Mr. Peter Cassells:

I thank the Chairman and the other members of the committee for the opportunity to brief it on the work of the expert group on the future funding of higher education, and also to get their views and advice on the issues we are considering. As the Chairman said, the former Minister for Education and Skills, Deputy Ruairí Quinn, established an expert group in July 2014. We were asked to consider the long-term sustainable funding of higher education in this country and to identify funding options for the future. I was asked to chair the group as an independent chair. The other members are listed in the appendix to the opening statement that has been provided so I will not go through that information. As the Chairman indicated, I am joined today by two members of the secretariat, Laura Casey and Mary Armstrong. No doubt, they will be able to provide help if we get into detailed technical questions.

With the agreement of the Chairman, I will briefly outline the context for the group’s establishment, the work programme we are undertaking and the process of consultation and engagement. It is not only consultation with the universities and institutes of technology, IOTs, but also with parents, students, business and social organisations. Today we will engage with the political process. I will then outline the key messages coming through in our work to date and in the consultation paper we published.

The group was established to address the growing pressures on the higher education system, which are well documented. Student numbers have grown substantially since 2008 and will continue to do so in the coming years, while staff numbers and public funding has reduced. Of the 210,000 students in universities and institutes of technology, 25,000 have entered since the economic crisis began. That is due to the increasing number of school leavers but also more adult learners entering the system. There has been a reduction in staff of approximately 2,000, which is an approximate reduction of 10%. As a result, the staff to student ratio has decreased and lags behind international norms. Core expenditure per student has decreased by approximately 10%. More important, in terms of demographics, enrolments are projected to grow by nearly one third over the next 15 years. Those twin pressures are resulting in what the Higher Education Authority outlined to the committee in February, namely, "a high and growing level of risk that significant unfunded expansion in numbers participating in higher education will damage the quality of provision" of higher education in Ireland with all the attendant consequences. I will return to the point. The main message coming through to date in our work is that the status quoof increasing numbers without increasing resources or a better use of existing resources is not an option.

In looking at the future options, as a group we are very conscious that we are undertaking this work at a time when the country has come through a very deep crisis but is now at a turning point. We are at the stage where we need to revive development in a way that lays the foundations for balanced future prosperity and greater social cohesion. In addressing the challenge, our growing young and highly educated population, which is unique in Europe, gives us an enormous advantage and opportunity. However, availing of that opportunity will require significant investment in education, not just higher education but further education and apprenticeships and an examination of the use of current resources. The requirement for further investment in education comes at a time when despite the stabilisation of the public finances, public resources and household incomes will continue to be stretched for some time. We will all be faced with many difficult investment choices. Committee members do not need me to spell out the competing demands such as health services, housing, jobs and regional development. It is necessary to evaluate where education fits in among those priorities. To come to any conclusion on the future funding of higher education and what priority should be given, we need first to achieve a shared understanding of what we are funding and what value higher education and its different contributions offers society and the economy. That is the main focus of the current phase of work and what I wish to brief the committee on today.

Committee members have the expert group’s terms of reference, so I will not go through them except to say that they encompass two or three issues which are of importance to us. First is the identification of the benefits of higher education not just to the individual but also to the wider economy and society. We are also focusing on the examination of future demand for higher education. I mentioned that the projections show an increase of approximately one third in the next 15 years. We are also currently examining the potential for efficiencies and giving consideration to long-term funding options. It would be easier if it were just a technical exercise but that is not the case. We are required to come up with implementable options, for example, to members as public representatives, and to try to seek to build a shared understanding around those options. As the Chair has indicated, an important aspect of the group’s work programme is consultation with the sector itself and with the wide range of stakeholders and interested parties such as parents, students, business and regional groupings.

This consultation process will be ongoing as part of trying to get a shared understanding of the options. Today is part of that consultation to brief the committee.

We are approaching the work programme in three phases about which I want to inform the committee as we will want to revert if we can be given the opportunity in the next phases. The first phase is the examination of the role, value and future scale of higher education in Ireland. We have published a consultation paper on that which the committee has received. I will return to the key points in the paper shortly. Following the publication of that paper, we have engaged in wide-ranging consultation. We have had a roundtable discussion with representatives from the sector, including management, students, staff, businesses and employers, people from second level and further education, community and voluntary groups, and Departments and Government agencies. We have also had targeted forums around these areas. What that is giving us is a deep insight into what our people's expectations from the higher education system are and what the challenges are going to be to meet those expectations.

The second phase of our work programme, which we are moving into now, looks at the current operation of the system and its level of efficiency and effectiveness. This is a very important aspect of our work because before there is any consideration of additional investment, we want to be confident that the current resources are being managed and used to best effect. We are examining income streams into the universities and institutes of technology, the levels of expenditure, the opportunities for new working methods, including the use of technology, workload management, shared services, and regional collaboration between different institutions, to name a few. In that context, we will be seeking to benchmark the performance of the Irish system against international comparators. We expect to publish our second consultation paper which will address those areas in that phase in June and, again, we will have a round of consultation around that area to see the reactions and responses. The final phase of the work will be the identification and examination of the range of options with the potential to provide a sustainable base for the funding of higher education in the long term. For this phase, we will draw on international expertise and experience and also engage in significant consultation. It is not just a matter for the institutions involved as to how this would happen. It is also a matter for parents, the taxpayer and the committee members as public representatives.

