JOINT COMMITTEE ON JOBS, SOCIAL PROTECTION AND EDUCATION díospóireacht -
Wednesday, 27 Jul 2011

Department of Education and Skills Bodies: Discussion

Vice Chairman

We are here to discuss the proposed rationalisation of the VECs and agencies under the aegis of the Department of Education and Skills. I welcome Mr. Martin Hanevy, assistant secretary general, Mr. Dalton Tattan, principal officer, and Mr. Matthew Ryan, principal officer of the Department of Education and Skills.

Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. By virtue of section 17(2)(l) of the Defamation Act 2009, you are protected by absolute privilege in respect of the evidence you are to give to this committee. If you are directed by the committee to cease giving evidence in relation to a particular matter and you continue to so do, you are entitled thereafter only to a qualified privilege in respect of your evidence. You are directed that only evidence connected with the subject matter of these proceedings is to be given and you are asked to respect the parliamentary practice to the effect that, where possible, you should not criticise nor make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.

I now call on Mr. Hanevy to begin the briefing on the rationalisation proposals.

Mr. Martin Hanevy

The Government decided on 22 June to reduce the overall number of VECs from 33 to 16. That was confirmation of an earlier decision in October 2010 by the previous Government. This decision revised the configuration that had been decided by the previous Government. In addition, it approved in principle the preparation of a new Bill to replace the existing VEC legislation.

The Vocational Education Act 1930 originally established 38 VECs, but following rationalisation in the 1990s, that was reduced to 33. This was due essentially to the merger of town VECs with the VEC of the county concerned. In July 2009, the special group on public service numbers - the McCarthy group - proposed a reduction in the number from 33 to 22. The previous Government decided on a reduction to 16, to deal with issue of scale and based on the current and potential requirements of the sector. On entering office, the current Minister for Education and Skills invited the Irish Vocational Education Associationto submit alternative rationalisation proposals. The IVEA had expressed concerns regarding the configuration decided by the previous Government, and it made a submission to the Minister which proposed 20 new entities. While the new configuration decided by the Government took account of the IVEA's submission, and the implementation corresponds in many respects with those proposals, the overall number of VECs remains at 16, compared to the 20 sought by the IVEA. The list of the 16 VECs and proposed mergers is before committee members.

Eleven of the new entities matched the IVEA proposal. In addition, the IVEA proposed a merger between the City of Galway VEC with County Galway VEC, Sligo with Leitrim and the City of Waterford VEC with County Waterford VEC. That has been reflected, albeit with the inclusion of an additional county in each case. While the reduction from 33 to 16 in the number of entities can over time yield savings in the current cost of the headquarters functions of the VECs, it is important to note that at the core of the decision is the need to address the current low scale and size of operations to sustain existing services and meet emerging needs. The reduction to 16 is also consistent with the policy of seeking to reduce the number of agencies overall and the strategic objectives of the transforming public service agenda since it enables service delivery by a smaller number of agencies, each benefiting from efficiencies through greater scale.

On implementation, the special group examined the savings issue and identified up to €3 million in potential savings. The Department decided that is a reasonable projection in the medium term. As matters have developed the reduction to 16 will facilitate obtaining savings through the required reductions under the public service employment control framework. There would be savings in the administrative staff employed in the VECs while protecting the services they provide.

The Department fully recognises the need to engage in consultation with stakeholders on the detailed implementation of this decision. Following the initial Government decision, officials engaged in consultation within the sector and continue to do so. These include meetings with the IVEA, the association of CEOs of VECs and education officers, along with contact with individual VECs and union negotiations on redeployment issues. The Croke Park agreement is the context for the negotiations with the unions.

Officials are working on the preparation of legislation. It will involve bringing together the provisions of the existing nine vocational Acts into one new Bill. The objective is to have the heads of the Bill for approval by the Government in the autumn. The Minister has already indicated that it is his intention to provide the heads to this committee for its consideration and not to wait for a drafted Bill.

The legislation on the other rationalisation project under way was published this week. It concerns the merger of the Higher Education and Training Awards Council, HETAC, the Further Education and Training Awards Council, FETAC, and the National Qualifications Authority of Ireland to form one new body to be known as the qualifications and quality assurance authority of Ireland. In advance of the enactment of legislation that will give statutory underpinning to it there is an interim board and a CEO designate has been appointed. They have begun the detailed planning required for the amalgamation and it will continue in parallel with the passage of the Bill.

Deputy Brendan Smith

I join the Chairman in welcoming the delegates from the Department. I agree with the rationalisation of the VEC structures and support this proposal. Any of us could come up with different permutations and combinations in regard to the amalgamation of different counties. I would not agree entirely with the Minister on the Government's proposed entities but I agree with the overall structure and the need for 16.

Concern has been expressed to me from County Cork in regard to the amalgamation of the city and county which were separate in the previous Government proposals. Concerns have also been raised about County Mayo, County Sligo and County Leitrim. The most southerly second level school under the VEC scheme in Leitrim is in Carrigallen which is on the Cavan and Longford border. It is a long journey from there to Erris Peninsula at the far end of Belmullet. Concern has understandably been expressed in regard to that entity. Leitrim is the smallest of the three counties to which I referred but is a rural county.

