We have received apologies from Deputies. I remind members and officials to please ensure their mobile phones are switched off for the duration of this meeting, as they interfere with the broadcasting equipment, even when on silent mode. This meeting has been convened to consider the Supplementary Estimates for Vote 45 - Further and Higher Education, Research, Innovation and Science, which was referred to this committee by Dáil Éireann. I welcome the Minister of State, Deputy Niall Collins, who has responsibility for skills and further education, and his officials to the meeting. I thank them for the briefing document which was provided for this meeting. I ask the Minister of State to make his opening statement. Members can then ask general questions on Vote 45.
Vote 45 - Further and Higher Education, Research, Innovation and Science (Supplementary)
I thank the Chair and Deputies for the opportunity to speak to them this morning and for the committee’s consideration of the 2023 Supplementary Estimate for the Department of Further and Higher Education, Research, Innovation and Science. I am accompanied by officials from my Department. They are Paul Lemass, assistant secretary; Valerie Considine, principal officer; and John Wilson, accountant. As part of budget 2024, the Government outlined that Supplementary Estimates would be required to provide for a number of measures, including a cost-of-living package of €2.1 billion; costs of humanitarian supports for Ukrainian refugees of €1.3 billion; Covid-19 related spending pressures; and the Christmas bonus payments for eligible social welfare recipients.
I will provide the committee with an overview of the Supplementary Estimate. The allocation was drawn as part of the normal budgetary process. At a Cabinet meeting on 21 November 2023, the Government agreed to a substantive Supplementary Estimate, which increased the net voted allocation to €3,211,397. This allowed for funding a number of measures. First, €115 million is for measures that will provide immediate and tangible relief for apprentices, undergraduates and postgraduate students to address the challenges of the cost of living. Those measures include a once-off €1,000 reduction in the undergraduate student contribution fee for higher education students eligible for the free fees initiative, which is estimated to benefit approximately 94,000 undergraduate students. Second, there is a once-off reduction of 33% in the contribution fee for apprentices in higher education. Third, there is an increase in the postgraduate contribution grant from €4,000 to €5,000, benefiting approximately 1,790 students eligible for SUSI. Fourth, there is a further €8.1 million investment in the student assistance fund for the 2023-24 academic year, bringing the total of that fund to in excess of €17 million.
These are significant, impactful changes that will help to address the cost-of-living issues facing students. Second, €8.9 million in funding will provide supports to Ukrainian students in Ireland. We are all well aware of the profound impact of the war in Ukraine. The funding builds upon the supports the Government put in place in the 2022-23 academic year for Ukrainian persons eligible under section 60 of the International Protection Act 2015. These supports include tuition fees and payment of a monthly stipend for students in higher education, a temporary bursary scheme for those in further education, and access to the student assistance fund and mental health supports. English language provision remains a priority and funding was agreed in budget 2024 negotiations for the continued delivery by the 16 education and training boards, ETBs, of the English speakers of other languages programme for Ukrainians wishing to develop their language competency as part of their social, economic and cultural integration into Irish society.
Finally, as part of the Supplementary Estimate, other technical adjustments, amounting to a total of €500,000, are required to facilitate university pay and pension costs, impacts of Department of Social Protection budget 2024 announcements on the further education sector and offset of 2023 expenditure pressures by savings expected on the Vote. Appropriations-in-aid received greater than forecast brought the total net supplementary ask to €107 million. I trust that this overview is of assistance to the committee. We are happy to discuss these issues in more detail. I commend the Supplementary Estimate to the committee.
Gabhaim buíochas leis an Aire Stáit as an méid sin. I thank the Minister of State and his officials for the opening statement.
I welcome the Minister of State and his officials before the committee.
I note the Supplementary Estimate and welcome it, in particular the €115 million that is going to be used for cost-of-living measures for students in third level. Like the Chair, I welcome the fact that this has been provided in respect of undergraduates, apprentices and postgraduates. I note what the Minister of State said in terms of the amount of money that is being provided. Is this something that he hopes we will be able to provide again next year, or is it just a one-off measure because of the cost-of-living pressure that has existed in 2023?
