Seán Fleming (Laois, Fianna Fail)
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Item No. 7 on the agenda today is an examination of the 2015 appropriation accounts for the Department of Education and Skills, Vote 26. From the Department of Education and Skills we are joined today by Mr Seán Ó Foghlú, Secretary General, Mr. Dalton Tattan, assistant secretary, Mr. Keith Moynes from the finance unit, Mr. Christy Mannion from the higher education unit, Ms Emma Leonard from the planning and building unit, and Mr. Hubert Loftus from the schools division. From the Department of Public Expenditure and Reform we are joined by Ms Marie Mulvihill.

Before we begin, I remind members, witnesses and those in the public gallery to switch off their mobile phones. I wish to advise that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of that evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise nor make charges against any person, persons or entity either by name or in such a way as to make him, her or it identifiable. Members of the committee are reminded of the provisions of Standing Order 186 to the effect that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies. Finally, members are reminded of the long standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

I call on the Comptroller and Auditor General to make a brief opening statement.

Mr. Seamus McCarthy:

The 2015 appropriation account for Vote 26 - Education and Skills records gross expenditure of €8.73 billion. In addition, the Department administers the National Training Fund, NTF, which recorded expenditure of €334 million in 2015. The Vote and the fund are managed together within an overall spending limit which is set by the Department of Public Expenditure and Reform.

On the income side, receipts into the Vote as appropriations-in-aid totalled €549 million. Over 93% of this, or €513 million, comprised employee pension contributions and pension related deductions from teachers’ and other education sector employees’ salaries. Receipts into the fund, totalling €370 million in 2015, come mainly from a statutory training levy collected on the Department’s behalf by the Revenue Commissioners as part of employers’ PRSI contributions.

The gross Vote expenditure was spread across four expenditure programmes, as shown in the graph now on screen. Note 3 in the appropriation account gives a more detailed breakdown of each of the programmes. As the graph shows, the preponderance of expenditure was in the first, second and early years education programme, at 71%, followed by the higher education programme, at 17%. Over 87% of the €6.2 billion voted expenditure on first, second and early years education relates to the pay and pension costs of teachers, special needs assistants and non-teaching school staff. Other substantial areas of spending included in the programme are capitation and other grants to schools and the cost of school transport. This programme also includes spending on residential institutions redress, about which I have reported separately, and which the committee has indicated it will examine in the coming weeks.

Expenditure under the higher education programme was €1.5 billion. This consists mainly of grants to third level education institutions of €922 million, channelled through the Higher Education Authority, HEA, and student support grants totalling €414 million. The original Vote Estimate provided for student support grants of €332 million, down from €372 million in 2014, representing a reduction of around 11%. The outturn for the year was 25% higher than originally provided and was funded substantially by a Supplementary Estimate provision of €78 million. The committee may wish to note that student support grants are administered nationally on behalf of the Department by the City of Dublin Education and Training Board, CDETB, under the Student Universal Support Ireland, SUSI, system.

Expenditure on capital services in 2015 was €655 million, made up of €577 million in building and equipment grants across the education sectors, €66 million in payments under public private partnership, PPP, agreements and the balance of €11 million in administration costs. Forward capital commitments under contracted PPP arrangements at the end of 2015 amounted to an estimated €478 million, as indicated in the notes to the account. When recurrent commitments under the PPPs are included, the total legally enforceable commitments amounted to an estimated €1.34 billion.

Almost all of the €330 million spent on skills development under the Vote represents funding provided to SOLAS, the further education and training body. SOLAS income in 2015 was €591 million which included the grant funding received from the Vote and funding of €279 million from the NTF.

The overall grant funding provided to the 16 education and training boards, ETBs, is not evident from the appropriation account. The boards were established in 2013 following the dissolution of vocational education committees, VECs. In addition, they took on certain training functions of the former FÁS. Excluding the student support grant funding provided to CDETB that I referred to earlier, over 90% of the combined income of the boards, which is estimated at around €1.5 billion in 2015, originates from the Vote or the NTF. The first, second and early years education programme covers ETB teacher and other salaries and school capitation grants. SOLAS provides funding to the ETBs for further education and training and finally, building and equipment grants paid to ETBs are financed from the capital programme.

About a month ago, I published a special report on financial reporting in the public sector. In that report, I highlighted a general problem around the late finalisation of the ETB financial statements for 2013-14. These were the first financial statements for the new boards. A number of the new boards had difficulties putting the required reporting arrangements in place across the revised areas of operation. At present, statements for the 2013-14 period of account for Mayo, Sligo and Leitrim ETB remain uncertified. The 2015 financial statements for 11 of the ETBs have been completed and presented to the Oireachtas and the audits of three ETBs for 2015 are at various stages of progress.

Two education and training boards, ETBs, have not yet produced draft financial statements for 2015, namely, Mayo, Sligo and Leitrim ETB, and Limerick and Clare ETB.

Seán Fleming (Laois, Fianna Fail)
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Thank you, Mr. McCarthy.

I propose the committee writes to the chairpersons of the Mayo, Sligo and Leitrim ETB, and Limerick and Clare ETB, requesting an immediate explanation as to why their accounts for 2015 have not been prepared to date.

I call Mr. Seán Ó Foghlú to make his opening statement.

Mr. Seán Ó Foghlú:

I thank the committee for the opportunity to discuss the 2015 appropriation accounts of the Department of Education and Skills. We have provided the committee with briefing material and, accordingly, in the interests of making best use of the committee's time, I will keep my opening statement short.

The Department's net voted expenditure in 2015 was nearly €8.2 billion. Of this, €621 million was capital expenditure. In addition, the Department's expenditure ceiling included the non-voted national training fund, which had an allocation of €362 million in 2015, providing for upskilling and re-skilling for both of those seeking employment and those in employment. The Department received €549 million in appropriations-in-aid.

Approximately 80% of the Department's overall budget is accounted for by pay and superannuation. In 2015, this provided for over 98,000 public service employees and over 44,000 public service pensioners.

The Department's expenditure is subdivided into four expenditure programmes. Programme A provides for first, second and early years' education. The overall expenditure in 2015 was €6.2 billion, which among other things, covered pay and superannuation for teachers and special needs assistants, grants to schools, including capitation, costs associated with teacher education and provision of school transport.

Programme B covers skills development, including upskilling and re-skilling that meets the needs of individuals and the labour market. The overall expenditure from the Vote in 2016 was €329 million, which among other things, covered grants to Seirbhísí Oideachais Leanunaigh agus Scileanna, SOLAS, in respect of further education and training. It also provides funding for support of the European Social Fund and European Globalisation Adjustment Fund's activities in Ireland.

Programme C supports learning, research and innovation opportunities in the higher education sector. Expenditure in 2015 was over €1.5 billion, covering grants to higher education institutions, superannuation costs, research, student support and related costs, international activities and grants to the Higher Education Authority.

Programme D covers capital services and supports the planning and provision of appropriate infrastructure for learning environments through the Department's building programme. The total expenditure in 2015 was €655 million which covered the costs of building, equipping and furnishing of schools, higher education capital costs and costs associated with public private partnerships.

The Department was voted a Supplementary Estimate of €175 million towards the end of 2015. This made provision for an increased allocation of special needs assistants, increased superannuation payments in the schools and institute of technology sectors, an additional allocation for higher education student support and provision for summer works scheme. The Supplementary Estimate also took account of a projected shortfall in the level of receipts to be brought to account in 2015.

I am conscious the issue of timeliness in the submission of accounts and financial statements is a matter of concern to the committee. It was flagged as an issue in the Comptroller and Auditor General's recent special report. The report acknowledges the background to these delays, including the pressures which resulted from the public service moratorium, the significant organisational change which has taken place in the ETB sector and the particular complexities which pertain in the university sector given the significant amounts of non-Exchequer funding.

This is an issue which the Department is taking seriously. We have been engaging with sectors on measures to improve reporting capabilities, including filling critical vacancies. In our engagement with our bodies, we have strengthened our emphasis on the importance of timely submission of accounts. We have also stressed the importance of communication and engagement with the Comptroller and Auditor General's office to ensure a collaborative approach to addressing issues which arise.

More widely, we see our response to this issue as part of an overall effort which the Department is undertaking to further develop and implement robust and consistent governance arrangements across the education sector. Our aim is to ensure utilisation of public funds is achieved within a framework of high standards of performance, accountability, compliance and oversight. A management board committee on sectoral governance and accountability, which I chair, was established in 2015. This committee provides overall guidance on the enhancement of governance arrangements across the education sector. This has included enhancement of audit oversight in certain sectors, as well as ensuring enhanced compliance-reporting structures are in place specifically to address the timely clearance and certification of financial statements.

The committee also reviews work on governance enhancement across the education sector, for example, rolling compliance reviews being undertaken by the Higher Education Authority, roll out of the financial services support unit at primary school level and work to review the code of practice for the governance of education and training boards. The management board committee is complemented by a principal officer sectoral governance network, which includes principal officers with responsibility for public service bodies. An internal audit education sector forum has also been established.

A specific sectoral governance unit has been set up in the Department. This unit provides support to the management board committee and principal officer network, as well as undertaking work to support the enhancement and standardisation of governance and accountability oversight across the Department. This has included rolling out of the first phase of a programme of governance compliance reviews involving the Department's non-commercial bodies.

This is an area we will continue to focus on, having regard to good practice and developments in governance generally, including issues which have been identified by the Committee of Public Accounts as part of its work programme.

Seán Fleming (Laois, Fianna Fail)
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Thank you, Mr. Ó Foghlú. Will people please turn their mobile phones to airplane mode? Even when phones are on silent, when they are receiving calls, e-mails and so forth, they can still interfere with the recording systems. Some people who might be making important contributions might not be adequately picked up. It is important for us and the witnesses. I call Deputy Rock.

Noel Rock (Dublin North West, Fine Gael)
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I thank Mr Ó Foghlú for his presentation. I will start with pay, given it is such a large percentage of the Department's voted expenditure. The Comptroller and Auditor General's report highlighted how administrative staff salary overpayments at the year-end were €394,000 in 262 cases. This is almost treble what it was in 2014 when there were overpayments of €113,000 across 84 cases. Are there particular circumstances which give rise to this level of overpayment?

Mr. Seán Ó Foghlú:

The Department work continues to work with PeoplePoint and the Payroll Shared Service Centre to minimise the number of overpayments. This is part of the overall shared service for payments in the Civil Service. We are still in the relatively early years of this shared service and we continue to have difficulties with the timing of informing and updating PeoplePoint and the Payroll Shared Service Centre. It is really around the information flows and enhancing those to the largest extent possible. We have been working on this in partnership with the shared services. This has been assisted by the publication of the circular on public service bodies and the recovery of payments from staff, which sets out the administrative arrangements for the overpayments made to staff working in various public service bodies made by PeoplePoint.

Overpayments in 2016 provisionally stand at €335,000 with a total of 135 cases. We have been working on those and we have recoupment plans in place for all 51 of those. We are working on the rest now.

Noel Rock (Dublin North West, Fine Gael)
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According to my figures, in 2015, there were 49 cases where recovery plans were not in place. What is the situation with those and the other 50 odd mentioned by Mr. Ó Foghlú?

Mr. Seán Ó Foghlú:

There was a timing issue towards the end of 2015. We have arrangements in place now for 2016 in respect of those 49.

Noel Rock (Dublin North West, Fine Gael)
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In terms of the role of this shared service in minimising the level of overpayments, is that a relatively new system?

Mr. Seán Ó Foghlú:

It has been in place for three or four years. The issue about payments also has to do with the flow of information about people being on sick leave, taking career breaks or incremental days. Those are the sorts of issues that can arise between the PeoplePoint system and the payroll-shared services system. We have to get the flow of information as accurate as possible. I am not seeking to find fault with the shared services; it is a shared issue between ourselves and them.

Noel Rock (Dublin North West, Fine Gael)
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It sounds like a natural enough evolutionary process. I notice there are other overpayments as well, including supplementary pension overpayments. At year end it was €2.6 million, which is similar to the 2014 figure of €2.8 million. There were 320 cases found when the Department's superannuation section carried out a review of pensioners aged over 65 who are in receipt of the supplementary pension. Why did they receive supplementary pension payments when they would also have been in receipt of a State pension?

Mr. Seán Ó Foghlú:

The previous question was about Department staff directly. This question really concerns teachers, primarily, who are also on our payroll. We operate the biggest payroll in the State. We have, I think, just over 100,000 payees. The supplementary pension is a top-up pension paid by occupational pension providers in the period between retirement and age 66 to public servants who paid class A PRSI in order to ensure that they are not disadvantaged. It is a rule of the pension scheme that a supplementary pension should cease or be abated as appropriate when a pensioner applies for and comes into receipt of the State pension. This fact would have been documented to pensioners. The advent of new pension legislation in late 2012 facilitated the sharing of information between this Department and the Department of Social Protection. In late 2012 and early 2013, the Department conducted an analysis of those pensioners over 65 who were in receipt of a supplementary pension. On completion of this analysis and a follow-up exercise, about 320 teacher pensioners were identified as being in receipt of a supplementary pension to which they were no longer entitled as they were also in receipt of a State pension from the Department of Social Protection. Payment of the supplementary pension ceased as soon as possible and the overpayment calculated. The gross overpayments amounted to €2.7 million, however, net of statutory deductions they were likely to be in the region of €1.5 million. We have been putting arrangements in place for that to be rebated. Now we share information with the Department of Social Protection to ensure that it does not recur.

Noel Rock (Dublin North West, Fine Gael)
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It is great to hear about that information sharing. Previously, this would presumably have been happening but was not detected as readily. Would that be the case?

Mr. Seán Ó Foghlú:

Yes. We were not in a position to have detailed data sharing in place with the Department of Social Protection. As soon as the new pensions legislation was passed, we were able to get the information from the Department of Social Protection. Prior to that, we were relying on returns from individuals.

Noel Rock (Dublin North West, Fine Gael)
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Did the Department try to go back retrospectively as far as possible?

Mr. Seán Ó Foghlú:

Yes.

Noel Rock (Dublin North West, Fine Gael)
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In terms of the €2.6 million, could Mr. Ó Foghlú provide an update to the committee about how much has been recovered to date?

Mr. Seán Ó Foghlú:

The gross amount that I have here is €2.78 million. Offset statutory reductions are €518,000 and, therefore, the amount of demand is €2.264 million. The amount recovered to date is €684,000 and the outstanding amount is €1.579 million.

Noel Rock (Dublin North West, Fine Gael)
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Does the Department have any timeframe for when that will be paid off, or any anticipation of it being paid off?

Mr. Seán Ó Foghlú:

We are entering or have entered into agreements with everyone, with a view to the amounts being paid off over a period of time depending on the individual case.

Noel Rock (Dublin North West, Fine Gael)
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In terms of other overpayments, at year end, non-teacher retired personnel overpayments were €3.8 million regarding 3,905 cases. Again, there was a similar figure in 2014 when there was an overpayment of €3.3 million and 3,835 cases. I understand there are recovery plans in place for all these overpayments. In effect, is the Department saying there is nothing it can do to prevent these overpayments, and that it is an accepted part of the system that it will overpay a certain amount and then have to recoup a certain amount?

Mr. Seán Ó Foghlú:

Nearly, but not quite. We accept that overpayments will always occur for certain reasons, but we are seeking to minimise their extent. They can be generated by both external factors, outside the control of the Department, and by internal factors. A typical example of an external factor would involve data submitted by managerial authorities. This Department acts as a paymaster on behalf of managerial authorities of over 3,700 schools. They have voluntary boards of management so we are dependent on them submitting the data required at the right time and so on. There are issues there. For example, if a person is no longer employed and a school is no longer in receipt of an acting up allowance, we need to be told on time and there can be a slowness there. Another example of overpayments that have occurred in recent years is when there have been major policy changes with insufficient time being allocated for the implementation of policy decisions. There is a range of different factors.

In terms of internal ones, not just to blame external factors, there could have been a payment of salary on the incorrect point on a scale, payment of an incorrect allowance and of course there could human error.

Noel Rock (Dublin North West, Fine Gael)
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Recovery plans are in place.

Mr. Seán Ó Foghlú:

We have them in place in various forms. We could have repayment by deduction from a salary or pension. We could have repayment in part by a lump sum, we could have instalments or we could deduct from the retirement gratuity. Indeed, sometimes we could make it a repayment from the estate of the deceased. There is a variety of arrangements that we would put in place.

Noel Rock (Dublin North West, Fine Gael)
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There is a variety of controls. That is great to hear. I might move on to something close to home for me, which is the Grangegorman development. It is one of the more exciting developments within the Department right now. It is under the auspices of the Grangegorman Development Agency, is that correct?

Mr. Seán Ó Foghlú:

Yes.

Noel Rock (Dublin North West, Fine Gael)
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What is the background to that agency and the purpose of establishing it, as opposed to having the matter directly under the Department?

Mr. Seán Ó Foghlú:

We established the Grangegorman Development Agency a number of years ago. We felt the project was such a major undertaking that it would be appropriate to have an agency to undertake the work. The agency is managing a number of different projects in the health and education sectors. We felt that, given the expertise needed and so on, it would be appropriate to establish a separate agency to work with ourselves, the Dublin Institute of Technology, DIT and the Higher Education Authority, HEA.

Noel Rock (Dublin North West, Fine Gael)
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How does that agency sit with the Department and then with DIT? What is its relationship?

Mr. Seán Ó Foghlú:

It is an agency of the Department. It is under our aegis directly.