Does Mr. Hanevy expect the Bill to go through the Oireachtas by this time next year or will it be later? What progress has been made on the appointment of the CEOs and the location of the head offices?

Mr. Martin Hanevy

On the Bill, at official level we have done what we think is a reasonable body of work on having a draft set of heads. We have had one preliminary engagement with the office of the Attorney General in regard to that and the intention is to bring it to the Government in early autumn. Assuming the Government approves the heads of the Bill it will be drafted. The Minister's desire is to see the Bill enacted in the first half of next year but that will be affected by pressures in the office of the Parliamentary Counsel to the Government.

The current legislation could have been amended but we are taking the nine existing Bills and consolidating them. The 1930 Act had been amended on several occasions but we felt it was timely to run with one Bill and the Minister agreed. It will make far greater sense and it will be easier to follow, rather than having to cross reference Acts. We are modernising the legislation. The 1930s legislation talked in terms of technical and vocational education. The role of the VECs changed dramatically throughout the 1960s and 1970s when they expanded beyond delivering a group certificate to providing a full range of education to leaving certificate and beyond. That is the legislative framework. We hope the Bill will be passed in the first rather than the second half of 2012. The Minister's decision to give this committee a chance to consider the heads of the Bill may be an efficient way of bringing to the surface various issues which may make its passage through the two Chambers easier in the long run.

We have a redeployment scheme for the CEOs which we are discussing with SIPTU. It is based on the part of the Croke Park agreement that covers redeployment and other issues which relate to IMPACT and SIPTU grades in the education sector. The document we have adheres to that. There are currently 33 VECs but only 22 have a permanent CEO. There is an acting CEO in place in the other 11. They will return on enactment of the Bill to their earlier roles. Some were education officers in VECs and others were teachers. The 22 permanent CEOs will potentially fill the 16 posts remaining or be redeployed outside the sector. That scheme is with SIPTU and we hope it will be agreed in September. It provides a process by which the CEOs express a preference. The intention is that they will be CEO designates in advance of the Bill but will not displace the existing 33 postholders. For example, if someone is the CEO designate for County Cork, comprising the city and county, he or she will be part of the planning team in that capacity with a clear vested interest as he or she will take over the function, but the existing CEO for whom he or she is acting will discharge the functions with the committee in the normal course until the Bill is enacted.

On the matter of HQs, the identity of the headquarters' will need to be known for the commencement of the redeployment process of the CEOs because one of the clauses in the proposed agreement is that CEOs will clearly know what their headquarters will be when they are exercising their preference for where they wish to go. It is a piece of information they need to have.

As officials we are currently examining the information we have from the sector on the existing accommodation and the key determinant. The previous Minister invited consultation on a number of issues by written submission, one was on the headquarter function. It had been said to committees as a guidance that the key issue of the 45 km rule within the Croke Park agreement which facilitates redeployment of staff, had to be a factor. The least-cost solution in terms of available accommodation was also a key issue. We have been examining the conditions, length of leases and so on. A clear consideration is the fact that the property market is flat at the moment so the issue of disposing of properties in the short term may not be so urgent because it may not yield savings.

Deputy Brendan Smith

If the 22 existing chief executive officers wish to retain that function post-amalgamation and there are only 16 positions, will seniority come into play?

Mr. Martin Hanevy

Yes, seniority is the key criterion in the relevant sections of the Croke Park agreement. It is a case of last in, first out. I am conscious this is an industrial relations matter but the draft scheme is almost providing a CAO-type option in order of seniority so that people can opt and have a second preference. There will be a period between the commencement of the scheme and the enactment of legislation and it is possible that other chief executive officers may retire in the interim. There might be 20 people for 16 posts and someone may have opted and not received their first preference but their first preference may then become available. The most junior people are the most vulnerable to having to take an appointment elsewhere.

Deputy Seán Crowe

I cannot get my head around the rationale for the process. The number was originally 38, it then went down to 33 and then to 22 and now we are at 16. I note the discussion with the IVEA which suggested a possible 20. The IVEA was in a difficult situation. The rationale behind the decrease is to do with efficiencies, according to Mr. Hanevy. He said that some of the headquarters are leased buildings so they will not produce any efficiencies. The document refers to savings of €3 million. The special group suggested a savings of €3 million and the Department considers a saving of that order is a reasonable projection in the medium term. I do not understand how these savings will be made. They will not come as a result of redundancies because we will not lose chief executive officers or other staff under the Croke Park agreement. This is a reshaping exercise. I do not understand it. The criteria in the past were enrolment, transport links, geographic size, affinity with an area. For instance, the VECs in the Cork city and county areas were to be retained but now the two committees are to be amalgamated. What was the rationale for the reversal of the previous decision? Is it a case of trying to reach the golden number of 16? I do not understand from where these numbers have come. I ask where is the affinity between Roscommon and Galway. It does not seem to be based on size. I presume County Cork would be bigger than the likes of County Kerry. There is a reference to efficiencies through smaller scale. I ask Mr. Hanevy to expand on this statement. It is not clear how the Department has come up with the savings of €3 million. What is the timescale for these savings? Are redundancies envisaged?