That is a very pertinent question. It is something that we provided in 2022 and 2023. We have been clear, when we have been providing for it last year and this year, that it is on a one-off basis. There is no doubt but that we live in a world where pressures are expressed to us, as public representatives, and we have to try to seek to address them. I cannot give a commitment here and now, which I am sure members will appreciate, but it would be desirable if we are in a position to be able to help continue to force down the cost of education to everybody. It has been a central focus of the Department in addressing the cost of education across a whole range of measures. Part of that has been to produce an annual paper, which is recognition by the Department of the issues in addressing the cost of education to students.
There are many moving parts to addressing the cost of education, and this has been one of them, as the Deputy will be aware. What was the Cassells report has morphed into the Funding the Future paper, which has identified demands on our available finances. There is a settled figure of €307 million in terms of addressing the deficit of the funding of our higher education institutions. We have closed that gap significantly over a period of two years. There are other pressures in terms of dealing with legacy issues around pensions, particularly across our university sector. There are also demands in the whole area of further education, which the Acting Chair and the Deputy are both well aware of.
It would be desirable and ideal to provide the measure next year, but obviously, I am not in a position to give that commitment at the moment. Certainly, the conversation and the pressure will come around again in the budget next year.
I note that the one-off measure for undergraduates will benefit around 94,000 undergraduates, and in respect of postgraduates, it will benefit around 1,700. Does the Minister of State have any indiction of how many apprentices will benefit from the 33% reduction in their contribution fee, or is that information that the Department cannot specify with accuracy yet?
We can give the committee an exact figure in relation to that. There have been about 8,000 registrations this year and we have an apprenticeship population heading towards 20,000 apprentices across all our programmes in apprenticeship training. We estimate that the one-off 33% reduction in the contribution fee will benefit around 11,000 apprentices.
Okay, so we are talking about more than 100,000 students who will benefit from this Supplementary Estimate that the Minister of State is bringing before us today. I thank the Minister of State for coming before the committee and note the Estimate.
Do we have another member online? No. Gabhaim buíochas leis an Aire Stáit as teacht os comhair an choiste seo. The Minister of State is very welcome to the committee today. I am new to this committee and I must say that I think it is disappointing that the Minister, Deputy Harris, is not here, in front of the committee. I have to be honest about that. It is not the way I would usually have dealt with it in other committees. It is very disappointing. It is welcome that the Minister of State is here and I appreciate his engagement, but really and truly, the senior Minister should be in attendance for this kind of thing when we are talking about these amounts of money. I wanted to say that at the outset.
My first question relates to the new net allocation of €107 million, and how it relates to subhead 10. On pages 2 and 3 of the Department briefing document, it is stated that the cost of adjustments to university pensions and pay-related measures is half a million euro. That would be less than 0.5% of the new allocation. When I look at the breakdown of the subheads, the document notes that it will cost €61 million in additional funds to address pension shortfalls in the sector, and that will be almost 60% of the new allocation. To put that figure into context, it is almost the amount the Government closed the core funding gap by this year. I ask the Minister of State to explain that figure. Which figure is correct?
On the Acting Chair's point about the attendance of Minister, Deputy Harris, there is a Cabinet meeting today. The Cabinet meets most Tuesdays, as she is probably aware. I just wanted to flag that with her.
She mentioned the figure of €61 million and €56 million of that funding is to address the university pension shortfall. The forecast is that that shortfall will be cleared by the end of December 2024. The remaining balance of €5.3 million is for institute of technology pensions due, pension payments and lump sum costs being above forecast because of changing demographics and an increase in retiree numbers. What we can do is-----
So that makes the €61 million?
Yes.
We can give the committee a note on that which will reconcile all of the figures in the briefing note, if that is of assistance.