I return briefly to some of the key elements in the paper we published in January. It is around the role, value and scale of higher education and its contribution both to the economy and society and the challenges of maintaining and enhancing those contributions. On the gains, there is no doubt, as members will see from the paper where we have tried to go into it in some detail, that investment in higher education has been a key in enabling both the economy to grow but also the contribution that has been made to the development of society over recent decades. Our well-educated population remains a central plank of our national economic strategy. As a member of the board of the IDA, I know how that comes up continually and to a greater extent sometimes than the corporation tax rate among companies with which the IDA has discussions. Graduates' knowledge and capabilities are crucial to enhancing productivity. The institutions themselves are central to the whole area of research and knowledge generation, but also as engines of growth regionally and in local economic development. I will come back to the question of whether they are and how we make that happen. In overall terms, it is clear that the State and taxpayers benefit significantly from the investment through higher tax contributions and lower calls on welfare . However, the paper also points out that we should not just look at this in economic terms. In social and cultural terms, there are also strong gains from having a higher education system. Higher education informs and nurtures our understanding of our own national identity, those of other cultures and belief systems, enriches our own cultural heritage and raises the whole question not only of our history but also of our culture in other areas.

A significant number of graduates, in fact the majority, find employment in the public sector. This is often something people ignore. Higher education is instrumental in enhancing the quality and the professionalism of a great many services, particularly in education, health and public administration. In the paper, we set out that we are looking at this as a collective public good, as a collective success for our society and in terms of the individual gains people get from having gone through higher education. However, there are also significant personal gains. We have shown that graduates earn more and find employment more easily in Ireland. An honours degree is linked to earning 100% more than an adult whose highest educational attainment is the leaving certificate or its equivalent. We have brought together a great deal of information to show the gains in terms of getting employment and the level of incomes that graduates have.

The paper also looks at the growing demand for higher education. There is a strong and growing demand for higher education both from the perspective of those who are seeking to enter it, the traditional 18 year olds, and increasingly adult learners. There is also a growing demand from the labour market for graduate education, and the consultation paper sets out a continuing demand for higher education graduates. It is projected that nearly half of all job openings by 2025 will be for graduates. That is a key issue we need to address. The paper also shows that participation rates in higher education have grown year on year. In 1980, the participation rate in higher education was 20%. It is now 56%. This reflects what we all know in our own family lives, which is the increasing normality of going to higher education for a much broader cohort of students. In my own case, no one from my family, including me, went to higher education other than subsequently in terms of apprenticeships or what we called night education. The majority of the next generation have gone to higher education, however, and have an expectation of that continuing to the next generation. Our current demographic structure will continue to drive higher education demand over the next period. That is unique in Europe. We included a graph in the briefing for members to show that the future projected demand includes 30% growth in numbers over the next decade. That is driven by demographic change alone and takes no account of any change in the participation rate.

It is important to mention something that we and the committee members as public representatives and policy-makers need to take into account, which is that demand for higher education is influenced by a range of alternatives for school leavers and other potential earners. For example, we need to look at further education, apprenticeships and post-second level opportunities and to determine how those opportunities or entry points open up for people. A strategy is being developed for further education and another is being developed around apprenticeships. In recent years, the trend has been more towards higher education directly because the opportunities that are relevant were not there, and this must be considered in tandem with the work that we are doing.

We have identified four areas we believe need to be the enduring focus in terms of the quality and contribution of higher education. The first one is very important. It is that the quality of the provision and the quality of the graduates is what remains paramount. It is what higher education, whether at the university or the institute of technology, is about.

This is the single most important way in which higher education serves students, society, taxpayers and the public good. We need graduates who can understand our past, engage with the present, imagine the future and engage in critical thinking. This requires renewed attention not just to what graduates learn but also to how they learn.

The second area is research, either in the arts and the humanities or the STEM subjects. We suggest the institutions need to further adapt and respond to the fundamental changes taking place in innovation and how knowledge is generated. Knowledge is not just generated in the universities or from science, engineering and technology, it happens across a range of spheres, including higher education, business, government and civil society. It is through their overlap and engagement in all of these areas that other countries have the edge. Interaction in an open manner in a wider range of disciplines means innovation and knowledge generation are not confined to science, technology and engineering but are extended to the arts and the humanities. Where they overlap, we have the advantage of being able to operationalise research later.

Third, we require the system to be more responsive to the changing needs of the economy, society and the public system in the medium and long term. This raises questions about how to give attention to improving the employability of graduates. Throughout the consultation process we kept hearing that while the core discipline and qualification were important, the capacity of graduates to engage in team work, communication, accept responsibility and engage in critical thinking and problem solving were equally important. The issue of quality, informed career guidance and support for students is also crucial and we must consider how we fund this in the future. In that context, we must also consider regional development and what role the institutions should play in enabling regions to develop economically and socially in co-operation with businesses, Government agencies and civil society.

The fourth crucial area we identified was that of equitable access to the opportunities offered by higher education. Access for persons from non-traditional backgrounds needs to be improved. Our paper sets out the issues in this regard. From the point of view of funding, we must acknowledge that addressing resource inequities is resource intensive. While significant progress has been made - we received presentations from the Cork Institute of Technology, DCU, the Institute of Technology Tallaght and others on their programmes - we believe improved access for under-represented groups must be a key part of the social contract in the context of future funding improvements. We have set this out in our consultation paper. These are the broad issues on which we have concentrated in our consultations.

I thank the committee for providing us with this opportunity to give it an overview of the task the group has been given and the approach we are taking to it. This is not just a technical exercise. We firmly believe we need to develop a shared understanding of the role and value of higher education and the efficiency of the current system before we consider funding requirements and options for meeting these requirements. I look forward to the discussion and hearing the committee's views on the issues raised which will be a key part of the advice we are gathering. I would also welcome an opportunity to return to the committee as our work progresses during the year because it will provide significant options that will require consideration not just by us but also by the committee and the Government.