Oireachtas Joint and Select Committees
Wednesday, 30 November 2016
Select Committee on Education and Skills
Estimates for Public Services 2016
Vote 26 - Education and Skills (Supplementary)
We are meeting to consider the Supplementary Estimate for Vote 26 - Education and Skills, in the amount of €136 million which was referred to the select committee by order of the Dáil on 22 November. Under Standing Order 184, the discussion must be confined to the items contained in the Supplementary Estimate. There may be no discussion of the original Estimates, save in so far as it may be necessary to explain or illustrate particular items under discussion. The committee will have an opportunity to review the additional allocations being sought on an item by item basis, to focus on the reasons the additional allocations are being sought by the Department of Education and Skills and to review the targets set for the relevant items, the resources available for them and the expected outputs and impact of the activities concerned. A briefing document from the Department has been circulated to members.
I thank the Deputy.
I welcome the Minister for Education and Skills, Deputy Richard Bruton, and his officials. We are meeting to consider the Supplementary Estimate for Vote 26 - Education and Skills, in the amount of €136 million. I will repeat the following for the benefit of those members who were not present at the start of the meeting. The committee will have an opportunity to review the additional allocations being sought on an item by item basis; to focus on the reasons the additional allocations are being sought by the Department of Education and Skills; and to review the targets set for the relevant items, the resources available for them and the expected outputs and impact of the activities concerned. An opening statement has been submitted to the committee and will be published on its website after the meeting.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person outside the Houses or an official, either by name or in such a way as to make him, her or it identifiable.
I invite the Minister to make his opening remarks.
I thank the Chairman and the committee for accommodating us in the taking of the Supplementary Estimate. I am seeking an additional €136 million, of which €100 million is capital expenditure and €36 million is current expenditure. As members can see, some of the subheads show savings, while others show increases.
The original allocation for primary and post-primary capital expenditure was €427 million. An additional allocation of €100 million was recently sanctioned by the Minister for Public Expenditure and Reform to facilitate the delivery of further large projects and the payment of the minor works scheme grants in 2016-17 to primary schools.
We will complete 48 major projects on the capital side and we have a strong pipeline of work ahead. As members will be aware, a tranche of new builds was approved in April and a further tranche was approved in October. This money allows us to continue this pipeline of work, which is driven by substantial pressure on school places. We are currently providing funding for approximately 20,000 additional school places per annum. The strong and beneficial population growth we are experiencing is exerting significant pressure on schools. The population bulge, which continues at primary level, is now moving into secondary level. For this reason, the balance of projects is moving more towards secondary level, which tends to involve larger, more complex buildings.
The other element is an increase of €37 million being sought for increased superannuation payments in 2016 in respect of teaching and non-teaching staff in certain first and second-level schools. This additional sum will cover the additional lump sum and related costs of a projected 488 extra retirements in 2016 above the original estimate. A Supplementary Estimate of €11 million is being sought for increased superannuation payments in respect of institutes of technology staff in 2016. This extra allocation will cover the additional lump sum and related costs of 59 more retirements in 2016 than originally estimated. It is difficult to forecast the scale of retirements from year to year in the educational sector.
On appropriations-in-aid, an estimated shortfall of €18 million is being factored into the 2016 Supplementary Estimate due to an overestimation of the level of receipts to be brought to account in 2016. The 2016 allocation in the Revised Estimates Volume provided for overall estimated receipts of €505 million to be brought into account. However, it is very difficult to accurately forecast the exact impact of teacher retirements and increasing teacher numbers on the level of superannuation contributions payable in a given year. The impact of previously announced reductions in the rate of pension related deductions adds to this difficulty.
There are also expected to be savings on a number of subheads, which offset the total amount required in the Supplementary Estimate. Estimated savings on primary teacher salaries of €24 million are being projected. These savings arise mainly as a result of lower than anticipated substitution costs, which are difficult to forecast owing to the complexities associated with estimating them. There are three individual substitution rates and, depending on the nature of the absence being covered, a personal rate may be paid. The increased number of teachers retiring has also contributed to this saving as those retiring have usually reached the higher points in the incremental salary scale but are generally replaced by new teachers who are starting at the lower end of the scale.
