Mr. Seamus McCarthy:

The 2015 appropriation account for Vote 26 - Education and Skills records gross expenditure of €8.73 billion. In addition, the Department administers the National Training Fund, NTF, which recorded expenditure of €334 million in 2015. The Vote and the fund are managed together within an overall spending limit which is set by the Department of Public Expenditure and Reform.

On the income side, receipts into the Vote as appropriations-in-aid totalled €549 million. Over 93% of this, or €513 million, comprised employee pension contributions and pension related deductions from teachers’ and other education sector employees’ salaries. Receipts into the fund, totalling €370 million in 2015, come mainly from a statutory training levy collected on the Department’s behalf by the Revenue Commissioners as part of employers’ PRSI contributions.

The gross Vote expenditure was spread across four expenditure programmes, as shown in the graph now on screen. Note 3 in the appropriation account gives a more detailed breakdown of each of the programmes. As the graph shows, the preponderance of expenditure was in the first, second and early years education programme, at 71%, followed by the higher education programme, at 17%. Over 87% of the €6.2 billion voted expenditure on first, second and early years education relates to the pay and pension costs of teachers, special needs assistants and non-teaching school staff. Other substantial areas of spending included in the programme are capitation and other grants to schools and the cost of school transport. This programme also includes spending on residential institutions redress, about which I have reported separately, and which the committee has indicated it will examine in the coming weeks.

Expenditure under the higher education programme was €1.5 billion. This consists mainly of grants to third level education institutions of €922 million, channelled through the Higher Education Authority, HEA, and student support grants totalling €414 million. The original Vote Estimate provided for student support grants of €332 million, down from €372 million in 2014, representing a reduction of around 11%. The outturn for the year was 25% higher than originally provided and was funded substantially by a Supplementary Estimate provision of €78 million. The committee may wish to note that student support grants are administered nationally on behalf of the Department by the City of Dublin Education and Training Board, CDETB, under the Student Universal Support Ireland, SUSI, system.

Expenditure on capital services in 2015 was €655 million, made up of €577 million in building and equipment grants across the education sectors, €66 million in payments under public private partnership, PPP, agreements and the balance of €11 million in administration costs. Forward capital commitments under contracted PPP arrangements at the end of 2015 amounted to an estimated €478 million, as indicated in the notes to the account. When recurrent commitments under the PPPs are included, the total legally enforceable commitments amounted to an estimated €1.34 billion.

Almost all of the €330 million spent on skills development under the Vote represents funding provided to SOLAS, the further education and training body. SOLAS income in 2015 was €591 million which included the grant funding received from the Vote and funding of €279 million from the NTF.

The overall grant funding provided to the 16 education and training boards, ETBs, is not evident from the appropriation account. The boards were established in 2013 following the dissolution of vocational education committees, VECs. In addition, they took on certain training functions of the former FÁS. Excluding the student support grant funding provided to CDETB that I referred to earlier, over 90% of the combined income of the boards, which is estimated at around €1.5 billion in 2015, originates from the Vote or the NTF. The first, second and early years education programme covers ETB teacher and other salaries and school capitation grants. SOLAS provides funding to the ETBs for further education and training and finally, building and equipment grants paid to ETBs are financed from the capital programme.

About a month ago, I published a special report on financial reporting in the public sector. In that report, I highlighted a general problem around the late finalisation of the ETB financial statements for 2013-14. These were the first financial statements for the new boards. A number of the new boards had difficulties putting the required reporting arrangements in place across the revised areas of operation. At present, statements for the 2013-14 period of account for Mayo, Sligo and Leitrim ETB remain uncertified. The 2015 financial statements for 11 of the ETBs have been completed and presented to the Oireachtas and the audits of three ETBs for 2015 are at various stages of progress.

Two education and training boards, ETBs, have not yet produced draft financial statements for 2015, namely, Mayo, Sligo and Leitrim ETB, and Limerick and Clare ETB.