Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

I thank the select committee for the opportunity to discuss my Department’s requirement for a Supplementary Estimate of €175 million for 2015. My Department provided background briefing material to the committee and, therefore, I propose to keep this opening statement brief.

The Supplementary Estimate sought will increase my Department’s overall net voted allocation from €8.012 billion to €8.187 billion. The additional €175 million sought comprises €125 million for current expenditure and €50 million for capital expenditure. A sum of €40 million in current funding is required to cover the cost of a projected 600 additional retirements across the education sector in 2015. While 1,540 retirements were originally provided for, the number being forecast is in excess of 2,150 retirements. The additional funding is required to meet both the lump sum element and the ongoing pension cost element of the additional retirees. My Department has little control over this component of expenditure. Estimating the number of retirements in recent years has been difficult, due in part to the extension of the grace periods with regard to the calculation of retirement salaries - subheads A8 and C10 refer. A further €78 million in current funding is required to cover additional costs associated with third level student supports in 2015, €61 million of which is needed to alleviate financial pressures being experienced by higher education institutions, HEIs, by bringing forward to December 2015 payments in respect of the student contribution that were originally due to be paid to the HEIs in January 2016. An additional €17 million is required, in large part to meet upward demographic pressures not originally provided for - subhead C11 refers.

The €50 million required in capital expenditure is needed to progress projects under the 2014 summer works scheme that were not progressed or finalised in that year. Applications were submitted by schools in November 2013 for inclusion in the 2014 scheme. A total of 787 schools were initially approved to undertake school improvements across five categories of projects - gas, electrical, mechanical, the upgrade of toilet facilities and roof improvements. Schools whose applications were not reached in 2014 were advised that their applications would be reviewed in the event that funding became available.

In April last, a further 559 schools were approved to undertake works across the remaining four project categories - upgrading and replacement of windows, school specialist room refurbishment, school building improvements and external works such as closed circuit television and fencing. The total value of these projects was €108 million and €50 million is needed to complete this work in 2015 - subhead D3 refers.

A further €6 million is required to provide for the increase in demand in the number of students requiring access to special needs assistants, SNAs, in schools, including students in special classes and students enrolling in special schools. Government approval for an additional 610 SNAs was granted in July 2015. This builds on the increases of 365 additional SNA posts provided for in last year’s budget and the 390 additional SNA posts announced in December 2013. The July 2015 decision increased SNA numbers from 11,330 to 11,940, and represents an increase of 11.7% in SNA posts available for allocation to schools since the Government came to office - subhead A6 refers.

A total of €12 million is required to cover an estimated shortfall in appropriations-in-aid receipts, due to an overestimation of the level of these receipts to be brought to account in 2015. These receipts mainly cover superannuation contributions, pension-related deduction receipts and European Social Fund receipts. The receipts are effectively offset against the Department’s gross expenditure figure to produce the figure for net expenditure. The 2015 Revised Estimates allocation provided for receipts of €573 million, but this will reduce to €561 million in the Supplementary Estimate.

All these additional expenditure requirements amount to €186 million. However, my Department has also identified offsetting net savings of €11 million in the Supplementary Estimate. These savings arise on subhead B5, covering grants to SOLAS in respect of further education and training activities. The net saving of €11 million comprises savings of €14 million. Based on expenditure returns received from the education and training boards, ETBs, there is an estimated accumulated surplus of €14 million in the Exchequer funding from SOLAS to the boards in respect of further education grants. SOLAS has agreed with the ETBs to recoup these surpluses by reducing the final tranche of payments to be made to them before the end of the current financial year. The saving of €14 million in the ETBs will be offset by additional expenditure of €3 million, which will be required to cover the cost of the 75% Christmas bonus announced by the Minister for Social Protection in budget 2016. This €3 million will cover the cost of paying the bonus to 18,000 participants on vocational training opportunities scheme, VTOS, courses and other ETB programmes that fall under my Department’s remit.

This summarises my Department’s requirement for a Supplementary Estimate and I am happy to respond to any questions the committee may have.