Joanna Tuffy (Dublin Mid West, Labour)
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I welcome the delegation from the Department of Education and Skills, headed by the Minister for Education and Skills, Deputy Ruairí Quinn. He is accompanied by the Minister of State with responsibility for training and skills, Deputy Ciarán Cannon. The Ministers' officials are also joining us. I ask members and guests to turn off their mobile telephones.

On 13 June 2013, the committee considered the Estimate for the Department of Education and Skills for 2013 in the context of existing policy and the financial framework.

Budget 2014 will be announced at the earlier time of October. The purpose of today’s meeting is to engage with the Minister and Minister of State on the financial allocation being considered for 2014, the targets that arise from these allocations and related issues.

I invite the Minister to make his opening statement.

Ruairi Quinn (Dublin South East, Labour)
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I thank the committee for the invitation to discuss the pre-budget position for the Department of Education and Skills for 2014. I welcome the initiative to enhance the role of the Oireachtas committees in the Estimates and budgetary process. I am happy to hear inputs from committee members that could assist the Government in formulating the education and skills element of the budget.

The enhanced budgetary role of the committees, together with the new performance budgeting format of the Estimates process, are important elements of the commitment to improve this process and make it more open. I am happy the Department is involved in the pilot project regarding the whole-of-year budgeting process. Notwithstanding the inevitable teething problems, I hope the lessons from the pilot will lead eventually to a wider and more productive engagement in the Estimates process.

Under new arrangements, the budget this year will be announced on 15 October, also moving forward the other elements of the budgetary calendar. This earlier date presents particular challenges for the education sector, given that the academic year only starts in September when a clearer picture of the student population for the year ahead emerges. My Department will be required to make an earlier call than usual on the projected expenditure position for 2013 and its likely impact on requirements for 2014. This will require close attention in the lead up to the budget.

Budget 2013 saw the identification of savings measures on current expenditure amounting to some €90 million on the Department of Education and Skills Vote, increasing to €103 million in 2014 and to €123 million in a full year. These measures were taken to ensure overall expenditure on the Vote remained within the ceiling set as part of the comprehensive expenditure review. They also facilitated funding for additional initiatives on the Vote and the offsetting of emerging cost pressures on the pay side. These initiatives included funding for the literacy and numeracy strategy in schools, junior certificate reform and the continued roll-out of 100 Mbits broadband to second level schools. Important funding was also provided for extra places under the labour market education and training fund, Momentum, and the Springboard programme.

The Estimate for 2013 also made provision for up to an additional net 900 teachers in schools in September 2013, clue to increasing demographics. These demographic drivers are likely to be of similar scale for 2014. While the savings measures announced in budget 2013, and in earlier budgets, will have follow-through effects in 2014, committee members will see that I am still required to identify measures to yield a further €44 million in current expenditure savings next year. I will also be required to take account of further upward pressures on expenditure that may emerge in 2014. While it is very early to make strong projections at this stage of the year, it is anticipated that the last of the payments to be made under the redress scheme will impose upward pressure on the 2014 ceiling.

In addition, I will need to take account of the surge in demand for resource teachers in schools. Members will recall that I recently authorised the National Council for Special Education to retain the level of resource teachers available to students with special educational needs at the 2012-2013 levels. The costs of additional resource teachers will have to be met from within the ceiling for 2014.

My Department will also have to pay close attention for 2014 to expenditure on superannuation payments which account for over €1.1 billion, 13% of current expenditure, on the Vote. The scale of this expenditure, over which I have effectively no control, means that even slight increases in retirements can have a significant impact on other areas of the Vote.

The 2014 expenditure ceiling for the Department will also be adjusted to take account of savings arising from the implementation of the Haddington Road agreement. This adjustment will be determined in conjunction with the Department of Public Expenditure and Reform. Securing additional savings of €44 million and containing upward expenditure pressures next year, while continuing to seek to protect front-line education services, will be a difficult challenge. The budgetary arithmetic for 2014 already takes account of extra savings that will accrue in that year as a result of decisions taken in previous budgets. These decisions include increases in the third level student contribution up to 2015; reductions in the levels of capitation payments to schools and to higher education institutions, also up to 2015; and savings from adjustments to the staffing schedule in small schools up to 2014.

The Department has sought in the briefing material provided to give some perspective regarding the savings requirement for 2014. It shows that 78% of current expenditure is on pay and pensions, which covers the pay costs of approximately 94,000 staff in education and goes towards the superannuation costs of some 41,000 pensioners. Apart from the payroll adjustments arising from the Haddington Road agreement, securing further savings on pay expenditure on my Vote will essentially require reductions in numbers of staff in education. Discounting for demographics, it can be seen that significant staff numbers have already been withdrawn from all levels of the education sector, as a result of measures announced in previous budgets. Nevertheless, if further savings are to be found in this area, the maths is simple, if the resulting impacts are not.

The key elements of non-pay expenditure are also set out in the slides provided. Effectively all elements of non-pay expenditure have been the subject of budgetary adjustments since budget 2009. Making further adjustments in these areas, which are already close to the bone, will certainly present challenges to the continued delivery of quality education services.

Efforts to improve the delivery of education and training services continue. The new education and training boards will soon be responsible for the delivery of local education and training on a much larger scale than ever before, when they assume control of the 16 FÁS training centres later this year and during 2014. SOLAS, Seirbhísí Oideachais Leanunaigh agus Scileanna, will be formally established before the end of this year and will provide a national strategy for the wider further education and training sector, including those services delivered by the education and training boards.

I am also anxious to progress implementation of the national strategy for higher education, so that we can have a higher education system providing a high quality education for increasing numbers of students. A key priority will be the establishment of a new relationship between the State and the 39 publicly funded higher education institutions to make sure graduates are being provided with the skills needed for the social and economic well-being of the nation. A proportion of public funding to the institutions will be set aside as performance funding in this regard.

The determination of the overall budgetary strategy for 2014, including adhering to the deficit targets that were set by the ECOFIN council in 2010, will be finalised over October. While we would prefer that education and skills expenditures were insulated from further reductions, the reality is that the savings measures necessary to regain economic equilibrium will have to be secured across all areas of government.

I hope I have sketched out for members the challenging backdrop to the formulation of the Department of Education and Skills Estimate for 2014.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I thank the Minister and his officials for this presentation. The material provided to the committee is very useful as it gives breakdowns in expenditure and savings. This is a welcome engagement.

Looking at the menu of potential cuts to save €44 million, one can see they will hurt and impact on education services. Does the Minister have a breakdown of the impact of the additional resource teachers that will be employed? I note the figure of €44 million in cuts has not been updated, as the Minister indicated it might be, to take into account these costs.

What is that cost? It is a cost that should be found elsewhere but the Minister has indicated that it is his intention to do that.

The Minister also referred to certain savings relating to the capital assets test option in his projections of options on the table. I might ask for more detail on what is involved in that. Figures have been provided. How have they been arrived at and what type of measures would be required to hit those targets that have been identified?

In respect of last year's budget measures and their impact, a significant part of the Minister's budget savings last year were to be taken from the reserves of VECs and the institutes of technology sector. From my engagement with the sector I believe this is having a very significant impact. We are finding that many of our institutes of technology are struggling to make ends meet as a result of the continuing reduction in funding to them. Does the Minister have any plans to repeat that or to assist those that are finding it difficult?

Does the Minister have any more detail in respect of the impact of the Haddington Road agreement and what the reduced costs relating to his Department will be? He has indicated that the vast majority of his budget is fixed cost based on staff payments, therefore, the Haddington Road agreement is significant in respect of the Department costs that may decrease. What is the impact of that? Since education has such a high proportion of fixed costs and staff costs and, therefore, would take a much higher proportion of the benefit of the Haddington Road cost reductions, surely we should not have to look at any cuts in the upcoming budget?

In respect of the debt situation in our primary schools, we had a meeting two weeks ago where we heard representatives from primary school management associations. The Catholic Primary School Managers' Association indicated that according to its calculations, up to 60% of primary schools will be operating in the red this autumn. That is because of the removal of the minor works grant and other issues. Has the Minister any plans to address that because it puts the burden back on families to raise funds to make up that deficit which is not a sustainable situation?

Brendan Griffin (Kerry South, Fine Gael)
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I welcome the Minister and officials and thank them for attending. Every Minister will make a case as to why their Department should not have to make such large adjustments and argue their corner. Has the Minister made that case? We are looking to the future to try to break this cycle we seem to encounter every 30 years where we go bust as a country. Education will form a major part of breaking the 30-year cycle we have had since the foundation of the State. Can the Minister go back and make a case that we cannot afford to cut €44 million from our budget this year because the long-term costs would be detrimental to the State? What efforts have been made to date and could the Minister make further efforts to reduce that figure?

Along with detrimental costs to society, one area from budget 2012 that is still impacting and about to impact further relates to small schools. The highest tier of that adjustment is about to kick in for the forthcoming academic year. Even at this stage, could that be reviewed, could there be a row back from implementing that highest tier and could we stay at the second tier announced in budget 2012?