Noel Rock (Dublin North West, Fine Gael)
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It is a separate legal entity entirely, then.

Mr. Seán Ó Foghlú:

Yes.

Noel Rock (Dublin North West, Fine Gael)
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Does the Department have any level of oversight over it?

Mr. Seán Ó Foghlú:

Absolutely. We would have a regular relationship with the chief executive and the chair, and a governance relationship indeed, as we would with all of our national agencies.

Noel Rock (Dublin North West, Fine Gael)
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It received €2.9 million in 2015 and €2.5 million in 2014.

What is the anticipated relationship going forward? When Grangegorman is sufficiently developed, will it be shut down similar to Ballymun Regeneration Limited or is it envisioned that it will continue perpetually?

Mr. Seán Ó Foghlú:

I would like to be in a position where we could begin to talk about, and reflect on, not needing it to continue but we have very ambitious plans for Grangegorman. The full realisation of that will take some time, so we are not really into planning the standing down of the authority, although that would certainly be something. I do not know whether we plan to stand it down or maintain it as a continuing body. There is a lot of needed development under way. There are the PPPs, the traditional builds, the sale of buildings by DIT, building and so on. There are also capital requests for further development on the site. I do not think the development agency is really reflecting on whether it might not be needed because the outlook is very busy for a good five to ten years.

Noel Rock (Dublin North West, Fine Gael)
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Perhaps that question will be valid for a future Committee of Public Accounts. In terms of other capital expenditure and the disposal of capital assets, the Department transferred control of 15 schools, valued at €128 million, to school authorities in 2015. Will Mr. Ó Foghlú explain how that works to the committee? Does the Department still retain ownership, as distinct from control, of these schools?

Mr. Seán Ó Foghlú:

To reflect for a second on the various issues in regard to school ownership, the first thing I would say is that under the previous model ownership was primarily with the diocesan authorities. Under that model there is a trust involved jointly between a religious order and the education and training board, formerly the VECs, or the community schools. The predominant model was the denominational school model. We have effectively stopped that model for new schools.

The model we have now is that the Department sources the land and enters into a lease agreement with the patron. It may be land for a brand new school being established, in which case there is a process to decide on patronage, but equally it may be a school moving or expanding and needing a new piece of land. We would normally buy that land now. In exceptional circumstances the denominational body may have land they wish to provide but that is becoming very rare now, so we normally buy the land. We, therefore, have ownership of the land for the future.

In terms of releasing the interest in land that was previously held, that would generally occur where a school building is not in use any more and may no longer be needed. Generally, the Catholic Church or another church body would have ownership of it. The Department would have an interest, a lien, because of its investment and would get some repayment from the owner to release that interest. It would typically be fairly small. Typically, these cases occur with buildings that are no longer in educational use. Sometimes we waive that. Often we waive it if the building is going to continue in community use. We would generally only seek payment if the building is being sold on for further use or if it is entering into commercial use. Generally, we would not seek repayment of moneys where it was going to stay in local community use, unless it was a high figure.

Noel Rock (Dublin North West, Fine Gael)
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In terms of the rare instances where the Department seeks repayment of money, am I correct in saying that it received payment for the 15 schools, control of which it transferred? Is that correct or am I misreading that?

Mr. Seán Ó Foghlú:

I am not sure we would have in each of the cases. We would probably only have received payment in a few of those of those cases. I do not know the answer in detail.

Noel Rock (Dublin North West, Fine Gael)
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Mr. Ó Foghlú might provide the committee with that subsequently if he does not mind.

Mr. Seán Ó Foghlú:

We can certainly do that.

Noel Rock (Dublin North West, Fine Gael)
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I appreciate that. As far as I understand, the range of valuations in any event was between €2 million and €22 million. How are these valued? I imagine it is quite hard to put a valuation on them.

Mr. Seán Ó Foghlú:

For a surrender request, the value of the land itself is one issue, but the second issue is the value of the building that the Department has still got an interest in. This would relate to the expenditure of the Department on that building over a number of years, with a reduction given in respect of the number of years since that investment.

Noel Rock (Dublin North West, Fine Gael)
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That is logical. I might move on to something that is a topic of interest for me in particular, if the committee will indulge me. In 2015 the Irish Research Council, IRC, had a little under €2.7 million in respect of grants that remained, in effect, unspent. How did this come about?

Mr. Seán Ó Foghlú:

May I just have one second?

Noel Rock (Dublin North West, Fine Gael)
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Absolutely. Mr. Ó Foghlú should feel free to have his colleagues chime in.

Mr. Seán Ó Foghlú:

My understanding is that is primarily a timing issue as opposed to an actual underspend or a lack of allocation. Typically, the Irish Research Council is involved in postgraduate fellowships and doctoral support and funding would depend on the time of the commencement of the work, but it has to allocate and commit to an individual or a group of individuals over a number of years.

Noel Rock (Dublin North West, Fine Gael)
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For the sake of full context, one of the major universities, Dublin City University, is right at the heart of my constituency. Doctoral students and postgraduate students are a large group of my constituents, so I often interact with them around these grants. They are a tremendous support but I am curious about the future plans for, and the current execution of, them. Are there any plans for further administrative support? One of the key things that comes up is that people are often waiting months on quite modest bursaries of €16,000 per annum.

Mr. Seán Ó Foghlú:

Are they from the IRC or from Science Foundation Ireland, SFI?

Noel Rock (Dublin North West, Fine Gael)
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From the IRC, not from the university itself.

Mr. Seán Ó Foghlú:

The primary funder of postgraduate research is SFI, which is under the aegis of our sister Department, the Department of Jobs, Enterprise and Innovation. The primary funder of postgraduate funding and postdoctoral fellowships is that Department. We have a more limited fund in the IRC and we work in partnership with SFI and the Department of Jobs, Enterprise and Innovation. There is a small unit which is located within the Higher Education Authority. I could not say how many people are working on the IRC but I think it is two or three.

I was not aware of any delays in processing. The processing of payments is one thing, but the IRC also has a very peer-reviewed approach to deciding what gets funded. The Deputy might be referring to that. That is at the heart of the work of the IRC and that is undertaken in a very professional, academic way. The Deputy might be referring to the time to come to a decision in that regard.

Noel Rock (Dublin North West, Fine Gael)
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We will not delve into it too much. It is perhaps another issue.

Mr. Seán Ó Foghlú:

We would be happy to follow up on any individual.

Noel Rock (Dublin North West, Fine Gael)
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Absolutely. I might do that if Mr. Ó Foghlú does not mind. To zoom out, in terms of higher education grants in general, I noted from the Comptroller and Auditor General's report on this that the original Vote provided for student support grants of €332 million which is down about €40 million, or 11% from 2014. What contributes to this? Are demographic factors effectively is causing it to come down? I was somewhat surprised to see it come down so much in a year.

Mr. Seán Ó Foghlú:

No. On the whole I think it was changes of approach in how we fund institutions. I have appeared before the Committee of Public Accounts, although not in this particular session, on a number of occasions regarding Student Universal Support Ireland, SUSI. We had a hearing on it two and half or three years ago. SUSI is operating very well. It is processing applications in line with its objectives. Obviously, it is very difficult to get that flow of information completely right, but it has been bringing back the time from which people can apply to as early as possible. It has been processing those quickly. Partly as a result of that, grants and fee payments are being processed more speedily.

The manner of releasing tranches of money to individuals was reviewed and revised and was brought forward a bit because of the pressures on individuals in the first term. It pays slightly higher amounts to individuals in the first term than it did previously.

Similarly, having regard to the financial position of the higher education institutions, the timing of payments to those has been revised a couple of times. We have tried different ways of doing that. We are trying to maximise the appropriate way to transfer money from SUSI to the institutions. We are particularly conscious of a few issues.

One is that not every recipient of student support completes his or her course. Particularly in first year, there is an issue about completing the first term. We have to be careful about that. Also, people want to have their grant protected so that if they attend only half of the first term, they have protection in place if they seek to commence another course. Issues such as that arise. It is a matter of making sure we have appropriate arrangements in place. There is a complex set of different arrangements that we put in place to bring that forward. Particularly in the context of the Supplementary Estimate, we brought forward the payments to institutions given that higher education is in a very tight funding position. We did not want to be under-funding from SUSI into the higher education sector. We wanted to make sure that we were funding appropriately.

Noel Rock (Dublin North West, Fine Gael)
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Naturally. In terms of SUSI-----

Seán Fleming (Laois, Fianna Fail)
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The Deputy's time is up.

Noel Rock (Dublin North West, Fine Gael)
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Of course. I appreciate that. I thank the Chairman. It is rare that I use up more than my allocated time at this committee. It is fair to say the number of complaints concerning SUSI has gone down substantially in the past 24 months, in particular. Therefore, the Department is to be commended on that work and on the work in general. Having looked at the report, I noted there are very few anomalies and flags raised. I thank Mr. Ó Foghlú for his answers to questions. Most of them were on timing issues, to be frank. Broadly speaking, the Department's work is to be commended.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I will start with the education and training boards. Mr. Ó Foghlú already said we are going to write to the four or five that have not made returns on audits done. Is there a reason they have not been made? Are there timescales set for this? Having spoken about governance and good practice, could Mr. Ó Foghlú explain why the groups in four or five counties have not made the returns?

Mr. Seán Ó Foghlú:

First, we recognise that this is a very important issue. The first issue relates to the amalgamation of the VECs into the ETBs and the big change of which that was part. They were effectively new State bodies which were amalgamated State bodies from the ETB. That was the first issue.

On the second issue, concerning amalgamation, where we were amalgamating two and sometimes three former VECs into ETBs - both of the ones that were talked about here were actually three VECs coming together - they would have had different financial systems and so on. We had reduced staffing as a result of the amalgamation so we have been working through, with the Comptroller and Auditor General, the form and manner of the accounts. We have been working through the updating of the systems and we are putting in place a shared financial services system, which is under way in planning, as well as a shared payroll system. We are working that through.

For the ETBs that were particularly challenged, we have prioritised additional resources. They are seeking to address this. The particular one that has not completed the initial set of accounts has had to do a manual check through all its work. It is working through that manual check at the moment. It hopes to complete that in the next short while - we are talking weeks here - and it will move immediately to a manual check of the payments for the following year. It is an 18-month account followed by a 12-month account. The ETB is very conscious of the need to do that. To be fair to that ETB, the VECs that make up that ETB actually had been fairly efficient in returning their accounts previously so it is not that they comprised an inefficient organisation coming in; it is just the mixing of the new organisation having regard to the staffing. Particularly in Mayo, Sligo and Leitrim, there was a long-term sick-leave issue in the leadership of the accounts. There were a number of different factors that gave rise to the issue. That is not to say that the ETB is complacent about it. We are certainly working very closely with it and, indeed, the Comptroller and Auditor General's office.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is Mr. Ó Foghlú happy that everything is or will be in order?

Mr. Seán Ó Foghlú:

I am confident that a return will be made. Partly as a result of engagement with the Comptroller and Auditor General and with this committee, we have put in place very coherent and co-ordinated arrangements to be aware of where exactly everybody is at in completing their accounts and to look at their accounts when they come in and the issues that are coming up to engage with them to support the internal audit service of the ETBs. There is a huge amount of co-ordinated activity under way to ensure we are learning lessons in every way about both the processing and preparation of the accounts and, indeed the issues that come up in the accounts, whether they are sectoral or individual.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Deputy Rock touched on capital assets and disposal, and 15 schools had control transferred. Does the Department retain ownership or control? What does that mean? When the Department transfers the control, is the ownership gone as well, or are the schools still owned by the Department?

Mr. Seán Ó Foghlú:

I referred to the Department moving its interest. For the part of the accounts in question, I understand it is a matter of where we put a lease arrangement in place where we retain ownership.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The Department still has ownership. It is only control that it is giving away.

Mr. Seán Ó Foghlú:

Yes. We do not transfer ownership of schools in full. If we own the land, we maintain ownership, period.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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On the redress board, there is a balance due of €898,000. What is that about? Why is that outstanding?

Mr. Seán Ó Foghlú:

I would imagine it is around timeliness of payments but we are just checking that now.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Would it be the norm to have a balance of that kind of money due? Did I catch out the officials?

Mr. Seán Ó Foghlú:

I have a folder full of information about redress to prepare for this and the forthcoming meetings but I do not have the information on that particular issue. However, we can revert to the Deputy.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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On building equipment and the furnishing of primary and post-primary schools, the original figure was €468 million and it ended up at €524 million. The Department was basically putting this down to the summer works scheme. Could Mr. Ó Foghlú state the nature of the summer works scheme and how this budget was determined?

Mr. Seán Ó Foghlú:

The summer works scheme has a number of different categories.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It is a very good scheme. I welcome it. It does a lot of work in small schools.

Mr. Seán Ó Foghlú:

Absolutely. In 2015, we got a Supplementary Estimate. We actually got a commitment earlier in the year that enabled us to allocate the money, which then was confirmed in the Supplementary Estimate at the end of the year. The Supplementary Estimate for the summer works scheme was of the range of €50 million in that year so we were able to fund activities under the scheme. The summer works scheme is a programme that we had to curtail a little bit in the depths of the downturn but we have been able to allocate around €40 million or €50 million per year in the past couple of years. It is an important way for schools to be able to work through and plan their own refurbishments. Unfortunately, we never have sufficient funds to fund every request under every one of the categories.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is it normal that the Department would get a Supplementary Estimate during the year? Why would the budget not be anticipated in the beginning and in place from the start? Why is it that the Department of Finance comes up with more money during the year and has more money available, allowing the Department of Education and Skills to get a slice of it?

Mr. Seán Ó Foghlú:

It is part of the engagement of government. On the capital side especially, there can be occasions where we can get some additional one-off funding. The advantage of Supplementary Estimates in the capital space is that they do not have continuing costs, which are a continuing ongoing cost. It has been the case that we have been fortunate enough to have Supplementary Estimates in the capital space on a number of occasions. For example, it could give rise to us being able to bring more schools to construction than we would initially have been able to bring to construction. The summer works comprise another example.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The summer works scheme is very welcome. It is a great scheme.

Under the heading "Severance/Redundancy", I see 255 non-teaching staff and two primary teachers were paid redundancy sums totalling €2,281,664. What circumstances gave rise to these redundancies? What kind of scheme was it? Was it voluntary or compulsory?

Mr. Seán Ó Foghlú:

We have no compulsory redundancy for teachers. I will have to check the detail of the redundancy payments.

The non-teaching staff would probably have been the special needs assistants, SNAs, redundancies. We pay them redundancy if their employment in a school comes to an end. We also have a redeployment panel where they have first rights to apply for further jobs and if they succeed in getting a further job within two years the redundancy is repaid.

As we do not have redundancy payments for teachers I assume payment to the two primary teachers were individual-----

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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I presume they were outside the natural retirement age so there must have been a reason for the redundancies.

Mr. Seán Ó Foghlú:

There must have been but I do not know it. I will check it and come back to the Deputy.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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How were the non-statutory amounts determined?

Mr. Seán Ó Foghlú:

There is a standard arrangement in place depending on the number of years for an SNA's entitlement to redundancy.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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There is a total legal cost here of €251,000. What was the general nature of the claims involved? The average compensation awarded was €6,500. Could Mr. Ó Foghlú tell us more about these claims?

Mr. Seán Ó Foghlú:

We have a range of different cases under way where we support the payment. They are claims under the State Claims Agency and so on, where we enter into cases we are committed to pay. The payments include a couple of Ombudsman judgments where we would have agreed to make a payment and injuries sustained on school properties where we had responsibility for making the payment. That might be in the community and comprehensive sector. There are other settlements. Overall the cases are very small.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The interesting point is that the average claim was €6,500 but the legal cost per claim was €18,000. That seems extraordinary. Why are legal costs almost three times the average payment? Is there anything the Department can do to reduce legal costs? The average claim is €6,500 yet the average payment to solicitors I presume is €18,000 per claim.

Mr. Seán Ó Foghlú:

I assume that the legal cost arises where we paid both the legal cost of the school in the community and comprehensive sector and the costs for the individual as part of the settlement.

Mr. Hubert Loftus:

The State Claims Agency manages those legal claims in the community and comprehensive sector and would have the expertise to make the best judgment on the most efficient and effective outcome for the taxpayer.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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It sounds very high with an average payment of €6,500 and legal costs of €18,000, which is three times the payment. I suppose that is as good as I am going to get. Is there any way to reduce them?

Mr. Seán Ó Foghlú:

We cannot reduce the State Claims Agency costs but this as a result of our being the insurer for the community and comprehensive sector so as part of the deed of trust arrangement with that sector we are effectively its insurer. Therefore we have to make payments. Overall we have only 16 cases which is a very limited number.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Is this relating basically to accidents in schools?

Mr. Seán Ó Foghlú:

Yes, in the community and comprehensive sector.

Mr. Hubert Loftus:

There are over 90 schools in that sector and they have public indemnity. The taxpayer does not have to fund insurance costs for that sector but the alternative is that we have to pick up the legal costs based on the advice of the State Claims Agency which negotiates them on behalf of the taxpayer.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Do most of these go to court or are they settled out of court?

Mr. Hubert Loftus:

The State Claims Agency takes a strong line wherever it feels there is a case to be brought to court. It has also done huge work on preventative measures, guidance, support, training and prevention of accidents. That is in the taxpayers' interests.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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There were ten new cases of fraud and suspected fraud and irregularities in 2015. What is the nature of these and how much money do they involve?

