Brian Hayes (Dublin South West, Fine Gael)

I wish to share time with Deputy Ulick Burke. I endorse the Labour Party motion and I congratulate the party for putting it on the Order of Business. There is something entirely dysfunctional about an education system where the State defines a school as a charity, yet that is exactly what is happening. In information that I recently received from the Minister for Finance, 420 schools, representing about 10% of the total number in the country, have obtained from the Revenue Commissioners charitable tax designated status for the purposes of raising money from charitable donations. Are we happy that this should be the case? Have people really thought through the implications of this new departure? Schools are now being forced to describe themselves as charities simply to obtain funds to keep afloat.

It is arguable that the 10% of schools that have obtained this tax status are probably from the wealthiest parts of the country. That in itself highlights the growing two-tiered nature of primary education, where wealthier parents can effectively subsidize their children's education, thereby giving them a considerable head start over other children. The segregation that has become such a feature of post primary education in recent years is now becoming very evident within primary education. If this goes unchecked for much longer, the entire strength of our national school system will be dismantled as segregation becomes the order of the day.

If schools are to obtain special tax status due to charitable donations, then at the very least those schools should have to demonstrate to the Department of Finance and to the Revenue Commissioners where exactly the public benefit comes from the status they enjoy. Crucial questions needs to be asked. Is the school open to all? How many children from a special needs background are within that school? Are the school's facilities open or available to the wider public? What is the enrolment policy of such a school? If a new public benefit test is not employed when granting tax designation, it is fair to say the gap will continue to widen, as new benefits can only be enjoyed by a small selection of schools.

As a rich country we have been getting our education system on the cheap for too long. The spectacle of schools surviving on weekly lotto draws is a kind of embarrassing and tacky admission that education in Ireland is funded on the basis of leftovers. Schools are asked to make ends meet on bits or scraps. The Government really believes that much of what goes into education should be provided on a voluntary basis. We even witnessed the spectacle yesterday where Government backbenchers stated on the national airwaves that parents enjoy fund-raising activities. What planet are they on?

Listening to the Minister for Education and Science last night, there is no sense that she is fully engaged with the hand to mouth financial operation that school managers have to encounter on a daily basis. Listening to her, one could get the impression that it is really the fault of the school that seems unwilling to recognise the great strides that we have made, according to the Pravda like announcements from the current Government. She lives in a parallel universe where the quality of propaganda and spin from her Department is more important then the quality of the funding we make available to our schools. It is time that era of spin was brought to an end.

While I accept that tonight's motion is focused on providing a proper financial footing for schools, there are other things that need to be done. There needs to be a review of the time of the year that capitation grants should be paid, rather then the current regime where massive overdrafts have to be entered into by schools. There needs to be additional supports for schools in disadvantaged areas where fund-raising is not an option, as well as a review of the school start-up grant which is woefully inadequate. We need to review how waste and water charges can be removed from schools' running costs and to investigate the feasibility of the State Claims Agency taking a role in providing insurance for schools, currently one of their biggest annual costs. I cannot understand why the State cannot underwrite insurance in all our schools, rather than asking each school to pay for the insurance cost. Have we not got the capacity, through the State Claims Agency, to develop a model of insurance which allows a small premium to be paid by all schools or no schools at all? Such a model exists for other State buildings and throughout the public sector. Finally, we need to examine the possibility of extending VAT relief to schools, as they cannot be described as businesses but must pay VAT at 21%. Can we redesignate schools for the purposes of reducing their VAT bill so they can at least get relief on the claims they make?

We also need an independent commission, free of political and departmental interference, with the power to assess and recommend capitation levels. A proper comparative study needs to be published which will show our funding arrangements in comparison to other EU school funding arrangements and whether we meet international best standards. I have been calling for this for the past six months. We need an independent international commission which will report to this House within six months on what should be paid by the Government and the kind of funding mechanism that needs to be employed. With schools falling into debt and parents propping them up, a whole new way of thinking about education funding is needed. That can begin with the establishment of an independent commission, and I make that proposal.

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