Mr. Seán Ó Foghlú:

I thank the committee for its invitation to be here today. Together with my colleagues I am happy to assist it in its examination of public sector allowances in so far as they relate to the education sector. As requested by the committee, the Department has supplied detailed information on allowances in the education sector. It might be helpful if I present an overview of this material and put a context around allowances as paid in the sector.

In its analysis, the Department of Public Expenditure and Reform took a cross-sectoral approach to allowances payable in Departments and state agencies. Leaving these aside, in broad terms the sector can be divided into the school sector, the institute of technology sector, the university sector, and the VEC sector. The overall pay bill inclusive of allowances for these four areas is €5.116 billion. Of this overall figure allowances, however defined, account in aggregate for approximately €639 million or 12.5% of the overall pay allocation.

Allowances paid to teachers account for approximately €616 million or 96% of the overall amount paid as allowances in the education sector. This equates to 16% of the overall teacher pay bill of €3.83 billion. These allowances are paid in various combinations to virtually all of the approximately 58,000 teachers in the system. In the range of allowances paid to teachers, four are dominant in terms both of scale and amount. It might be of assistance, therefore, if I give some insight into these. The four allowances in question are those payable for qualifications, substitution and supervision, posts of responsibility, and the 35 year service allowance.

Teachers have been in receipt of qualifications allowances since the Ryan report on teacher pay in the late 1960s. In large measure, this report used the qualification allowance as a mechanism for making recommendations on teacher pay, which would avoid public service-wide repercussions. Until the introduction of a cap on the overall amount payable in December 2011, the amount of this allowance was linked to the nature of the qualification held by the teacher and ranged from €5,539 for a teacher with an honours degree and higher diploma in education to €6,638 for a teacher with a higher diploma in education and a doctorate. Following the introduction of the cap, the overall qualification allowance payment for new beneficiaries was restricted to €4,426. More recently and following the review of allowances, qualification allowances for new entrant teachers were abolished. As part of this measure a new pay scale is being put in place for these new entrants, with a starting point equivalent to the fourth point of the existing teacher pay scale.

The origin of the allowance for substitution and supervision was the protracted industrial dispute over the period from 2000 to 2002. The ultimate negotiated settlement to this dispute involved putting in place a new regime for the delivery of substitution and supervision with an associated allowance, which in current terms is €1,592 per annum.

Allowances paid for posts of responsibility are broadly analogous to promotion posts in other areas of the public service. Such allowances relate to four types of post, namely, principal, deputy principal, assistant principal and special duties post. It is very debatable whether these are allowances in the commonly understood meaning of the term. That said, we will review this post structure and look at issues such as the feasibility of a grade-based structure as opposed to the current arrangement. There is no doubt this raises issues, such as the fact that a principal's allowance reflects school size and that principals assume that role at various stages in their career as a teacher.

The fourth largest allowance payable to teachers is the 35 year allowance. This becomes payable to teachers ten years after reaching the maximum point of the pay scale and is comparable to a long-service increment, paid in many areas of the public service.

In teaching there are a range of other allowances and the details have been provided to the committee. Outside the teaching area there is a very wide spectrum of allowances principally in the university and institute of technology areas. These are payable across a wide spectrum, and at €22 million they account for 1.7% of the €1.29 billion total pay bill for those sectors.

Committee members have in their possession the various business cases established by the Department as part of the review of allowances conducted by the Department of Public Expenditure and Reform. In addition, the material provided by the Department provides further detail on the categories of allowances grouped by business case as requested by the committee. These categories are, in turn, disaggregated in a more detailed spread sheet provided for the assistance of the committee.

Following the review of allowances, the Government has approved a number of measures relating to public service allowances for new beneficiaries. In terms of the teaching profession, the impact of the Government decision will apply to new entrant teachers only. The Department will shortly issue circulars giving effect to the Government decision. Allowances already paid to currently employed teachers are not directly affected by the Government decision. However, the Department of Public Expenditure and Reform has recently directed that line Departments should open discussions with individual union groups on the removal of certain allowances from current beneficiaries. The process, which is one of negotiation, has commenced. This process will involve the examination of more than 80 allowances currently paid in the education sector. There are in excess of 12,000 beneficiaries of these allowances in the education sector, with an approximate annual cost of €16 million.

As I mentioned, we will be happy to assist the committee in answering to the best of our ability any questions members may wish to put to us or in making available any supplementary information not currently provided.