Mr. Michael Casey:

Committee members will be aware that the Cassells report set out a number of options, all of which involved additional investment in the context of core funding.

I suppose core funding is the funding that keeps the institutions ticking over. It is the bread and butter stuff. It is the area that has suffered dramatically in the past decade or so. It is fundamental to the quality of what universities produce, whether it is at undergraduate or research output level, etc.

The Cassells report had 2015 as its baseline. At the time direct State grants to third level institutions amounted to €923 million. By 2019 that figure had increased to €1.1 billion, but in analysing the figure, it translates to an increase of €189 million over the period, with €102 million being subsumed by increases arising from pay restoration and centrally agreed pay costs which are outside the control of the universities. The increase in funding, net of pay awards, over the period was €87 million. The Cassells report identified a number of options. Now we are faced with the status quowith respect to maintaining the student contribution and increased State funding. The report identified increased investment by the State of €842 million by 2030. If we assume that figure applies on a flatline basis over the period, it amounts to €56 million per annum. On that basis, by 2019, we should have seen an increase of €225 million in real terms. As I indicated, the actual increase was €87 million; therefore, we are €138 million shy of where the Cassells report identified we should be. That is fundamental to the quality of what we produce and it is one of the risks for the sector in terms of investment.

Quality is a tricky issue with which to deal. As a representative body for the universities, the quality of what we produce is fundamental. We need to maintain that quality. We are trying to promote what we produce, but with the lack of investment, it is inevitable that quality will be at risk. We do not necessarily want to say this, however, because it can become a self-fulfilling prophecy. The reality is we cannot absorb the cutbacks in funding without there being some impact on quality in the long run. The big risk from a quality perspective is that there tends to be a time lag between investment and quality. By the time we, as a state, realise quality may be impacted on, we could be chasing ten years of investment to try to get ourselves back into position. The time lag is a critical factor. We need to realise as early as possible the importance of investing and maintaining quality.