To address grants to schools, education and training boards and other institutions, my Department's budget for 2016 included provision to fund the implementation of an arbitrator's recommendation for pay increases for grant funded school secretaries and caretakers. The first phase of the multi-annual pay increase under the arbitration process came into effect from 1 January 2016 and the full amount for this payment was provided in the subhead for this year, leading to savings of €6 million in 2016. The full funding will be needed in 2017 and beyond for future phases of the arbitrator's recommendations.
I thank the Minister and his officials for their attendance. Savings of €24 million on teacher salaries have been forecast arising from lower than anticipated substitution costs. While this substantial saving is clearly welcome, the Minister is only allocating €10 million next year for a pay increase for young teachers. If teachers are working harder or substitution is not costing as much as provided for, surely there is scope to make further improvements in pay for young teachers.
May I address other issues or should I confine my contribution to subhead A3?
Overall, the proposed Supplementary Estimate appears to be benign in that the Minister is proposing to increase the Department's net voted allocation from €8.2 billion to €8.3 billion. The capital budget is being increased by €100 million from €427 million. While I welcome the decision to build more schools, the proposed increase amounts to approximately 25% of the original capital budget for the year. How many additional school places will be provided as a result of this increase of €100 million compared to the number planned in respect of the original provision of €427 million? Have costs shot up dramatically or are additional projects and school places planned?
The question asked in the media is whether the Department has run out of money and whether it is able to pay the bill for projects that are due for completion. It has also been suggested that this increase reflects a pre-election splurge that has gone wrong. In other words, too many projects were announced in the rush before the general election. While I am sure all these projects were necessary and welcome, is it the case that they were not planned for financially? This is a legitimate question in light of the substantial increase required in the capital budget. All the Deputies present will fight to secure as much of the capital budget as possible for our own areas and schools in general. However, this increase appears to suggest extremely bad planning by the Department.
The minor works grant is included in the capital budget. Have the grants been allocated or will they be allocated by the end of the year? For how much of the €100 million increase does the minor works grant account?
In my constituency, schools which had been informed that building projects were due to proceed to construction next year have now learned that they will not proceed as planned. It has been suggested that the money required has been spent by the Department and that funding is no longer available. Is this a widespread problem? Has the programme of major capital works the Department announced last year slowed down because costs have increased or did the Department not provide sufficient money to complete it?
A Supplementary Estimate of €11 million for superannuation for institutes of technology staff will cover lump sums for 59 retirees. This works out at approximately €189,000 per retiree. Is that figure correct?
I presume Deputies may make a further contribution when the Minister has responded.
I thank the Minister and his officials for coming to the committee. The €6 million savings arising from the full amount of the arbitrator's award have been included in the subhead for costs in respect of secretaries and caretakers. How much was spent in this area in 2016 and how was it calculated? Was each school allocated a standard increase or did the Department take account of the hours worked by secretaries and caretakers? I understand schools have flexibility with regard to how they spend this money. Schools are under great financial pressure and I have heard anecdotally that caretakers and secretaries are having their hours cut. Will the Minister provide some clarity on the issue?
Replies to several parliamentary questions indicate that the allocation for the ancillary grant has remained steady in recent years. Does this not mean the grant has reduced in recent years given that school enrolments have increased in the same period?
I thank the Minister for coming. He referred to a saving of €24 million on primary teachers' salaries. That indicates that there is room to further address the issue of pay inequality in the teaching profession.
There is quite an increase of €100 million in capital expenditure. Was there a huge underestimation of how much would be needed to complete projects? There is huge concern in my constituency about the number of primary school projects that have been announced. They are badly needed because, as the Minister knows, places cannot even be found for some primary school students who were displaced owing to a recent school closure. There is concern about insufficient investment in second level schools and that we will reach a stage where children will not be able to find places in such schools. Is there a need for a review of expenditure on secondary school projects?
In respect of the allocation of €37 million for superannuation payments to teaching and non-teaching staff, will the figure increase year on year? Is there an exact way of forecasting what will be needed in future years?
I will ask a few questions and then revert back to the Minister. I will give every Deputy an opportunity to make comment and revert back again to the Minister for his closing remarks.