Mr. Seán Ó Foghlú:

These were cases where schools used funds for purposes other than those for which they were intended. Other typical fraud issues would have been where schools might have over returned the number of pupils which caused an over-allocation of teachers and so on. We have taken two major steps in this regard, the first was to put in place a primary pupil database as well as a post-primary pupil database so that no more than one school can claim for one individual. Every child has a personal public service, PPS, number which minimises the chance of overpayment for capitation or over allocation of teachers. The second is to enhance the audit arrangements for schools and we are commencing a financial services support unit for the primary sector to enable it to have a support service to help in its financial provisions and eventually to put in random audits of primary schools. We are taking extensive steps to ensure that the frauds do not occur.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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How does the Department penalise schools if they are found to be guilty of fraud?

Mr. Seán Ó Foghlú:

In the nth degree they could be referred to the Garda but we have to be very careful when penalising schools that we do not penalise the pupils. We face this difficulty across the board in the education sector. If somebody has engaged in a sufficiently large fraud that would be referred to the Garda or to human resources and industrial relations processes. The school would have to repay any over allocation. We would have to be careful if there was a penalty system in place not to penalise allocations which support the children in the school. The allocation of non-pay funding to schools is very tight. We had to reduce capitation several times during the downturn and we have not been in a position to seek to increase it since.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Does all the fraud concern numbers of pupils?

Mr. Seán Ó Foghlú:

That is the sort of case we have. There could be overclaiming of resources. One of the primary ways that was done was through pupil numbers but we have put a system in place and we hope that will decline.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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The settlement with the Revenue Commissioners in March amounted to €1,359,358 for the period 2010-2013. Why was the Department not tax compliant in respect of these payments?

Mr. Seán Ó Foghlú:

Primarily this was an issue of interpretation and the Revenue Commissioners did not put a penalty in place because they recognised we were not seeking not to pay. It arose in two areas, one of which was home tutor payments which were made directly by the Department to home tutors. They were subject to pay as you earn, PAYE, pay-related social insurance, PRSI, and universal social charge, USC, but the Department had been making the payments on a gross basis with the tutors required to make the returns.

The second one related to board and committee members. Payments were made by the Department to such individuals on a self-employed basis and subject to a deduction of professional services withholding tax. However, they should have been treated as office holders and subject to PAYE, PRSI and USC. There were differences in interpretation which we worked through with Revenue. We obviously had to repay the money to it, but it did not impose a penalty.

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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What arrangements are in place to ensure this will not happen again? Is more scrutiny needed? Does the Department need an internal auditor, for example?

Mr. Seán Ó Foghlú:

We seek to implement Revenue guidance wherever we can and engage with Revenue on interpretations. Revenue officials visit and discuss issues with us and can start audits arising from these visits, if Revenue so wishes. We have a detailed internal audit service in place which carries out a range of audits. We have an independent internal audit committee chaired by a person external to the public service - a retired accountant. We work through these areas.

Mr. Hubert Loftus:

On home tutors, the issue with Revenue arose at a time when home tutors were paid via a grant paid to the parents who were the employers. Home tutors have since been put on the payroll operated by the Department such that tax issues are dealt with automatically through the payroll system. One of the engagements we had with Revenue was to address this issue in order that it would no longer arise.

Seán Fleming (Laois, Fianna Fail)
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Does that cover the July scheme? Certain schools remain open for the month of July. Sometimes when the school does not provide it, children with special needs can receive home tuition for the July period also.

Mr. Hubert Loftus:

I am virtually sure it is done through the payroll system rather than the grants system.

Seán Fleming (Laois, Fianna Fail)
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Mr. Loftus might confirm the position and send us a note. He knows the programme I am talking about.

Mr. Seán Ó Foghlú:

I can confirm that the July provision for home tuition is paid centrally from our payroll.

Seán Fleming (Laois, Fianna Fail)
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That question has been answered.

David Cullinane (Waterford, Sinn Fein)
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Gabhaim mo bhuíochas leis an gCathaoirleach. I welcome Mr. Ó Foghlú and his team. I will start with the youth employment initiative and funding under the European Structural Funds operational programme. How much did the State receive in 2015 from this fund?

Mr. Seán Ó Foghlú:

The Deputy might allow me one second.

David Cullinane (Waterford, Sinn Fein)
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If I said it was €68 million, with an additional €19.8 million, would I be accurate?

Mr. Seán Ó Foghlú:

Let me find the file first, please. Perhaps I might speak a little about the youth employment initiative before-----

David Cullinane (Waterford, Sinn Fein)
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Before Mr. Ó Foghlú speaks at all about it, I was hoping he would have the figures and it is to be hoped he can get them. However, my understanding is €19.8 million had to be reimbursed to the European Commission. Is that correct?

Mr. Seán Ó Foghlú:

The youth employment initiative was introduced to tackle youth unemployment. The funding is reserved for use in those regions with higher youth unemployment levels. We receive allocations under that heading. In terms of the funding-----

David Cullinane (Waterford, Sinn Fein)
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My understanding is €19.8 million was returned because of a failure on our part to meet requirements during that period. There was a return in 2016; therefore, the money could not be spent. Is that correct?

Mr. Seán Ó Foghlú:

I am just trying to find the answer to that question.

David Cullinane (Waterford, Sinn Fein)
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Does Mr. Ó Foghlú know if money had to be returned to the European Commission? Is he not be familiar with it?

Mr. Seán Ó Foghlú:

I am familiar, but the scale of the briefing I have received is quite significant.

David Cullinane (Waterford, Sinn Fein)
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Leaving aside the numbers, will Mr. Ó Foghlú confirm that money had to be reimbursed?

Mr. Seán Ó Foghlú:

I can give an assurance that no money was lost to the Exchequer for expenditure on the youth employment initiative. It concerns the way in which money is transferred to us. Depending on the assistance given, it is transferred back again.

David Cullinane (Waterford, Sinn Fein)
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I am sorry, but that is not accurate.

Mr. Seán Ó Foghlú:

I am trying to-----

David Cullinane (Waterford, Sinn Fein)
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I know that Mr. Ó Foghlú is trying to get the information, but I can put questions as he is trying to do so.

Mr. Seán Ó Foghlú:

Fine.

David Cullinane (Waterford, Sinn Fein)
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It is not that money is lost but that it could not be spent in the time period in which it should have been spent. As Mr. Ó Foghlú stated, because of problems and delays in getting systems up and running, we had to reimburse the European Commission €19.8 million. This relates to financing for youth employment initiatives. The level of youth unemployment is still relatively high compared to European standards. That we had to reimburse the Commission because the Department did not have the systems required up and running and did not satisfy the appropriate requirements is akin to a dropping of the ball on its part.

Mr. Seán Ó Foghlú:

The funding is part of the overall EU Cohesion Fund allocation and there is a need for an IT system to be put in place. The Department of Public Expenditure and Reform which works with us is overseeing the delivery of this system.

David Cullinane (Waterford, Sinn Fein)
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It would have been known that having the appropriate IT systems in place was one of the requirements to be met in drawing down the funding.

Mr. Seán Ó Foghlú:

That is correct.

David Cullinane (Waterford, Sinn Fein)
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Was the Department aware that it was a requirement when it made the funding application? If it was, why were the processes and systems required not up and running?

Mr. Seán Ó Foghlú:

We were so aware and working with our colleagues in the Department of Public Expenditure and Reform to put the IT system in place. A project team and project board had been established to seek to bring this about. We sought to engage on it. In the meantime, we are putting in place an interim arrangement in order that there can be claim building under the existing arrangements. I stress that, as the programme was adopted in February 2015, the deadline for claiming the 2014-15 allocations is end-2018. This is a cash-flow issue and it is expected that the system will be fully operational later this year. Funding which will be claimed has not been lost. There is no loss of activity or funding.

David Cullinane (Waterford, Sinn Fein)
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On the completion of this meeting today, will Mr. Ó Foghlú furnish the committee with a report or paper on what happened in terms of system failures or systems not being in place, indicating whether the matter is being rectified?

Mr. Seán Ó Foghlú:

I will. This is the nature of what the ESF calls its initial pre-financing or advances; it is the way in which the money flows. We received certain moneys and some of the pre-financing had to be reimbursed. That is the nature of the system, but it does not mean that activity did not take place. This is a cash-flow issue, but we are happy to provide the Deputy with the information required.

David Cullinane (Waterford, Sinn Fein)
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Mr. Ó Foghlú might furnish us with a paper on it. On the national training fund, is there a surplus?

Mr. Seán Ó Foghlú:

Yes, there is.

David Cullinane (Waterford, Sinn Fein)
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How much is it?

Mr. Seán Ó Foghlú:

I will get the precise figure for the Deputy. I will also speak about the surplus.

David Cullinane (Waterford, Sinn Fein)
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What is the reason for it?

Mr. Seán Ó Foghlú:

Expenditure from the national training fund is part of the annual Estimates of the Department. There is a limit to the expenditure within the Estimates. While there was a surplus for a number of years, annually we were spending more than what was being taken in under the national training fund. As more is now being taken in, we are building up a surplus again.

David Cullinane (Waterford, Sinn Fein)
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There are many challenges in higher education institutes. As representatives of all of them will be here in the next few weeks, I am sure they will all tell us that they have problems with funding and that they need more money. Given this, how can we accumulate a surplus? My understanding is the surplus is €232 million.

Mr. Seán Ó Foghlú:

It was €183.7 million at the end of 2015. It is clear that it has increased since.

David Cullinane (Waterford, Sinn Fein)
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Why would it be allowed to build to that amount when there are funding pressures in institutions?

Mr. Seán Ó Foghlú:

As it is still an Exchequer allocation, it would still be an increase in State expenditure under the national training fund. It is not at the discretion of the Minister to increase expenditure under the fund but at the discretion of the Government. Under the expenditure rules, to increase the level of that expenditure other expenditure by the Exchequer would have to decrease. It is not bonus money available to us to be spent on education and training. It would be great if it was, but it is not. Therefore, jointly with the Department of Public Expenditure and Reform, we have issued a discussion paper on the national training fund outlining options for increasing funding for further and higher education and training.

Funding relating to the national training fund is referred to under that. We are considering the potential for increasing that. Any increase in taxation would not be caught under the European rules for increasing expenditure more generally. If the level of tax was increased, it would be additional expenditure which the State would be allowed to undertake within the European rules. That is my understanding. We are consulting on that, but if we were to spend more on the national training fund now, it would just take down the rest of our voted expenditure. It would circle off.

David Cullinane (Waterford, Sinn Fein)
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I will move to funding for third and fourth-level institutions and will start with institutes of technology, specifically the ones with which I am most familiar, namely, Waterford Institute of Technology, WIT, and Institute of Technology Carlow. In 2008, the core grant for WIT was €40,134,565. In 2016, the core grant was €26,000,460, which is a very substantial cut in core funding over that period. The level of student enrolment has remained static but the funding has been cut from €40 million, essentially, to €26 million. Could Mr. Ó Foghlú talk to us about the funding for institutes of technology and his understanding of the percentage of pay as against core funding in respect of institutes of technology? Is it a problem?

Mr. Seán Ó Foghlú:

Regarding the issue of the reduction in expenditure by the State, a certain amount was balanced upwards by the increase in the student contribution. Therefore, as I understand it, the absolute reduction is not as absolute as that set out by the Deputy. He is talking about the core grant. There is now increased student contribution. That is not to deny a significant reduction in the funding of higher education. We understand that this is a difficulty and a challenge. We obviously had to reduce expenditure during the difficult times-----

David Cullinane (Waterford, Sinn Fein)
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I can correct Mr. Ó Foghlú on that. The student fees in 2008 for WIT amounted to €10.203 million. The fees in 2016 amounted to €6 million. The total funding in 2016 for WIT was €32 million. In 2008, it was €50 million. What Mr. Ó Foghlú just said certainly did not happen in Waterford or Carlow institutes of technology.

Mr. Seán Ó Foghlú:

It is true that we have increased the student contribution over the past ten years to €3,000 per year. It is also true that a high proportion of those students - it is higher in the IT sector than in the universities - are given grants to pay those fees by-----

David Cullinane (Waterford, Sinn Fein)
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Several parliamentary questions have been tabled in respect of this matter. Does Mr. Ó Foghlú know the percentage of pay as opposed to core funding in institutes generally? I can give him the figure for Waterford. It is 87%. Does it not trouble him, as Secretary General, that such a high level of the core funding goes towards pay, even though the institutions in question are staff-heavy? Is the figure of 87% of concern to him?

Mr. Seán Ó Foghlú:

We are concerned. Clearly, people are the business of higher education institutions, and pay levels for people are a key part of running an institution. We have an ECF number for each institution. WIT, from what I recall, is about four or five staff members above its ECF level. We are concerned that it is slightly above its ECF level. That is a small issue for WIT, but there is an issue-----

David Cullinane (Waterford, Sinn Fein)
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Third-level institutes also run deficits. A number of institutes of technology, of which Waterford IT is one, are doing so.

Mr. Seán Ó Foghlú:

The HEA undertook an exercise to look at the funding of institutes of technology more generally, and we have published a-----

David Cullinane (Waterford, Sinn Fein)
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On that, could Mr. Ó Foghlú provide a rundown of what the funding streams are for institutes of technology? We know there is a core grant and we know there are fees. Those two are the big ones. What other forms of income do institutes of technology have at their disposal?

Mr. Seán Ó Foghlú:

They could apply for competitive research funding, whether nationally or internationally.

David Cullinane (Waterford, Sinn Fein)
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Research funding is one. What else is there?

Mr. Seán Ó Foghlú:

They have the option to seek philanthropy. They could have income arising from their investments. For example, in the case of WIT, the Manor Village complex gives some income to the institution.

David Cullinane (Waterford, Sinn Fein)
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What else? Are there other income streams?

Mr. Seán Ó Foghlú:

Yes, there are international students as well and the higher level of fees associated with them.

David Cullinane (Waterford, Sinn Fein)
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Are other one-off funding streams available to institutes of technology?

Mr. Seán Ó Foghlú:

There is the capital expenditure we provide. We have made an allocation for equipment and refurbishment.

David Cullinane (Waterford, Sinn Fein)
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Of all the examples Mr. Ó Foghlú has given, one he left out is revenue from intellectual property and spin-out companies. Is that not a revenue stream?

Mr. Seán Ó Foghlú:

It could be.

David Cullinane (Waterford, Sinn Fein)
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Could Mr. Ó Foghlú talk me through how that works in policy terms?

Mr. Seán Ó Foghlú:

Sure.

David Cullinane (Waterford, Sinn Fein)
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How is an institute of technology protected in terms of intellectual property? I note that there is a national protocol. I ask Mr. Ó Foghlú to talk me through that first.

Mr. Seán Ó Foghlú:

Clearly, supporting innovation is very important for us. We are trying to do that overall and we are seeking to encourage higher education institutions to engage in innovation. One of the ideas in this regard is greater utilisation by enterprises of the research assets of our higher education institutions by engaging enterprises with research centres and technology centres and translating intellectual property or new thinking into commercial products and services and the role of higher education institutions in that.

David Cullinane (Waterford, Sinn Fein)
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Then there is co-location of private companies in institutes of technology, is there not? There are private companies in respect of which there is an element of vulture fund funding, there are, perhaps, researchers or staff in institutes who are part of those companies and then there are spin-out companies.

Mr. Seán Ó Foghlú:

There can be different aspects to that. For example-----

David Cullinane (Waterford, Sinn Fein)
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The aspects to which I have just referred are there, though. I am not saying they could be there. They are there.

Mr. Seán Ó Foghlú:

Yes, but they might not be the only ones. For example, many of our institutes of technology have technology centres which are part-funded by Enterprise Ireland. They can include spin-outs or they can have companies coming in which are not spin-outs but which come in to link into the services there. These technology centres can operate in different ways. We have a number of them operating-----

David Cullinane (Waterford, Sinn Fein)
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There could then be spin-out companies in respect of which there would be a combination of funding from vulture funds and they would perhaps have an equity in the company. There could be researchers or academics in institutes who would also be directors and shareholders and then there would be the institute itself, which would be a shareholder. What level of protections is in place to make sure the institute would be a fairly substantial shareholder so that if there is a spin-out and substantial revenue accruing, the institute would be protected and get its fair share?

Mr. Seán Ó Foghlú:

To correct the Deputy - I do not think he made the error intentionally - I think he meant to refer to venture capital, not vulture funds.

David Cullinane (Waterford, Sinn Fein)
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Yes.

Mr. Seán Ó Foghlú:

Vulture funds arise in a different context.

David Cullinane (Waterford, Sinn Fein)
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That is a matter of opinion.

Mr. Seán Ó Foghlú:

No-----

Seán Fleming (Laois, Fianna Fail)
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That is a political debate. Mr. Ó Foghlú need not get into the Deputy's description.

Mr. Seán Ó Foghlú:

Okay. I am not trying to suck the committee into this, but there are venture capitalists and funders, especially in the spin-out area, that are different from the other kinds of companies to which, I think, the Deputy referred. However, I am not trying to enter into that-----

David Cullinane (Waterford, Sinn Fein)
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How are the institutes protected?

Mr. Seán Ó Foghlú:

National codes are in place which are established under the aegis of Enterprise Ireland. There is an intellectual property, IP, protocol policy document which sets out the framework underpinning research, collaboration and access to IP from State-funded research, and there is an IP protocol guide that provides an overview of the national IP management guidelines and links to resources-----

David Cullinane (Waterford, Sinn Fein)
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I have all of that.