Aodhán Ó Ríordáin (Dublin North Central, Labour)
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I thank the Minister, the Minister of State and officials for being here. It would be ideal if we could insulate the education budget from any adjustments this year. There has been much success in the past number of years in the maintenance of class sizes across the board. Special education has effectively been ring fenced and there have been developments regarding the pay and pensions issue within the education budget, which takes up a large chunk of it. Much has been protected. Overall expenditure on special education is €1.3 billion. I know this can be a difficult and delicate subject to raise but we have an imbalance where schools in slightly more affluent areas get a disproportionate amount of the resources and schools in my constituency with a poorer demographic do not seem to be getting the same cut of that €1.3 billion because they do not have access to private psychological assessments. Is there any sense that we need to reform that expenditure to ensure that those who really need that expenditure get it?

Deputy McConalogue touched on the capital assets test. I have not seen the figure but I think about €330 million, if not more, is spent on student grants every year. Again, there is a problem in that system in that it does not funnel the money to those who really need it because we do not have a test that adequately takes in the assets of somebody who has a magician of an accountant, who can maintain their child's maintenance grant despite the fact that they have large assets. There are two large elements there could be investigated.

The debate around fee-paying schools is sometimes more emotive than based on reality. There is no figure of €90 million that can be easily yanked from the fee-paying sector because these schools do not get capitation grants because if this was to happen overnight, a number of them would come into the system and it is as not as easy as saying that there is €90 million that could be easily spent somewhere else. It is not as simple as that. However, we must focus on the 92% of schools within the free system that are totally dependent on the State. If we were to ask them to feel the pinch, we should do so. Notwithstanding the fact that it is not as simple as taking €90 million away from the fee-paying sector and putting it somewhere else because it would not work out that way, there would be some savings that could be made by disproportionately increasing the pupil-teacher ratio as we have been doing in the past number of years.

I do not come to this trying to find easy answers. The suggestion that special education resources are not going to where they are most needed, that student grants are not being spent the way they should be or the issue of fee-paying schools are difficult subjects to raise but we are in the business of asking hard questions and finding solutions. In terms of class size, what we have achieved so far must be maintained. The money spent on special needs assistants and resource hours must be maintained. Everybody across the board must make the point that we value the teaching and the professionals involved in our education system who are dealing with huge pressures, undergoing huge change and reform, are being asked to do much more and are dealing with children, students and families who have suffered hugely in the past number of years. They are holding everything together.

Ruairi Quinn (Dublin South East, Labour)
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I thank the three Deputies for their questions. I will ask the Minister of State to come in if he wishes to address some of the issues that have been raised. As a background to this, we are very conscious in the Department that we are asking everybody in the system to do more with less, that there are many pressures and that many families are under pressure. Schools and the education community are no different. In many cases, some second-level teachers are operating in difficult circumstances because of the nature of the contracts they have.

I will turn to the specific queries that were raised by the three Deputies. I will take them in the order in which I received them. In response to Deputy McConalogue's question, we are still operating on the figure of €44 million.

If the full 500 teachers are required to maintain the status quoin special education resource teachers, we calculate that, as of now, it is of the order of €22.5 million. We will not know that for definite until September and it is a rough calculation based on the average cost of a teacher multiplied by 500. We had provisionally put into the 2014 figures revenue of approximately €6 million, coming from a saving on grants due to the asset tests. That has not been finalised or completed yet and I do not expect we will make much progress on it for this year. That is a problem.

On examining the reserves for the Vocational Education Committees, VECs, Education and Training Boards, ETBs and the institutes of technology, we were always aware that some of those institutions might be more stressed than others and less robust in their funding than others. There will be discussions with all of them individually on how we will proceed. Letterkenny Institute of Technology has a particular, once-off difficulty with which the Deputy is probably familiar, having spoken to those in the institute. The impact of the Haddington Road agreement is a very good point and we will make it. We have not yet had the detailed discussions. We are being credited with €51 million for 2013 but no figure has been agreed for 2014 or 2015. That is a work in progress and any support the committee can give us would be very helpful.

I was interested to hear what Deputy McConalogue said about the Catholic Primary School Managers' Association, CPSMA, deputation that appeared before the committee. I was not aware of that precise figure of 60% in the red. We will certainly examine it. If there are proceedings from the committee it would be useful for us to get them. I was not directly aware of it. I have made the case with the Taoiseach and others to try to get some degree of ring-fencing for education. We are the only part of the public service that is continuing to recruit additional people because of the demographics. That is not the case in other areas, although there has been some slight reduction as a result of yesterday's Cabinet announcement. I will continue to make the case. On small schools and the implementation of the third year of the alteration in the pupil-teacher ratio, I will not change it. It will proceed. There is much internal money in the smaller school sector in some respects and everybody must contribute to the savings.

Deputy Ó Ríordáin raised three specific issues. The special education allocation of €1.3 billion is just €100 million less than what we put into third-level education in its entirety. That is why I have asked Mr. Eamon Stack, the chairperson of the National Council for Special Education, NCSE, to head up the special working group which will report to me at the end of September this year, regarding getting a different allocation model for resource teachers, SNAs and resources to schools. Those who know how it would function tell me it will take at least two financial years before I will have an operational model. It is proposed to profile the school and make the resources available to that school as opposed to an individual's diagnosis unlocking access to resources. That would be controversial.

Aodhán Ó Ríordáin (Dublin North Central, Labour)
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It would be a great reform if it could happen.

Ruairi Quinn (Dublin South East, Labour)
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It would be controversial. This committee might like to talk to Mr. Stack and his people to examine it.

Aodhán Ó Ríordáin (Dublin North Central, Labour)
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Very much so.

Ruairi Quinn (Dublin South East, Labour)
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If one assumed the distribution of medical conditions such as autism, Asperger's syndrome, are evenly distributed across the profile of the entire population, we cannot say the resources are evenly distributed because a person who can afford to get a diagnosis for his or her child can access resources. We have received correspondence from people, many of whom have borrowed money. The Society of St. Vincent de Paul talked about making money available for such a diagnosis. It needs to be examined and I have asked Mr. Stack to do so.

We have not got agreement on the introduction of the capital assets test for student grants. There are two kinds of capital asset tests: assets that a household may possess irrespective of the economic activity of the household; and working capital required for running a farm or small business. I make a very clear distinction between the two. During a debate I received a telephone call from a person in the south west of the country, not in Deputy Griffin's constituency, who indicated that a person had qualified for a third-level grant although one of the parents had more than €300,000 in prize bonds. The current assessment is purely an income assessment so there is some room for equity. A rough calculation more than a year ago of the saving was of the order of €6 million. This is not a precise figure.

There are 55 fee-paying schools in the country. The standard pupil-teacher ratio in the free post-primary schools is one teacher for every 19 pupils. As a result of last year, the reduced ratio for fee-paying schools is one teacher for every 23 pupils. That may be looked at again. As Deputy McConalogue said, given what we are charged to do, we must examine everything and cannot ring fence one particular part of it. All of it is stressful and I have received strong representations from across the spectrum on this. Would the Minister of State at the Department of Education and Skills, Deputy Cannon, like to add to any of that?

Ciarán Cannon (Galway East, Fine Gael)
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No.

Joanna Tuffy (Dublin Mid West, Labour)
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When the Minister makes his decisions with the Cabinet on where the savings might be found, what broad principles would he take into account? In social welfare there has been an understood principle over the past few years that the weekly core social welfare payments would not be cut. Is there any similar broad principle on what the Minister proposes to do? What saving options identified in previous expenditure reports but not implemented are being considered for this year's budget?

Ruairi Quinn (Dublin South East, Labour)
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Years ago, before the troika arrived on these shores, Cabinet Ministers spoke of the Department of Finance's "Asgard list" of unthinkable possibilities such as selling off the Book of Kells and the Asgard. Obviously I am joking and referring to the last century. It was a frighteners' list, and there is a modern version of it but I will not say its name. The principle that informs the Minister of State, Deputy Cannon, the Government and I about this section is to protect front-line services as best we can and see what savings can be found that will not disrupt, seriously impair or hamper the delivery of the education services. I just signed off some statistics which will be published later today. The increase in the numbers is substantial.

In a sense, we are ring-fenced to the fact that every increase of population automatically releases funding for a primary schoolteacher and a post-primary schoolteacher. Other than that, we literally just have to look where we can get funding that is not being properly used or that we think can be used in a more effective way. This is why we looked at the balances both the IOTs and the ETBs had last year, and we were able to get a once-off payment in that regard.

Joanna Tuffy (Dublin Mid West, Labour)
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We will move to programme A.

Charlie McConalogue (Donegal North East, Fianna Fail)
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Can I ask about the Minister's last comments?

Joanna Tuffy (Dublin Mid West, Labour)
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Yes.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The Minister indicated that €22.5 million could be the cost in regard to the resource teachers. Will he break down how that cost will come about? Does it apply to 2013 or 2014? Those 500 teachers who were held back for the autumn period will now be employed from September, so there will obviously be a cost from September to December. What is that cost?