Mr. Martin Hanevy

I might work back to the more general. On the Deputy's last point, the chief executive officers are members of SIPTU and they are covered by the terms of the Croke Park agreement.

Deputy Seán Crowe

There is no offer from the Department.

Mr. Martin Hanevy

No, because they may be capable of being redeployed to other senior positions in the public service where the Minister for Public Expenditure and Reform determines a post may be filled. The savings figure was produced by the special group, the McCarthy group. Both under the previous Minister and the current Minister, the Department simply took the view this was a reasonable figure. It would be achieved, for example, through the reduction in pay of 16 chief executive officers rather than 33. It also comes from the potential disposal of property and that is why it refers to the medium term.

Deputy Seán Crowe

That does not make sense. The chief executive officers will still be there receiving the same salaries.

Mr. Martin Hanevy

There will be only 16 chief executive officers when the legislation is enacted.

Deputy Seán Crowe

They will still receive the same salaries.

Mr. Martin Hanevy

Yes, but the other 17 salaries will be saved. The payroll costs for the VEC sector will reduce because there will be 16 positions rather than the current number. That person may be employed somewhere else.

Deputy Seán Crowe

There will be no real savings.

Mr. Martin Hanevy

We already have 11 posts banked because they are filled on an acting basis. That unravels right back in some instances. I refer to the appointment of a teacher in a school who is substituting for someone who has become the principal of the school because the principal is the acting chief executive officer in the county. At the moment we are looking at up to six people surplus. Given the age profiles, one or two people may opt for retirement between now and next year. Either way, the net payroll will be for 16 people and the surplus will be run through the redeployment process. This is an integral part of the downsizing of the public service in general. The analogous posts that come into play might be in the HSE or in local authorities or within the wider educational sector in the first instance. We have been somewhat cautious in saying the €3 million is a reasonable estimate of the savings; the property portfolio savings is indeterminate at this time. The redeployment criteria will mean that, pro tempore, we will retain a sub-office in certain locations because the 45 km rule will not allow for amalgamation initially.

What is happening in parallel is that the employment control framework - which is about reducing numbers of public servants across all Departments and agencies - in this year alone requires us to reduce the staff of the VECs. If the VECs are unable to meet the set targets, they must do so by natural wastage and they are required to identify people for a redeployment panel run by the public appointments system. This is in order to free up staff who are capable of being redeployed to social welfare exchanges or wherever. This is under way. The consolidation will ultimately enable the VECs to deliver by integration and to sustain services against a falling number of administrators. This is the logic and consequence of the reduction in public sector numbers. This has been the policy of both this and the previous Government.

To explain the rationale more fully, when I use the term "scale" and the transforming public service agenda, the savings are at the back end. Fundamentally, the decision taken by the previous Government and the current Government was rooted in an analysis that there were 33 VECs doing this work around the country. Twenty of the 33 had a budget of less than €30 million and 15 of the 33 had fewer than five schools under them, so to speak. If one excludes Cork City VEC and Dun Laoghaire VEC, where the provision has been fundamentally further education exclusively, in 11 of the 31 VECs remaining, the total secondary school enrolment is below 1,500 pupils and in nine of those 11 VECs, the enrolment is fewer than 1,000 pupils. An enrolment of 800, 900 or 1,000 pupils is the type of figure the Department uses to decide if one new second level school is required in a developing area. Many existing second level schools have more pupils than some VECs, as they are currently constituted. That was the challenge. That is probably why the number of VECs is to be 16 rather than 22, as suggested by the special group. It recommended a reduction to 22 in terms of a potential alignment on the local authority side and that the employment control framework should parallel that process. We examined that as a recommendation when it was put to the previous Government and when the proposal was put to the current Government. To attempt to do that would not result in the scale in terms of the savings. Under these arrangements, the median budget size goes up €60 million, if one takes the number of VECs as the 16 configured. That was a core starting point, namely, that some VECs, by attrition of schools and other means, had become quite small. There was an administrative structure. Not all of them had an education officer and there was no prospect of a VEC getting sanction for an education officer, which is a vital member of the team in any VEC in terms of the quality of education provision, pushing out the boundaries and improving the delivery by existing schools.

This is about each of the 16 new entities being of a greater scale that allows them to do more things in the future, to do what they have to do better but also to be positioned to do anything else that comes along the way. One of the achievements of which the VEC system can be proud historically is that it always has been prepared to do new things for the Government of the day and to do things that other providers were not prepared to do. Undoubtedly, future challenges will arise from time to time. That is the underpinning at the back end that will deliver savings and will enable the savings required to be made under the employment control framework but with the VEC retaining a capacity, through consolidation, to continue to do what it needs to do.