It is just one thing that stood out for me.
My next question follows on from that. Looking at last year's Supplementary Estimate, under the same subhead B10, there was a request for additional money - this time it was €147 million. I also had a look at the report of the Comptroller and Auditor General and it said something similar about addressing accumulated liabilities relating to pension schemes. In 2021, it was the same, and the same amount was requested. I am wondering about that figure of €0.5 million and the figure of €56 million in comparison to the €147 million. Is there some kind of forecasting issue with exactly where that is going? Does it relate to increases from public sector pay agreements?
There is that as well, because pensioners avail of that.
But it is significant.
I am advised that the €0.5 million figure is net of all movements across the different subheads. We can provide the committee with a grid to reconcile all of those numbers.
It does state in the briefing document that part of the additional cost has arisen because of changing demographics and an increase in retiree numbers. I am guessing that when it mentions changing demographics, it is referring to the demographics of the sector's workers. I imagine that the wider demographics would probably be more favourable, with the population rising. If it is the case that the demographics relate to the sector's workforce, is this another example of the unintended consequences and costs associated with the employment control framework?
The €61 million relates to the closed pension schemes in the university sector. It is a legacy issue that is being dealt with.
I have a number of other questions in relation to pensions, but maybe I will leave that and perhaps we can get a note on that.
The €1,000 reduction in fees might be a good place to start. People will obviously welcome a €1,000 reduction. We can all agree on that and it is fine. I think that most people, not just students and their families, would have anticipated that the reduction would be a permanent one, given that this was what was being reported in the media on the morning of the budget. Usually, media sources on the morning of the budget are fairly accurate.
Will the Minister of State advise us why it was decided to forgo a permanent reduction in those fees in favour of a once-off one?
First of all, we built additional moneys into the base within the Department. The Acting Chair will be aware of that in the context of apprenticeships and, as I said earlier, future funding and closing the identified gap there of €307 million. We have closed that gap by €100 million over a two-year time span. As in any Department, there are competing asks and demands. The €1,000 reduction is part of the cost-of-living measures-----
I appreciate that.
The Acting Chair clearly understands that.
Why was the decision made to go for a once-off rather than a permanent reduction? There is obviously an impact on the cost. People are going through a cost-of-living crisis and we do not see an end to that in sight. Given people are doing forward planning about whether their children can access third level education why was a decision made, I suppose by the Ministers, to go for a once-off €1,000 reduction rather than a permanent one?
Supplementary Estimates only deal with the here and now in-year-----
I understand, but this is part of it.
The best answer I can give the Acting Chair is this would be of a commitment of resources and a permanent change in approach. It is something everybody probably wants to see, but it is being funded in the last number of years and in the here and now as a temporary measure. We have to get ourselves into a position where resources will allow for a permanent reduction and phasing out of student contributions.
When does the Minister of State see that happening?
I cannot say here and now. I do not think anybody can say here and now. It is something that would have to be considered as part of the budgetary process. That process is internal within a Department. Sections within each Department compete for available resources. The Department and the Minister and Ministers of State sit down with the Department of Public Expenditure, NDP Delivery and Reform. That is a negotiated issue as well, in that we make a pitch in the same way as every other Department and we have an ask. We do not always get what we ask for and that is not unique to this Department. It is probably the same with every Department of State across the horizon of government. It is about allocation of resources and we have lots of competing demands, as the Acting Chair knows. We have student accommodation, we have to deal with apprenticeships and all the other funding required for further and higher education. It is all part of it. We obviously have to keep an eye on the everyday cost to students. We have put significant resources into the student assistance fund, as the Acting Chair knows. It is a very valuable tool for helping and making available resources to students. It also gives a lot of local autonomy and decision-making to student services officers and the organisations and committee that run the funds across the different colleges. To be straight up, I am not in a position to give the Acting Chair a commitment in the here and now there will be a permanent reduction. It is desirable, I would like to see it and I think we all would, but we are not at the point where I can say it in the here and now.