What is the current position in terms of providing a supply of resource teachers for this autumn to meet the demand which will come into play at that time? It is hard to define what that demand will be. Last year, the demand used up most of the 500 teachers brought forward, but whether it will use up that many this year is hard to quantify. The Minister might provide a breakdown of that €22.5 million and explain the position in regard to providing additional teachers this autumn to meet the extra demand.

Ruairi Quinn (Dublin South East, Labour)
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If we have to do this, and the likelihood is that we will, although I must put a caveat on it and note it is too soon to be absolutely definite, we have enough resources to pay for the additional teachers for the rest of this year - for the first term of the 2013-14 academic year, if one likes. The numbers are approximately €7 million in salary costs for approximately 500 teachers, depending on what may manifest itself. In terms of a full-year cost, it is one-third in the autumn of year and it becomes two-thirds plus one-third the following year, as a rough rule of thumb measurement.

Charlie McConalogue (Donegal North East, Fianna Fail)
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That is to bring the 500 forward to September.

Ruairi Quinn (Dublin South East, Labour)
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Yes.

Charlie McConalogue (Donegal North East, Fianna Fail)
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There will be a demand for teachers to be provided in the autumn. I presume they will start when they are allocated so where are we at-----

Ruairi Quinn (Dublin South East, Labour)
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If they are allocated. I presume we will have to await what the schools present and what we are told we need to provide.

Charlie McConalogue (Donegal North East, Fianna Fail)
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At the same time last year, some 500 would have been held back. At the start of this year, the National Council for Special Education, NCSE, held 500 back for expected demand in the autumn. What the Minister has done is to bring those 500 forward to meet existing demand, as such, when the NCSE had held those 500 back for a demand it expected in the autumn. It would be fair to assume that the demand it was expecting to supply with those 500 teachers will still be there. As it is now July, some type of forward planning is needed from the Minister with regard to how many teachers he will provide through exceeding the cap and bringing in another 500 to replace that 500 in order to meet the demand expected by the NCSE. What is the Minister's position on that?

Ruairi Quinn (Dublin South East, Labour)
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From within our existing resources, we can provide for the 500 for the first part of the academic year 2013-14, that is, up to the end of 2013.

Charlie McConalogue (Donegal North East, Fianna Fail)
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That is the 500 the Minister has brought forward.

Ruairi Quinn (Dublin South East, Labour)
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Yes.

Charlie McConalogue (Donegal North East, Fianna Fail)
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What about the 500 who may be required to meet new demand?

Ruairi Quinn (Dublin South East, Labour)
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I am told we had not budgeted for the extra demand but we had budgeted for the 500 for this financial year.

Charlie McConalogue (Donegal North East, Fianna Fail)
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Okay. I make the point that extra teachers will be needed in the autumn to meet the new applications that are coming in from students who will start school and also for those who missed the February deadline and who are currently in the system awaiting allocation. Without some clarity as to how many additional teachers over and above the cap will be available this autumn to meet that additional demand, because the cap has now been reached in simply providing for existing demand, those students who need those resource teachers will simply be left waiting. This is an issue on which I did not consider there was clarity in the Minister's announcement of the bringing forward of the hiring of the 500, and clarity is needed.

On another point, the Minister mentioned in regard to the capital assets test that he has a rough figure of €6 million. He used the term "working capital" and said he was making a distinction between working capital needed for running a business or a farm and other types of capital. Will he elaborate further on what he means by working capital? Is it, for example, a business premises and land itself or is it the money used on a day-to-day basis to keep the business operating?

With regard to the Haddington Road agreement, the Minister indicated that the Department of Public Expenditure and Reform has allocated €51 million to the Department of Education and Skills this year in terms of the savings that have been found. Was that €51 million budgeted for this time last year? Is this €51 million the Minister did not expect he would have?

On another point concerning the Haddington Road agreement, I find it hard to work out why there is not clarity as to what the savings will be for the Department in 2014 and 2015 considering the amount of negotiation that would have gone into this with the Department of Public Expenditure and Reform and the unions. Before anything was signed off, it would have been crystal clear what the savings from education were going to be.

Joanna Tuffy (Dublin Mid West, Labour)
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Does Deputy Griffin have related questions?

Brendan Griffin (Kerry South, Fine Gael)
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Yes. I welcome the acknowledgement of the distinction between working capital assets and capital assets, which is important. With regard to the €6 million figure, does that arise from applying that distinction or is that the total amount before a distinction is made between working capital and overall capital?

In the context of the Haddington Road agreement, has there been any progress with unions in regard to young, newly qualified teachers who are currently out of work being able to come into the system to alleviate some of the pressures on the front lines? Through agreement, would that be a way of helping to ease the pressures on the front lines? Has there been any discussion on that side?

Joanna Tuffy (Dublin Mid West, Labour)
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I am not totally familiar with the distinction in regard to working assets as it does not tend to come up in my constituency. Is it like Tesco or Aldi stores? What is a working asset? I would think a working asset could be a very profitable asset.

Ruairi Quinn (Dublin South East, Labour)
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To deal first with Deputy McConalogue's questions, we cannot finalise our costings with regard to the potential savings because both the TUI and the ASTI teacher unions have decided to ballot their members on whether they want to accept Haddington Road or not. That will not become known to us until September as they will have to wait until the schools are back before they ballot their members. Therefore, we cannot sign off on this. The primary school teachers union, the INTO, has voted in favour of the Haddington Road agreement. As the other unions have decided to ballot their members in September, I would expect we will know late in September, but that is just a guesstimate on my part.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The €51 million was allocated for 2013. What does that include?

Ruairi Quinn (Dublin South East, Labour)
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It is what the Department of Public Expenditure and Reform is assigning if either the Haddington Road agreement is implemented in full or the alternative arises, namely, the changes in the FEMPI legislation. Presumably, it is a mixture of those two but it could change if the teachers change their attitude.

I do not want to say anything which would in any way prejudice this as it is an internal matter for the unions and they have their own internal decision-making process. We must await their decision before we can calculate more accurately than the estimates we have at present.

Charlie McConalogue (Donegal North East, Fianna Fail)
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Have savings been accrued since the agreement was signed? What needs to happen before savings are accrued?

Ruairi Quinn (Dublin South East, Labour)
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The pay reductions have been implemented for all of us, including Members of the Oireachtas and Ministers. These were implemented on the first payday after 1 July. The teachers need time to reflect on this and I hope they will come to a decision. I do not want to state anything which would prejudice this or interfere with the outcome. It is a matter for teachers.

The Cabinet has not yet discussed capital assets measures. I was given a definition of working capital as cash required to run a business, and some businesses have a cyclical nature. Most of the revenue for a bookshop comes in between September and December, which is when the vast bulk of books are sold in this country. There are businesses which by their nature are cyclical but have fixed costs requiring payment throughout a 12 month period. Anybody in a business of a cyclical nature, whether a farm or another business, must have cash reserves to function. A capital asset which generates an income is also in this area, for example a property generating rent above and beyond mortgage repayments becomes an asset. There are clear definitions in economics and accountancy which can measure this. We have made a clear distinction in informal discussions but no decision has yet been made on it.

With regard to young teachers and new teachers, in our education system at post-primary and primary level we have a public private partnership between the State and school patrons. The State pays the salaries of teachers, sets the curriculum, and provides for the inspectorate at primary school level and the junior certificate and leaving certificate examinations at post-primary level. The private sector patrons hire the teachers and manage the schools. The patrons used to provide much of the infrastructure but now this is provided by the State. It has been continually brought to my attention that in many cases retired teachers are being brought back from retirement and hired as substitute teachers, in some cases for quite a long period of time. We have issued circulars which reflect my concern that any vacancy should be made available to young teachers, but we cannot direct schools to do this because as part of the private public partnership contract it is in their side of the house. Even though all primary schools teachers, including principals and young staff, are in the same union, namely, the INTO, which has frequently stated young teachers rather than retired teachers should be hired for substitute work, it is a decision we can wish to have changed but we cannot do anything directly to make it change because it is not part of our side of the equation.

Joanna Tuffy (Dublin Mid West, Labour)
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We will now move on to programme A.

Ruairi Quinn (Dublin South East, Labour)
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Another question about young teachers was asked with regard to their position under the Haddington Road agreement which so far only affects primary school teachers. The revised proposal put forward by the Labour Relations Commission for the public service stability agreement contained a number of commitments to help newly qualified teachers secure permanent positions in the education sector. An expert group is to be established to consider and report on the level of fixed-term and part-time employment in teaching having regard to the importance for teachers of employment stability and security. This is a problem in the primary sector but is an acute problem at second level where teachers receive a small number of hours and it can take quite some time before they have a sufficient number of hours for a decent salary. Personally, I would prefer newly qualified teachers to have greater certainty, particularly in the second level sector. Second level teachers teach subjects in the main whereas primary school teachers teach young children.