To a certain extent, I am in agreement with my colleagues. It is always important to see extra investment in education, something for which we have all been fighting in the Dáil Chamber and at this committee. Having proper sustainable development in the right area is equally important. I understand this is the largest Supplementary Estimate placed before the House for many years, which is significant. The saving of €24 million on salaries should have been reinvested to address the issue of pay inequity, to reduce the pupil-teacher ratio, to provide extra resource teachers and possibly to restore teachers for the Traveller community. Some of it could also have been invested in professional development education courses for teachers. It is an opportunity wasted.
Regarding non-teaching staff, the school secretaries and caretakers I know are doing sterling work and it amazes that they have to be paid from the ancillary grant which does not cover their full pay. Caretakers, in particular, have an onerous job which includes having to deal with sophisticated electronics and boilers and work with cleaning staff. There is a lot of hustle and bustle both inside and outside school in terms of opening and closing hours and I do not think they are rewarded sufficiently for what they do above and beyond their salary.
I welcome the €100 million investment, but we need to ensure it will add value to get more bang for our buck in addressing real needs, as Deputy Thomas Byrne said, above and beyond what was projected. I would certainly like to see investment in my area. There are competing demands from various schools in all of our constituencies and it would be interesting and helpful to get feedback on that issue.
I said we would hand back to the Minister, but there are now two Government Deputies present and it would only be fair to give them an opportunity to speak. Does Deputy Jim Daly wish to speak?
I thank Deputies for their contributions. The saving on substitution costs is a once-off and not a basis on which we could fund a pay increase in the longer term. There is always an estimating element in deciding different issues and, as we see, superannuation and substitution costs are particularly hard to forecast. Just because there is a saving in one subhead does not mean that we can change pay levels that are negotiated centrally. The central negotiation of pay levels takes place within the Lansdowne Road agreement. We have used the flexibility within the agreement to make provision for new entrant teachers, an issue on which we negotiated with the TUI and the INTO. At the same time, in this school year which started in September provision was made for an extra 2,260 teachers. Provision is being made for an extra 2,400 teachers next September. We always have to balance the appetite for pay increases with the need to invest in services. Deputies will know that a lot of the money went to services with a particular priority, including special educational needs and so on. It is a balancing act. I was happy to be able to sit down with the trade unions and negotiate not just on new entrant pay levels but also in other areas such as permanency and flexibility in the use of Croke Park agreement hours, as well as dealing with other issues that are important to teachers. It is important that we have a well motivated teaching force and respond to pressures that are emerging.
On the increase in the construction budget, the original provision was smaller than in the previous year and the increase is necessary in the context of pressures that are emerging. It is not late; it was flagged much earlier in the year when I attended a meeting of the previous committee. It is not something that is happening at the last minute or an indication of bad planning. We were able to release a block of school projects in April and October. That shows that the Department's planning approach is delivering a consistent flow. The number of schools at which construction work is taking place on site is largely the same as it was last year. The increase in costs in the past two years is in the order of 35%. Deputy Thomas Byrne is right that there is pressure on costs as we see a recovery in the construction sector.
The allocation for minor works grants came to €28.5 million. I understand it has been paid out; therefore, it is gone.
Deputy Thomas Byrne mentioned that in the programmes school projects were described as due to go to construction. When flagged, it may be a misnomer, but I understand it means that a process is due to start which will lead to tendering. If a project was included was in the 2015 programme, it did not mean that it would go to construction in 2015.
A school is included in the programme for a particular year, which means that the Department will engage with the school on delivery in that year. However, the supply chain which involves planning, design, approval, tendering and so on, is of such a length that cannot be fully determined. Therefore, we cannot say it will happen in month X or Y because it depends on the complexity of the work on the site. We have often come across additional traffic or conditions to be applied in the planning phase, meaning that the school has to come back and obtain approval from the Department. It is not by any means a perfect science, but it means that the process is due to start in the particular year. Some projects will move very rapidly through the process, depending on their nature. To try to deal with this, we have introduced what are termed rapid builds. Because of this concern and the need to move more quickly the Department has developed a variety of faster track initiatives.
I have details of average retirement lump sums.
The average retirement lump sum of primary teachers is €89,000; of second level and community college teachers, is €83,000; of ETB staff, both teaching and non-teaching, is €48,000; and of IOT staff, teaching and non-teaching, is €59,000.