I thank the Minister of State. It is simply that people were very much expecting there was going to be a permanent reduction. I was taken by surprise on budget day when there was not. The other thing that took me by surprise that day was there was no mention of student accommodation in either of the Ministers' Budget Statements. I am acutely aware the Minister of State did not write those speeches, so I do not take issue with that.
I will come back to student accommodation, but I wish to touch on apprentices because the Minister of State has mentioned them a number of times during the course of this meeting. We are obviously aware there are major backlogs as craft apprentices wait for off-the-job training. Covid was an issue and we understand that, but at this stage people would see that as an excuse because we are nearly in 2024 and we still seem to be heading in the wrong direction. For example, in August 2022 we had 5,252 apprentices who had been waiting more than six months for their off-the-job training. By August of this year the number had increased and it did so also in September. I do not have the figures for October and November yet, but has the Minister of State any idea of whether there will be a further increase with that? I appreciate any assistance that can be given to apprentices as cost-of-living measures are extremely important, but we want to see people moving forward.
At the end of October there were 5,514 apprentices who had been waiting more than six months to access their off-the-job training. Some 5,319 were at phase 2 and the remainder were at phases 4 or 6. Through budget 2024 there has been an additional €67 million allocated to the whole area of apprenticeships. It is our target, as the Acting Chair knows and has heard us say before, to grow the numbers in apprenticeship, especially in the craft apprenticeship area, from 13,000 place to over 16,000 places. That is obviously to deal with the demand out there in the labour market, particularly for craft apprentices.
However, people will look at the number of apprentices waiting for off-the-job training. The Minister of State mentioned €67 million, but how will it actually impact on this backlog? We are dealing with real people's lives as well-----
Yes, absolutely.
-----let us be frank about that. People have told me they completely feel they have been held back. My generation was impacted by the crash, so people were not as quick to go into craft apprenticeships at that time. There were people my age who were trying to move on with their lives, buy houses - which is nearly impossible under this Government - and also looking at trying to start families, but it is incredibly difficult when they are in this waiting moment with their off-the-job training. I hear €67 million, but what does that mean with respect to exactly how the Minister of State will handle this?
I will give a little bit of further context. Our core funding for the apprenticeship space has increased from a number of €172 million in 2021 to over €254 million in the year 2024. That is a 47.5% increase when those years are compared, so significant money is going into this.
How is that going to practically work though?
The Acting Chair's points about addressing the backlog are well made. It is not abating. As a result, we set up an emergency group that consisted of SOLAS, the National Apprenticeship Office and representatives of our education and training boards and of course staff organisations. It is chaired by the Department. The group is working to ensure the delivery of the required additional training capacity to reduce phase 2 waiting times and to right-size the system's capacity overall to match demand. SOLAS and the National Apprenticeship Office are leading on developing a series of options that will significantly reduce the backlog by the end of 2024. That includes increasing the capacity of our education and training boards to provide a total of 6,153 places in 2024, a temporary and emergency delivery of 640 phase 2 places through higher education institutions and about 150 places gained by subcontracting of training to colleges in Northern Ireland.
It is acutely on our radar and we are doing everything possible at our disposal to try to address the situation. There are resources available to it. It is a capacity issue as well, which I think is fair to say. The capacity has to be built. The training places and the staff have to be made available. The Acting Chair is probably aware of this, but as part of our emergency response post Covid, there was an agreement with staff representatives in the education and training boards to provide a third intake. Previously, it was a biannual intake. That was challenging as well because there were capacity issues. Staff have their terms and conditions also, which have to be respected and there has to be a process of negotiation between them.
Does the Minister of State believe this will work?
We do. The resources are being made available to it. It is about providing the capacity. Capacity takes a while to build no matter what you are doing. I think the Acting Chair will appreciate that. Once the capacity is there, the resources are there to deal with it. It is our intention to have it addressed comprehensively.