Mr. Seán Ó Foghlú:

I know.

David Cullinane (Waterford, Sinn Fein)
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Would Mr. Ó Foghlú draw a distinction between researchers and, for example, heads of departments or people who would have a governance or management role in institutes or universities and individuals in those positions having an interest in being either directors or shareholders in these companies? Obviously, if one is in a management or executive position, one has a function and a responsibility regarding oversight. For example, in respect of protection of intellectual property, where in an institute would the buck stop?

Mr. Seán Ó Foghlú:

The buck stops on all these issues of governance-----

David Cullinane (Waterford, Sinn Fein)
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Where would the buck stop in the case of an institute of technology?

Mr. Seán Ó Foghlú:

-----with the president's role to-----

David Cullinane (Waterford, Sinn Fein)
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With the president. I will stop Mr. Ó Foghlú there.

Mr. Seán Ó Foghlú:

The buck stops with the president, reporting to the governing authority.

David Cullinane (Waterford, Sinn Fein)
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The buck stops with the president.

Mr. Seán Ó Foghlú:

The president is the accountable person in the institute-----

David Cullinane (Waterford, Sinn Fein)
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Exactly.

Mr. Seán Ó Foghlú:

-----to ensure that all the governance arrangements-----

David Cullinane (Waterford, Sinn Fein)
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Would there be any instances where a president of an institute would also be a shareholder or a director in some of these companies?

Mr. Seán Ó Foghlú:

We would not have details on the ownership of individual companies.

David Cullinane (Waterford, Sinn Fein)
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Is the witness aware of any situations where a president of an institute would be a director or shareholder in research companies based in the institution for which they are responsible for governance?

Mr. Seán Ó Foghlú:

Is the Deputy talking about a president having an ownership role in a company which was established while that person was president or-----

David Cullinane (Waterford, Sinn Fein)
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It could have been before the person was president-----

Mr. Seán Ó Foghlú:

-----it could have been when linking to-----

David Cullinane (Waterford, Sinn Fein)
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I will make it very simple. Is the witness aware of any circumstances where there are co-location companies based in research and development institutes in any part of the country where the president of the same institute has a shareholding or is a director in some of these companies and multiple companies? Is the witness personally aware of any situations where that is the case?

Mr. Seán Ó Foghlú:

I believe the Deputy is referring to WIT. On WIT-----

David Cullinane (Waterford, Sinn Fein)
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I did not mention that. I am asking if the witness is aware of any such circumstances.

Mr. Seán Ó Foghlú:

I know. We are not aware of the detailed arrangements for any companies, but we are aware of a case of a company that is no longer in WIT. The Deputy asked about current companies. That company is no longer in WIT. It is in private ownership or has been sold, and there is a particular issue that is ongoing or concluding. Chairman, my brother is also a shareholder in the same company. He was also employed in WIT. He was a co-founder of the TSSG, the communications unit that spun out this company. He was a director of this company, was in employment and had some ownership.

David Cullinane (Waterford, Sinn Fein)
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I am not referring at all to-----

Mr. Seán Ó Foghlú:

I will ask my colleague, Christy Mannion, to answer the question.

David Cullinane (Waterford, Sinn Fein)
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I am not asking the witness to respond to any of that. I am trying to understand where there are demarcation lines-----

Mr. Seán Ó Foghlú:

The Deputy asked if I was aware of a case. I will give the Deputy the case of which we are aware, but I will not talk about it. My colleague, Christy Mannion----

David Cullinane (Waterford, Sinn Fein)
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Before the witness does that I wish to put something to him. In a response to a parliamentary question which asked whether there were any conflicts of interest, the witness referred to policies and procedures and said that his officials had been made aware that there was an internal review under way in one institution with a view to confirming that the institution's interest had been appropriately represented and protected. Can the witness say where that institution is?

Mr. Seán Ó Foghlú:

That is the reason I am referring the question to Mr. Mannion.

Seán Fleming (Laois, Fianna Fail)
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Mr. Mannion will answer. If Mr. Ó Foghlú says there is a connection to him, I can understand that it is probably more appropriate to stand back in fairness to everybody.

David Cullinane (Waterford, Sinn Fein)
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I will direct my questions to Mr. Mannion.

Seán Fleming (Laois, Fianna Fail)
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However, we are concluding quickly on this point because representatives of that institute will be appearing before the committee.

David Cullinane (Waterford, Sinn Fein)
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Can I return to it later because I have other questions?

Seán Fleming (Laois, Fianna Fail)
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You certainly can. Mr. Mannion, this is the last point on this issue. Then I will call Deputy Madigan.

Mr. Christy Mannion:

Regarding the point the Deputy raised and his reference to the parliamentary question, there is an issue-----

David Cullinane (Waterford, Sinn Fein)
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To which institute is the witness referring?

Mr. Christy Mannion:

We are talking about Waterford.

David Cullinane (Waterford, Sinn Fein)
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This is the one that is under review.

Mr. Christy Mannion:

Yes.

David Cullinane (Waterford, Sinn Fein)
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Who is carrying out the review?

Mr. Christy Mannion:

It is being carried out by the financial controller on behalf of the chair of the governing authority. I understand a report will go to the governing authority in the next week.

David Cullinane (Waterford, Sinn Fein)
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What is the nature of the review? What is it examining?

Mr. Christy Mannion:

It is exactly what the Deputy referred to earlier. It is examining whether all the relevant policies, protocols and procedures have been complied with and the statutory governance processes have been applied. It will report on that.

David Cullinane (Waterford, Sinn Fein)
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Would the Comptroller and Auditor General have any role in respect of oversight or auditing here? If a payment was made from any of these spin-off companies to an institute, would that be included in its annual accounts? Has the Comptroller and Auditor General looked at this issue in general terms?

Mr. Seamus McCarthy:

I am certainly aware of a disposal and receipts into the institute and how the receipts were applied. It is forming part of the current audit that is under way.

Seán Fleming (Laois, Fianna Fail)
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I am going to move on. The Deputy will have a further opportunity to return to this. I call Deputy Madigan.

Mr. Seán Ó Foghlú:

Our submission has not been published. My understanding is that all of the submissions to be made under the capital review are to be published by the Department of Public Expenditure and Reform. As I am talking in advance of the publication I must be a little careful. However, in our capital implementation generally we are seeking to be as innovative as possible. Public private partnerships, PPPs, are one way to do that and the European Investment Bank is another assistance. In fact, the European Investment Bank assists in public private partnerships. We have a number of PPP projects under way. The fifth bundle of the schools PPPs is under construction at present and obviously the Grangegorman-----

Catherine Connolly (Galway West, Independent)
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I am sorry, what was that?

Mr. Seán Ó Foghlú:

It is the fifth bundle of the schools PPPs. That is under construction at present. We have a commitment to two big developments in higher education. One is a €200 million bundle of higher education PPPs and the second is Grangegorman, where we are hoping to advance arrangements very speedily. We have undertaken an exercise with higher education institutions relating to future funding of capital developments. We put a call out to them regarding areas for which they would wish to have funding. We will examine those in the context, hopefully, of the Government deciding to give us additional funding under the capital review or, possibly, in the context of the €200 million programme of PPPs to which we are committed. The European Investment Bank is one of the primary funders under the PPPs, so that is a good way to access funding. The European Investment Bank is also a funder of developments in the university sector, which is very useful. It enables them to borrow in addition to the commitments they get from the State. It also can replace other areas of Exchequer borrowing in our capital plan. We always work closely with the Department of Public Expenditure and Reform so that some of the borrowing for the schools or other developments may be funded by the EIB. That would be organised centrally by the Department of Public Expenditure and Reform. We would not be directly involved.

A further area of innovation, and it is one we are very conscious of, is the balance in funding where it occurs, particularly in higher education and in the university sector, but not uniquely. There can be elements of philanthropical investment, so the full cost need not have to be borne by the State. A building might be 50% funded through private sources, so the State investment is not the full investment. Obviously there can be good returns for the State in that regard.

There are a number of different ways in which we are seeking to be innovative. I would not rule out any other options in the future because it is an area we seek to keep under review. If there are other ideas and ways in which we can access different funding or assist institutions in accessing different funding, we would be very supportive of that. Obviously we must be careful about indebtedness in the sector.

Mr. Seán Ó Foghlú:

This is a very important area for us to ensure that we have different mechanisms in place. We established SOLAS as a funding and regulatory authority for the further education and training sector. That was with a view to enhancing the responsiveness of that sector, to have central planning in place and to have local autonomy in terms of the role of the education and training boards, ETBs. We brought the former FÁS training centres under the ETBs and gave the training centre responsibility to the ETBs. A number of reviews are under way on different aspects of further education and training expenditure by SOLAS. The first, which is nearing completion, is a review of the post-leaving certificate courses, PLCs, provided in the ETB sector. That is being undertaken by the Economic and Social Research Institute, ESRI, and there will be recommendations.

I think SOLAS may have the report but it has not made recommendations to us on the way forward. A number of different arrangements are in place.

Mr. Seán Ó Foghlú:

I think SOLAS has the report. I have not seen it but I heard about initial outcomes from it. It is being, or is about to be, finalised. SOLAS has been working on developing its relationships with the ETBs in moving towards a more performance-based framework of funding. It is trialling some arrangements with some of the ETBs about what capacity there is to move in that direction. There have been movements in terms of funding mechanisms to try different streams and aspects of funding to move things around. Obviously, we are dealing with a lot of public sector employees so there are limits. However, there is some capacity that is used to tender for provision of services. Combined with that, a lot of work on outcomes is under way. A training programme participants annual survey by SOLAS is under way to look at completion rates and so on. We are also looking at arrangements to put databases in further education and training in place so there can be follow on regarding the effectiveness of provision in order that we can see not just from returns from people but also from looking at Revenue records on an impersonal basis and social welfare to see where people are six months or a year on from having a completed a course. We are doing the same thing in higher education and, indeed, with the same information in primary and second level education, we can get flows the whole way through so we can follow a typical learner's progress because, obviously, we would not share the individual information.

Mr. Seán Ó Foghlú:

The framework for interaction with businesses is really important. The main interaction is the one between businesses and further education and training institutions and higher education institutions. We have established a regional structure so that we can enhance the dialogue at regional level between employers and institutions in further and higher education. We have published a discussion paper about investment in further and higher education. I am not aware of responses having been received. To be fair, there is a range of businesses. They range from SMEs up to the big multinationals. There is a recognition of the need to have sufficient funding in place for further and higher education and training. I did not talk about the apprenticeship developments but those are under way as well. It is a challenge for them. To be fair to them, in our dialogue with them, some of them have been supportive of considering increases in the national training fund, NTF. Listening to what they have been saying, they would like to see commitments from the State at the same time. This is the first year in a number of years where we have been able to enhance the budget in higher education with the additional €35 million we received in the budget. Businesses would like to see a mechanism where there is balanced increased investment by the State if they are to put in increased investment. There is a third element to that, particularly the question around whether there is increased support in higher education from the learner's point of view. The Cassells report is under consideration at the moment by the Joint Committee on Education and Skills so we are looking forward to seeing the response to that. It is a balanced range of different areas.

Mr. Seán Ó Foghlú:

The Minister published a three-year strategy and action plan in September 2016 and followed it up with an annual plan in late January. We are working on the basis of quarterly reporting on activities and on the basis of an annual report on actions. We find it very valuable to be able to plan in a joined-up way for the education and training sector. It is effectively a plan for us and our national agencies combined and we are seeking to do it in partnership with them. There is a wide range of different aspects across all areas. One of things we are trying not to get lost in, although it is important, is the issue of resources being the only thing. Yes, there is a dependency on resources to expand provision but everything does not depend on additional resources. We must look at how we can work resources; be more efficient, which is the business of this committee; decide to stop funding areas; change funding; and seek to increase funding having regard to the resources available to us. It gives us a coherent way to seek to do that. There are different challenges in each of the different sectors. There are challenges for the Department and the national agencies in terms of prioritising. We would operate a number of overlapping strategies within the action plan. An example of that would be the national skills strategy, whose actions are embedded in it, or the literacy and numeracy strategy. We have a number of those.

Mr. Seán Ó Foghlú:

The report on 2016, which we published in January, showed that 82% of the actions for 2016 were completed. A number of them were completed shortly after that period. Turning to the area of multidenominational schools, the Government has set an ambitious target of 400 multidenominational schools. There are a number of different ways in which we are seeking to address that.

Mr. Seán Ó Foghlú:

I think so. New schools are being established and a process is in place where a new school is established and the local population - the parents whose children are in or about to go to school - is consulted on that. We can look at having regard to that and other criteria regarding what the patronage of newly established schools will be. In primary education, while there will continue to be some, we do not expect that an extensive number of new schools will be established because the primary school population will begin to decline in 2019. The post-primary school population is-----

Mr. Seán Ó Foghlú:

It is due to the number of births. The peak birth year is already in primary schools and the decline will be from the 2020-2021 school year onwards. That is not to say that other things cannot happen. Immigration will change and so on. The peak year for post-primary education is 2025-2026 so we are looking at huge expansion in second level education. We have established about 30 new 1,000-pupil second level schools and we will have many more. Many people here will be aware of those in their own constituencies. They are not just in Dublin. They are across the board.

Mr. Seán Ó Foghlú:

We carried out a survey around 2005 and would have had that information from then, so that is the evidential basis we have for that. There are two other ways in which we are seeking to enhance multidenominational provision in addition to new schools. One is what was called divesting arising from the report of the forum on pluralism. A number of areas were identified and we seeking to negotiate in those areas for existing schools or school buildings that might not be in use or other public sector buildings to be transferred to our ownership or leased to us to enable us to open schools. We have succeeded in about eight or ten schools in that regard. I have the precise figure but I do not have it to hand. We have initiated a further process where we are seeking to engage with the ETBs, communities and existing school patrons to see if there are possibilities for patronage change. We are trying in a number of different ways. It is a challenge because we do not own the school buildings. The school buildings are owned by the local communities. Regarding support for change in the community, if one takes a community that might have five schools, each of which might contain 20% who would like a change, it means that there is no majority for change in any of the five schools. However, in the area as a whole, possibly a total of a single school population would wish to change.

This is down to negotiation in communities and so on and we see a potential valuable role for the education and training boards in having an involvement so there is not a perception of a top down approach from the Department in communities.

Mr. Seán Ó Foghlú:

This was the issue around the home tutors and board members that we discussed earlier. We have home tutors on the payroll now and we have the other arrangements in place to be compliant with Revenue. There were no penalties. Revenue treated the settlements as a technical adjustment so there were no penalties but there was interest.

Mr. Seán Ó Foghlú:

The total settlement was €1.359 million, including interest payments of €220,000.

Mr. Seán Ó Foghlú:

We believed that we were, and these were issues of interpretation in both of the areas around the way in which we were funding the two activities. On the one hand, we believed that the home tutors had the responsibility because that is what we understood to be the case and in the case of-----

Mr. Seán Ó Foghlú:

-----we made the payments that they were required because we were not employing them. They were employed by the parents of the children who where getting the home tuition. It was not our understanding that we had a duty to take the tax.

Mr. Seán Ó Foghlú:

Yes, that it was their responsibility to make their own tax returns.

Mr. Seán Ó Foghlú:

We treated the board and committee members as self-employed and subjected them to professional services withholding tax but they should have been subject to PAYE, PRSI and USC. Those were interpretations that we worked through with Revenue and its officials accepted that we had been acting genuinely but that we were acting inappropriately.

Mr. Seán Ó Foghlú:

Yes. We could have appealed it. I made a call that we were going to have to sort it out and we did not want to get into a dispute with Revenue. We got a one-off allocation to make the payments and, therefore, it was recognised as a one off and the amount went to take account of that.

Catherine Connolly (Galway West, Independent)
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There are so many questions that I would like to keep Mr. Ó Foghlú here all day. Luckily, I am time limited. I thought I understood the transfer of control of 15 schools on pages 13 and 14 of the appropriation accounts but when I went back on it, I did not understand it on the basis of his second reply earlier. I understood the schools were being transferred and he said they were no longer in educational use but when I checked, they are all functioning schools. Will he clarify that? I am lost somewhere in the explanation.

Mr. Seán Ó Foghlú:

I created the confusion, not the Deputy. I understood that initially I was being asked about when schools stopped being used as schools and I gave an answer about that but, in addition, my understanding is when we have a lease arrangement with a school, we still own the school but it is not returned. It is in our control in the accounts.

Catherine Connolly (Galway West, Independent)
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The 15 schools are valued at €128 million and control was transferred to the school authorities. The list is there and one is Galway.

Mr. Seán Ó Foghlú:

It is a technical adjustment. We still own the school building but because we have a lease in place-----

Catherine Connolly (Galway West, Independent)
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Gaelscoil de hÍde in Oranmore is one of the 15 and its value was more than €5 million. Will Mr. Ó Foghlú explain this?

Mr. Seán Ó Foghlú:

My understanding is that, in general, we own the site, we build the school and then we lease the school. The accounting treatment is that when we lease the school, there is a technical adjustment.

Catherine Connolly (Galway West, Independent)
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Is the Department showing it as an asset or not?

Mr. Seán Ó Foghlú:

We are not showing it as an asset because we have a lease in place for it.

Catherine Connolly (Galway West, Independent)
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So the Department is not showing it as an asset on its books. That is fine.