Brendan Ryan (Dublin North, Labour)
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Why can the Minister not do anything about who gets substitute hours?

Ruairi Quinn (Dublin South East, Labour)
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The courts have found we are not the employers of teachers. We pay their salary but we are not their employer. The contract of employment is between the patron of a school and the teacher. If a vacancy arises, for instance because of maternity leave, the person who makes the decision is the principal, presumably in consultation with the board of management and the patron. If they choose to hire somebody who has retired or somebody else who is not a recently qualified teacher I would regret it because it means young teachers are not getting an opportunity for employment, but it is not on our side of the equation in the public private partnership.

Brendan Ryan (Dublin North, Labour)
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Is it possible to change the equation?

Ruairi Quinn (Dublin South East, Labour)
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It would be a major cultural transformation in the nature of our education system. It is set out in law in the education Acts.

Brendan Ryan (Dublin North, Labour)
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We would have to change the Acts.

Ruairi Quinn (Dublin South East, Labour)
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It would be a major change.

Joanna Tuffy (Dublin Mid West, Labour)
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The issue is older teachers being employed.

Brendan Ryan (Dublin North, Labour)
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It is about retired teachers coming back.

Mary Moran (Labour)
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I have raised the issue with the Minister of the number of retired teachers taking over jobs, be it on a part-time basis, for a short time or for a long time. I do not see why schools have full autonomy when the Department pays all the salaries. I appreciate the Minister's work in the area, and when these teachers do take up posts their salaries are at the bottom of the scale, but when we have so many newly qualified teachers looking for jobs we should investigate this area further.

Joanna Tuffy (Dublin Mid West, Labour)
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Everything should be done to incentivise the employment of new graduates but I am concerned about ageism. We are pushing people to retire and we want people to leave the public sector, but retired people may have many years ahead of them. We need balance in the debate. We do not want to be ageist and state people are finished at a particular age, but we are also concerned about newly qualified teachers. The issue raised is valid, and we need to help young people get jobs but it should not be the case that older people cannot be employed just because they have retired.

Mary Moran (Labour)
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I agree, and many retired teachers start a very successful new career, but it is wrong for retired teachers in receipt of a pension to return to the same school they left or a neighbouring school.

Joanna Tuffy (Dublin Mid West, Labour)
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It is about trying to get the balance right. Not all of them would be in receipt of a pension.

Ruairi Quinn (Dublin South East, Labour)
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I will read the reply given in response to a parliamentary question asked by a Deputy on this matter. It reads:

Circular 31/2011 details a cascade of measures for recruitment of teachers, prioritising unemployed registered teachers over retired registered teachers and registered teachers over unregistered people. It is important to note that boards of management of schools and vocational education committees employ teachers and not the Department of Education and Skills.
Under the current Circulars, each principal must report to his or her board of management on a regular basis on the fact that a list of unemployed registered teachers is being maintained, and the circumstances in which he or she has had to engage a registered teacher in receipt of a pension under a public service pension scheme or an unregistered person.

From January 2011 teachers who are in receipt of a pension and who return to teaching are remunerated at the first point of the relevant salary scales applicable to new entrants. [This was not always the case, in that they returned at the top of the scale.] This represents a significant financial disincentive for teachers who retired at the top of their salary scale, often with a post of responsibility allowance, to return to teaching.

The Department monitors the engagement of retired teachers in schools. Where there is a long-term engagement of such teachers, the schools are written to and reminded of the provisions of circular 31/2011. The remainder of the reply is not relevant to this specific case.

Joanna Tuffy (Dublin Mid West, Labour)
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We have the basis.

Brendan Ryan (Dublin North, Labour)
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Will the Minister consider what else he can do to streamline the process further?

Ruairi Quinn (Dublin South East, Labour)
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I remember the first INTO conference that I attended in my capacity as the Minister for Education and Skills. This was a major issue. I needed to remind the delegates clearly that they had the power to do it within their own union, as all of the principals were members of the union.

Mary Moran (Labour)
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Yes.

Ruairi Quinn (Dublin South East, Labour)
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As Deputies Griffin and McConalogue know from their constituencies, there may be locations at which young teachers are not readily available to take up posts, particularly for short-term vacancies. There must be a certain degree of flexibility, but there is a distinction between a short-term vacancy and, for example, a maternity leave vacancy, which is typical of longer term vacancies. We will continue to do everything that we can. I hope that the new education and training boards, ETBs, will ensure an employment policy among its members. The vocational education committees, VECs, which are to become the ETBs, are the employers. Their members can move on this.

Brendan Griffin (Kerry South, Fine Gael)
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I will make a suggestion, although I am unsure as to whether it is worth considering. Would it be possible to pay a reduced rate in the case of someone who is in receipt of a Department of Education and Skills pension? It would be a disincentive. I welcome the move in 2011 to return people to the bottom of the scale, but could my suggestion be done?

Ruairi Quinn (Dublin South East, Labour)
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I do not know, but I will examine it. As there could be complications, I do not want to give a snap answer.

Brendan Griffin (Kerry South, Fine Gael)
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It is grossly unfair to graduates and those with no incomes that people who are being paid pensions are taking up these jobs.

Mary Moran (Labour)
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I know of newly qualified teachers who have been offered two or three hours in schools, only to find other substitutes are already there when they arrive. It is futile.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I accept the Minister's point that the schools are the employers, but the Department is the payer. If the Department was to take a tough line with a school that had notified it of employing a retired teacher and require the school to provide an explanation of what effort it had made to find a new teacher in search of work, more could be done. I accept that a circular has been issued, but the problem remains.

May I make a further point?

Joanna Tuffy (Dublin Mid West, Labour)
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Many issues have been raised in the context of the first programme on first, second and early school education. We will wrap up that programme. Is the Deputy's question on it?

Charlie McConalogue (Donegal North East, Fianna Fail)
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Yes. It relates to the two points that have been discussed. The Minister indicated that the cost to the Department of resource teachers this autumn would be €7 million. Does that amount cover them being employed from 1 September or later in the term?

Ruairi Quinn (Dublin South East, Labour)
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If needs be, I will revert to the Deputy with clarification, but I am informed that the €7 million refers to the National Council for Special Education, NCSE's assessment of the additional demand between February and now, which it expects will impact on the start of the academic year.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The amount does not relate to resource teachers starting on 1 September or in October or November, but to the additional demand.

Ruairi Quinn (Dublin South East, Labour)
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Yes. We do not know what it is yet.

Charlie McConalogue (Donegal North East, Fianna Fail)
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It is not clear. Given the fact that the 500 posts have been moved forward, the cap will be reached as of 1 September.

Ruairi Quinn (Dublin South East, Labour)
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Yes. We have budgeted for that.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The €7 million refers to teaching posts in excess of the cap, be that 300, 400 or 500 teachers.

Ruairi Quinn (Dublin South East, Labour)
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Yes.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I wish to clarify the issue of working capital under the capital assets test. The test is still on the table, in that it is still being discussed and has not been ruled out. I was trying to assess whether the Minister believed that working capital included, for example, business premises or land. He has indicated that it is cash flow.

Ruairi Quinn (Dublin South East, Labour)
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From the point of view of accessing assets for the purpose of sending someone to college, a fixed asset like a piece of machinery or property could only be used for educational purposes if it was sold. That seems to be a contradiction. This is my personal opinion and I am not a professional economist or accountant, but I am making a distinction of capital above and beyond what would be required. By capital, I mean cash. A certain minimum of money reserves would be required to run a business of a cyclical nature.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The Minister has in mind cash rather than fixed assets like land or premises. I have no issue with that. If someone has €200,000 or €300,000 in the bank, grand. Whether one is PAYE or-----

Ruairi Quinn (Dublin South East, Labour)
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The history to this goes back a long time and is probably no longer true. I have been told clearly by the Irish Creamery Milk Suppliers Association, ICMSA, and the IFA that accountancy standards for farm income and small businesses are different from what they were ten or 15 years ago. It was an urban or rural myth that PAYE creamery workers across the country could not get grants for their children to attend college whereas self-employed dairy farmers could because they could allegedly manipulate their incomes. However, the current levels of compliance with accountancy standards are quite different from what they were in the past. This is a debate upon which no decision has yet been made.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The Minister is considering cash assets. If a notional value was put on land or business premises, a person could only access that value for the purpose of sending someone to college by selling the asset.

Ruairi Quinn (Dublin South East, Labour)
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Yes.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The Minister does not believe that should be the case.

Ruairi Quinn (Dublin South East, Labour)
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That was never the intention.

Charlie McConalogue (Donegal North East, Fianna Fail)
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Land and farming assets would be excluded from the capital assets test.

Ruairi Quinn (Dublin South East, Labour)
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It would be unwise for me to go any further in this discussion, as the debate has not been concluded internally. It would be counterproductive and contradictory to force a business to close in order to send children to college. On what would those people live? It is a question of making a distinction between reserves of cash above and beyond what is necessary to run a business over the 12-month period.