Deputy John Halligan

My view on this is similar to that of Deputy Crowe. The McCarthy report envisaged savings of €3 million and I am not sure if it gave a breakdown of that figure, but I would have imagined Mr. Hanevy, in coming to this committee, would have been able to give us a breakdown of where those savings could be made. He said there will be a cut back in the number of chief executive officers and savings through natural wastage but that does not account for a substantial saving. In spite of the Croke Park agreement, are we talking about job losses in the sense that staff may be forced to leave in terms of the 45 km rule? The distance involved in many cases will not be 45 km but 90 km. If people are redeployed from one area to another, they will have to travel up to 90 km. A similar exercise is happening in the banks where redundancies are being sought and staff are being told they will not be made redundant if they move from Waterford to Cork or vice versa, which makes the job unattainable for the person concerned considering the distance involved

As a member of this committee, I would like to know the breakdown of the €3 million savings to be made. I am all for rationalisation and having a better quality of service if I can be assured a better quality of service will result from the rationalisation of the VECs. I cannot see where a better quality of service can be obtained when account is taken of the catchment areas. For example, Waterford city, County Waterford and Wexford VECs cover a huge catchment area. If the headquarters of the VEC were located in Waterford, it would be a great disadvantage to a person in Wexford or in County Waterford - where the area covered extends south as far as Youghal - to deal with the Waterford office. I am not being parochial but just citing the example of the headquarters of the VEC being located in Waterford. The same would apply to other areas.

Mr. Hanevy might have included the consultation process with the county councillors and city councillors but he did not mention that. Many councillors deal with the VECs on a regular basis. Were county councillors and city councillors consulted? Also, can Mr. Hanevy tell us where the €3 million in savings will be made?

Deputy Damien English took the chair.

Mr. Martin Hanevy

The guts of €2 million of the savings will be made instantly, in that the salaries of 17 chief executive officers that will be saved will come close to €2 million. However, I cannot tell the Deputy what amount will be realised from the disposal of properties.

Deputy John Halligan

Mr. Hanevy cannot tell me that.

Mr. Martin Hanevy

Obviously, I cannot do that. It is not that I will not.

Deputy John Halligan

I understand.

Mr. Martin Hanevy

It is because I cannot predict what a property will realise in the market because in many instances there is no market at present. In the period since this proposal was put forward initially or since the special group did its work, we are all wiser.

The Croke Park agreement provides that a person cannot be asked to move more than 45 km. It contains language that implies there can be a little flexibility around that but I do not believe that extends much beyond the 45 km rule. It might be a few more kilometres but it is certainly not 90 km. The Deputy is right in that some of the moves would involve a distance of up to 90 km, which essentially means those people cannot be moved but they can be declared surplus to be redeployed somewhere else within the region.

Deputy John Halligan

Is that the same as moving them? If it were decided to close the Waterford office, an offer might be made to the senior people in that office to move to Wexford and to travel to and from there every day. Such a request would make the offer unreasonable for many workers.

Mr. Martin Hanevy

Yes, but they are guaranteed to be employed somewhere in the public service within 45 km of their current headquarters. Deputy Smith asked about the timescale for the implementation of the legislation and the position if it is not enacted until next year and this rationalisation occurs during the course of 2012. We are engaged more intensively in discussions with SIPTU because there is the more pressing issue of identifying chief executive officers in this process. Our discussions with IMPACT have not been as detailed. The issue of redeployment is playing out under the employment control framework, as we speak. We will be pragmatic. We will have buildings that we will not be disposing of in the short term and we will also have staff. The numbers will slim down under the employment control framework which will deliver some of the savings below the level of chief executive officer that we would have been seeking otherwise from this proposal, but we are now getting them because of another policy. I do not envisage there being a major upheaval in 2012 or 2013 in many of those offices. There will be an attrition process under the employment control framework, which will harvest what this proposal might have harvested in any event.

Deputy Michael Conaghan

When one starts tampering with the geography or configuration of an entity, there is a concern that one might in some way diminish the dynamic of a system such as the VEC system, which has been a mighty force in this land. To put it into context, we read in the newspaper yesterday that the new campus in Grangegorman will incorporate up to 22 colleges. Until a decade or so ago, these colleges were nurtured and cultivated by the city of Dublin vocational sector. It is a strand of education with a great history. Since this is an education committee, we should at some stage reflect on that achievement and the values which drove forward this system in the past couple of hundred years. We should reflect a little on that and see how some of those values can be incorporated and restated. I know the Minister intends to do that in respect of the further education sector. We should restate some of those values and set it as a sector in its own right in the broad VEC structures.

Although money comprises much of the rationale behind this, and it is an important consideration, we should have broader debates since this is an education committee. I look forward to the Chairman organising them.

Chairman

That will happen.