Mr. Seán Ó Foghlú:

It is initially shown as an asset and then transferred in the year----

Catherine Connolly (Galway West, Independent)
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It was confusing.

Mr. Seán Ó Foghlú:

I created the confusion and I apologise.

Catherine Connolly (Galway West, Independent)
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I will go to climate change and back to the points raised by Deputy Cullinane. There is a window of opportunity and this is the last stall to have any opportunity to take action against climate change. What actions has the Department taken at policy level? What is happening on the ground in respect of climate change?

Mr. Seán Ó Foghlú:

In terms of buildings?

Catherine Connolly (Galway West, Independent)
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I have a list relating to energy efficiency, solar panels, etc.

Mr. Seán Ó Foghlú:

We have a wide range of different measures in place in terms of buildings. I can provide the Deputy with a detailed written briefing on that but the specification for buildings is going up and up and we are providing a huge number of new builds which have to meet these high specifications. They have regard to all those issues.

Catherine Connolly (Galway West, Independent)
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Presumably, the 15 schools listed were all new. I will take them as an example, with Galway having one. Are they all energy efficient? Do they have solar panels?

Mr. Seán Ó Foghlú:

It depends on the nature of what works in a school context given the use of schools. They are particular issues around the times of the year and the times of the day that schools are in heavy use. They all operate on an energy efficient basis. Our specifications are going up and up and, therefore, the requirements on new schools are increasing all the time. We use the summer works to fund upgrades for older schools. We have a small section in the planning and building unit which works on ensuring the planning is as up to speed on all these issues as possible - we have a few experts - and they are incorporated into the guidance for buildings. For example, we trialled the use of different aspects of energy efficiency. Some worked and some did not in a school context.

Catherine Connolly (Galway West, Independent)
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Mr. Ó Foghlú said there is a special unit. If I follow this up separately, will there be documentation available? I am thinking of a scoil lán-Ghaeilge in Galway. It cost a fortune. That is not the Department's fault because it related to the compulsory purchase of the land. It must be the most expensive school in the country. I put my hands up because I supported the building of that school. However, it is not an energy efficient school. Climate change was not taken into account. Has the Department learned from this? Is there a proactive programme? Will I see a trail separate from-----

Mr. Seán Ó Foghlú:

Standards are going up all the time and the Deputy will see-----

Catherine Connolly (Galway West, Independent)
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I do not mean to interrupt but I am going to. Mr. Ó Foghlú has repeated that the standards are going up. I do not want to use up my time on this. If I follow up on this, will I see a total commitment to climate change measures in the Department's policy in respect of all buildings at primary, secondary and third level?

Mr. Seán Ó Foghlú:

Yes, in respect of the specifications for new builds. Retrofitting is a more challenging area, which can be done under the summer works. Due to demographics, we have had to prioritise expansion of schools and the need to have a school place for every child. We have put significant expenditure into the summer works scheme and so on but there is still a huge demand for further investment.

Catherine Connolly (Galway West, Independent)
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I will come back to this separately.

The National Training Fund has three functions - upskilling those who are employed, upskilling those who are unemployed, and providing information about necessary skills. Who is responsible for advising the Government on what necessary skills are required?

Where are we going in that regard? It is not the fault of the Department but of the Government that the smallest percentage of the Department's budget is allocated for training and skills.

Mr. Seán Ó Foghlú:

We have a good national skills infrastructure which we are improving. This is one of the few countries that turned its education and training system towards STEM and ICT at a very early stage, especially in the further and higher education sector. We had an expert group on future skills needs, which engaged in planning in sectors. We had huge investments in ICT and STEM from about 17 or 18 years ago onwards and turned our system in that direction. We have a very high proportion of STEM graduates compared to other European countries. We published a skills strategy last year and are establishing a national skills council which we will put in place in the near future. I understand the Minister will make an announcement on the membership of the council in the next number of weeks.

Catherine Connolly (Galway West, Independent)
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He will make an announcement.

Mr. Seán Ó Foghlú:

He will make an announcement on the membership of the national skills council in a number of weeks. We will have a national skills infrastructure to advise on priorities. There are also actions. We have an ICT action plan; a foreign languages strategy is under development and we have a STEM strategy under development for schools. There are a number of overlapping actions, but we need to bring them together in an overall strategy.

Catherine Connolly (Galway West, Independent)
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Two weeks ago I had the privilege, among others, to present awards at the Galway Mayo Institute of Technology in Galway. It was clearly acknowledged at that event that there was a lack of training in necessary skills. It was a very positive event in which prizes were awarded for first, second and third places in the leaving and junior certificate examinations. It was clear from speaking to the men and women on the ground that there was an absolute failure in policy at Government level to provide the necessary skills. While I am glad that Mr. Ó Foghlú has indicated that this is now being done, it is a reaction to the failure to do so in the past. Is that correct?

Mr. Seán Ó Foghlú:

I do not agree. As I said, we are probably at the vanguard of developments internationally in turning the education system. There are aspects which are progressing at different rates. Our apprenticeship systems are different from international systems and we are developing them.

Catherine Connolly (Galway West, Independent)
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Will Ó Foghlú tell me about apprenticeships?

Mr. Seán Ó Foghlú:

We have a range of traditional apprenticeships which are being updated, mostly in the construction area. We have a new apprenticeship council which is looking at proposals from providers and the industry to establish new apprenticeships. We have an apprenticeship action plan to bring the new apprenticeships on board. Bringing about cultural change and embedding new types of apprenticeship within employment and further and higher education provision is a big issue. We have initiatives under way, with a number of new apprenticeships in financial services and the insurance sector already announced.

Catherine Connolly (Galway West, Independent)
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I am aware of them. I was referring to more practical skills on the ground which are becoming less and less practical as a result of technology. While I accept Mr. Ó Foghlú's answer, I am not happy with it.

I do not know where to start with the National Educational Psychological Service, NEPS.

Seán Fleming (Laois, Fianna Fail)
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The service is not provided in every school.

Catherine Connolly (Galway West, Independent)
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That is a good start. The service is not available in every school. Which schools do not have a service? What is the position on NEPS? How can the Department stand over a system in which a certain number of hours are allocated to a school which then faces Solomon's choice as to which child it will select for assessment? When schools are at their wits' end, they will avail of a private assessment and recoup the money. Where does the amount paid to the private sector show up in the Department's books? I understand the Department is in the middle of a review of the service. Is that information correct?

Mr. Seán Ó Foghlú:

Our aim is that NEPS which is a part of the Department will provide a high quality, comprehensive education psychology service for all schools. That is the aim.

Catherine Connolly (Galway West, Independent)
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Mr. Ó Foghlú should not set out the mission statement which I have read but the position on the ground.

Mr. Seán Ó Foghlú:

The way the Deputy described it as being based on assessments of individuals is what I am seeking to address in my response. The aim is to have a tiered service delivery model of casework in working with individual learners or their teachers and parents and also system work to improve all outcomes with learners in order that there will be provision of advice and support.

Catherine Connolly (Galway West, Independent)
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I interrupt because I will be stopped very soon. Am I wrong in stating that until now the role of the service was to provide an assessment for schools based on numbers and that one or two assessments were provided each year, leaving schools with a Hobson's or Solomon's choice, whichever term one prefers to use, to make? Is that correct?

Mr. Seán Ó Foghlú:

I do not agree with the Deputy's analysis of what the psychological service is. It is not primarily to provide individual assessments. That is one aspect of what it does. In relation to individual assessments, I can discuss the matter, but I do not consider it to be the primary role. The primary role is to assist schools in working with children and where it is not possible for them to do so, assessments are undertaken by NEPS. The discourse on NEPS has been primarily about the assessment of individual children. That is not an appropriate description of the complexity of its role.

Catherine Connolly (Galway West, Independent)
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I happen to agree with Mr. Ó Foghlú in the sense that I have the privilege of coming from that background. What the Department did was reduce the role of NEPS to one of carrying out assessments by giving a certain number of hours to schools. Is that correct? A certain number of assessments were allowed per annum. I ask Mr. Ó Foghlú to answer that question.

Mr. Seán Ó Foghlú:

Is the Deputy referring specifically to assessments?

Catherine Connolly (Galway West, Independent)
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Yes.

Mr. Seán Ó Foghlú:

We protected NEPS when the moratorium was in place as we sought to enable it to keep up its numbers. However, the service has had difficulty in providing coverage across the country, even with these numbers.

Catherine Connolly (Galway West, Independent)
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Good; now I have an answer. To bridge the gap Mr. Ó Foghlú outlined, schools were then left to use the private system, which meant ringing a psychologist with whom they were not familiar, paying €500 or €600 and recouping the money from the Department. Is that correct? The answer is either "Yes" or "No".

Mr. Seán Ó Foghlú:

It is not merely to go to the private sector. There was a scheme in place for commissioning assessments with a number of people on a list who were in the private sector. Yes, schools could go to them and, yes, the Department would pay for it.

Catherine Connolly (Galway West, Independent)
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Good; Mr. Ó Foghlú has answered "Yes" twice, although he will probably not answer "Yes" to my next question. NEPS provided a completely sketchy service. It was an insult to call it a psychological service to schools. I do not expect Mr. Ó Foghlú to agree with me, but what I want to know is whether a circular has been issued to change the system. What is in progress?

Mr. Seán Ó Foghlú:

We managed to reduce the number of external assessments significantly. They were running at more than 4,000 in 2007 and 2008 and we reduced that figure to around 2,000. The lowest level reached was 1,700. We would prefer not to be in a position where this was playing such a major part in the overall provision. The Minister is very interested - appropriately - in well-being which features very strongly in the action plan.

Catherine Connolly (Galway West, Independent)
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Has a circular been issued to change the system? Is the NEPS system in the process of being changed or has it been changed?

Mr. Seán Ó Foghlú:

I am not aware of any circular having gone out, but we are actively looking at the role of NEPS in supporting well-being.

Catherine Connolly (Galway West, Independent)
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What does "actively" mean in terms of a review?

Mr. Seán Ó Foghlú:

We are expanding the numbers in NEPS.

Catherine Connolly (Galway West, Independent)
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That is good.

Mr. Seán Ó Foghlú:

There is a commitment in the programme for Government to expand the numbers in NEPS. Initially, we are increasing, in the expansion of the DEIS scheme, the number of NEPS psychologists this year.

Seán Fleming (Laois, Fianna Fail)
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I understand schools have been informed in recent days of a new allocation based on resources.

Mr. Seán Ó Foghlú:

I think the Chairman is referring to the allocation for resource teachers for special education, not a change in the role of NEPS.

Seán Fleming (Laois, Fianna Fail)
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Did NEPS have a role in that regard?

Mr. Seán Ó Foghlú:

It has a role in supporting it, but it is not a changing of its fundamental role.

Seán Fleming (Laois, Fianna Fail)
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NEPS had a role. Will Mr. Ó Foghlú confirm that under this new arrangement, parents do not have the right to make an appeal? This is related to the issue raised by Deputy Catherine Connolly. In the past few days schools have been informed that parents do not have a right of appeal.

Mr. Dalton Tattan:

On the role of NEPS and numbers, as Mr. Ó Foghlú stated, we are increasing the number this year by ten as part of the 65 in the programme for Government. There are also 11-----

Catherine Connolly (Galway West, Independent)
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I did not quite tune into Mr. Tatton's reply because the language was hard to follow.

Mr. Dalton Tattan:

There is a commitment in the programme for Government to increase the number of NEPS psychologists by 65 in the lifetime of the Government.

Catherine Connolly (Galway West, Independent)
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What would that bring the figure up to?

Mr. Dalton Tattan:

I think it will bring the number to 238. This year we are increasing the number of NEPS psychologists by ten as part of the DEIS plan. These are psychologists who will be assigned specifically to DEIS schools. In addition, there are about 11 vacancies being filled. In total, therefore, by the beginning of the next school year in September, we expect to have an additional 21 educational psychologists in the system.

Recruitment has taken place for that through the Public Appointments Service. A panel is in place and they are now undergoing Garda vetting. We expect those psychologists to be in place over the summer. That is the situation on the supply question.

The Deputy is correct that in the past there was a right of appeal by a parent to the NCSE in a situation where there had not been an allocation to a child in respect of his or her special need in the low incidence category, such as autism - disabilities which were in the special education review committee report from the early 1990s - and where there was an allocation of a set number of hours in response to a particular disability category. What we will have is where schools are getting an allocation, it is based on a profile, and within that profile there will be an allocation for complex needs which is akin to what now describe as low incidence. Each school will have an allocation and it will be a matter for the school to deploy that allocation within the resource. If the school is unhappy with its allocation, it can lodge an appeal. There will be an independent appeals process in place for that.

Seán Fleming (Laois, Fianna Fail)
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It must come through the principal of the school rather than the parent.

Mr. Dalton Tattan:

That is right. That was the case under the old model as well. For instance, where an allocation was made and perhaps a parent was unhappy with how it was being handled by the school - sometimes the school might have had an allocation of hours but the school may have used shared teaching and other things to do that - the parent might approach the principal first. That will remain the case.

Seán Fleming (Laois, Fianna Fail)
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Has NEPS a role with the special needs assistants? That is being separated under this new scheme. The SNAs are separate from the new allocation.

Mr. Dalton Tattan:

It is separate. At the moment there is a review of the SNA scheme which the National Council for Special Education is leading. It is involved in consultation with stakeholders on that and we expect an initial report during the summer. For now, the current system for SNAs remains in place which means that NEPS remains involved in assessments where children need access to a SNA.

Seán Fleming (Laois, Fianna Fail)
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We have NEPS dealing with schools on SNAs and the special education section dealing with resource teachers.

Mr. Dalton Tattan:

The resource teachers are still allocated through the National Council for Special Education. It has responsibility for allocating both resource teachers and SNAs. The system is changing. For the resource teachers, the new model which will not require individual assessments is how we will do the allocation.

Seán Fleming (Laois, Fianna Fail)
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The SNAs will.

Mr. Dalton Tattan:

For now, the SNAs will. We have to await the outcome of the review.

Seán Fleming (Laois, Fianna Fail)
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Does the Department understand how utterly confusing this is from the point of view of a parent with a child with some special need? The parent is told NEPS has a role relating to one aspect and special education has a role in another. The Department must appreciate that it makes life very complicated for stressed parents, and they are all stressed when they have to deal with these issues. It makes life very complicated.

Mr. Dalton Tattan:

Absolutely. There would be a lot of concern and we would understand that in trying to change the system from what we had. A lot of people, including parents, would have talked to us about the inadequacies in the current system. Obviously, changing that creates uncertainty so we have met with all the education partners repeatedly on this and they are broadly supportive. Groups such as the National Parents' Council have been very supportive of this. At the moment, the special education section combined with the inspectorate and NEPS and the NCSE are doing a series of information sessions with schools to explain how this is changing. There was one in Croke Park this week for primary and post-primary schools, and there will be one next week in Limerick.

To pick up on the earlier point about NEPS role, it will continue to have a role on resource teaching even under the new model but the role will be different. It will be more supportive of schools. Instead of NEPS spending time doing assessments, that time can be used more profitably assisting schools, working with pupils and teachers to support their needs.

Seán Fleming (Laois, Fianna Fail)
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I apologise to Deputy Connolly but I will return to her.

What about parents who were unable to get it through the one or two that were provided to the schools? Parents who could afford to spend the €500, €600 or €700 were able to get a NEPS assessment in the private sector and return to the school and it was accepted. That was fine for those who could afford it, but how about all those who could not. Where was the equality in that system?

Mr. Dalton Tattan:

Under the old allocation model for resource teaching there was not equality. People who could afford it could procure that assessment and then come in to school and say they wanted five hours a week or whatever it might be. The idea now is that the school would be given an allocation so it should create equity. It is not about an ability to pay but about identifying the children with the greatest needs and how can we best meet them.

Seán Fleming (Laois, Fianna Fail)
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I will hand back to Deputy Connolly. It is a minefield.

Catherine Connolly (Galway West, Independent)
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It has been made a minefield. I have worked in the area a long time ago. How will the Department assess the needs? How will the needs be assessed if there is no assessment?

Mr. Dalton Tattan:

There will not be a formal assessment as a way to unlock resources but NEPS will continue to work with teachers, schools and children to assist the schools to identify those needs or to work directly with children.

Catherine Connolly (Galway West, Independent)
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I want to ask two other questions. It is a total mess and was totally unjust. I do not know if what the Department is going to do will be any better but I will have to look at it. How many appeals have gone in under DEIS? I am sure I am not alone in being aware of a particular school in Galway which has all the qualifications needed to qualify but it does not qualify. How many schools in Galway city and county have appealed and how many throughout the country have appealed? Does Mr. Tattan know?

Mr. Dalton Tattan:

I do not have a specific number but I can give an approximate number for the country, which is about 100.

Catherine Connolly (Galway West, Independent)
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Around 100 have appealed. Mr. Tattan might come back to me with a breakdown.

Mr. Dalton Tattan:

I can do that.

Catherine Connolly (Galway West, Independent)
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Lovely. My second question relates to tendering. I refer to a school which I will not name. It was been brought to my attention that a sports hall was built. Vast amounts of public money went into that as well as fundraising. There was a proposal that a private company would operate it in the school system. Is that something the Department has been made aware of and what is its attitude towards that? I will rephrase the question if it is unclear.

Mr. Dalton Tattan:

Obviously, there is tendering for the procurement of the building which has to follow public sector guidelines. The Deputy is not talking about that.