Deputy Nolan raised a question about the caretakers. This is due to the phasing. The pay increase of 2.5% in the hourly rate of grant came in on 1 January 2016. In addition, the introduction of a minimum hourly rate of €10.25 was introduced. The ancillary service grant was increased in 2016, from €147 to €153, to enable primary schools to implement the first phase of the arbitrator's recommendation and also to provide for a pay increase under the FEMPI Act for grant-funded school cleaners. Primary schools that had insufficient funds to pay the minimum hourly rate of €10.25 could apply to the Department for top-up funding and this application process resulted in €107,000 being allocated to 133 primary schools. Further increases in the ancillary service grant will be made to enable schools to implement the future phases of the arbitration recommendation.
This came from an arbitrator's recommendation. Obviously, the schools have to determine how they deploy across their requirements. This will result in a 10% increase over the phasing. The full increase is 10% between 2016 and 2019.
Deputy Catherine Martin raised whether we need to step up capital funding. We have a step-up in capital funding for the coming year. It is a €40 million increase. That is recognising both the cost pressures and the pressures of the bulge moving from primary to post-primary. The cost of a primary school place is considerably lower than a secondary school place so that as that bulge moves on, it is considerably more expensive.
On that concern I raised, there is a feeling that what happens when both second-level schools and primary schools are announced is the staff go off into one Department but those who are designing the second-level schools never talk to those who are designing the primary schools, and then there is a massive problem. I was talking to a planner recently and that is the view.
It is accurate to say that planning permissions would not be the central feature in the way the Department plans; it would be births within the catchment and the pattern of births leading to preschool, first year, etc. We track the data. The Department breaks the country down into 314 squares within which the population projections, both at primary and at secondary level, are forecast against the available places within that catchment. It is where we anticipate the growth in numbers which are documented by children who are coming through the scheme or from other population indicators, such as those of the CSO and our own school data. We use that to forecast. That is the basis on which we identify an area that has a shortage of school places, either at primary or secondary. We then look to identify whether the best way to provide those extra places is the expansion of existing schools or new builds. That is the process.
As the Chairman will be aware, sometimes people would like a particular type of school. The Department looks at the whole catchment and all the school places available to it. It does not look at the preferences of parents in planning the buildings. There could be spaces available in one school and a lot of people want another school, and that can result in pressures which we all know about. I suppose, as the Deputy rightly says, if we had more money we could provide more options. The policy has been to live within the available capital that we can get for this purpose and to provide for the growing population areas. I think we stay on top of those, but there can be difficulties with individual parents.
The forecasting of superannuation is a tricky matter too because staff have a certain degree of flexibility in when they time their exits. We have to anticipate what that might be from year to year and that gives rise to difficulties in forecasting. That is one of the big reasons for the Supplementary Estimate.
This is perhaps one of the biggest Supplementary Estimates, although it is probably not as big as some of the other areas because Health, Social Protection and Justice all had increases. I suppose this was flagged. The €100 million, which is the mainstay of it in terms of substantive change, was flagged much earlier in the year. It reflected the genuine pressure on the building programmes that we needed to respond to. It has been helpful that we have been able to do that and we are building on that for next year as well.
As Deputy Thomas Byrne and others have often said, the bigger capital problem is in the third level area where we do not have anything like a capital programme commensurate with our ambitions. This will be an issue where we would be hoping in the upcoming mid-term capital review we can look to try to increase capital allocation in the higher and further education area. The total provision in the higher and further education area is relatively small, at approximately €50 million. It is a small capital budget compared to the pressures. That is wrapped up in the wider discussions the committee is having.
I think I have dealt with the issues. Did the Chair have another issue?
It is a bigger issue than the Supplementary Estimate that the ancillary non-teaching staff are having to be covered from the grant and not even the full amount of what they are paid comes from that.
Yes. It would need a substantial decision that this was a policy priority within the education budget. That has been the approach for a considerable number of years. I suppose we are trying to keep pace with curriculum pressures, pressures to provide resource teachers, pressures to look at class size, etc. In any given period, one is looking at how to share out the available funding in the best way within the education system. Over a long period, this has not been the top priority. We have been more focused on the immediate impact on pupils, in terms of teaching and access to teachers, curriculum, buildings, etc.
