Professor Patrick O'Shea:

I am delighted to be here. I have recently returned from 37 years in the United States, working most recently at the University of Maryland. Though just returned, I am fully aware of the financial constraints Irish higher education sector has been operating under for the past decade, and I think the people of Ireland and the Government are to be congratulated for their accomplishment and forbearance during this difficult time.

UCC has risen to these challenges with increasing student participation, increased graduate output, lower staff numbers and growth in income diversification to offset the reduction in State support. While the university has provided briefing papers to the members on the areas the committee wishes to examine in detail, I will make the following comments on the overall financial performance during the period 2013 to 2014, while my colleagues will be in a position to provider greater detail to members during the session.

Income from operations was €285.4 million and shows a decline of €5.2 million, or 1.8% from the previous year, primarily due to the reductions in Exchequer funding in support of all teaching, learning and research activities. While academic fee income has increased year on year, it did not increase to a level to keep pace with the Exchequer decline. Research income recorded a welcome increase of €1 million to €79.4 million. To offset the decline in income, expenditure at €290.3 million is lower by €4.7 million as the university reduced pay by €1 million and operating costs by €1.5 million, despite rising student numbers. Depreciation is also lower by €2.6 million, given the continued reduction in Exchequer grant support for the university’s estate. Overall earnings before depreciation, interest, tax and amortisation result in a surplus of €4.4 million. However, when adjusting for depreciation and amortisation, the net out-turn for the year on the income and expenditure showed a deficit of €4.9 million, primarily due to a greater level of depreciation vis-à-visamortisation due to asset revaluation. There was a delay in 2014 of total resolution of funding issues for the dental school and hospital, and there was the overall decline in State funding for higher education. Reserves on the balance sheet following the performance in the year have declined to a surplus of €138.1 million, comprising revenue reserves now of €3.9 million and revaluation reserves of €134.2 million.

In the longer term, the decline in capital support for the sector remains a major concern. The existing recurrent funding model assumes continued Exchequer support for ongoing refurbishment, maintenance and infrastructural capacity needs. The absence of same will seriously impact the quality of higher education and further increase the financial pressure on already reduced operational funding. On funding policy, the sector urgently requires the ambition we all have for our young adults to be matched by implementation of one of the recommendations of the expert group on future funding for higher education, currently being considered by the Joint Committee on Education and Skills. In saying this, I acknowledge that legislators must make difficult choices with competing demands for limited resource allocation. As pointed out by the chair of the group, Mr. Cassells, doing nothing for funding of higher education is no longer an option. The changing geopolitical landscape presents some real opportunities for higher education. There is a great opportunity for higher education to contribute strongly to the overall economic recovery.

I myself am committed to ensuring accomplishment, transparency and accountability for all taxpayer resources that flow to the institution. I want to build trust between public, legislators and the university. I want to increase the socioeconomic and ethnic diversity of our student population. I am a strong supporter of what I call “needs blind admission”, which is that those who can pay should and those who cannot pay should be provided with necessary financial support to realise their potential. I support the application of knowledge we create at the university for the benefit of the community, society and economy. I am committed to increasing philanthropic funding for the university to leverage the contribution the State already makes to the university. My own overriding goal and ambition for my tenure is that after my stewardship at UCC, we will be seen as a great modern metropolitan model of a research university that is dedicated to discovery and understanding of knowledge, its dissemination through education, and to application of that knowledge for the good for all people.