Catherine Connolly (Galway West, Independent)
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No, I am not. People put in a lot of money.

Mr. Dalton Tattan:

If a school has a resource and seeks to widen access to it to the general public, that is a really positive thing and we are putting a lot of effort into encouraging schools to engage with their communities to use -----

Catherine Connolly (Galway West, Independent)
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If Mr. Tattan could listen, I will rephrase my question.

Mr. Dalton Tattan:

I am getting there.

Catherine Connolly (Galway West, Independent)
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No, but I will be stopped. The Department has put in vast amounts of money, maybe €400,000, and there has been fundraising. It is being given out to a company to run it. There has been no tendering. Is that something the Department stands over or does it have a policy?

Mr. Dalton Tattan:

If a school has an asset, it should tender for the provision of a service. It should be tendering for the provision of a service. If a school is seeking to have its PE hall used by the public and needs assistance in doing that, it sounds like potentially a good idea, but it is something that should be tendered for.

Catherine Connolly (Galway West, Independent)
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On additional schools, representations have been made. I know the Department wants to increase the number of non-religious schools or multidenominational schools. Educate Together in Galway has put forward a very comprehensive submission. It has highlighted differences with the Department of Education and Skills relating to the position of education in Galway where there are waiting lists for schools. It has asked for a meeting and to work with the Department on this. Is the Department open to this?

Mr. Seán Ó Foghlú:

Is it primary or post-primary?

Catherine Connolly (Galway West, Independent)
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Post-primary.

Mr. Seán Ó Foghlú:

We have put two new schools in the Galway area, Doughiska and Claregalway

Catherine Connolly (Galway West, Independent)
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I am aware of that. That has all been set out.

Mr. Seán Ó Foghlú:

The way we deal with new schools is that we know the numbers who are going to school and the transfer rates. We are willing to be challenged on that, but what we do not do is respond to requests from patrons of new schools. We decide on the need for a new school and we are open to engagement from anybody to explore those issues. Things can change and patterns of movement in and out of cities change. We do talk to Educate Together all the time.

Catherine Connolly (Galway West, Independent)
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That is very good. We are not arguing about patrons here. That is not the issue. The point is Educate Together in Galway has come forward to say it has comprehensive facts which are different from what the Department has said, so an engagement would be lovely.

Mr. Seán Ó Foghlú:

We always welcome that.

Seán Fleming (Laois, Fianna Fail)
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The Department is open to that. The Deputy has got a "yes" on that one.

Shane Cassells (Meath West, Fianna Fail)
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I welcome Mr. Ó Foghlú and his team. A lot has been covered already but I have a few questions. One of the most startling things was the percentage of the budget that relates to pay, as in so many Departments. It is 80%.

On a topic related to pay, I wish to ask about a 2001 Labour Court recommendation by the then chairperson, Mr. Finbarr Flood, that local training initiative co-ordinators, LTIs, should have a pay relationship and be linked proportionately to the community training workshop managers. It was never implemented despite that the LTIs and community training centres effectively perform the same function. Both of these come under the remit of the education and training boards, ETBs, and are funded and part-governed by the ETBs.

Mr. Seán Ó Foghlú:

Honestly, I am not aware of that. That hearing would have taken place when these matters were funded by a different Department. We took the transfer in. Of course, we are willing to respond but I am not aware of that particular industrial relations matter.

Shane Cassells (Meath West, Fianna Fail)
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I appreciate that because it is going on for 16 years now. These people effectively perform the same duties. I would appreciate it if I could get a follow-up on that.

Mr. Seán Ó Foghlú:

Yes.

Shane Cassells (Meath West, Fianna Fail)
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I move on to the debate of the special needs assistants and the funding for that, particularly for those on the autism spectrum. How is the Department handling that within the primary school network with regard to the funding and the grants available for autism spectrum disorder, ASD, units? Is the Department meeting the demand that has been submitted to it? In terms of the follow-on to post-primary level and the demands on parents to find an appropriate place in the post-primary network, how is the Department facing that challenge?

Mr. Seán Ó Foghlú:

I might make an overall comment about special education first. We are spending €1.7 billion in 2017 on special education. In 2007, we were spending about €800 million. There has been a huge commitment from the State under various Governments to enhancing expenditure to meet the needs of those with special educational needs. We are always seeking to try to make it as effective as possible with our SNA review, our new model and the various arrangements we have to support school transport. Balancing that with what we were talking about earlier in higher education, there has been a huge amount of investment in special education to try to meet the particular needs and try to be as helpful as we can to this group. We have to acknowledge that in all of the discussions we have. The issue for us is also about the effectiveness of the expenditure.

Coming back to the specific issue about ASD units, we obviously work with the National Council for Special Education, NCSE, on ASD units. It tries to advise and plan on where there is a need for ASD units to go. Typically in new builds and new post-primary schools, we put in ASD units as we are doing them. Typically, the NCSE and ourselves negotiate with primary schools and post-primary schools about the demand. There is always a difficulty, especially at different times of the year when there is an uncertainty about where demands arise. I am aware of different cases or groups of cases in which there are challenges. This has been debated at the Oireachtas committee on education and in the context of the Education (Admission to Schools) Bill. I and Mr. Tattan have discussed it with the Minister for consideration. We are looking through the issues around ASD units and the demand at second level to try to get an evidential basis for that demand and to see if it is being met. We believe the system is responding, but we need to double-check that having regard, as Deputy Connolly said, to information that is coming. We have to be responsive. We are hearing there are not sufficient places in certain areas. We are looking at that and at how we can meet that demand-----

Shane Cassells (Meath West, Fianna Fail)
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We could all give anecdotal examples of how the places are not available in our own constituencies. Will the witness elaborate very briefly on some of the conceptual ideas the Department is working with? It would put at ease many of the concerns parents have in terms of availing of space within a relative and easily accessible geographical spread.

Mr. Seán Ó Foghlú:

The overall conceptual idea for special education is to try to have as many kids in mainstream schools as possible. However, that is not an absolute. We have to be careful about that. We try to have an integration policy. We try to have the various supports in place as integrated as possible. We have put a huge amount of effort, in partnership with the NCSE, into ensuring that in terms of teacher allocations, rather than it being a decision made externally to a school, we give sufficient resources to the school to manage it and be responsive in a local context. We have a review on SNAs at the moment. I am not sure what the outcome of that will be, but we have hugely increased our investment in SNAs.

We want to encourage children to stay in mainstream second level education. We want to work with schools to put ASD units in place to enable that to be the case. With the NCSE, we are working with all schools to ensure that can be the case. It can be difficult in individual cases to find places at different times. That is one of the reasons we have a specific proposal in the Education (Admission to Schools) Bill to give the power to the NCSE to place a child with special educational needs in a school. That is an important proposal because we want to get through the difficulty of schools arguing, to a certain extent. We do not want to do that. We are obviously also working with Tusla. It has the responsibilities of the former National Educational Welfare Board with regard to children accessing schools generally.

Shane Cassells (Meath West, Fianna Fail)
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Okay. I turn to higher education, which was mentioned by a number of speakers, and the expert report on same. Section 2.3 of that report has a startling headline. I think it sums up the entire report. The headline reads, "The Contribution of Higher Education to Ireland's Development is Now Threatened". It points out, "Core funding per student in Ireland fell by 22 per cent in the seven year period to 2015." It goes on to state:

There is a real danger that all four of the key channels identified above will no longer function well. While this arises primarily because of the limitation on resources, the funding problem is interacting with other trends in ways that need to be understood.

That report recommended that expenditure should increase to €2.4 billion by 2021 and to €2.8 billion by 2030. It was obviously well debated in the context of the budget, but the allocations within the budget have obviously not met what was set out. Does the witness accept the figures that were put forward in terms of what has to be achieved? More importantly, what is his view on the pace of the implementation of attaining those figures, given the timelines that have been set out?

Mr. Seán Ó Foghlú:

The Department was obviously a part of the team that put together the Cassells report. We are supportive of the approach. As I discussed earlier, we believe that a three-pronged approach is really needed here. It is a combination of looking at the possibilities from the State, from the private sector and from the learner. So-----

Shane Cassells (Meath West, Fianna Fail)
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I accept that. I am asking in terms of the pace of delivery, given what was allocated in the budget this year.

Mr. Seán Ó Foghlú:

The Government made a call in the programme for Government to refer the Cassells report for discussion among political parties about what the future funding of higher education should be. We are awaiting the outcome of that. We are very pleased-----

Shane Cassells (Meath West, Fianna Fail)
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That is a fear. I have a fear that they cannot agree the day of the week. In the interim, given what the budget allocations were in October of last year, the deadline that was set out and what was asked to be achieved year on year to that point, I simply ask whether the witness thinks that will be achieved.

Mr. Seán Ó Foghlú:

We were very pleased to get an additional allocation in this year's budget for the first time in about seven or eight years. That was as a result of the Minister pushing and being committed, in partnership with the Minister for Public Expenditure and Reform and the Government as a whole, to increase investment in further and higher education and training. I believe it is a very important aspect, and we are equally pleased with it, that the Minister published the consultation paper on the proposed Exchequer-employer investment mechanism on 10 March. That is a really positive step forward in demonstrating the commitment of Government to the importance of human capital within further and higher education and training. We are pushing on with the advances and we need further commitments, but there is not just one side of the equation. We have to look at options and be open to different ideas in ways that have a joined-up approach across the various interests to realise this-----

Shane Cassells (Meath West, Fianna Fail)
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Just on that-----

Mr. Seán Ó Foghlú:

The future of our society is dependent on the outputs of our education and training system. We believe that is really important and we need to find ways for everybody to work together to ensure it is maximised to the greatest extent possible.

Shane Cassells (Meath West, Fianna Fail)
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Okay. I accept there was a funding increase, but what was allocated this year was not what was called for. The witness said the Department and the Minister made a call. They did. There were funding reductions in the seven-year period up to 2015. We also saw increased enrolment in those years as well. Those were achieved by internal efficiencies, cost-cutting and so forth. What will suffer and regress if the Minister and whatever Government of the day do not commit to what was set out, given what the witness responded to Deputy Madigan on the question of the primary school figures decreasing?

We have seen the demographics for the projected 26% increase in full-time enrolments in higher education up to 2030.

Mr. Seán Ó Foghlú:

If we do not find a solution to this, everything will potentially suffer, whether it is the proportion of the population going into higher education or the depth and breadth of their experience in higher education. We need a way to address this issue. I do not want to get into a series of hypotheticals but we need a way to address this issue. We have a societal conundrum and we need a way to have a collective dialogue about how to address it.

Shane Cassells (Meath West, Fianna Fail)
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I know Mr. Ó Foghlú does not want to engage in hypotheticals, but in terms of meeting the student support services for higher education and restoring the staffing levels - we have a chart showing increasing enrolments and decreasing staffing levels - something has to give if the figures are not achieved. I want to know what suffers as a result.

Mr. Seán Ó Foghlú:

That is the reason we are seeking to enhance investment in higher education in different ways. That is the reason we commissioned the Cassells report and the Minister secured the investment in the budget. It is also why we published the consultation paper which is under consideration by the Oireachtas.

Shane Cassells (Meath West, Fianna Fail)
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I sincerely hope for all our sakes that the Minister commits to the levels of funding that were sought on a year by year basis up to 2021 in the first instance.

I will now focus on the issue of guidance counsellors in second level education, which was also raised this week. Will Mr. Ó Foghlú outline the timeframe for the reinstatement of the full allocation of guidance counsellors?

Mr. Seán Ó Foghlú:

Progress has been made on the guidance issue. The Government committed further investment in the budget which will give rise to increased investment in increased numbers of guidance counsellors in September 2017. There are further commitments in the programme for Government, which the Government will look at in the context of the next two budgets covered by the programme. Effectively, it is a three year commitment in the programme for Government and one third of the remaining commitment was returned in this budget.

Shane Cassells (Meath West, Fianna Fail)
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I wish to raise the role of the Department of Education and Skills in the provision of the early years education programme. In the past few years, the Department of Children and Youth Affairs developed an early childhood care and education programme which also falls under the remit of the Departments of Health and Education and Skills. People in the early childhood sector find they fall between three stools. In the Action Plan for Education 2017, one of the key themes is the increased quality of learning in early years. The Department states:

We will continue to actively support the Department of Children and Youth Affairs to improve the quality of early year’s provision. We will support the implementation of Síolta and Aistear (the early years quality and curricular frameworks).

The quality frameworks will be supported with training for mentors and training and upskilling of the workforce.

The recent furore at budget time when a small amount of money, relatively speaking, was given as an additional allocation to the early years sector shows the level of ignorance that still exists in this country. There are people in this sector who are championing a programme of education and they were belittled by those who were arguing against that allocation of funding and trying to pigeon hole them as simply childminders. I know Mr. Ó Foghlú would know that those working in this sector are pioneering education there. I would hope that the Department of Education and Skills would be an advocate for them and that it would speak about this sector coming within its remit.

In regard to the commitment in its action plan to deliver quality learning, the majority of people the Department is assisting are working for the minimum wage and my question is whether this is acceptable. I also addressed this question to the Secretary General of the Department of Children and Youth Affairs when he was before the Committee of Public Accounts. Is it acceptable that the level of pay for staff who are being asked to implement Government policy initiatives in early education is so divergent from the pay of primary school teachers?

Mr. Seán Ó Foghlú:

The funding of the preschool sector and the funding of the capitation model is a matter for the Department of Children and Youth Affairs. We do not fund that sector. In my position as Secretary General and Accounting Officer, it is not appropriate for me to give an opinion.

Shane Cassells (Meath West, Fianna Fail)
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I know.

Mr. Seán Ó Foghlú:

However, what I would say is that the Government commenced with funding a one year early years education programme and has now increased it to two years of preschool education. This is really important for the future of Irish education and has the potential to play a significant role. A section of our Department supports the quality provision in the sector embedded in the Department of Children and Youth Affairs. We have a group of inspectors in the Department of Education and Skills funded by the Department of Children and Youth Affairs doing early years inspections on a systematic basis for the first time. We have supports, again led by the Department of Children and Youth Affairs, for children with special educational needs in the sector for the first time in the past year following dialogue between ourselves and the Department of Health. An increasing amount of support and resources are going into the sector.

There is a need to change and upskill over time. That takes investment and we are working with the Department of Children and Youth Affairs in that regard. We hope to see significant changes over time in the effectiveness of education generally as a result of having the two year preschool experience in place on an universal basis. We are really positive about that. We do not shy away from working with the stakeholders across early years education in that regard.

Shane Cassells (Meath West, Fianna Fail)
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I appreciate that answer from Mr. Ó Foghlú but it did not address my core point, which is the pay disparity between what those in early years education are paid and the pay of a primary school teacher. Those pioneers and champions of early years education have stood outside the Dáil on two occasions in the past 12 months, seeking an admission by Government of their role. I have made the point that they have fallen between stools, because, as Mr. Ó Foghlú said, it not under his remit. When I put the question to the Secretary General of the Department of Children and Youth affairs, he said that we are only assisting a sector that is effectively private but both Secretaries General are asking them to implement Government policy. The people in the early childhood sector are working for the minimum wage. I will continue to raise their concerns because they are the first rung of the education ladder for our young children.

I also wish to focus on the anticipated fall off of admissions to primary schools. Will somebody square this circle in terms of the national planning framework that is being discussed at present and a projected population increase over time? Areas of development and growth are being identified. One of the major headaches for the Department for Education and Skills during the period of the noughties was the proliferation of prefab schools due to the population explosion. I have been in the Department of Education and Skills' fine offices in Tullamore where one sees the chart of the hot spots. In terms of getting ahead of the curve and working with the Department in anticipated population growth areas, given that Mr. Ó Foghlú believes there will be a population fall off in primary admissions, what role has the Department of Education and Skills had with the Department of Housing, Planning, Community and Local Government at this stage?

Mr. Seán Ó Foghlú:

First, in spite of falling numbers, it does not mean they will not increase again in seven or eight years, because one can only plan primary education five years out.

Shane Cassells (Meath West, Fianna Fail)
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That is the point I am making.

Mr. Seán Ó Foghlú:

We are working very closely with the Department and the local authorities as planning proposals for new areas go in, where they are setting aside areas for schools, so that we will not be caught out in the way we were in the past. It is not so much that prefabs to extend schools is the issue, rather making sure that when there is a new area for development, there are sites for schools, perhaps one or two primary schools and a site for a post-primary school. That is what we are seeking to achieve and we have much better framework in place in partnership with the Department of Housing, Planning, Community and Local Government to achieve that

Shane Cassells (Meath West, Fianna Fail)
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Mr. Ó Foghlú mentioned utilisation of resources earlier and he referenced a dozen public buildings that had been utilised. In the context of a changing demographic, the population centres were built on the edges of the new towns created on the eastern coast, but there were old large school campuses with few students in the towns.

The student population is falling from what it was in the 1970s and 1980s. Has Mr. Ó Foghlú looked at analysing those large campuses and how they can be utilised, given the demands for new builds on the periphery of towns?

Mr. Seán Ó Foghlú:

When we look at any town or area where there is an increased population, we will look first at the existing provision within the areas to see if we could expand it. We tend to look there rather than to new schools, but in the context of demand for multi-denominational primary education, and indeed not just multi-denominational, the Irish medium is in the same space. We look at a combination of factors at any one time and take account of all of those issues. There have been cases where we have sought to put schools onto land owned not by religious denominations, but the private sector.

