Mr. Ned Costello:

I will start with Deputy McConalogue's questions and then comment on some of the other points raised, following which my colleagues will respond to some of the specific issues raised.

I will respond to the questions in the order they were asked. On the legislation, as I stated, it is evident from our report on governance that we take the governance issue seriously. We believe that the recommendations in that report in regard to the governing authorities and academic councils will significantly strengthen governance. While I did not mention it in my speech, a revised code of governance is before the governing authorities of all the universities.

I will outline our principle concern about what is contained in the draft heads of the Bill. There is a strong suite of governance provisions in the Universities Act 1997. They are centred around section 20. I am speaking in this regard of where a university misbehaves. Sections 19 and 20 deal with visitation. They provide that where the Minister forms the view that there is prima facie evidence that a university has acted ultra vires, he or she can send in a visitor, who will be a judge or retired judge of the High Court. That is the mechanism currently provided for in the 1997 Act. To our mind, that mechanism has two important aspects to it. First, cause is required in that the Minister must form the view that something is actually wrong. Second, there is a degree of independence in the selection of the visitor. In the heads of Bill as currently drafted, there are no requirements for cause and independence of the individual. Therefore, the Minister is granted sweeping powers. In essence, we believe that any further strengthening of governance - there may be some reasonable case for the strengthening of section 20 - should be addressed in the context of section 20, linked to the provisions we are proposing in relation to governing authorities. The issue is one of appropriate checks and balances. We do not believe the appropriate checks and balances are provided for in the Bill as drafted. We believe the issue can be dealt with in a different and better way. It is to be hoped this will be done.

The point on staffing reductions is a good one. When the employment control frameworks emerged in 2009-2010, we advanced the view that it is far more effective to control the budget and to allow institutions to make decisions, in terms of how they dispose of or configure their resources, in the best interests of students. The employment control framework head count reduction approach means one must achieve a specified level of head count reduction and has limited control in that regard. In the context of the no compulsory redundancies, save in respect of clause 1.6 of the Croke Park agreement, flexibility is further limited. This has caused a certain amount of difficulty. The no compulsory redundancy requirement has affected contract and casual staff. That is one area where a reduction has been achieved. Also, universities have tried to prioritise front-line services, whether non-academic or academic. There has been a concerted effort in this regard.

The other significant aspect is that universities have been actively managing the changed staffing requirement through the introduction of workload allocations systems to better balance workloads and better match staff to academic requirements which they are required to deliver. This is all based around developments in universities in terms of the creation of schools, head of school position and the putting in place of a more effective management structure to allow universities in a modern way to manage their resources. All of these developments, initiated by the universities, have helped in addressing the crisis. However, there are limits on what can be done in terms of quality and sustainability, which is where the concern arises.

I will pass over the issue of online learning, which Mr. Purser will address later, to the question about reserves.

For absolute clarity, these are not cash reserves. In other words, this is not money which has been put away in the bank and is available to do whatever an institution wishes to do with it. Rather, it is the amount of cash on hand in the institutions in a given funding period. If, therefore, one uses the analogy of musical chairs, when the music stops, there will be a person for every chair. What is being done in the Estimates is a technical exercise. As we understand it - this is based on the short briefing we received - cashflow to the institutions will be slowed down and they will, therefore, be obliged to draw on their working capital more extensively. The reality is that at an accounting level they will carry a debtor forward into the next year. Therefore, it will actually show up in the accounts of the universities. It is somewhat technical. I again stress the fact that there is not €25 million in spare cash sloshing around anywhere in universities which can simply be delivered up without this materially affecting operations. I hope that clarifies the position somewhat.