I will believe it when I see it. For the sake of those who are waiting, I hope it will be dealt with. It is shocking that it is at this stage, especially given where we are in our housing crisis. I do not need to remind the Minister of State of the thousands of people who are homeless.
I wish to touch on student accommodation, which the Minister of State mentioned. One of the key barriers for students is accommodation issues. We have heard from students who have to travel every day over and back for hours on end. We have seen colleges look at the drop-out rates of students. I was surprised there was not a mention of student accommodation by the Ministers on budget day. I think it came as a surprise to many. I am aware that millions of euro were announced later and I am interested in the detail of that. Even when I contacted some of the colleges, they were not aware of the detail until that morning. Can the Minister of State delve deeper into that for my own knowledge?
Previous to the budget, the Cabinet and Government took a decision that basically the market needed a Government intervention. The Acting Chair will be aware of that. That policy decision has been taken and it is welcome. Our Department last year provided €61 million to intervene across four higher education institutions to provide about 1,000 beds - DCU, Maynooth, the University of Limerick and the University of Galway. DCU and Maynooth are pretty advanced. UL and the University of Galway are not advanced to where we would all like to see them, but there is a process that has to be followed.
In parallel with that, work is going on with the sector, particularly the new TU sector, to devise a strategy. Some €1 million was provided to support the exercise to give us a proper strategy given the fact that we have now established the new technological university landscape. They are all multicampus organisations now with a presence in most counties across Ireland. They are diverse and dynamic in their offering and demands. We need to get proper value for money and a proper picture, given where our demographics are going and the strategic direction within which our technological universities going, as to what will be their demand. That is a process that is being worked through. We do not want to just throw money here, there and everywhere across the sector. We need a co-ordinated, strategic approach to it.
I refer to the €434 million.
That will also include standardised design, which is something the Acting Chair and I would both know in respect of national schools and secondary schools, which we lobby for in our constituencies. There is much standardisation of design by the Department of Education building unit, which has been quite successful in earlier delivery and cost control, which is important.
Part of the student accommodation response will also be public sector, on-campus, purpose-build student accommodation, which is what we are speaking about. We will also look at digs accommodation and maintaining the tax-free income that people who offer digs-type accommodation can earn, expanding that also to include other reliefs for people who have local authority tenants. We will also ensure the €14,000 tax free earning potential does not impact on other benefits such as social welfare and medical card entitlements. There is much going on in that space. This year was not as acute or critical as last year. Many more beds became available, particularly in the digs space. There has been a lot of building and delivery of purpose-built student accommodation. The pipeline is not turned off; it is working and delivering. There are a couple of numbers I wish to give the Acting Chair.
My question is specifically about the €434 million that was announced. From what I know, there is very little detail on it. I am sure the Minister of State has the detail.
Which number?
The amount that was announced by the Ministers, Deputies Harris and O’Brien.
The €61 million.
No. “Ministers Harris and O’Brien welcome more than €400 million investment in student accommodation” from 26 October 2023. It seems there are many announcements but we need to see what the story is with the actual money.
That is with the Housing Finance Agency. It is a policy that is being worked on to provide a low-cost funding facility, which will probably kick in when the strategy that I just spoke about - particularly across our TUs - is agreed in respect of the funding of the purpose-built student accommodation. What the Acting Chair just referred to will be one avenue of finance that will be available potentially to our HEIs and TUs to fund the building of it.
When does the Minister of State expect that strategy to be done? When does he expect the €400 million to be accessed? To be fair, the way it was announced, one would think it was immediately becoming available. I remember there seemed to be quite a bit of shock across the sector because people were not aware of it. You are giving hope to students as well when you are announcing more than €400 million. Students will be expecting that money to be delivered and to see housing as a result. When does the Minister of State expect the more than €400 million that was launched with great fanfare to make an impact?