Shane Cassells (Meath West, Fianna Fail)
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I compliment Mr. Ó Foghlú and the work he is doing to broaden the school base. I have two children in a community national school, both being reared as Catholics but enjoying the experience of a broad education in the fullest sense within the Ard Rí community national school. I hope that a site will be secured for the building of that school so that it can stop using the pre-fabricated structures it is in.

Catherine Murphy (Kildare North, Social Democrats)
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I will try to keep my questions short and I would appreciate succinct answers, because we are limited in time.

On the €621 million in capital expenditure, of the €8.2 billion in 2015, does Mr. Ó Foghlú have an estimate of needs over the next few years for what the Department's capital obligations might be? I know there have been significant improvements in the past decade or so with school buildings, but I am sure there is a sizeable amount of building at project stage.

Mr. Seán Ó Foghlú:

We do, and we covered that in the capital submission that we made to the Department of Public Expenditure and Reform to seek an estimate to complete the buildings that we have in our plans and the demands for new buildings for demographic reasons.

Catherine Murphy (Kildare North, Social Democrats)
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Do we know the amount in that?

Mr. Seán Ó Foghlú:

It is a future planning issue, but I have-----

Catherine Murphy (Kildare North, Social Democrats)
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That is fine.

Mr. Seán Ó Foghlú:

We understand that the capital submission is to be published in the near future.

Catherine Murphy (Kildare North, Social Democrats)
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The ratio between the spend and the Department would presumably need to go up to cater for it.

Mr. Seán Ó Foghlú:

We have been increasing our expenditure on major projects in recent years, and we will continue to have to keep up major school projects to cater for increased numbers. We will continue to have to keep up a high level of expenditure in those areas. We have completely diversified in how we deliver major school projects. As well as traditional, we also have public private partnerships, PPPs, we are using the education and training boards, ETBs, we have used the Office of Public Works, OPW and the National Development Finance Agency, NDFA, on traditional builds, and we work with local authorities. We have a diverse way of getting schools built as quickly as possible.

Catherine Murphy (Kildare North, Social Democrats)
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Mr. Ó Foghlú tells us there are 98,000 public service employees and 44,000 public service pensioners. Has he done an actuarial assessment for those ratios going into the future? Their longevity is an issue, and there will be other issues. I am just looking at the ratio.

Mr. Seán Ó Foghlú:

The Deputy is right. It is very stark.

We are doing that in conjunction with the Department of Public Expenditure and Reform, with its estimates across the public sector for the number of pensioners in the public sector and how that will be funded. Reports have been published by the Department of Public Expenditure and Reform on future numbers of those who will be subject to public sector pensions. The high number of pensions was one of the reasons given for putting new pension arrangements in place. The pension-related deduction was put into place for public sector workers because of the scale of the pension demand going forward.

We have workforce planning under way with regard to the number of employees in the number of sectors and the funding available for schooling, both further and higher. The schooling issue is primarily dependent on the number of pupils and the further and higher issue is dependent on the level of funding. The levels we have entering further and higher educational training and the proportion of the population which goes on is dependent on the resource. A very high proportion of the population goes on to further and higher educational training.

Catherine Murphy (Kildare North, Social Democrats)
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I will seek clarification about the Grangegorman campus. A very fine piece of work has been done there and will be developed over time. Parts of DIT will be moving onto the campus and then buildings will be freed up. Bolton Street would be the exception, with the others earmarked to go onto the site. What happens to those buildings? Are they owned by the company? Are they owned by the Department? Are they regarded as an asset?

Mr. Seán Ó Foghlú:

DIT was spread across over 40 different buildings when we moved towards Grangegorman. A number of those are rented, so it would cease the rents, and a number are owned by DIT directly. I do not think there is a huge number of buildings, but the plan would be for DIT to sell them to finance the move for increased capacity on the main campus. I do not think a final decision has been made about the future of Bolton Street and whether it might remain, given its proximity to the Grangegorman campus. The aim for the other main buildings is for DIT to move from them, free them up and sell them. It depends on the progress on a number of different factors, and DIT would have to work with us on that, but the idea is for it to provide financing for the new buildings.

Catherine Murphy (Kildare North, Social Democrats)
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On the issue of the redress board, the Comptroller and Auditor General produced a report in the past couple of weeks about the redress scheme and the non-payment of some of the commitments that have been made by some religious orders. Some relate to the Department of Education and Skills bringing in some of those funds. Do those show up in Mr. Ó Foghlú's accounts other than the €898,000? What system is in place in the Department of Education and Skills? What happens to funding after it comes in?

Mr. Seán Ó Foghlú:

We have a couple of points. We will be back here in three weeks' time to talk about the redress board.

Seán Fleming (Laois, Fianna Fail)
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We have a special meeting on this but Mr. Ó Foghlú can answer that one quick question.

Mr. Seán Ó Foghlú:

The additional contributions which were committed to by the institutions after the Ryan report go into a fund for the expenditure by Caranua, up to a maximum of €110 million. The legislation states that any excess goes towards the children's hospital if the money exceeds €110 million. The Oireachtas decided that.

Mr. Seamus McCarthy:

On the accounts, there is subhead A13, which is payments in respect of residential institutions, redress, and cost associated with the Commission to Inquire into Child Abuse. It is on-screen there. It can be seen that the expenditure under that subhead in 2015 was €13.8 million. It was €55 million in the prior year. That reflects the scaling down in the operations of the redress scheme.

Seán Fleming (Laois, Fianna Fail)
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I will address the Accounting Officer on that point. In section 6.5 on page 39 of the appropriation account, he deals with, under the redress scheme, the issue of the contingent liability. Many payments were made up to the end of 2015. There are still some outstanding and categorised as a contingent liability.

My question relates to amounts that are expected to be paid by the institutions to the State. Does the Department have a corresponding figure for a contingent asset? How does the Department account for what it hopes to get but has not yet received? I want to know the accounting position because we have asked this question of other Departments.

Mr. Seán Ó Foghlú:

My understanding is that we do not account for contingent assets.

Seán Fleming (Laois, Fianna Fail)
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In other words, the Department is telling us that the amounts not yet paid by the religious institutions are not even factored into or included or recorded in its accounts as amounts to be received at any stage.

Mr. Keith Moynes:

If I might respond, I think it is prudent practice. The Comptroller and Auditor General mentioned this at previous meetings. It is prudent practice, and generally accepted accounting practice, not to account for contingent assets on the accounts.

Seán Fleming (Laois, Fianna Fail)
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That is fine. If money is due, it is an asset. The Department has made a decision that this money is not due because if it came to the conclusion that it was due, it would be recorded as an asset. The Department has come to the conclusion it is not due and, therefore, it is not an asset. It might be a contingent asset; therefore it will not be recorded. Who arrived at the decision that this amount is not due to the Department? The Department has come to that conclusion; it is not just an accounting issue. The accounting follows the decision. If the Department believed it was due, then, like any other amount due, it would be in there.

Mr. Seamus McCarthy:

Just a clarification. The prudent thing to do is not to recognise a contingent asset on the balance sheet. It is a different point to not note it.

Seán Fleming (Laois, Fianna Fail)
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I understand that.

Mr. Seamus McCarthy:

I think the Chairman's point is about whether there is a note there explaining that there are amounts due.

Seán Fleming (Laois, Fianna Fail)
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The Department has figures for outstanding amounts that are due to it and recorded as an asset. I am not talking about this being a contingent asset. Does the Department not consider the amount that is due to be paid by the institutions as an amount actually due? If it believes it is due and has to provide that it might not get it all, we are into a different question. However, the Department has made a decision not to record it because it has made a decision that it is not due to the Department.

Mr. Seamus McCarthy:

It is not due in the appropriation account. There is a separate special account.

Seán Fleming (Laois, Fianna Fail)
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Is it recorded as a-----

Mr. Seamus McCarthy:

It is recorded there.

Seán Fleming (Laois, Fianna Fail)
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How much?

Mr. Seamus McCarthy:

I do not have the-----

Seán Fleming (Laois, Fianna Fail)
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What is the name of that account?

Mr. Seamus McCarthy:

The residential institutions redress special account.

Seán Fleming (Laois, Fianna Fail)
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Does the Comptroller and Auditor General audit that?

Mr. Seamus McCarthy:

Yes, we do audit that.

Seán Fleming (Laois, Fianna Fail)
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Is it the subject of the Comptroller and Auditor General's special report.

Mr. Seamus McCarthy:

That is what that is drawing on.

Seán Fleming (Laois, Fianna Fail)
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Is the amount that is due on the State's balance sheet?

Mr. Seamus McCarthy:

It is not on the State's balance sheet.

Seán Fleming (Laois, Fianna Fail)
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Because we do not really believe it is due.

Mr. Seán Ó Foghlú:

Something that is due under the indemnity agreement, there is an obligation on the congregations to pay it. Something that is due under a commitment post-Ryan, is a commitment by the institutions to pay it that is not a legal commitment.

Seán Fleming (Laois, Fianna Fail)
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So there is a legal commitment in respect of the earlier amounts, but no such commitment for the second amounts.

Mr. Seán Ó Foghlú:

Yes.

Seán Fleming (Laois, Fianna Fail)
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Are the amounts due on the first half of that recorded as a legal debt in the State's balance sheet?

Mr. Seán Ó Foghlú:

I am not sure about the answer to that.

Seán Fleming (Laois, Fianna Fail)
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Mr. Ó Foghlú is the Accounting Officer and should know this. I will be straight up. Mr. Ó Foghlú does not know if the Department has something recorded in its accounts as an asset or not. I do not mind him getting the help of the Comptroller and Auditor General, but Mr. Ó Foghlú is the Accounting Officer who presents the accounts to him for audit. Let us get the sequence right. The amount relating to the first half is legally due on the indemnity agreement. Mr. Ó Foghlú is accepting that. Is that included on the State's balance sheet?

Mr. Seán Ó Foghlú:

It is a commitment they have entered into that they fully intend to meet, whereas the second was an offer that some of them have changed since they made it.

Seán Fleming (Laois, Fianna Fail)
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Is the first one a debt due to the Department? Mr. Ó Foghlú is saying the second one is not. It is extraordinary that, 15 years after this agreement was reached, Mr. Ó Foghlú cannot answer the question as to whether that debt is legally due to the State and whether it is shown on the State's balance sheet. I could not think of a more basic question at the end of the day. That 15 years on the Department of Education and Skills cannot answer that defies a lot of things.

Catherine Murphy (Kildare North, Social Democrats)
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Can I say on that-----

Seán Fleming (Laois, Fianna Fail)
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Sorry, we will not go into this. We will come back to it. We will want exact answers. If it is legally due, it should be on the State's balance sheet. If somebody feels that it is legally due but that it is not really going to be paid and decides not to include it, we want to know who arrived at that decision within the Department to exclude a legally payable debt and not to include it on the State's balance sheet. We also need to know why and when the decision was made.

Catherine Murphy (Kildare North, Social Democrats)
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Is there a follow-on in terms of how it is accounted for?

Seán Fleming (Laois, Fianna Fail)
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I think Mr. Ó Foghlú gets the point. We will want exact clarification on this before he returns to the committee. We want that sent us in advance. We will park that for today, but I think Mr. Ó Foghlú knows we want that specifically laid out for us before he comes to deal with that special report. We will come back to it on that day.

Catherine Murphy (Kildare North, Social Democrats)
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I am sure the Chairman will give me back a big chunk of my time.

Seán Fleming (Laois, Fianna Fail)
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I will.

Catherine Murphy (Kildare North, Social Democrats)
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That is fine.

I come to something different entirely, home tutors. I heard what Mr. Ó Foghlú said earlier about how that occurred. I have some further questions on that process. Different categories of people will seek home tuition. There are people who actually opt for home-schooling. There is another category of people who find themselves in a situation where their children are out of school, often for fairly complex reasons. They have to go off and find themselves teachers. Invariably, they are at sea. I have come across several parents in that category, including those with a child with special needs leading to behavioural issues, etc. They have to go off and source a teacher for themselves. They often ask me where they should look. Does the change in the categorisation of home tutors have any impact in changing policy in that regard? Obviously, the presumption was that the obligation was on the tutors themselves as almost sole traders, but now they are something different from that. Does that impact on the changing policy?

Mr. Seán Ó Foghlú:

To clarify, where there is home-schooling going on as an option entered into by a parent, the Department does not fund that. Just to clarify, there is no funding for optional home-schooling.

Catherine Murphy (Kildare North, Social Democrats)
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All right.

Mr. Seán Ó Foghlú:

I think the answer to the Deputy's question is "No". It has not changed the policy. We see the home tutor scheme as being an interim support while people are getting back into schooling in some fashion. We see that as an interim measure. We do not have a panel of teachers available to provide home tuition. We have not taken the route of developing a panel. That is correct, is it not?

Mr. Hubert Loftus:

That is correct, but we would be encouraging the tutors to use the Teaching Council list of registered teachers as their mechanism for getting that tutor. What the new payment arrangement for tutors has done is relieved the parents of the administrative burden of making the payments to the tutor and the Department has taken on that administrative burden through the payment of them through the payroll operated by the Department.

Catherine Murphy (Kildare North, Social Democrats)
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I come to an issue which may be driven by schools funding themselves. I refer to the commercialisation of some of the school buildings, for example, in the context of after-school activities. I have no problem with after-school activities. Some of them, such as dyslexia classes, are educational. Sometimes those involved are charged commercial rates for the use of classrooms in circumstances where the activity is educational in nature and is of educational advantage. Is that driven by Department policy or would the Department caution against it?

Mr. Seán Ó Foghlú:

There is a difficulty with the level of school funding and capitation funding in schools seeking to encourage both a community use and a return on the use of their school building. We would encourage them to have access to other funding but we would not set down that they must charge commercial rates for activities on school premises. We very much support the concept of school premises being used by the communities outside of school hours. Schools, including caretaker staff and so on, need to support the use of buildings. It is not just a matter of a building being there to be used; there is infrastructure around it. People would not normally be there in the evening, and so forth. Schools have to pay somebody to come in to monitor the use of the building or to facilitate access. That may be why a school engages in that activity but it is not something that we regulate.

Catherine Murphy (Kildare North, Social Democrats)
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There is an educational advantage for the child and the education system through these types of initiatives. This is not particularly prevalent, in terms of after-school use, but it strikes me that there is something perverse about a school charging commercial rates for educational initiatives that actually benefit the school and I think the Department should caution against that. Such initiatives should be encouraged and I am not suggesting that those running the after-school initiative should not have to pay for a school caretaker but they should not have to pay a commercial charge.

Mr. Seán Ó Foghlú:

We are drafting guidelines to encourage the use, by schools, of their buildings and will consider the Deputy's suggestion in that context.

Catherine Murphy (Kildare North, Social Democrats)
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Going back to the issue of capital investment of €621 million, obviously demographic pressures will drive some new needs, as well as the process of eliminating prefabs and upgrading schools. Where does choice come into play in terms of patronage, the Irish language and so forth? In north Kildare, for example, there is demand for a gaelcholáiste but the Department keeps insisting that the demand be demonstrated, even though it has been demonstrated over decades. It was demonstrated by the opening of a school in Lucan which is fully subscribed. Where does choice fit into the decisions that will be made in terms of the allocation of resources?

Mr. Seán Ó Foghlú:

In principal, the primary issue is to provide a school place for every child and in providing additional schools, to have a process in place to decide on the patronage of those new schools. We cannot expand funding for places, where there enough places available already, for the purposes of choice. We did that to a certain extent up until 2007 or 2008. Given the pressures on the budget now, however, allowing a school to go from two streams down to one stream and building a new school next door is not an efficient use of Government money. In simple terms, it is inefficient to fund for three streams but only have two in use. However, it is never as simple as that and that is why we want to allow schools to reconfigure in the primary space. If there is a demand for more Irish-medium or multi-denominational spaces, the best option is for a school to switch. That way, we do not have to put in the investment again. That is why we have this exercise with the ETBs. In the particular case of north Kildare regarding the gaelcholáiste and an Aonad in the ETB school, that is under active consideration at the moment. The case is very well made and we have committed to actively examining it. I do not see that particular case as one involving huge costs. Hopefully we will be able to sort that one out, given that the demand is shown and there is an expanding number of students in the area. It is where there is a declining or static number in an area that we have a difficulty. We just cannot duplicate provision when provision is so limited.

Catherine Murphy (Kildare North, Social Democrats)
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On divestment, there is a programme under way to change patronage and reduce the level of religious patronage of schools. In terms of school assets, would some of the schools that would be subject to divestment be owned by the religious institutions? If so, has the purchase of those assets been factored in? What way does that work?

Mr. Seán Ó Foghlú:

This is a real challenge area. Our policy was that we did not want to purchase those schools because we felt that we had already invested in them. We have had some co-operation and in some cases, a minimal amount of money could be paid for a long-term lease. That is our preferred approach and we are seeking to advance that in our discussions. We cannot buy back schools that we already partially own but even schools where we only have a small ownership, our preferred position is not to have to buy them back.

Catherine Murphy (Kildare North, Social Democrats)
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Is that one of the impediments? The process has been very slow-----

Mr. Seán Ó Foghlú:

It is one of the impediments but it would not be the primary impediment. As I said earlier, the fact that there can be a majority in favour of choice in an area but not in a single school is part of the challenge. Putting the ETBs into the local dialogue space will, we hope, assist in advancing this.