Mr. Martin Hanevy

The example of the RTCs, as they were called, is probably the stellar example of the contribution the VEC system has made. That is not to belittle in any way that it was the provider for those who would not otherwise have had access to education long before the days of free second level education, whether that was through adult night classes or whatever.

At various points down through the decades when the Department and a Minister needed something done, they turned to the anchor of the VEC system. The RTCs, now the ITs, are a classic example. They then evolved and had separate statutory underpinning. The view of this Minister and of previous Ministers is that this is about positioning the sector to do whatever is asked of it in a transforming Ireland into the future.

The Deputy talked about restating values. The legislation will set out the functions and objects in the language of this century rather than of 1930 when they were set up, and the Deputy will have a very clear opportunity to contribute to it.

Chairman

We have a debate scheduled for 21 September 2011, so we will give it a full hearing.

Deputy Michael Conaghan

In many ways, 1930 is a very misleading date because it was a formalisation of a process that had been in existence for decades prior to that. Sometimes we talk about 1930 as if the sector commenced then rather than being a formalising of something-----

Mr. Martin Hanevy

It was put on a statutory basis under the Free State-----

Senator Deirdre Clune

I am glad we have had an opportunity to expand on this. This is about more than merely saving €3 million. We are looking at the whole VEC structure and how it has evolved. The debate we will have will be very interesting, in particular because the heads of the Bill will come before this committee.

Mr. Hanevy mentioned that some VECs were not large enough to have an education officer, so there will be a benefit to those receiving the service. It is important that the amalgamation will not only be a consolidation of services but will improve them. Is that information available? I know there is the geographical rationale but there is also a rationale in terms of the services available. Is that information in the public domain?

Deputy Michael Conaghan

It was in the various statements that accompanied the last decision by the Minster.

Senator Deirdre Clune

It is a very important aspect of the debate.

Mr. Martin Hanevy

It would have been in previous Ministers speeches to the IVEA annual conference as a wider rationale.

Senator Deirdre Clune

I was a member of the City of Cork VEC. Change is good. We should work with this but why did Cork city and Cork county suddenly appear?

Mr. Martin Hanevy

I think Deputy Brendan Smith would acknowledge that one could produce different combinations, depending on different issues around this. I can only give the Senator the two different perspectives. One would say that Cork city had a particular further education focus and was more akin to Dun Laoghaire but then Dun Laoghaire is going in with County Dublin. I am addressing this in more educational terms but there is a counter view - it has to be weighed up and different perspectives can be taken - that one may get a cross-fertilisation of the best in the further education space with the more general County Cork scheme. Ultimately, these were matters for final determination by two different governments.

Deputy Ray Butler

I was on the board of County Meath VEC and I see the facts and figures. I understand the situation in regard to Dublin but people have asked if it was a government decision in regard to Donegal and Kerry standing alone. I would like facts and figures on the enrolments. Some 11 have 1,500 and nine have 1,000. We are looking at this county by county. Surely we could get the enrolment figures for each county to determine the value of this.

Mr. Martin Hanevy

We can arrange to provide them.

Deputy Ray Butler

There is a belief that the decision in regard to Donegal and Kerry standing alone was a Government one.

Mr. Martin Hanevy

The proposal put by officials was largely taken by the last Government. This Minister decided to engage in consultation with the IVEA and I suppose Kerry and the joining of Tipperary was a key dynamic which came out of that. In our original one, Donegal was left on its own and that was essentially on geographical grounds.

Deputy Ray Butler

Was it because of the Minister of the day?

Mr. Martin Hanevy

I can honestly say the papers will not reveal that. We put forward Donegal but were not asked to do so. As officials, we put forward Donegal as a stand-alone. I was not asked to do that. That was our best call and it was accepted by the then Minister and it went to Government.

The current Minister and the IVEA process had a view that Kerry should be treated the same way. We had gone a slightly different way and had put it with Limerick. There are arguments which suggest Kerry is at one end of the country in the same way as Donegal is at the other end. The scale in Donegal was up to €50 million of a budget in any event.

Mr. Matthew Ryan

To add to that, of the 33 VECs, Donegal is currently the fourth largest. It has a current budget of €52 million, 26 second level schools and an enrolment of almost 11,000 pupils. It is a large VEC in its own right even leaving aside the geographical situation.

Chairman

We will get the figures for every county and will circulate them to all members.

Deputy Anthony Lawlor

We could have gone further. I like the idea of rationalisation. Savings will come not only from chief executive officers. Over time there will be an amalgamation of the staff base in the VECs and the number of boards will be reduced. A long time ago, I sat on the board of County Kildare VEC and, to be honest, I thought it was a waste of time. I seemed to rubber-stamp things and did not make much of a contribution so that is the reason I got off it. I am delighted with what is happening.

My question relates to the second part of the presentation and the bodies under the Department's aegis, three of which will be amalgamated. I do not understand why they cannot be scrapped and come under the HEA. We are all into rationalisation currently. Do we have a full list of these bodies? A number of the quangos associated with education that have been created in the past 15 years are not part of this initiative. Is it possible to bring the amalgamated bodies within the aegis of the Higher Education Authority and are there further opportunities for rationalisation?