Charlie McConalogue (Donegal North East, Fianna Fail)
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We seem to be discussing savings. When a farming enterprise's accounts are done at the end of a year, its working cash is regarded as profit. The farm assist scheme, which is essentially the farmer's dole, is based on a previous year's income and may only amount to a small payment. The farmer is expected to make enough income over the course of that year to bring him or her up to the level of the dole received by someone who does not have an enterprise. However, I welcome the fact that the Minister seems to be referring to cash savings. He recognises the issue with attaching a notional value to land and business premises.

Ruairi Quinn (Dublin South East, Labour)
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I have always recognised it. It may be a useful topic for the committee to explore.

Joanna Tuffy (Dublin Mid West, Labour)
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Yes, but it is probably another day's work. I understand that the Union of Students in Ireland, USI, is in favour of testing in principle. It adopted a decision recently. It would be good to have the USI attend on this issue.

Charlie McConalogue (Donegal North East, Fianna Fail)
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We seem to be discussing an assessment of savings and cash rather than working capital, that being fixtures and fittings, machinery, land and business premises.

Joanna Tuffy (Dublin Mid West, Labour)
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If members are agreeable, we will move to programme B on skills development and work our way through the programmes on higher education, etc.

Mary Moran (Labour)
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May I ask a supplementary question? It may have been covered already. I apologise, as I needed to leave. It relates to the pupil-teacher ratio in private secondary schools.

Joanna Tuffy (Dublin Mid West, Labour)
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That matter was covered briefly.

Ruairi Quinn (Dublin South East, Labour)
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For non-fee paying post-primary schools, the pupil-teacher ratio is 19:1. In the 55 fee paying schools of the 723 post-primary schools in question, the ratio is 23:1. This figure increased from 21:1 last year. This change has a saving of approximately €2 in the first year and €6 in a full year. I am sorry - €2 million and €6 million, not €2 and €6.

Mary Moran (Labour)
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I was wondering. Does the Minister propose further changes?

Ruairi Quinn (Dublin South East, Labour)
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No, but we have not started the budgetary exercise yet. All I know is that the Minister of State, Deputy Cannon, the Department and I must find savings in the order of €44 million, possibly more. A list of interventions, including the pupil-teacher ratio, can be made to produce money. Our task is to quantify the savings so that we can be accurate in assessing what we will get. This is what the Department’s economics unit, represented by my three colleagues who are present, do throughout the year with the finance unit. We must make political decisions and propose them to the Cabinet, as expenditure and revenue changes are a matter for the entire Cabinet.

Mary Moran (Labour)
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I have received several representations from Protestant schools and the committee received a briefing recently. Parents have told me of people’s presumption that, since their children attend private schools, they are wealthy or that money is not an issue for them. The school that I have in mind is in Dundalk, is a fee paying boarding school with a Protestant ethos and has a wide catchment area spreading across the surrounding counties. Some of the parents have told me that they are scrimping and saving to send their children to the school, not because they are wealthy, but because the school has the Protestant ethos in which they were reared. They argue that if Catholic children are allowed to attend Catholic or Educate Together schools, they should have an equal opportunity to avail of Protestant schools.

Brendan Ryan (Dublin North, Labour)
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Regarding the pupil-teacher ratio, is it fair to say that the Minister will endeavour to find the €44 million in savings elsewhere and that increasing the ratio will be a last resort?

Ruairi Quinn (Dublin South East, Labour)
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I have regarded the situation in that way so far. We have not changed the ratio at primary or second level because it is part and parcel of front-line services. Frankly, what we aspire to do and what we must do are two different matters.

The history of this should be understood.It dates back to 1907 with the Ne Temere decree, which the Vatican imposed on this country but not on Germany, for example, which had a mixed population of Catholic and Protestants. Under the decree, a person of the reformed Protestant faith who married a Catholic needed to give an undertaking that he or she would have all of his or her children reared in the Catholic religion. Prior to that, culture and custom were that the children of a marriage followed the religion of their parents – daughters followed mothers and sons followed fathers.

When the free schemes were introduced by Donogh O’Malley in the mid-1960s, they recognised that many people in the reformed Protestant faith felt that, given the numbers, the Ne Temere decree was a form of forced conversion and that they would lose their families. They wanted their children to be able to socialise and be educated with other members of the reformed church tradition. Given the low density of numbers across the country, boarding schools became necessary to facilitate this desire.

The Department and the Ministers of the time set up a block grant for the reformed church, called the Secondary Education Committee, SEC, of €6.5 million currently, which is given to the Protestant community to provide for fees for Protestants who cannot afford the schools’ fees. The community administers it.

Some have repeatedly asserted to me that there is an animus against the Protestant church on the part of the Government, but that is not the case. There is a legal opinion to the effect that we cannot knowingly subsidise one religion over another. It is prohibited by the Constitution. We have within the SEC a mechanism through which we can address the issue of access, as it is a right of a parent to send his or her child to a school of his or her choosing, all other factors being equal. The role of parents as the primary educators is recognised in the Constitution. There is no animus against Protestant schools, even though that has been articulated by some.

Mary Moran (Labour)
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I am not trying to suggest that.

Ruairi Quinn (Dublin South East, Labour)
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I know. Recently, I met parents in Limerick from Munster’s farming community who believed that their ability to have their children reared in the tradition to which I have referred was being made impossible by virtue of changes to the pupil-teacher ratio.

Joanna Tuffy (Dublin Mid West, Labour)
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If members are agreeable, we will move on to skills development, the element that includes FÁS-SOLAS, Quality and Qualifications Ireland, etc. Do members have questions on this programme? It is outlined on pages 8 and 9 of the committee secretariat’s briefing.

As there are no questions, I will ask one. Will the education and training boards, ETBs, fall under this section? Maybe not. The first meeting of the ETB comprising the merged south Dublin,-----

Ruairi Quinn (Dublin South East, Labour)
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Dún Laoghaire.

Joanna Tuffy (Dublin Mid West, Labour)
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-----Dún Laoghaire and other bodies was on Monday. Will savings accrue from the merger this year or next year? Has a figure been put on the savings?

Ruairi Quinn (Dublin South East, Labour)
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The estimate – I must stress that it is only an estimate – from a few years ago when this idea was first mooted was €2 million to €3 million in savings per year during the first couple of years, after which time we would have a clearer picture. To be honest, that estimate comes with a health warning.

Joanna Tuffy (Dublin Mid West, Labour)
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The savings in the foreseeable future will not be large.

Ruairi Quinn (Dublin South East, Labour)
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No.

Joanna Tuffy (Dublin Mid West, Labour)
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Programme C is higher education, as outlined on pages 9 and 10 of the briefing. Are there questions on it?

Charlie McConalogue (Donegal North East, Fianna Fail)
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Will we have an opportunity to go through the Estimates in the format in which they are laid out, for example to discuss them under the headings programme 1, programme 2, programme 3, programme 4 and so on? The Chair is referring to programmes A, B and C, but they do not match the headings in the Estimates.

Joanna Tuffy (Dublin Mid West, Labour)
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We are discussing the tables from the Department which deal with the savings. They are probably presented in a slightly different format from the Estimates. If Deputy McConalogue is agreeable, I suggest we stick to this programme and then we can move back.

The level of funding to the third level sector was cut. How did that work out in practice? Would the Minister comment on how the third level sector managed the books?

Ruairi Quinn (Dublin South East, Labour)
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The funding agency for third level is the Higher Education Authority. The Department makes the money available indirectly. The Higher Education Authority allocates the funding. There are 39 different institutions in receipt of funding, 14 institutes of technology, seven universities and basically each institution will be spoken to by the HEA and would agree the level of reduction. I do not have the details of that with me.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I wish to ask a general question on third level funding. Over the lifetime of this Government and the Minister's period in the Department of Education and Skills, in what direction is funding going? Does he envisage putting forward proposals to address the issue of third level funding? The funding of third level institutions has been decreased by the guts of 20% at a time when student numbers have increased by 20%. There was some wastage in the system but now the reduction in funding is severely impacting on the quality of the service being provided. The Minister has indicated that he will increase the registration fee annually by €500 to the year 2015. I am aware of a landscape document and a clustering arrangement between institutes of technology and the universities to try to bring about greater collaboration and effectiveness and efficiencies but so far that is as much as the Minister has indicated he will do. During the previous Government's term in office the Fine Gael Party had a document on a proposed loan scheme. Prior to the election, the Minister had indicated he would not increase the registration fee, but his position has changed and the registration fee will increase every year until 2015. How does he propose to deal with fees?

The Minister made a recent announcement on the IT sector, with the door being opened to two proposed universities in the south east and the south west. They must hit certain benchmarks, such as increasing the quality of education on offer and the overall facilities at each institution to achieve the potential to reach the university status. That will cost money, yet there is no parallel outlay or programme in place that will enable them to reach that. That being the case, it would be very difficult to reach without some type of collaborative effort to see how they would be supported financially. They are stretched to maintain the quality of the product as opposed to developing it.

