Mr. Tom Boland:

I thank the Chairman and members for the opportunity to attend today's meeting. This journey began in February 2011 when the then Minister for Education and Skills, Deputy Ruairí Quinn, announced his commitment to a major reform of higher education following broadly the strategy set out in the national strategy for higher education to 2030, colloquially known as the Hunt report. Since then, the Higher Education Authority has taken on the mandate for leading implementation of the reform programme. We welcome this opportunity to brief and discuss with them some of the key aspects of the reform.

The context of the reform is the increasing demand for higher education. Our submission includes a graph showing projected future demand. It indicates that the number of new entrants to higher education is projected to rise sharply from the current figure of approximately 45,000 to 50,000 in 2020 and close to 60,000 by 2028. This substantial growth is driven purely by demographic change, with the number of school leavers set to grow every year to 2028. The projected increase refers solely to those who are already in the system. This rate of growth will mean we will do no more than maintain current participation, although increasing participation is a policy objective. The green line in the graph shows what would happen if we were unable to facilitate such growth in numbers and keep the number of entrants steady. In such circumstances, the participation rate would begin a sharp and sustained decline, which would have severe implications on two fronts. First, it would impact on our ability to meet the skills needs of the economy because we need more graduates and, second, it would severely damage the drive for equity of access and participation.

Resources are a key determinant of outcomes, both in terms of the efficiency with which they are deployed and the actual amount of resource available. In this respect, the story is troubling. Between 2008 and 2014, total income per student decreased by 22%. This reduction in the resources available is reflected in the reduction of approximately 2,000 staff across the system. To give members a sense of the magnitude of the decline in staff numbers, it is equivalent to closing University College Dublin, our largest university, and redistributing all of its students across the system. The student contribution has also increased significantly in recent years.

The Higher Education Authority and higher education sector in general recognise the fundamental crisis the country has endured in recent years and the necessity or virtual inevitability of such funding constraints. It is fair to note that the sector has accommodated increasing numbers of students throughout the economic crisis and continues to produce high quality graduates. The key point, however, is that this is not a sustainable position.

While struggling with current problems, it is important to look to the future and consider the role of higher education in that future. Evidence of an economic recovery is mounting. The Higher Education Authority sees this evidence in the improved employment outcomes for graduates and projections for the labour market prepared by SOLAS which show increasing demand for graduates. The SOLAS research, which was published in 2013 and is based on the ESRI medium-term review 2013-20, indicates that in a scenario of economic recovery, which is to be hoped for and appears increasingly likely, graduate outflow at the current projected level would fall short of labour market demand by 20% or 7,000 graduates per annum. There is now compelling evidence that the economy is recovering much faster than even the optimistic assumptions. SOLAS and the ESRI presented three scenarios for total employment in the labour market for 2020. Of these, the first option has already been exceeded and I expect the figure in the second scenario will be overtaken this year. At current rates of job creation, the third scenario will be realised well before 2020. In that context, as members are probably aware, the most recent figures indicate that unemployment has declined further to 10.5%. When one considers that it stood at 15.1% just two years ago, one gets some sense of the dynamic at work.

In another indication of the importance of higher education, the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, issued a policy statement on foreign direct investment on 30 July 2014. In a section entitled "Nurturing our key differentiators", talent tops the list. The document states: "Ireland will be distinguished internationally not only by having a sustainable supply of world class core competences, but also by the higher order abilities of its workforce and graduate output". There is no doubt, therefore, that we need more well-qualified graduates. I propose to address how the reform agenda will contribute to meeting this requirement.

At its core, the reform agenda has one objective, namely, better quality outcomes, which is to be achieved by the creation of a more co-ordinated system of higher education institutions with clear missions replacing a more incoherent system of poorly collaborating, stand-alone institutions. This is to be combined with reform of the relationship between the State and higher education institutions, with a change of focus from inputs to outcomes and funding contingent in part on performance. The reason we need better quality outcomes is to meet demands, including demand from the economy for high-level skills, from would-be students for access to the life enhancing impact of a higher education qualification and of a vibrant, successful society. To meet these demands we need reform at a number of levels, specifically in structures, funding and governance.

I will briefly outline some key elements of reform. The first element is the creation of a co-ordinated system which delivers to national objectives. For the first time, a Government has set out its objectives for higher education. These include meeting skills needs, equity of access, excellence and accountability. The Higher Education Authority is accountable to the Minister for the creation of a coherent system approach to meeting these objectives.

Each higher education institution has entered into an agreement or a compact with the Higher Education Authority on how it proposes to address national objectives in a manner that is appropriate to its mission and strengths. The compacts also include metrics by which performance is to be measured. In subsequent years, as well as setting targets for successive periods, the Higher Education Authority will assess performance against agreed metrics, with up to 10% of funding contingent on outcomes.