Catherine Murphy (Kildare North, Social Democrats)
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Lastly, on the legal awards, there are particular issues relating to the awards themselves as well as the legal costs. I presume that over the years there has been a reduction in legal challenges against the Department. There was a plethora of such challenges in the late 1990s and early 2000s from parents seeking appropriate education for their children. Is it safe to assume that has reduced dramatically?

Mr. Seán Ó Foghlú:

Yes, that has reduced significantly. That is not to say that there is not a small number of outstanding cases but the special education cases have reduced dramatically.

Catherine Connolly (Galway West, Independent)
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Are there other cases that are presenting as a group that could be addressed not through the courts but by way of policy, thus reducing legal costs for the Department?

Mr. Seán Ó Foghlú:

We would always keep the legal trends of engagement under review. I am not aware of any single one where a policy intervention would be an appropriate measure. However, we have regular updates that we examine within the Department to see where the trends of legal actions are going. For example, we would have quite a number of challenges in the pay area, in terms of the steps we took on pay during the downturn. Hopefully, some of those will be resolved in pay agreements going forward. That is an example of one area. We have more actions in the patronage area now than we had in the past as we have become more active on that issue. There can be different actions at different times.

Catherine Murphy (Kildare North, Social Democrats)
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What kinds of actions would they be?

Mr. Seán Ó Foghlú:

We had one where a school wished to reopen, having been closed. That case did not succeed. We had one where Secular Schools Ireland - if I have that name wrong I will clarify it in writing - took a case against us in relation to a process for determining patronage. We had ruled it out of the process because it did not agree to the criteria. It won its case, saying that we had not made it clear that it had been ruled out because it did not agree to the criteria. We are now making it doubly clear that if a body does not agree to the criteria, it is not included. When the Department is entering a new space, issues arise and there are legal challenges. We have to learn and develop processes to deal with it.

Seán Fleming (Laois, Fianna Fail)
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I have two questions for the witnesses but before posing them, I want to get the agreement of the committee regarding something that has come up in the Chamber. We are scheduled to begin our afternoon session at 2.30 p.m but I am proposing that we move that to 3.45 p.m. It is a late start and I know it is inconvenient for members but Government business has collapsed in the Chamber. The Government wants to bring forward a Private Member's Bill, with the agreement of its proposer, who is Deputy Alan Kelly. Obviously, Deputy Kelly is here, attending this meeting. He is entitled to hold his time slot but that will mean that the Dáil will have to suspend for several hours and deal with his Bill later on.

David Cullinane (Waterford, Sinn Fein)
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That is a product of having no Sinn Féin Deputies in the Chamber; the whole thing collapses.

Seán Fleming (Laois, Fianna Fail)
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Absolutely, Sinn Féin keeps the Government on its toes.

That is agreed to. We need to let the Business Committee and the HSE know that we are going to defer the afternoon session.

I have a few quick questions and Deputy Cullinane has asked to come back a second time. Is there a transfer panel in place for special needs assistants, SNAs?

Mr. Seán Ó Foghlú:

There is no direct redeployment. There is a redeployment panel from which people have a right to apply for jobs but not a direct entitlement to be redeployed.

Seán Fleming (Laois, Fianna Fail)
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Could the witness explain the difference?

Mr. Seán Ó Foghlú:

Teachers are redeployed------

Seán Fleming (Laois, Fianna Fail)
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Yes, in a region or whatever.

Mr. Seán Ó Foghlú:

Yes. However, the arrangement for SNAs is that they are not redeployed, they are made redundant and have an entitlement to put themselves forward for a redeployment panel if they wish. They can apply for jobs when applications open. Priority is given to people on the redeployment panel.

Seán Fleming (Laois, Fianna Fail)
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They get priority rather than guaranteed redeployment?

Mr. Seán Ó Foghlú:

Yes.

Seán Fleming (Laois, Fianna Fail)
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In recent years there has been competition between third level colleges for particular courses. Is there excessive competition between colleges, with some not filling courses as a result which leads to under-utilised teaching and support staff? Does that arise much? Does the witness understand the point I am making?

Mr. Seán Ó Foghlú:

I understand the Chairman's question.

Seán Fleming (Laois, Fianna Fail)
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I am asking a general question, not looking for specifics. Who can manage that? If every institution decides to run a course in whatever the most fashionable subject is-----

Mr. Seán Ó Foghlú:

There are a number of ways that can be managed. The institutions themselves can engage in the regional clusters that the Higher Education Authority, HEA, has established so that they can work together to respond to employer needs rather than work against each other. The primary way for the State to intervene is through the performance dialogue with the institutions. This has now been initiated and under way for a couple of years. The HEA has a consultation in progress in this area which is examining performance-based funding and so on. Aspects of that issue could arise in that context.

Seán Fleming (Laois, Fianna Fail)
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The regional thing does not answer the question. Many people outside the main cities would be as happy to go to Dublin, Cork or Galway. The region does not matter------

Mr. Seán Ó Foghlú:

If it is two institutions in the same city competing for a course that has limited supply, the regional thing and the dialogue at regional level could help that. If a course is on in Dublin and then is put on in Galway, that is a very specific thing. One would think demand would be there for the two different areas. The issue is really when neighbouring institutions put on competing courses. There is an opportunity to address that sort of thing in the performance dialogue.

Seán Fleming (Laois, Fianna Fail)
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The witness needs to watch out for that. There is unnecessary competition. Third level students are quite willing to travel to different parts of the country to get away from home.

State boards and the higher education institutions are mentioned in the documentation. Where are we in terms of gender balance in higher education institutions? What is the gender balance for all third level institutions?

Mr. Seán Ó Foghlú:

The Minister does not appoint all members of third level institutions. I can get that information for the Chairman.

Seán Fleming (Laois, Fianna Fail)
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Is the witness able to break it down? I am concerned that there is not gender balance.

Mr. Seán Ó Foghlú:

There are legal provisions in both the ITs and the universities about the manner in which nominations are made.

Seán Fleming (Laois, Fianna Fail)
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Does that militate against achieving gender balance in some situations?

Mr. Seán Ó Foghlú:

It should not. It should be the other way around. In more recent legislation we have said that if two nominees are coming forward, at least a man and a woman would be nominated. I can revert to the Chairman with more detail.

Seán Fleming (Laois, Fianna Fail)
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The witness might send me a note.

Mr. Seán Ó Foghlú:

Yes. We can cover more generally because we do monitor the national agency boards, which are completely appointed by the Minister, and we prepare a report on those.

Seán Fleming (Laois, Fianna Fail)
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I suspect there is an approximate gender balance in students at third level. I do not know about the teaching staff.

Mr. Seán Ó Foghlú:

There are actually more female students than male in universities.

Seán Fleming (Laois, Fianna Fail)
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Fine. The witness can see where I am heading. Can he give us a figure for gender balance in third level teaching staff and board membership? I am sure that figure is in the Department's system. I suspect the balance is different at board level than in teaching staff or the student population.

Mr. Seán Ó Foghlú:

The HEA had a process and advisory group chaired by Máire Geoghegan-Quinn which dealt with gender issues generally. It produced a recommendation which we are working through-----

Seán Fleming (Laois, Fianna Fail)
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I know that. Can the witness give us the figures as they are? In regard to the public private partnership, PPP, programme which is covered on page 20 of the Department's accounts, there is approximately €500 million of commitments to the seven projects listed. The note on page 21 indicates that they all include design, build and financing. Is the witness able to give us the financing cost in terms of the APR or interest rate for those bundles? Some of these projects were negotiated a few years ago. Can the witness contact the National Treasury Management Agency, NTMA, or the National Development Finance Agency to see whether that €500 million can be refinanced? Although most of those agreements are in place for 25 years, there should be an opportunity for them to be bought out or refinanced at different stages during the lifetime of the contract. If the NTMA is able to borrow at extremely low interest rates, I would hate to think the Department is paying 5%, 6%, 7% or 8% interest which the State does not need to be paying. A 1% saving on that €500 million amounts to €5 million. If a 3% or 4% saving could be made, it would be significant.

Mr. Seán Ó Foghlú:

Ms Leonard can correct me if I am wrong but my understanding is that these financing arrangements are entered into by the bidders. They enter a commitment for the 25 years. The State is not borrowing the money, the bidders are, so it is not something that we can intervene in.

Seán Fleming (Laois, Fianna Fail)
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I understand they do the borrowing but I just want to know-----

Mr. Seán Ó Foghlú:

Does the Chairman want to know if we have access to information about what their rate is?

Seán Fleming (Laois, Fianna Fail)
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No. Their rate is their rate. When the Department signed the contract, the cost structure of the contract was built up based on the design, the build, the maintenance, plus a financing percentage rate. Is the State irrevocably locked into a 25 year contract?

Mr. Seán Ó Foghlú:

We do not sign up based on that. We sign up based on a single price. The bidders make that up. We do a public sector benchmark which works out what the equivalent would be. We have a process of publishing the public sector benchmarks seven years after they are done up. It would impact on competition to do so sooner. We were the first ones to publish a public sector benchmark and it is our plan to continue with public sector benchmarks.

Seán Fleming (Laois, Fianna Fail)
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Some of these contracts are 10 or 11 or 12 years-----

Mr. Seán Ó Foghlú:

The published public sector benchmarks show what we estimated at the time. The borrowing costs are in public sector benchmarks. We can come back to the Chairman on that point.

Seán Fleming (Laois, Fianna Fail)
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I ask the witness to send in the report on those issues. While it may not be possible to send the most recent, it needs to be looked at. I call Deputy Cullinane.

David Cullinane (Waterford, Sinn Fein)
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My question is for Mr. Mannion because-----

Mr. Seán Ó Foghlú:

If the Deputy could ask his question and then we can see who is best placed to answer it.

David Cullinane (Waterford, Sinn Fein)
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I would prefer to put them to Mr. Mannion. Mr. Ó Foghlú has said it might be difficult for him to answer some of the questions himself.

My first question is in regard to policy on intellectual property. Mr. Ó Foghlú may be able to answer this himself. Research funding agencies such as EU funding, Enterprise Ireland, Science Foundation and so on that publicly fund research all require that the higher education institutes own the intellectual property rights but that they can be commercialised. There are rules on how they are commercialised. Will the witness outline those rules?

What national guidelines are in place? Is it the case that each of the higher education institutes will have its own policies and procedures in place as well?

Mr. Seán Ó Foghlú:

The national IP protocol sets out that commercialisation may benefit higher education institutions and provide incentives to the researchers involved in creating IP. This may include protectable IP and know-how. They can make provision for higher education institutions to have a system for the sharing of income from commercialisation within the organisation, including with the relevant researchers. It is international practice that researchers may hold shares in spin-out companies. The national protocol makes it clear that higher education institutions should have policies and procedures in place that minimise or manage potential or actual conflicts of interests. They have to work within the overall framework.

David Cullinane (Waterford, Sinn Fein)
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I accept that it is international practice. I can accept the logic because one wants to encourage innovation, research, etc. The Secretary General has said that there is a national guideline, namely, the national protocol, and that each of the institutes would have their own guidelines. Who in the institutes would, in the first instance, draw up the guidelines and, in the second instance, have management, governance and oversight roles?

Mr. Seán Ó Foghlú:

That would be within the governance and accountability under the governing body, and the president is the accountable person.

David Cullinane (Waterford, Sinn Fein)
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In terms of the chain of command, who follows the governing body and the president? Would a dean or head of research play a role?

Mr. Seán Ó Foghlú:

It would depend on the arrangements that each institution has put in place.

David Cullinane (Waterford, Sinn Fein)
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Is that not part of the problem? Various institutes have different policies and procedures. When I researched this matter I discovered big variances in guidelines between institutes in terms of their robustness.

Mr. Seán Ó Foghlú:

I am not sure that there is a problem but I am happy to explore whether there is. What we are seeking to do is put in place arrangements for the commercialisation of research. We are seeking to be as supportive as possible of the commercialisation of research, the spin-outs and the employment that arises from that. It is a balance between various elements. The principle aim is to enhance the possibilities for that.

David Cullinane (Waterford, Sinn Fein)
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I accept that.

Mr. Seán Ó Foghlú:

I know that the Deputy does not dispute that.

David Cullinane (Waterford, Sinn Fein)
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Yes. I do not for one second allege that there has been wrongdoing by anybody. I am concerned about processes, policies and procedures. I have heard what Mr. Ó Foghlú said and I get the issue of encouraging researchers to start up companies and commercialise some of the work. Is a distinction drawn between researchers who have no input into governance, management and oversight and those who do play a role in this regard? Does the Secretary General see that it is important to make this distinction? Does he view the role of the head of research in an institute to be demanding?

Mr. Seán Ó Foghlú:

It would depend on the nature of how somebody undertook the head of research role. It is, of course, a demanding role and it is a senior role.

The issue about the codes of conduct for employees and conflicts of interest is the key issue. It is a matter for governing bodies to oversee if there is a conflict between being in the chain of responsibilities for research funding and having a potential interest in the relevant company. I think that is-----

David Cullinane (Waterford, Sinn Fein)
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I want to ask the Secretary General a specific question. Does he see a difference between a researcher who plays no role or responsibility in respect of management, oversight or governance in an institution and somebody who does do so? For example, someone who either takes up a directorship or shareholder role in a company that is co-located in a public institute. Does the Secretary General understand the point that I have made? Would he make a distinction?

Mr. Seán Ó Foghlú:

No, not necessarily.

David Cullinane (Waterford, Sinn Fein)
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Why?

Mr. Seán Ó Foghlú:

Because the person may have an involvement in the company. I do not think we should exclude people who are heads of research from an involvement in the establishment of companies.

David Cullinane (Waterford, Sinn Fein)
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If the person is the head of research, would he or she play a role in how grants and research grants are spent or play an oversight role in that context?

Mr. Seán Ó Foghlú:

One would not want to take somebody out of the innovation space just because he or she was in a management position. I am saying that one would need to make sure that arrangements were in place. Just because somebody is in a management position, I do not think that he or she should be removed from the innovation space.

David Cullinane (Waterford, Sinn Fein)
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I shall move on to asking Mr. Mannion questions. Is he familiar with a company called FeedHenry?

Mr. Christy Mannion:

I know of it, yes.

David Cullinane (Waterford, Sinn Fein)
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Does Mr. Mannion know much the company was sold for?

Mr. Christy Mannion:

No, I do not have the exact figure for what it was sold for.

David Cullinane (Waterford, Sinn Fein)
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It was sold for €64 million. Does Mr. Mannion know how much the Waterford Institute of Technology received?

Mr. Christy Mannion:

I know it had a percentage that it negotiated.

David Cullinane (Waterford, Sinn Fein)
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Does Mr. Mannion know how much the institute received?

Mr. Christy Mannion:

No, I do not know the exact figure.

David Cullinane (Waterford, Sinn Fein)
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Perhaps the Comptroller and Auditor General can confirm the following as the figure is mentioned in the institute's 2010 accounts. It got €1.3 million out of the €64 million paid for the company. Does Mr. Mannion think that was a significant return for the institute in light of the fact that the company was co-located on its campus?

Mr. Christy Mannion:

First of all, it would depend on the arrangements that were made at the time. I understand that there is a process in place.

David Cullinane (Waterford, Sinn Fein)
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Who made those arrangements?

Mr. Christy Mannion:

I understand that there is a process in place in all institutes to actually deal with this particular issue of spin-out companies.

David Cullinane (Waterford, Sinn Fein)
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Who would make the arrangement in terms of shareholding?

Mr. Christy Mannion:

The arrangement would be between the company and the institution itself, which would appoint someone to negotiate on its behalf. I am sorry but I do not know exactly who negotiates on behalf of individual institutions.

David Cullinane (Waterford, Sinn Fein)
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The institute was a very minor shareholder.

Mr. Christy Mannion:

That was the way it was set out. In advance of any of these issues coming up, the percentages are set out as to what is-----

David Cullinane (Waterford, Sinn Fein)
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I am trying to understand the process. In this instance, which is one example, the company was sold for a significant amount of money, of which the institute received a tiny fraction. We have been told that the institute is in deficit. The core funding for the institute has also been cut quite substantially since 2008. In terms of public accountability and people who would be in senior positions in an institution and who might play a role as a director or shareholder, surely we have a right to know whether the person benefited and by how much? How can we find out that information? Is the information in the public domain?

Mr. Christy Mannion:

I do not know if it is in the public domain. I am sure that it is information that could be found out.

David Cullinane (Waterford, Sinn Fein)
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Can Mr. Mannion supply the information to the committee? Can the Department furnish this committee with a breakdown of exactly who got what? I am talking about people who are employed by the State, namely, individuals who worked for the institute. I am not saying that it is wrong that such people would have an association with any the companies. The institute received €1.3 million and it would be interesting to discover how much the researchers who were shareholders received.

Seán Fleming (Laois, Fianna Fail)
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The Companies Registration Office might tell us. I wish to make the point that I do not know whether it is a function of an employer to go into the private financial details of their employees.

David Cullinane (Waterford, Sinn Fein)
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With respect, this matter is a bit different. I am referring to a company that is co-located in a research and development agency.

Seán Fleming (Laois, Fianna Fail)
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I do not disagree with the Deputy or anything but employers are probably limited.

David Cullinane (Waterford, Sinn Fein)
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I do not want to focus too much on the company.

Seán Fleming (Laois, Fianna Fail)
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Yes.

David Cullinane (Waterford, Sinn Fein)
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Is Mr. Mannion familiar with a company called Aceno Mobile Services?

Mr. Christy Mannion:

No, I am not.

David Cullinane (Waterford, Sinn Fein)
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