The Minister has often said that if were at the starting point today, he would not start with 18 institutes of technology but he is now proposing potentially technological university status for two institutes of technology, both based in the south, one in the south east and the other in south west. There is no national regional approach. In this case the Minister is starting from a blank page as such. How does he stand over two new potential universities in the south and none in the north west or no potential development in the north west? I acknowledge it is up to the institutes of technology to come forward with a proposal but that is the landscape that is being developed.

Ruairi Quinn (Dublin South East, Labour)
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Thank you Deputy. The previous Government asked Dr. Colin Hunt to head up a national review committee on a strategy for higher education and it published its report in January 2011. The report was finished in August but it got delayed for a variety of reasons. I was in opposition at the time but I welcomed the report. It was a very useful piece of work and while I did not necessarily agree with everything that was in it I was certainly not going to commission another report if I had responsibility for education. We had to get on with the job of modernising third level education.

What has happened since then is that there has been a very significant modernisation and reform in initial teacher education. There were 19 institutions delivering education for teachers, mostly owned for historical reasons by religious organisations. They have been reconfigured into six clusters and are proceeding to integrate and to rationalise and improve. The most advanced is St. Patrick's in Drumcondra, which has linked up with DCU, Mater Dei and the Church of Ireland College of Education. The 14 institutes of technology were asked to envisage where they would see themselves in the future and that report has recently been published. Three colleges, the institutes of Technology in Galway, Sligo and Letterkenny, have decided to form an alliance which may evolve into something more than that and they are now proposing how they will do that. They will report back to the HEA. Three clusters of IOTs have decided they would like to aspire to become a technological university and meet the criteria set out by the HEA in a separate publication. The first is DIT in Dublin with both Blanchardstown and Tallaght coming together to merge into a single entity and to move to improve their operational performance to the point at which they would be recognised as a technological university and meet these international criteria to which the Deputy referred. Kerry and Cork, CIT and Tralee Institute of Technology, have come together and indicated they would like to become a technological university and they have until Christmas to indicate to the HEA how they propose to meet the criteria and do that journey. Likewise Carlow IT and Waterford IT have said something very similar. We will await to see what operational plan they propose with regard to reaching the standard of the threshold set for them. The remaining ITs in Athlone and Dundalk have entered into structured relationships - Athlone has a structured relationship to Maynooth and Dundalk to DCU on how they would co-operate. Limerick IT has decided it wants to stay as it is and not change but to consolidate its own operation.

It is important to understand that whereas we fund the primary and second level education at 100%, much of the funding of third level education comes from other sources, from research grants, donations of one kind or another. For example UCD and Trinity would get at least 40% of their income from sources other than what is set out in the Estimates. That needs to be understood. The rationalisation of the 14 IOTs and rationalisation within the universities through regional clusters, which is another component of the Hunt report, will provide some savings or reveal overlapping and duplication. I want to see the picture before we start looking at making additional resources available for the third level institutions.

There is no doubt that the third level sector is facing a financial challenge and for that purpose I have started a sustainability programme. We are looking at the issue of sustainability.

First, I want to see what rationalisation and efficiencies we can get, now that modern technology and transportation links and other aspects of the improvement in our country's infrastructure can be used. For example, while every institute of technology may need to have an engineering department, it is possible we could consider specialisation of one type of engineering in one institution as against another. If, for example, in the modern languages sector in the universities, Galway, Limerick and Cork had French, German and Spanish departments, it could be decided that if one wanted to do a masters in any one of those languages, it would be done in a particular university. Each of the universities in question could offer a masters in one of those languages. That is the kind of proposal we should consider.

I am not a professional educationalist and there may be arguments as to why that is not the way to do it. However, people now have the opportunity and possibility, through distance learning and better travel links, of exercising those kinds of options and getting those kinds of efficiencies. Until such time as we see what the real operating cost base is of a modernised infrastructure of third level colleges, universities, institutes of technology and related colleges, we will not decide on funding. I want to see that platform first and will then look at funding and what needs to be done about it.

The one change I have made - reference was made to it - is that the registration fee will rise from €2,000 to €3,000 over four years, ending in 2015 at €3,000. The increment is €250 each year.

Joanna Tuffy (Dublin Mid West, Labour)
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On the issue raised by Deputy McConalogue, the Department used to break down expenditure under eight headings, but this has now been reduced to four headings. For example, programmes 7 and 8 under the old system are now programme C, which deals with higher education in its entirety. Are there any further questions on higher education before we move on?

Brendan Griffin (Kerry South, Fine Gael)
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I have just one question. Is there any data that would link the international ratings of Irish universities with the budgetary adjustments? Is this an area of concern or has it been considered? Is there a direct relationship between the expenditure reductions in recent years and the international performance?

Joanna Tuffy (Dublin Mid West, Labour)
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Before the Minister replies on that, I asked whether more could be done to get funding from the Department's top fund for our third level sector. The ESF funding was very important in the 1980s and 1990s. ESF funding of courses meant many more people could go to college. That was the start of free education for many people who might not otherwise have gone to college. Could funding from something like the youth guarantee be channelled into the Department of Education and Skills or is there any funding available similar to that which used to be available through the ESF funding?

Ruairi Quinn (Dublin South East, Labour)
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I will come back to that issue, but will respond first to the point made by Deputy Griffin. International university rankings are like tourist guides. They highlight different aspects of universities. The United States have ranked their universities for a long time. The rankings are like league tables and can be manipulated according to what one wants to try to emphasise. For example, more marks can be allocated for research than for something such as the pupil-teacher ratio. The tables can be constructed in different ways.

Now, because international third level education has become a major, global commodity, these rankings cannot be ignored. Depending on how we count, there are 15,000 or 13,000 universities in the world. The higher number includes colleges of further education. All of Ireland's seven universities rank - subject to correction - within the top 600 in the world. Therefore, we are very much up there. In terms of individual rankings for different kinds of activities, such as business schools, the Smurfit business school is highly ranked. I do not know the exact ranking offhand. The English department at Trinity College is ranked either 14th or 15th in the world.

The Shanghai index was put together in China by the Chinese education authorities to see what it would need to get its universities up to the level of those in the United States. In that regard, a large focus of attention is on the amount of research money that goes into them and also on the quality of the teaching staff. One of the indicators is how many Nobel prize winners are on the staff. This has led to certain distortions in the rankings. I learned recently that Singapore intends to get the University of Singapore into the top 50 and that it intends to spend accordingly. It is a bit like buying a player for a football team, like buying Ronaldo or whoever. A university can get a Nobel prize winner to be on the staff on terms and conditions negotiated privately with that person, but the teaching component and interaction with students is not necessarily specified. However, in terms of ticking boxes for the rankings, that sort of thing will happen.

The European Union has embarked on a ranking system of its own and I have encouraged all of the European countries and institutions in that. Rankings are now a fact of life, but they do not tell the full story. Frequently, they do not tell the full story as to the quality of the educational experience for most students.

Joanna Tuffy (Dublin Mid West, Labour)
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They seem a bit like league tables for second level schools, which in no way get across the message about teachers who help pupils who might not otherwise have made it through the education system.

James Bannon (Longford-Westmeath, Fine Gael)
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It may be inappropriate to raise this issue, but the implementation of the distance criteria in regard to school transport is causing untold problems in rural areas. Sometimes two children in a family may be going to one school, but the third child is now being forced to attend a different school. This is placing a huge burden on parents, who sometimes have to bring their children to two or three different pick-up points. Is there are any chance there can be flexibility for children whose siblings are in a different school? The Minister can understand the problems this issue causes working parents in rural areas, particularly if they have to drop children to pick-up points at different ends of the parish.

Ruairi Quinn (Dublin South East, Labour)
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The Minister of State, Deputy Cannon, has responsibility for school transport so I will ask him to try to respond to that question.

Ciarán Cannon (Galway East, Fine Gael)
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I am sure the Deputy is aware these changes arise from a value for money report initiated under the previous Minister. The conclusions of that report, which were found to be sane and rational, are now being implemented. The overarching conclusion was that the State should provide transport for children to the school that is nearest to their home, which, irrationally, had not been the case. We are now at a point where, for the foreseeable future, we will provide transport to the school nearest to the home.

When we came to implement the measure, we had to choose between being dogmatic and inflexible and saying to parents with children who were already in a school that was not their nearest school, that they should remove their child from that school, or whether to be flexible and allow them leave them in that school. We decided that if a child was already at a particular school, we would allow them complete their full education cycle in that school. That is how this anomalous transitionary phase has arisen, where older siblings are in one school and entitled to transport to that school, but younger siblings are not entitled to transport to that school.

The only concession we can make is to say to the incoming children that we will provide them with a concessionary seat on that bus if it is available, while that route continues to operate. Once the older children are through the school cycle, that opportunity will cease to exist. That route will cease to exist and a route which may already be in existence will be available to that family to the nearest school. That transition phase will take three to four years - it is already in place for one year - and these anomalous situations will arise. We do our best to accommodate the other siblings through the concessionary option.