Far reaching reform of the initial teacher education is firmly on track and will result in initial teacher education becoming university based, research led and integrated. This reform offers the prospect of improving the quality of education delivered to pupils across the entire education system.

Ireland must continue to value and support technological education in higher education. In addition to the continuation of institutes of technology, the national strategy identified the need to provide some institutes of technology with a developmental path towards university status. Technological universities will be universities, albeit with a strong technological focus, with close ties to enterprise in the development and will focus on delivery of academic programmes and research and programmes that are vocationally oriented from levels six to ten. The Higher Education Authority has recently overseen a process of review by an international panel of the plans of two of the three consortia which are seeking technological university status. Both plans have been approved to proceed towards the fourth and final stage of the process.

A particularly important feature of the structural reform of the sector, one which is worth special attention, is the development of regional clusters of higher education institutions, five of which have been established. This policy approach is consistent with developments internationally.

In March 2014, a British university think tank report stated:

In challenging economic times, government needs to invest in measures and assets that the regions already possess. These assets include so-called 'anchor institutions' ... that are inextricably linked to the history and character of the places in which they are situated. Universities are anchor institutions par excellence.

The OECD, if I might briefly quote it, states:

Higher education institutions can make a significant contribution to regional economic, social and cultural development. With globalisation this role is growing in importance. Too often the potential for synergy is thwarted by failures of communication between regional stakeholders and HEIs, weak or unclear policy signals, and conflicting agendas in institutions.

This statement well reflects the Irish policy context. The HEA expects close collaboration between the institutions in a cluster, in the first instance around two priority objectives set by the Minister – academic planning and delivery and pathways to support access. However, this is just a beginning. The HEA also plans for much wider development of the clusters, and we will use strategic dialogue and funding instruments to that end. To generate the synergies referred to by the OECD, the clusters will be required to operate as knowledge hubs in close association with stakeholders, both public and private, including education and training boards, SOLAS and Enterprise Ireland, as well as enterprise and community interests.

There are several other valuable contributions to the reform process. These include improving the transition from second level to higher education. This includes such important objectives as simplifying the range of options, which sometimes can be confusing and unhelpful, being faced by students as they consider programmes in higher education. The HEA has also supported the establishment of the National Forum for the Enhancement of Teaching and Learning with the objective of supporting the development of good practice in teaching and learning and disseminating it within the higher education sector.

A further valuable development has been the inclusion by Government of SOLAS within the remit of Minister for Education and Skills. There is now a unique opportunity to take a whole of post-secondary education view of education and skills development. The relationship between further and higher education also has particular relevance in the pursuit of educational equity.

An important element of the reform agenda, and the HEA's mandate, is its accountability to the Minister, and through her, to the Government, for the performance of the higher education system. In June 2014, we made our first report to the Minister on the performance of the system. The process leading to the report will be outlined to the committee shortly by Mr. Costello. The report showed a system operating well to meet national objectives and showing strong ambition for future performance. While that is welcome, the HEA felt that this positive and optimistic note had to be balanced by our deep concern for the funding of the system and potential risks to quality. In our report, we stated:

It is the view of the HEA that there is now a high, and growing, level of risk that significant unfunded expansion in student numbers will damage the quality of graduate outcomes, defeat the objective of improving the quality of outcomes generally across the system and restrict economic development.

The HEA advises that the development and implementation of a comprehensive policy on funding of higher education is an urgent national priority requiring a whole of Government response.

These comments accurately capture the sense of urgency felt by the HEA on the need to find a solution to the funding of higher education. The setting up of an expert group, under the chairmanship of Mr. Peter Cassells, to review the situation and to report to the Minister for Education and Skills by 2015 is a welcome development. I understand that Mr. Cassells will meet the committee at some point in the near future. The group recently issued a comprehensive paper to start the process of public engagement with its work, considering the demand for, and benefits of, higher education. In the meantime, and it may be two-to-three years before the impact of any recommendations from the funding group emerges and can be felt, demand for higher education will continue unabated and resources continue to be diluted. Therein lies the concern of the HEA.

Irish higher education is undergoing the most radical reform in the history of the State - that is no small boast. Its objective is to improve on the high quality we already enjoy from the sector and to equip it to meet future demand. Reform is happening with little fanfare and with strong commitment and leadership from the higher education institutions themselves. It will have a fundamental and lasting impact on the quality of the student experience and on the quality of the intellectual talent and skill-sets available in Ireland. There are grounds for much optimism but we urgently need to address the unavoidable connections between the funding of higher education research, the number of graduates and the quality of graduates and research outcomes, and the health of the society and economy.

I have tried to sketch out some of the high-level strategic issues. Mr. Costello, if it is appropriate at this point, and taking a less of the committee's time than I have taken, will outline some of the detail around strategic dialogue.