Mr. Martin Hanevy

I will begin with the caveat that the officials accompanying me are VEC people but I can address the Deputy's questions from a broader perspective. The HEA functions as a governance and funding body for the third level sector. The new qualifications authority will concentrate on quality assurance, improving course content and riding shotgun on the quality of provision in the universities. It is appropriate, therefore, that it be a separate entity. Ultimately, its establishment revisits the original decision to create three bodies with statutory responsibility for this area.

The bodies which operate under the Department's aegis fall into several categories and many of them are quite small. There are plans to merge the two research awards councils at administrative level. Four bodies flow directly from child abuse matters, namely, the Commission to Enquire into Child Abuse, the residential institutions redress board, the residential institutions review board and the finance board established to disburse certain funds under the original deal. These bodies will be wound down in the coming period. More significant agencies include the special education council and the State Examinations Commission.

I can outline the rationale for the latter body because I joined the top management of the Department at the time it was being created. Until 2000, much of my career was spent in the area of State examinations. If one considers how the State dealt with revenue collection, the appointment of public servants and public works, a high currency business like the State Examinations Commission would not have been established under departmental aegis in an earlier era but would instead have been given a board of commissioners. I never saw political interference of any kind in the commission's work but, in terms of structure, it would have been preferable to have given responsibility for it to a board of commissioners.

The special education council was created to provide for an area with which the State previously had not been good in dealing. Before its establishment in the late 1990s, a parent who sought to get a hearing about his or her child's resource needs was on the telephone line to a remote official in Athlone. A specific grade of special education needs organiser was created to provide an official who can interact with parents, conduct case conferences and assess and make recommendations on resource needs. These matters are kept under constant review. There is a general Government policy on agency reduction and the comprehensive expenditure review is examining this area.

I have outlined these matters in relatively general terms but the committee may at any time invite my departmental colleagues to address specific areas. The Minister for Education and Skills hoped to brief the committee but he is making an announcement later this morning.

Chairman

If Mr. Hanevy wants to do that now, he may. The Minister is conscious that it is wrong to release information we have not seen while we are attending committee meetings. He advised us that we would receive a briefing on the announcement.

Mr. Martin Hanevy

The Minister will be making an announcement on the future structure of further education and training, which involves the disbandment of FÁS and the creation of a new agency. A copy of the press release will be sent to the clerk to the committee.

The decision will create a new further education and training authority called Seirbhísí Oideachais Leanúnaigh agus Scileanna, SOLAS, which will have the mandate of providing 21st century, high quality further education and training programmes to jobseekers and other learners. It will take over the functions of FÁS and the further education strand of the Department's funding to create synergies in providing jobseekers with the skills needed for new jobs in the Ireland of the 21st century. It will ensure a shift from skills provision for traditional construction and manufacturing occupations, which have seen a significant fall in employment, to a focus on training and education programmes which prepare jobseekers and other learners for growth areas such as services, ICT, medical devices, food and bio-pharma.

SOLAS will also champion a greater emphasis on generic transferable skills, including people related skills, thinking and problem solving and digital literacy. Its work will be underpinned by stronger quality assurance, occupational standards, international benchmarks and course content reviews.

The Minister is establishing an implementation group which will be chaired by the Minister of State at the Department of Education and Skills with responsibility for training and skills, Deputy Cannon, and will include in its membership representatives from the Department, FÁS and the Irish Vocational Education Association. The group is tasked with bringing an action plan before the Cabinet committee on economic recovery and jobs in the autumn.

In advance of the Oireachtas passing the relevant legislation, FÁS will be renamed SOLAS on an administrative basis at the earliest opportunity. Over time, FÁS training centre premises and most regional staffing premises will be transferred to the VECs, which ultimately will be responsible for the integrated delivery of further education and training services. This will strengthen the role of the reformed VECs in their communities.

To ensure a smooth transition to the new arrangements at this critical time, the members of the board of FÁS who were appointed recently have been invited to serve out their terms as members of the SOLAS board. A vacancy has been created by the resignation of Mr. Seán Gallagher and the Government has decided to appoint the chief executive of the Irish vocational education association, Mr. Michael Moriarty, for the period until 2015. Mr. Moriarty is being appointed on a personal basis because his knowledge of further education will assist the board in preparing for its expanded remit.

Deputy Brendan Ryan

I have a slightly different perspective on the savings of €3 million. I was initially disappointed about the figure and the revelation that €2 million comes from the CEOs' salaries suggests that further savings could have been made. A reduction from 33 to 16 represents a decrease of 52%, although I acknowledge that the comparisons are not precise given the differing size and budgets of the agencies concerned. Did Mr. Hanevy state that the overall budget is currently €33 million?

Mr. Martin Hanevy

I spoke about savings from the administrative element of overall expenditure, including the headquarters. I did not refer to the programme moneys. Our current Estimate is in the order of €40 million.

Mr. Matthew Ryan

It is just over €40 million.