Up until last year, a child in the primary system who was eligible for transport was paying €50 and a child who was ineligible but was accessing a concessionary seat was paying €200. We equalised those and made it €100 across the board, which has helped a lot of parents. It is because we have been flexible and as supportive as we can to parents during that transition phase that has caused those anomalies to arise. Once those children are worked out of the system, we will then have a very straightforward, very simple and very fair system whereby every child will be eligible for transport to their nearest school and children from families in receipt of a medical card will have their transport provided free of charge. That is a very substantial number of families at the moment.

James Bannon (Longford-Westmeath, Fine Gael)
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There is flexibility involved.

Ciarán Cannon (Galway East, Fine Gael)
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There is flexibility as there are concessionary seats available to ineligible children on these bus routes. In fairness to Bus Éireann, it tries its best to accommodate as many children as possible in those concessionary seats.

James Bannon (Longford-Westmeath, Fine Gael)
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Is the nucleus of the parish identity taken into consideration for primary schools?

Ciarán Cannon (Galway East, Fine Gael)
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No it is not, and it cannot be. In my own parish, which is in a very rural area, I was in a two-teacher school as a young boy. That two-teacher school now has just over four teachers. They have never had a bus service because the vast majority of the children attending that school attended from within a small radius. If one was to attempt to reflect parish loyalties and county loyalties in the school transport system, it would cost a multiple of what it costs at the moment. If we tell parents that we will transport their child to the nearest school at a very reasonable cost for families who have not got a medical card, and free of charge for those who do have a medical card, then I think it is a major support by the State for rural families across the country.

James Bannon (Longford-Westmeath, Fine Gael)
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The reason I raise this is because it is killing the fabric of rural communities. The parish identity is very important in rural areas, with community involvement in local sports and so on. When people move to another parish, they tend to move through the various grades of football in their adopted parish, rather than in the local parish. This is causing problems for some rural parishes at the moment. Sport has little to do with education, but it is causing problems in those areas.

Ciarán Cannon (Galway East, Fine Gael)
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It is causing problems in a small number of areas. While school transport is a service provided by the State, the ultimate decision for parents on which school to send their children rests with parents themselves. If they determine that loyalty to the parish is so important to them, then they have the choice of transporting the children to their parish school, even though it may not be their nearest school. That parental choice is still an option. I know that in certain areas, parents come together, pool their resources and find a mechanism to get the children to and from the school.

I would love to have the resources to reflect the need of every single community and every single family in the country but we do not have those resources and we do not look like having them any time soon.

Joanna Tuffy (Dublin Mid West, Labour)
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What is the expenditure on this?

Ciarán Cannon (Galway East, Fine Gael)
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It is down to about €155 million or €160 million per year. It costs around €1,000 per annum per child and about €6,000 for a special needs child. The charge that we are making represents only a tiny percentage of the actual real costs to the State of the transport scheme.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The Department has still not developed any kind of appeals system.

Ciarán Cannon (Galway East, Fine Gael)
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We have. An appeals system has been in place for many years.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I am referring specifically to the nearest school rule, which came in last year. There are some situations where a secondary school is stretched beyond capacity while other schools are within capacity and which students are currently attending. Under these rules recently introduced, those students are now being required to go to the school which is over subscribed in order to get free transport. That would draw them away from the school where there is space. That defeats the purpose because if we are to follow that through, the school that is oversubscribed would have to build new classrooms in order to accommodate them, and the school which already had the space and in which the capital was already invested, would lose those students. Consideration has not been given to particular cases like that.

I have an example of this between the villages of Ture and Muff. The tradition has been that students from both villages go to Moville Community College, which was built about ten years ago. The two secondary schools in Buncrana, which are nearer to them, are oversubscribed and Buncrana College has submitted an application for a new campus. The school has been putting in temporary accommodation over the years and there is no longer room on the existing site for such accommodation. There are about 30 students in Ture and Muff who are currently attending Moville Community College, and they are being told by the Department that if they went over a hilly road, they would be closer to Buncrana than Moville. That is not a sensible route to take if there is any frost at all. A bus would not take that route either. The school management has written to the Department on this but consideration should be given to the merits of individual situations like this.

We are dealing here with a small minority of situations but that flexibility does not exist at the moment. It defeats the purpose and if there was a proper appeals mechanism, we would come across situations where it makes more sense to continue to provide the free transport even if it is a little further away.

Ciarán Cannon (Galway East, Fine Gael)
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The appeals process in place at the moment is to determine whether Bus Éireann is operating a scheme in accordance with the criteria laid down by the Department. If a family considers it is being hard done by or incorrectly treated by Bus Éireann, it can appeal it and those appeals can be successful. There is an independent appeals board.

Charlie McConalogue (Donegal North East, Fianna Fail)
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This one would technically not succeed.

Ciarán Cannon (Galway East, Fine Gael)
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It probably would not. We are looking at reviewing that appeals process to see if we can factor in the situation raised by the Deputy to some degree. There is a rule called the full school rule, where if a school determines that it is full and cannot take in another student, a facility exists to allow children to travel to the next nearest school. We have had one or two instances of that happening. We might look at formalising that arrangement and bringing it into the appeals process.

The capital cost associated with providing a classroom for a school stretched to capacity is a once-off capital cost. It will happen in one year and we will not have to encounter it again. The savings arising from school transport rationalisation and reorganisation accrue year after year, so there are two different challenges to bear in mind. To build a new classroom to accommodate those 30 extra children would be a once-off capital cost to the Department, but to continue to transport children on a yearly basis to a school other than their nearest school, would provide for an accruing cost to the State. It is not a fair comparison to make.

Charlie McConalogue (Donegal North East, Fianna Fail)
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In cases like that, the Department would not be spending the same amount of money transporting them to a different school than the school they are currently attending, so the transport costs still arise even though a classroom would also have to be built. I understand that the Department has to be strict in applying a rule, but there also has to be room for common sense.

It is a question of being equitable. There has to be room for common sense too in respect of some of them. I would like the Minister of State to take that into account in some situations.

Brendan Ryan (Dublin North, Labour)
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Regarding Traveller children in, for example, Balbriggan, they have been spread out and living in a variety of rented accommodation from which they can walk to school but the local authority has provided group housing for their families and placed them in a remote area to which there is no bus service. There ought to be school transport for those children. The nearest school is full and cannot take them. This group of children needs support to get them to school because in many cases the parents may not have regular transport available and the children's start and end times are staggered across early years and primary levels. These children should be prioritised in those special circumstances where the local authority has placed them away from the schools to which they could walk. Can a special case be made for that situation?

Ciarán Cannon (Galway East, Fine Gael)
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That case has not been made in the past but we could explore it and see what opportunities there are. If the children are living in an area that is serviced by a local school they would be entitled to transport to that school.

Brendan Ryan (Dublin North, Labour)
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The school is full.

Ciarán Cannon (Galway East, Fine Gael)
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As I said to Deputy McConalogue, if it is full we can get a determination from the school principal that he or she has no spare capacity. We can then organise to transport the children to the next nearest school. That facility is already there. If the Deputy wishes to report a particular case to me I will be more than happy to help him.

James Bannon (Longford-Westmeath, Fine Gael)
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There is an increase of €61 million in capital expenditure. I am sure that is because the Government has taken on a new initiative to replace prefabricated buildings around schools, which is proving a worthwhile exercise. How many prefabricated buildings is the State still paying for throughout the country? What is the capital expenditure on prefabricated buildings?

Ruairi Quinn (Dublin South East, Labour)
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There were 1,694 prefabricated units being rented in primary and post-primary schools at the end of March 2011 at a cost of €23.2 million. This compares with 1,490 units being rented at the end of March 2012 at a cost of €19 million and 1,273 being rented at the end of March this year at a cost of €17 million. We have been systematically trying to reduce it. The Deputy should note that one prefab unit may consist of one or more classrooms and-or ancillary accommodation. This reduction results from the delivery of projects from the five year capital plan and the 2012 prefab replacement initiative. The Deputy will be aware that, under the Department’s 2012 prefab replacement initiative, approval was given to 170 schools nationally to replace 558 prefab units with permanent accommodation. In excess of €42 million was allocated for this initiative of which €27.2 million has been paid to date. Of these, a total of 142 projects have gone to construction and 55 of these have been completed. The total rental savings achieved by the 55 completed projects are in the region of €1 million. These figures will be subject to change as further projects are completed.

The initiative will result in savings of approximately €5 million per annum on the rental prefabs of these schools in the coming years. In June of this year I announced a further prefab replacement initiative to replace in the region of 115 prefabs in 46 schools with permanent accommodation. A total of €15 million has been allocated in 2013 to 2014 and this further initiative will result in an additional rental saving of €2.5 million per annum. Replacing prefabs is part of the Government’s €475 million education infrastructure plan for 2014. The plan will provide for modern high quality accommodation for pupils and teachers and construction-related jobs for workers around the country.

