Mr. Tony Donohoe:

On the Chairman's initial question on the advantages of the income contingent loan scheme, I have been debating this issue for more than ten years and I have not come across any other credible alternative. The idea of State funding is very nice as a notion but the reality is that we will not have an additional €1 billion that is set out in option one of the Cassells Report. It is to be hoped we are entering a period of economic recovery and that we will see some of those more damaging cuts reversed, but if we are totally reliant on the State and the next economic downturn comes along, we can be guaranteed that it will be higher education funding that will be cut. It is much easier to cut. In education we do not have the headlines about people lying on hospital trolleys or about carer's allowance being cut. It is a slow-burning problem for which we will pay the socially and economically, and we need to put in place a sustainable solution, which is to have co-financing.

I will come to the two questions around the national training fund and employers' propensity to pay and also some of the further issues Senator Ruane raised around access. I sound a word of caution when we talk about the national training fund. When we talk about companies in a skills context, we tend to envisage large multinationals which employ many graduates, but most people are employed by companies with fewer than 50 staff, many of which do not employ graduates. There is a danger that they will see this as an employment tax with all the knock-on effects.

In terms of IBEC's attitude to paying an increase in the national training fund, I would make two points.

First, any increase or adjustment to the national training fund must be part of a greater solution. As Deputy Byrne said, given the scale of the funding shortfall, the employer contribution is not going to make a significant difference. That is not to say that we should not increase the contribution. However, under the options that Cassells set out. the amount was an additional €150 million. That is 0.05% of the total funding requirement. We need to get real. I am surprised at the amount of time that has been taken up at the first session of this committee discussing this magic amount of money that is to come from the business sector. Incidentally, the same sector also creates the jobs that allow people to pay income tax which underpins our system.

Employers may not be prepared to engage on this if it is used for politically expedient reasons. The increase in student fees is perceived as being precisely that. If we use an increase in the national training fund as a sticking plaster to mend the deep cuts that have been imposed on this sector, it is a problem for us. Any change needs to be part of a greater solution.

I wish to pick up on the point make by Deputy Martin relating to how the current national training fund is used at the moment. The fund will be in surplus by €272 million. That goes from year to year. A surplus exists and it is not used for any other reason except to balance the books. My argument is that it should be used for educational purposes.

Employers already pay 0.7%. They have little influence on how this is spent. I have done a breakdown of the programmes the national training fund supports. There are 16 different programmes. Most of them are at further education level, the exceptions being Springboard and, it is hoped, more apprenticeships in future. A report going back to 2008 published by Forfás suggests few of these programmes have strong labour market outcomes. The national training framework, NTF, is not being used for the purposes for which it was set up. Until it is, employers will not be prepared to engage in this conversation. However, we would if we had some influence on how the money was spent. We might take a different view if we were confident that it was being used to meet skills requirements, but not if we believed it was being put into a black hole. It is important that we do not lose sight of the bigger issue when we are talking about increases in the NTF.

Senator Ruane made a point about access. Access is impacted primarily by culture. If particular areas have little or no history of people going on to third level, that should be addressed by interventions far earlier in the system. It is also impacted by the early education experience of those affected. Again, this arises earlier in the system.

The third priority is around living costs, especially for people living away from home. The living costs associated with going to college are far higher than any fees being discussed. Cassells found no evidence that this had impacted access. A more insidious class gradient is happening. A total of 32% of people in university now are studying masters and postdoctoral programmes. There is no support for students there or for part-time study. That is creating another class gradient and more discrimination. Unless we address that, as proposed by Cassells, we cannot really discuss an equitable system.