Mr. Ed Farrell:

I thank the Chairman and bid the committee a good morning. The ILCU is the largest credit union representative body on the island of Ireland. It was founded in 1960 to provide representation and leadership, co-operation, support and development for credit unions in both Northern Ireland and the Republic.

The ILCU today has an affiliated membership of 355 credit unions - 262 in the Republic and 93 in the North. Membership of the league is open to every credit union in Ireland.

Our submission to the committee is based on the results of our annual back-to-school survey, which is conducted on our behalf by iReach. A total of 1,000 people were randomly selected for the 2018 survey, 383 of whom were parents of schoolgoing children. Of this group of parents, 328 parents responded to the survey. The results of the 2018 survey indicate a rise in the number of parents in debt due to back-to-school costs. Well over one third of parents in Ireland say they are getting into debt to cover back-to-school costs. This is a noticeable increase on the 29% who reported being in debt last year. Parents of primary school children are, on average, in debt of €367 - up from €345 in 2017. For secondary school parents, the average debt reported is €443, compared with €415 last year. In the interests of time, I will not go through the finer details of the survey as they are part of the written submission to the committee.

One finding is that of the parents in debt, more than one quarter say they have turned to a moneylender in an effort to cope with back-to-school costs, and this is of concern. The figure is up from 20% last year. Of this group in debt, three out of ten said they have borrowed between €400 and €500, while more than one quarter had borrowed over €800. When asked why their preferred option was a moneylender, 46% of this group said they felt they would be guaranteed the money and that the approval processes in banks and credit unions would be more difficult. Some 42% said they felt they had no other option because they had a bad credit history. Of concern also is the fact that a significant number of this group, 77%, said they will use a moneylender again this year to cover the back-to-school spend.

The ILCU has some recommendations regarding the financial costs and the rates moneylenders charge. It strongly recommends that the Department of Education and Skills should continue to urge schools to address the issue of back-to-school costs. Suggested areas for cost savings include the introduction of non-badged generic uniforms, including sports and gym gear, the introduction of book rental schemes or the distribution of second-hand books, a reduction in voluntary contributions sought by schools, a reduction in the costs of extracurricular activities and the abolition or reduction of expensive school trips so as to reduce pressure on parents.