I accept that the primary focus within any school or education system has to be the pupils. That aside, schools are to a certain extent like small businesses. Smooth administration is hugely important and is of great support to the principal and the teaching staff and we cannot underestimate the work of secretaries and caretakers. Indeed, in many cases, it is helping to facilitate wider community activities after school hours as well. That is correct too because there needs to be a more efficient use of school buildings, in terms of the community. I accept that is a wider issue.
I propose to go back now and conduct the round of spokespersons. I call Deputy Thomas Byrne.
First, could I get more clarity on that figure for the IOTs because the Minister did not really answer the question? When I did the sums based on the number of staff the Minister stated were retiring, it came to €189,000 per retiree. That was different from the average figures the Minister gave and it would not be low enough to include their pensions.
There is an extra €100 million, less the funding for the minor works grant. How many extra school places have been achieved this year? The note stated there were 1,000. Is it the case that there are 1,000 extra school places for that €100 million because that is certainly a lot of money?
The Minister mentioned that the capital budget will increase next year by €40 million but he is adding €100 million to this year's figure.
Is that €40 million on top of the new figure for this year or is there a cut in the capital budget of €60 million next year?
I welcome the fact that the Minister said a top-up fund was available for schools and that 133 had availed of it. However, more is needed. Schools are under pressure, hours are being cut and secretaries and caretakers do a fantastic job which is often undervalued. They are absolutely vital in a school but schools have had to make choices. I would like this to be addressed more effectively.
My issue was not about the type of second-level schools or parents' preferences. There is a huge concern that, a few years down the road, there will not be enough second level schools in the constituency which I represent. I wonder if this is reflected in other constituencies. Primary schools are badly needed because of population growth but when children who are now in junior and senior infants get to sixth class there will not be enough places in second level schools.
The Minister has heard me speaking about this before. In the Newbridge, Kilcullen and Kildare catchment area of Kildare South, many in the educational field believe, as I do, that a secondary school is merited. The data brought forward by the Department, however, state that it is not, though these data included fee-paying schools and this should not be the case. I accept that birth rate is only one of the measures used but housing prices are going up steadily again in Dublin and we are going to see many families with small children moving out of Dublin and into the commuter belts of Kildare, Wicklow, Meath and other counties. Their children will not have been born in those commuter areas but, all of a sudden, much higher numbers may be starting school than anticipated by the birth rate figures. I accept it is a wider issue but we cannot make this point often enough.
In answer to Deputy Byrne's question, the pension payroll is not operated by the payroll shared service. Funding is provided from two subheads covering the pension and gratuity costs of former IOT staff. The number of IOT staff retiring fluctuates from year to year and the scale of these fluctuations is not possible to precisely predict. The fact that these persons are not employees of my Department but of 13 IOTs, and are paid on those bodies' payrolls, adds to the complexity of the estimating process within my Department. The average costs of the gratuities, that is lump sums, fluctuates throughout the year as staff of differing service and grade levels retire. The 2016 allocation allows for the payment of 145 gratuities to newly retired employees of the IOTs, at the current average gratuity rates. However my Department now anticipates that the number of gratuities payable to the new retired IOT employees will be 204, an extra 59. Accordingly, a supplementary allocation of €11 million is being sought from the IOT subheads. The supplementary allocation will allow for the payment of an additional 59 gratuities to retired IOT employees at current average rates and associated increases in the cost of servicing the ongoing pension payroll. This will increase the overall cost of these subheads from the €65 million originally provided to €74 million.
I will get more detail for the Deputy as to what exactly the breakdown of the extra money is.
I assume it is the ongoing pension costs. If a person retires on 1 January they will get the full pension for that year.
The total capital allocation for the education sector in 2017 was to be €599 million, as announced in September 2015, but it is being increased to €690 million, though €51 million of that increase is due to the payment of PPP unitary charges previously issued, leaving a real net increase of €40 million. It is not recurring; the €100 million was a provision for last year.