James Bannon (Longford-Westmeath, Fine Gael)
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This is a very welcome initiative from the point of view of health and safety, and security, as I know from speaking to boards of management in my constituency and I am sure other members have heard the same thing. It is the way to go because many of those prefab buildings were costing the Department a considerable sum, as outlined in the report. I hope that we will see a greater reduction in them in the coming years.

Ruairi Quinn (Dublin South East, Labour)
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That is the intention. I should stress that because we have a rapidly growing population we will always need temporary accommodation and prefabs are a response to that need but they should not become a permanent solution to a temporary problem. I was very harsh on Ministers of the time about the prefab programme but part of the problem in the years of the construction boom was that many builders did not want to be doing supervised tax compliant work for the Department when they could do some crazy type of development that was not subject to the same rigours of inspection or scrutiny. Therefore, tender figures were very high and I suspect that part and parcel of the only answer to meet a problem was the prefab one, but that situation has clearly changed.

James Bannon (Longford-Westmeath, Fine Gael)
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Another factor which has been brought to my notice is that it is cheaper to get insurance for schools where prefabricated buildings are not located in close proximity to the main school. That should be factored in too.

Joanna Tuffy (Dublin Mid West, Labour)
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On that point, can the Minister say how many additional school places will be needed next year? Does he have an estimate of how many extra places will be needed and how does he tie that in with the need for buildings?

Ruairi Quinn (Dublin South East, Labour)
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I was presented with a report that will be published later today which, hot off the press, shows that the figure for 2012 to 2013, the academic year that has just ended, was 526,426 in primary school, an increase of 9,966, and in the post-primary sector the figure was 327,320, an increase of 4,790. In round figures, the top figure in 2016 to 2017 - the first academic year after the next general election, to bring it close to home - will be an extra 46,287 primary school places. A three stream school will have 24 classrooms multiplied effectively by 28 which gives the number. We are now building schools to accommodate 600 plus. At post-primary level the net increase will be 21,000 by 2015 to 2016. That is 21 community post-primary schools. The schools we are building now have a capacity for 1,000 and the inspectorate in the Department is clear that it does not like the teaching environment that a school with more than 1,200 pupils generates. It begins to be a problem to manage at that stage. In the United Kingdom there are post-primary schools with 3,000 pupils. In the south of England there is a bigger accommodation crisis. It is an enormous crisis.

Joanna Tuffy (Dublin Mid West, Labour)
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What is the figure for next year?

Ruairi Quinn (Dublin South East, Labour)
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The figure will be an extra 8,000 at post-primary level in 2014 to 2015.

In 2014 to 2015 the primary school population will be 552,019, another increase of almost 13,000. The total school-going population in 2016 to 2017 does not level off until about 2020 to 2023. This total figure will be of the order of 900,000. We have 90,000 teachers at the moment. The population of the country is 4.5 million. The entire education community accounts for 1 million people. The miracle of the public private partnership is that, Monday to Friday, for more than 30 weeks in the year, the system works; there are no trolleys, no drama, no crisis. If problems arise they are resolved. It is an extraordinary collective effort from all the people involved.

Brendan Ryan (Dublin North, Labour)
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When will there be a levelling-off in numbers?

Ruairi Quinn (Dublin South East, Labour)
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In the early to middle of the next decade, in 2023 or 2024.

Brendan Ryan (Dublin North, Labour)
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That is the prediction for the primary sector and there will then be a lag of six years for second level because the higher numbers will be coming through.

Ruairi Quinn (Dublin South East, Labour)
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Yes. I will provide the committee with the statistics that were brought to my attention today by the Department's statistical unit. That information is now on the departmental website.

James Bannon (Longford-Westmeath, Fine Gael)
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I have a question about the programme for the amalgamation of schools. When will schools which have applied to be amalgamated be informed of when the amalgamation will be sanctioned by the Department?

Ruairi Quinn (Dublin South East, Labour)
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We would hope to sanction them as quickly as possible. We do not receive many applications for amalgamations but we would welcome amalgamations, particularly in cases where the school communities come together. We will expedite and facilitate amalgamations. I ask the Deputy to inform me of any particular cases of amalgamations which seem to be moving slowly.

James Bannon (Longford-Westmeath, Fine Gael)
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There is one in Rochfortbridge in County Westmeath.

Joanna Tuffy (Dublin Mid West, Labour)
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Deputy Ryan asked about Traveller children in the education system. Some educational programmes for Traveller children were discontinued in recent years. Has the Minister any information on the progress achieved in supporting and keeping Traveller children in education?

Ruairi Quinn (Dublin South East, Labour)
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We do not have that precise information to hand but I will provide it for the Deputy.

Charlie McConalogue (Donegal North East, Fianna Fail)
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Has the Minister ruled out any of the suite of options?

Ruairi Quinn (Dublin South East, Labour)
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We are at a very early stage of the budgetary process. The budget will be announced in October and we will have a much clearer picture in six or seven weeks when the schools reopen. We will then be dealing with concrete numbers rather than estimates. My Department will have discussions with the Department of Public Expenditure and Reform in September and we will have a much firmer base of figures with which to argue. No decisions have been made as yet about any of the options.

Charlie McConalogue (Donegal North East, Fianna Fail)
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The Department has put forward options for saving money in the education budget. It proposes a 10% reduction in special needs assistants, a 10% reduction in resource teachers, removal of the cap on capitation fees which would create significant pressure on one third of schools. I presume the Minister will rule out many of these options.

Ruairi Quinn (Dublin South East, Labour)
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It is a collective Cabinet process. In the first instance, the Minister of State, Deputy Cannon, and I will work on the budget process along with the Minister of State, Deputy Seán Sherlock, who is not as involved in the Department as is Deputy Cannon who has devolved responsibility for the school transport programme. We have reached a political decision. In the past not every proposal we brought to Cabinet was accepted by my Cabinet colleagues. I hope we will be cut some slack by the economic and management council. The Deputy will have the full experience of it in time to come and he will see-----

Charlie McConalogue (Donegal North East, Fianna Fail)
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I would prefer to hear the Minister say that-----

Joanna Tuffy (Dublin Mid West, Labour)
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The Deputy is speechless.

Charlie McConalogue (Donegal North East, Fianna Fail)
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-----many of these options will not be considered rather than hear him skirting around the issue. Some of those options could not be countenanced. The Department's overall headline figure is €44 million. I do not understand why we are discussing €44 million today if the Minister is clear that funding for resource teachers next year will cost an extra €22 million. He has indicated it will be €7 million for the second part of this term. If the Minister was entirely sure he would exceed the cap by 500, which would cost €22 million, I do not see why that is not being discussed at this stage as being €66 million. I have a residual concern that the Department may not have accepted the fact that there will be an additional 500 over and above the cap. The Minister indicated that the additional cost of €7 million this year is for teachers, not for the 500 he has brought forward.

I refer to the information in the document for 2012, 2013 and 2014. Why is 2012 included?

Ruairi Quinn (Dublin South East, Labour)
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I am informed that document was produced in September 2011.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I have a final point which relates to savings on stationery expenditure for schools. This issue was discussed in the House by way of parliamentary questions. I ask for the most recent information on this matter.

Ruairi Quinn (Dublin South East, Labour)
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The Minister for Public Expenditure and Reform, Deputy Howlin, informs me that if the public procurement process identifies a price level for a standard ream of photocopy paper, for example, and a school has a traditional supplier of stationery and the unit price is €10, if the local supplier can provide it at that price then the school is entitled to purchase at that price. It has been the practice that Departments and agencies and sub-components of Government agencies in different parts of the country have been buying the same product at different prices from the same supplier. The Department has held meetings with schools management and the procurement officers to outline the flexibility available to them. Our only concern is value for money; we do not care who sells the product or where it is bought, provided that the unit price is a good price. If that means that the local supplier has to reduce his or her profit accordingly, that is a matter for the local school and the supplier.

Charlie McConalogue (Donegal North East, Fianna Fail)
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To be clear, that flexibility is available for the schools.

Ruairi Quinn (Dublin South East, Labour)
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Yes. We are not directing the schools as to from whom they should buy their supplies. If the Deputy knows of instances which are not in accordance I ask him to let us know. We are advising them of the price that should be paid for a ream of paper, for example.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I suggest that the Department should make it clear to schools that they can buy from local suppliers if the price is right.

There is some confusion. This is an important issue.

Joanna Tuffy (Dublin Mid West, Labour)
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That concludes today's proceedings. I thank the Minister, Deputy Quinn, the Minister of State, Deputy Cannon, and their officials for attending. It is expected that the committee will consider the 2014 Estimates for the Department of Education and Skills early in the new year. This forms part of a new all-year budgetary process. I thank everyone.

We will adjourn until 1 p.m. on Wednesday, 11 September. I encourage members to attend that meeting, as it will deal with the education of children with Down's syndrome. The meeting has been requested by parents of children with Down's syndrome. Professor Sue Buckley, an expert in the area, will address the committee.