Mr. Tom Boland:

Thank you, Chairman. I thank the committee for the opportunity to meet it. It is timely to discuss the national strategy as we step up a gear in terms of the implementation of the strategy.

The HEA is centrally involved in supporting the Minister and the Department in the implementation of the higher education strategy. We are very much guided by the principles and objectives outlined by the Minister in his recent speech to the higher education sector on Thursday, 22 November. Those objectives are recognising the importance of higher education in producing the human capital and research outputs that will underpin continued competitiveness and national economic recovery; building on our favourable demographic context – our large and expanding pool of young people that is one of our biggest strategic assets and one that many OECD countries envy; and recognising that Ireland operates in an international context, and that our higher education system and its institutions must compete and be successful in that international context. It is not just our institutions but our graduates that must compete.

My colleagues from the Department for Education and Skills will outline the broad context for reform and the main actions for change we are undertaking in partnership with it. I hope to complement what the Department will say by focusing on three particular elements of the programme. The first is building the landscape of higher education. The second is reforming the funding models, including introducing an element of performance into the funding of higher education, and the third is sustainability.

The national strategy recommended that the future higher education system should consist of autonomous, well-governed institutions that are strategically led. It also recommended that the strategy would be informed by a recognition of their particular strengths as institutions within themselves and within a broader higher education system, a recognition of national policy objectives, and a commitment by the institutions, individually and collectively, to meet those objectives according to their strengths and with a high degree of accountability.

Over the course of 2012, the HEA has led an intensive process of engagement with the higher education institutions aimed at better understanding their particular mission both now and into the future, to set the basis for the future higher education landscape. We have done this through our request for institutions to submit their vision for their future role in the system, and we have correlated this with extensive data collection on current institutional profiles and performance. We have also received international advice and assessed the institutional submissions against the stated objectives of the Hunt report - the national strategy for higher education. We have commissioned the ESRI to advise on the future demand for higher education, both student and employer-led. We aim to undertake further discussions with the institutions early next year, and to provide final advice to the Minister by March 2013. Thereafter, it will be a matter for the Minister to decide how best to move forward with the recommendations he receives on the structure of the system.

The process will also be critical in setting up the further development of our funding model into the future. In considering that future development, it is appropriate first to recognise the many strengths of the current funding model. It is widely recognised, within and outside Ireland, to be fair and impartial. I might also add that it is transparent. Furthermore, it has been very successful in meeting critical State objectives. The massive expansion from roughly 36% to approximately 65% participation in the past 20 years has been facilitated by a funding model that has incentivised efficiency and growth. In addition, institutions have played their part by using the model to manage their operations consistently within budget. It is noteworthy that despite the very severe funding restrictions of recent years and the significant rise in student numbers, all the HEA-funded institutions have managed within budget and produced quality outcomes in terms of graduates.

We are conscious the HEA can and must do more in this space. We are especially conscious that while our funding model is fair and impartial and drives efficiencies, it is relatively weak on assessing strategy and assessing performance against strategy, in particular the latter.

It is for that reason we proposed, and the national strategy accepted, an increased role for assessment of institutional strategy and for that assessment to feed into institutional funding. We want to ensure that as institutions shape their strategy, they do so in accordance with the principles I outlined, namely, that they shape their programmes and activities in line with their institutional strengths in the context of their role as part of a system of higher education rather than as stand-alone institutions, and that they take account of and deliver against national objectives in an accountable way. We have engaged in consultation with the institutions on how to translate this objective into practice, and we have taken international advice. We expect to commence this process in 2013 and to develop it over succeeding years. I emphasise that the process I refer to is a process of strategic dialogue and funding by performance by reference to outcomes.

The Higher Education Authority, HEA, is concerned, as is the Minister and his Department, to underpin the future development of Irish higher education on a sustainable basis. Sustainability has a number of elements. Within higher education we must take account of the extensive resources invested by the State and ensure best value is delivered. That is the point of departure. Considerable achievement is evident in shared procurement but much more needs to be done to improve shared services, and that has major implications in changes to work practices and, potentially, human resources strategies.

We must expand our thinking on the way other forms of institutional collaborations can improve quality, in particular how co-operation between institutions can enhance quality of programmes. We know there is considerable fragmentation of activity in many discipline areas. We must balance the important benefits that fragmentation or multiple provision can bring in terms of increased access, especially on a regional basis, against considerations that fragmentation may reduce the quality of the provision. We know from experience in the HEA that at the research level collaboration can bring great benefits. We must aim for similar outcomes at undergraduate level, and regional clusters of activity, as proposed in the national strategy, can be very important in this regard. I stress that we see these not as limited clusters between higher education institutions but also with further education providers and other relevant stakeholders.

More generally, there is an important sustainability strategy issue for Ireland. I mentioned previously the major strategic asset we possess in the form of a growing young population. We must remember that investment in their education has produced and continues to produce major returns for the individuals themselves, employers, society and the economy. That is not simply another cost to be met in an annual budget but part of investing in Ireland’s future. I will use an analogy to illustrate it graphically. We would be aghast if we read of a company discovering huge offshore oil fields but deciding not to exploit them because of significant upfront costs. No company would do that because they would see the future benefits that would arise for years after those initial investments. In that sense our young people are our oil, although there are indications that there have been some discoveries of oil off the south coast. However, the point is a valid one. We should consider our young people now entering higher education, and who will enter in increasing numbers for the foreseeable future, not as a cost but as our investment in our future.