-----was €595 million. Deputy Nolan asked about secretaries and caretakers. I am not an expert on this but some schools have them and there are various thresholds. There are some historical posts, many of which were suppressed during the FEMPI years because it was a discretionary area. They are funded through capitation. The level of capitation is always under scrutiny and we hope to be able to increase it, which is the fairest way to provide them and better than picking out some schools for secretaries and not others.
Deputy Martin suggested we might not have enough schools at second level and I take her point on this. Since I took this job we have approved three new primary schools for 1,500 children and nine new secondary schools with 9,000 places. The ratio is moving towards second level because the bulge was at primary level and has now moved on. The planning is responding to that but that is not to say that there are not pressures. A lot of schools start in temporary accommodation and the process develops - that is the way the system works.
Deputy Byrne asked about the €100 million but one cannot neatly assign it to specific projects. However, as a rule of thumb, a 1,000-pupil post-primary school would be approximately €19 million while a primary school for between 450 and 500 would cost €5 million.
There was €100 million allocated to 36 projects to proceed in 2017. The total cost of those over 2016 and 2017 is €260 million, about €70 million of which comes from the €100 million in 2016. All these projects were on the programme anyway so there is a net gain. We are not adding a number of schools but funding the existing pipeline programmes.
The schools involved have already been announced for 2016, 2017 and 2018. When they are ready to be released to tender we let them out, usually in blocks.
They are not always a neat arrangement. There is a three-month design phase, a two-month-----
May I ask one further question on that? In the major capital programme announced a year ago, there was a list of new secondary and primary schools but there was also another list, indicating that other schools may be required from 2018 and thereafter. Has the Department done work in order that it can be stated more definitively that schools will be required in those areas listed? Are there areas that were not highlighted at the time that may well become the locations of new primary or secondary schools?
I do not have that information with me. We are continually reviewing the population trends and the actual enrolments at different points. As the Deputy says, there are a number of areas, including some in my constituency, that have been flagged as borderline or which may need additional provision, but I do not believe we publish a list of what is currently being assessed. It is only when we reach the point of saying we now have an identifiable need that we consider whether it can be met by the expansion of existing facilities or opting for a new school. We are just looking at four new primary schools to go to sanction for the patronage competition.
Is it possible to get a breakdown of the €100 million in additional capital expenditure? I welcome that it will help 50 building projects to make progress. How many are now ready to move forward? I would like some clarity on that. Have we examined the possibility of additional capital expenditure where the allocation can be smoothed over a four-year period, which would help even more additional projects move forward?
I have asked parliamentary questions on prefabs. I understand there are about 200 throughout the State. What is the expenditure on the prefabs in many of our schools? I was not able to get a figure for that so I would like clarity.
The sum of €100 million is seeing 70 projects through their phase, which is the 2016-17 phase. The number of projects on site is 60. The number identified to commence in 2017 is 42. That is the projection. They are released in blocks. Thirty-six were released in April and 21 in October. There is a continuous flow of projects. Forty-two in all are expected to pass through the gate during 2017. They are at various stages of readiness. Some are only checking out disability and fire certificate requirements and they will go to tender. From 1 January, there will be a new tendering requirement to protect subcontractors. This will apply to some of the projects. The 42 will be coming on stream during the course of 2017.
The Deputy is correct on the fiscal space. If one spends €100 million, the EU counts only €25 million in year one. Then the figures proceed to €50 million, €75 million and €100 million. One uses the fiscal space in tranches so one gets a certain amount of advantage. That will be a feature in the capital review in that the provision will be available as a potential way of considering additional capital.
Approximately €20 million was spent on prefabs in 2016. This is up on €18 million in the previous year, and €16 million in the year preceding that. The programme has been renewed. Some years ago, before circumstances became more difficult, there was a pretty high ambition to proceed more rapidly, but we are now rebuilding the programme. It is for this reason there has been an increase from €16 million to €20 million.
The number of rented prefabs was 984 at the end of 2015. We have not got the most up-to-date position yet but that gives an idea of the scale.
It is an interesting question and the Department might respond regarding the €100 million, notwithstanding the 30% increase in construction costs. I refer to the cost of replacing prefabs. This is important to note, apart from the €20 million that had already been committed to.
I thank the Minister and his officials for attending. I appreciate the Minister's giving of his time to deal with the Supplementary Estimate and his willingness to go through all the issues in detail.