It is a low-cost facility that will become available. I am advised the strategy will be finalised in quarter 1 of next year.
Does the Minister of State expect them to immediately have access? Will it have impact by next September?
Once the strategy is developed, agreed and settled upon, the schemes will flow from that. I do not have a timeline. The strategy will be agreed in quarter 1 and once it is agreed, the scheme has to be developed.
To be honest, I sometimes worry a little bit about announcements when they give this kind of hope to people, which I think this one did. Sometimes in this Department I see figures being announced repeatedly and I am shocked by it.
My role previously was in public expenditure and reform. When somebody suddenly has €40 million in June, I wonder whether it was announced previously or not. It tends to have been announced previously, and it will be announced again and again. I have concerns about that. We need to be open with people about financing. People hear a figure of more than €400 million when there was no mention of student accommodation in the budget process. I understand the Minister of State is saying it actually is. However, when people hear that more than €400 million is being announced for student accommodation, they will not tell themselves they must contact the Department to find out exactly what that means. I am aware it was not the Minister of State who made that announcement, but the person who made it should be here. This committee is always open to changing the times of its meetings to meet the needs and demands of the Minister. We are aware of that.
I will give the Acting Chair three numbers to be helpful to the meeting. In regard to on-site and in development purpose-built student accommodation, there are currently 3,040 bed spaces. The private sector is presently delivering, in construction, 3,983 bed spaces. I mentioned digs accommodation earlier. The number of beds offered through digs in July was 1,225. This increased by more than 1,000 to 2,311 by 20 October. There was a significant increase this year in the number of bed spaces available through digs.
The Minister of State is aware that I am hoping to bring forward a Bill about digs regulation. It is still with the Bills Office, but I will bring it forward when I get it through. It is important and, to be honest, when I took over as spokesperson one of things that shocked me most was that there was no digs regulation. It obviously needs to be workable. You do not want to be pushing people out of providing digs accommodation. However, it is concerning that young women cannot lock their bedroom doors at night. That is really concerning.
My final question relates to apprenticeship money and the National Training Fund. From what I can see, €3.8 million from the National Training Fund was used for a once-off reduction of the apprenticeship student contribution. That obviously acknowledges that there are issues with using the National Training Fund in accordance what it is called and what it sets out to do, which is funding the costs of further training, education and skills. We have heard from the Irish Universities Association, IBEC, the American Chamber of Commerce, different political parties, including Sinn Féin, and just about everyone else with a stake in education, that they are not happy with the fund's idleness. Here we see it being used to fund a once-off reduction in costs of apprenticeship fees. Will the Minister of State explain how it could be used in that instance, and what specific problems exist with its governing legislation? If he has any specifics on what the relevant section of the legislation is, I would like to hear it. The governing Act is obviously particularly long and I would like to look into it further. A lot of the time people say it is difficult to access the National Training Fund for different reasons. However, from what I understand, €3.8 million was used to assist with the cost reduction of apprenticeship fees, so it is to get a better understanding of how that legislation exactly works.
The NTF surplus is part of the calculus for Government in terms of living within the 6.1% parameters. That is an issue, as the Acting Chair knows. It is something that has to be worked out at a higher level. The €3.8 million was a once-off supplementary to address what the Acting Chair has spoken about. In his budget speech the Minister, Deputy Donohoe, signalled his intention to re-examine how to better meet the funding needs for further and higher education within the spending parameters of the annual budget. Officials will bring forward options to include legislative changes for the future operation of the National Training Fund. It is obviously on the radar.
I am aware that it is very much on the radar. It is about the outworkings of it, but it might be something I need to contact officials about directly. It is something I am still trying to get my head around. It is just for my own sake.
Okay.
I have one final question, but I will leave it and return to it with a direct note. I have too many sheets and too many questions.
I thank the Minister of State and his officials for the very constructive engagement at this meeting. That concludes our consideration of the Supplementary Estimate for Vote 45.