Mr. Martin Hanevy

It is just over €40 million. Therefore, the saving is €3 million off €40 million. Deputy Ryan is probably correct. It is a little conservative if all goes well, but this is what I was trying to explain.

Deputy Brendan Ryan

If that is all the saving that will be delivered, although Mr. Hanevy suggests it may be more, is it worth the effort? If one is talking about integrating organisations, it will take two, three or four years to see the operational efficiencies that one would expect from full integration. I wonder what is the big deal.

Mr. Martin Hanevy

The answer to that was the other issue. It was about having 16 structures, as decided by Government, that are better placed to function. Even the announcement today, which is a flanking policy, has an integrated space because it is fundamentally stating that the VECs have a more significant role in pulling together training and further education. I would turn the question back on itself. Delivering the other decision today should be easier on foot of there being 16 rather than trying to make it work with 33.

Deputy Nicky McFadden

I warmly welcome the amalgamation and the configuration, especially of Longford-Westmeath, which is a natural affinity. I also welcome the €3 million in savings. Mr. Hanevy has explained them well and it is clear how he will be able to make €3 million in savings.

My big question today relates to the positioning of the headquarters. Can Mr. Hanevy outline the criteria by which he will configure the headquarters?

Giving the VECs a better and more defined role, and especially that they will be the umbrella that will take over SOLAS, is fantastic news. I warmly welcome it. There is no better organisation to be able to take on FÁS. I thank Mr. Hanevy for all his work and say, "Well done".

Mr. Martin Hanevy

I touched on the headquarters location earlier.

Deputy Nicky McFadden

I apologise.

Mr. Martin Hanevy

To recap, I was asked for the time line first. We will need to know the headquarters locations to run the CEO redeployment scheme because one is entitled to know, if opting to go here or there, where the headquarters are. It is a matter the Minister must determine, probably by early autumn.

Prior to the reconfiguration, all of the VECs had been asked their views on headquarters. What was stated to them in the letter of invitation, if they had anything to say, was that while a number of considerations may come into play, a fundamental requirement will be the need to ensure that the location of a VEC headquarters will to the greatest extent possible facilitate the distance requirements under which staff to be redeployed to that location can be redeployed under a redeployment scheme, allied to the need to operate at the lowest cost having regard to the accommodation available in different locations. That was essentially stating that if they came up with suggestions, that would probably be the key driver of any decision. In terms of that consultation, it is possibly no great surprise that the VECs that responded at the time either expressed no opinion, favoured a headquarters located in their own county or suggested an administrative presence in more than one county without volunteering to be the sub-office. In the real world, what one will see is a designated headquarters in every instance. Some of these configurations, given the 45 km rule within the Croke Park agreement, will not be conducive to allowing the merger go smoothly, and there is a pragmatic space of sub-offices, certainly in the short term, and because in any event, employment control frameworks will be whittling down staff. That is the key aspect.

The accommodation piece is that we will not be able to dispose of buildings quickly. What we will have ensure is that we do not increase costs by virtue of the fact that we would try to pull a great many people, even where it is possible under the Croke Park agreement, into one large new building. There is a pragmatism that must apply here at the same time. A gain for the Exchequer from property disposal will be contingent on what happens elsewhere. Some buildings may be more attractive than others. A point to make here is that there are really 13 individual mergers going on here and different dynamics in each of them in terms of properties, and so on.

Deputy Brendan Smith

One point Mr. Hanevy and other contributors mentioned was that the new entities must go by their predecessors, which took on new emerging needs and demands. They must be complimented on their ability to change and provide new courses over the years. The new entities would have that extra strength and ability to do that. I hope they would take on patronage at primary school level. They should have a significant role there. As Mr. Hanevy will be aware, the two VECs in my constituency, those in Cavan and Monaghan, are superbly efficient in providing IT services for some of the voluntary secondary schools and some of the primary schools. In those merged entities, there will be considerable capacity to do additional work in the education area.

Deputy Nicky McFadden

Hear, hear.

Deputy Brendan Smith

We discussed it here with the Minister, Deputy Quinn, a week or so ago, and in parliamentary questions as well, where I advocated the area of training and further education. Deputy Connaughton was strong on that matter as well. I welcome what Mr. Hanevy stated the Minister will announce later today.

On the new further education structure and training, will adult education and Youthreach come under that remit?

Mr. Martin Hanevy

Adult education certainly will. Potentially, Youthreach as well. I am not absolutely certain of that. I was not intimate with the gestation of the memorandum.

Deputy Brendan Smith

It is important they do. It is important that they are not left.

Mr. Martin Hanevy

As I understand it, it is fundamentally everything that is currently under the Department's further education division.

Deputy Aengus Ó Snodaigh

I apologise for being late getting here and that Mr. Hanevy might have already addressed this. It relates to the €3 million saving. Obviously, any saving is welcome in the current climate. Does that take into account the redeployment costs of staff? Is there a redundancy package for CEOs, the number of whom are being reduced from the current 33 to 16, or does this involve retirement? What are the effects of that?

