to deal with the relevant committee of the Irish Congress of Trade Unions. I think that meeting takes place this evening.

Deputy Gerry Adams

I asked the Taoiseach about starting talks. The Taoiseach ignored that question. It was a simple proposition. I asked him to start talks to try to find a pathway through these difficulties.

The Taoiseach has said there needs to be fairness for all workers. That is the exact opposite of what the Government is doing. The Government stance is untenable and I believe the Taoiseach knows it. He knows that, as we face into the winter, citizens will be alarmed at the potential for doctors and nurses to be on picket lines when we face into an accident and emergency department crisis. We know that the largest public sector unions are either balloting for industrial action or indicating that is what they will do in future. The Taoiseach has offered no solutions in any of his utterances so far. He has not even suggested a process to find a solution, which is what I was asking him to do. The Taoiseach might think of a different solution from what we might think up, but the process to find that has to begin.

It is also clear that the Lansdowne Road agreement has run out of road. I am saying to the Taoiseach that the process of reaching a new agreement must start. Facing down workers and their unions will not work. The Taoiseach should leave the macho posturing to the Fianna Fáil leader. Let him do all that strutting his stuff. The Taoiseach is the Head of Government. He should start the talking now and set the example. We need a conversation and a negotiation. Will the Taoiseach accept the need for dialogue without delay?

The Taoiseach

I have said to Deputy Adams that the Government will respond to this collectively and set in place its strategy for a best managed way of dealing with the many challenges facing the Government, the economy and, in particular, the Minister for Public Expenditure and Reform.

A low was reached in 2013 of 260,700 public servants. The corresponding figure was 285,400 in 2008.

The end of 2016 figure for public service employment is likely to be more than 279,000. Given the requirement for additional public services and investment in them, possibly 8,000 to 9,000 recruits will be required every year. The replacements for that reduction of more than 25,000 were mainly in the priority areas of nurses, gardaí, teachers and so on. In the interest of everybody, and to be fair to everyone, the Government is saying that we need a collective response. The Lansdowne Road agreement has proved to be a central tenet of public pay in this country. We stand by it. The ceilings have been set out. The Minister does not have the moneys being demanded, so there is a need, in everybody's interests, for a well-managed process and strategy by which these matters can be discussed in detail and a pathway forward negotiated.

Deputy Seán Crowe

When?

An Ceann Comhairle

I thank the Taoiseach.

The Taoiseach

There will be a time and a place for that. It is in the interest of fairness across the board because we face external challenges as well arising from the decision of the UK and other international events that may have an impact upon the world economy and upon ours as an exporting nation. There is pressure on the Exchequer pay bill. Nobody I know wants to wreck the hard-won gains in our economy made by the sacrifices of the people over the past six or seven years.

An Ceann Comhairle

I thank the Taoiseach.

The Taoiseach

Deputy Adams does not want that to happen, nor does anybody else. On that basis, it is imperative that the Government responds collectively but in the broadest possible way, with the best-managed strategy and in the interests of everybody.

An Ceann Comhairle

I thank the Taoiseach.

The Taoiseach

This is not a case of one particular sector trying to win over another. There are challenges and there are financial pressures, but we must deal with this through a carefully managed strategy and process by which everybody can have his or her say and by which we point a way forward in the interests of everybody.

Deputy Gerry Adams

When?

Deputy Mattie McGrath

I wish to raise several important matters related to the construction of, and the ongoing construction costs associated with, the national children's hospital. As the Taoiseach knows, the construction of the hospital is a key part of the programme for Government, which we all support, and is something we all recognise as vitally important. What we fundamentally disagree with is the suitability of the location. The Connolly for Kids campaign, which is composed of paediatric health care professionals, parents of critically ill children and many organisations, such as the Jack and Jill Children's Foundation, feels - we know this to be the case - it has been treated with contempt by successive Governments when it has tried to raise its concerns about this issue. This is despite the fact that the Connolly for Kids group has over 100 years of professional health care and paediatric experience, which is a lot of experience that neither the Taoiseach nor I has in health care.

I wish to raise with the Taoiseach the concerns about the runaway train of the hospital's construction costs. The original estimate was €480 million, but several newspaper reports and independent observers have now quoted the Government as admitting that it has exceeded €1 billion, which more than double the cost. What is staggering about this number is that it excludes the cost of any fit-out or IT equipment, and we all know the cost of fit-out and equipment for hospitals is millions and millions. The €500 million overrun costs for a single project represents almost half of the €1.2 billion fiscal space the Government told us it had before the budget last year for spending the following year. That €500 million could have covered the cost of the Garda pay claims 12 times over; it could have allowed young teachers equal pay; it could have sorted out all the issues of the child care workers outside the Dáil today, who littered us with details of their claims as we came in, and public servants; and it could have funded the many crisis points in our front-line health services, such as in Clonmel Hospital in south Tipperary.

While we all accept that the original budgets are liable to be exceeded, this is phenomenal and staggering and must be reined in, or does the Taoiseach want to be remembered in 25 or 30 years' time for a report into this waste and these absurd costs? This is the kind of runaway cost that not only threatens to deliver a disastrously located hospital that will put children's lives in danger - I do not say that lightly - but also substantially increases the likelihood of future costs to other areas of Government spending. We know the impact that will have and the problems related to budgets and how tight they are.

The Minister for Health has said he came with no baggage to the Department. His career is depending on this and I wish him well with his career. Will he be remembered for this failure and abject overrun? Will the Taoiseach deal with organisations such as the Connolly for Kids hospital campaign group and the Jack and Jill Children's Foundation, which looks after the sickest of children? They have been locked out of the hearings and even last week they were locked out and denied access. Will the Taoiseach please give me a direct answer on how he will curtail costs and ensure that the money is better spent? Will he try to rein in this runaway train?

The Taoiseach

I thought the Deputy was going to ask a different question when I heard him refer to runaway trains.

Deputy Mattie McGrath

We will deal with that another day.

Deputy Finian McGrath

The Ballybrophy terror.

Deputy Mattie McGrath

They do not run any more. They are stopped in the station.

The Taoiseach

The Deputy raises an important point. Everybody should take pride in the fact that at long last we were in a position to make a decision that there would be a national children's hospital. It was followed by a decision in respect of the location of the national children's hospital and the agreement from the planning process and An Bord Pleanála that it should go ahead. Any of the associated costs will be for the single biggest construction project in this country for very many years, to look after all the children of the island, North and South, and it will be a magnificent achievement for a country that prides itself on family and children. At long last they will have a world class facility for the next 50 years or beyond.

The Deputy raises an important point regarding costs but these are all subject to being tendered in a competitive process. I can inform the Deputy that what he raised will be the subject of a formal Government memorandum shortly, which will be brought by the Ministers for Public Expenditure and Reform and Health to the Government. The issues raised in general about the range and costs will be central to that memorandum. Specifically, there will be a focus on the value-for-money process involved. The matter will be the subject of a formal memorandum very shortly and, arising from that, I hope everybody will understand the scale, nature and requirement of this particular project, which is in the interests of all the children of this island for the next two generations at least.