Written answers

Tuesday, 8 November 2016

Department of An Taoiseach

Third Level Funding

Photo of Thomas ByrneThomas Byrne (Meath East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

67. To ask the Taoiseach further to parliamentary question number 316 of 11 October 2016, if the income for Irish universities that comes indirectly from Exchequer sources, such as via tuition fee grants for maintenance grant and full fee grant students or via research grants or state contracts, is counted as income from general government under EUROSTAT market test rules for determining whether the borrowings by universities are off-balance sheet and do not impact on the level of general government debt. [32370/16]

Photo of Thomas ByrneThomas Byrne (Meath East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

68. To ask the Taoiseach further to parliamentary question number 316 of 11 October 2016, if all universities here meet the market test; the outcome if, in a particular year, university income does not meet the market test by generating more than 50% of its income from non-Exchequer sources; and if the debt of a university would be included on the general government balance sheet in such a case. [32371/16]

Photo of Thomas ByrneThomas Byrne (Meath East, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

69. To ask the Taoiseach if the income for Irish universities that comes indirectly from Exchequer sources, such as via tuition fee grants for maintenance grant and full fee grant students or via research grants, is counted as income from general government under EUROSTAT market test rules for determining whether the borrowings by universities are off-balance sheet and do not impact on the level of general government debt. [32440/16]

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 67 to 69, inclusive, together.

The legally binding accounting rules which must be used by all EU Member States for producing Government Finance Statistics (GFS) are those of the European System of Accounts 2010 (ESA 2010). The Manual on Government Deficit and Debt (MGDD) provides further guidance on the implementation of ESA 2010 when reporting GFS.

To test whether a unit is in government, the decision rules that need to be followed are as per ESA 2010 and MGDD. These rules establish that an entity should be classified in the government sector if it is (a) under public (government) control and (b) if it is a non-market entity. The first step in the classification process is therefore to determine if the unit is under public control. Not all publicly controlled entities are in general government. This is because if a publicly controlled unit is a market producer (i.e. selling their output at economically significant prices) it is classified outside government as a public corporation.

Historically the universities were classified as privately controlled non-profit institutions in the National Accounts. The CSO, having reviewed the Universities Act, 1997, concluded that, on balance, the universities have sufficient degree of autonomy under this legislation to be classified as being privately and not publicly controlled. Therefore the universities are not currently included in the list of public corporations published by the CSO.

In 2012 the CSO reclassified the universities as market producers meaning they were classified to the non-financial corporations sector rather than the non-profit sector. Therefore, currently the universities are classified outside Government on the basis that they are (a) privately controlled and (b) market producers. This second assessment currently considers the fee income including the portion paid by the State (which is considered a transfer to households who then pay the fee) as sales. Other income combined with these fees is sufficient to meet over 50% of costs.

According to the rules of the MGDD the market / non-market criterion is applied taking results over a "number of years" - in practical terms usually a three year period is taken. Only when a clear pattern is observed is a reclassification undertaken. This ensures that government figures are not made volatile through reclassifications arising from exceptional events.

In common with other entities in receipt of significant public funds the universities are subject to routine checks on their sector classification by the CSO. If the universities were to be classified as under public control as a result of such a review, only then would the market/non-market criterion apply to the decision as to whether they should be classified in the government sector or not.

Comments

No comments

Log in or join to post a public comment.