I welcome the announcement of the new entity SOLAS. I hope it will have the flexibility to address the changing climate and changing circumstances. Not everything with FÁS was wrong and I hope the expertise it built up over the years can be retained. Despite the bad press, FÁS succeeded for many years in addressing the needs of Ireland in many ways. I hope the change will address the major problems that existed.

Obviously, FÁS has played an integral role in community employment and jobs initiatives over the years. Does that come under the new entity or will it be transferred to the Department of Social Protection?

Mr. Martin Hanevy

The skilling, training and employment activation piece is being transferred to the Department of Social Protection. There is a separate transfer of other parts of the functions to that Department.

Deputy Ó Snodaigh asked about the issue of CEOs. Of the 33 VECs, only 22 have a permanent CEO because of vacancies on retirement that have not been filled on a permanent basis. In the other 11, there is either an education officer of the VEC acting up as CEO or a principal teacher of one of the schools in the scheme has gone in, and they will revert to their original jobs. At present, there are 22 persons with 16 slots. There may be one or two more retirements between now and when this goes live.

We are bound by and working within the Croke Park agreement, which means that there is no redundancy package. It is a new job with one of the new entities or another job, either in the wider education sector or elsewhere in the public service. The 45 km rule applies to transfers unless someone elects to go further. This is the structure within which the number of CEOs will be reduced.

Under the administrative staff employment control framework, each VEC has a target to meet by the end of the year. Some VECs will meet their targets through natural wastage, but those that are unable to do so will need to give the names of people to the Public Appointments Service, PAS, to be potentially transferred to fill appointments in the wider public service deemed capable of being filled by the Minister for Public Expenditure and Reform.

Deputy Mary Mitchell O’Connor

I thank Mr. Hanevy for his presentation. He referred to CEOs, but will the reduction in the number of committee members be on a county-by-county basis or overall? For example, will the Cavan-Monaghan members be in one room? Will travel expenses increase?

The VECs will reduce staff numbers, yet it will be responsible for the delivery of skills under the SOLAS umbrella and the patronage of primary schools is being discussed. As I am unsure as to how it will all add up, will Mr. Hanevy clarify?

Mr. Martin Hanevy

Regarding the composition, the Deputy will appreciate that I cannot prejudice what the Government might decide to include in the heads of a Bill. The committee will have an input, as the intention is to lay the heads rather than the published Bill before the committee. The composition of the new committees is still to be determined. Several times, the Minister has stated that he is minded to have continuity of membership this side of the next local elections. This may give rise to large committees if they are rationalised during the coming year, in that everyone who used to be a member will be a member of a new VEC, but the eventual size of each committee will be much smaller. Local representation must be proportionate, as the connection with local authorities will remain. Something similar is running in the County Dublin VEC, which incorporates a number of areas, but these details will be addressed in the heads of the Bill, which will lay out the statutory basis for the new VECs.

The Deputy's second question was interesting. The challenge facing everyone in the public service is to do more with less. The rationalisation puts the VECs in a better position, in that they will be able to consolidate their administrative resources to continue delivering services and to take on new tasks. The delivery of skills under FÁS will present a challenge, but that point will only be reached after a time. As Deputy Smith mentioned, VECs carry out a range of other tasks, but some of them are being innovative and using existing resources to do so. For example, other schools are electing to avail of the IT business in County Cavan because they do not feel threatened by it. County Meath is another good example in this regard.

When taking its decision, the Government considered a memorandum in which we made a point about procurement. For example, there is a national entity to procure electricity and so on and VECs and other bodies can benefit from this. If the Cork city or county VEC leverages a deal on heating oil with local oil companies, primary schools all over the county might also want the discount. If VECs have the capacity to do something, other bodies might benefit. In this respect, the basic analysis shows that 16 VECs with a consolidated staff, albeit with reduced numbers, will be better positioned than 33 VECs would be. Some VECs have small administrations and could not get into the space. This is not to take from the fact that VECs were trying to partner up, but this will provide the bedrock from which the situation can progress.

Deputy John Halligan

Deputies McFadden and Smith referred to bringing training into an educational context. This is a major breakthrough for education and the vocational sector. People find training more enriching when it is undertaken in an educational setting rather than an isolated training building.

Deputy Smith referred to the VECs' potential as patrons for the national school sector. They are not being given enough opportunities to act as patrons. With the announcement of the new campus at Grangegorman, which will comprise 22 colleges that have been nurtured by the VEC sector for 150 years, it is ironic that patronage of its primary school is being handed to Educate Together. City of Dublin VEC should have been the patron.

Chairman

If there are no further questions, I thank the officials from the Department. I apologise for not being present at the start of the meeting, but the officials' attendance was welcome and we look forward to working with them on the heads of the Bill. I hope that new initiative will be successful. I wish everyone a good August.

The joint committee adjourned at 10:50 a.m. until 9.30 a.m. on Thursday, 1 September 2011.