Batt O'Keeffe (Cork North West, Fianna Fail)

The Government has clearly signalled its commitment to education by providing more than €690 million more for education in this year's Estimates, with a total allocation of more than €9.3 billion for the education sector. This considerable investment has been used to continue to implement improvements at all levels of our education system from primary right through to postgraduate level. Increased numbers are participating in all levels of our education system, including further and higher education. We are investing in developing and reforming our higher education system and investing significantly in research. We have targeted provision of resources for children from disadvantaged areas, special education and the language requirements of newcomer children.

The additional allocation in 2008 has enabled us to provide for more than 2,000 extra primary teachers since last summer. Capital investment continues with almost €600 million being spent on school building projects this year alone. Following the Government's deliberations, my Department is aiming to make savings of €6.6 million this year through efficiency measures across the sector to contribute to the Government's overall adjustment measures. To put this in context, the €6.6 million represents only 0.7% of the overall allocation of €9.3 billion this year.

With changing economic circumstances, this Government must carefully manage the public finances to ensure that as a country we work through the current difficulties and challenges in a manner that ensures past improvements in services can be consolidated and improved upon into the future.

We must take action now to ensure that when there is a cyclical upturn and a recovery in economy growth we are positioned to capitalise on that. The Minister for Finance has made it clear that we must now act to make sure that the financial situation facing us in 2009 is not even more difficult. He has made it abundantly clear that we are not taking what might appear to be the easy option advocated by some, that we go down the futile and damaging road of trying to deal with the downturn by further large-scale borrowing.

I know that the measures being implemented by the Government will help us to ensure that into the future our education system can continue to be improved and play the vital role it has played in the lives of individuals and in the economic and social life of the country.

The overall level of administrative costs in the Irish education system is quite lean, relative to international comparisons. Nonetheless, we must still ensure that efficiencies are achieved by targeting payroll, advertising, consultancy and PR and other costs and by seeking out any other general administrative efficiencies we can make. This is the challenge for my Department, for all its agencies and for the institutions in the higher education sector. The measures being adopted now are that vital first step. By taking them now we are applying immediate corrective action that will produce further savings on a full year basis in 2009.

I would like to give some details of the expenditure savings and other measures on foot of the decisions taken in order to deal with the expenditure pressures. In line with the Government's decision, payroll costs in the education sector will have to be reduced. This means restrictions on recruitment will have to commence immediately commensurate with ensuring a reduction of 3% on payroll costs in 2009. This measure will apply to my Department and to all agencies and bodies across the sector, including the higher education institutions. However, the Government has decided that an across the board adjustment of 3% would not apply to front-line staff in primary and post-primary schools and this includes schools in the VEC sector. This aspect of the Government's decision exemplifies the prudent and careful approach we are taking in applying restrictions.

The increase in teacher numbers in recent years reflects the particular pressures applying to schools as they respond to demographic pressure and accommodating children with special needs. This requires us to distinguish the position of schools from the rest of the education sector. However, we need to ensure resources for schools are efficiently targeted in accordance with the criteria for their allocation. The overall number of teachers and special needs assistants in schools will be agreed by my Department and the Department of Finance. All schools, including those in the VEC sector, will open next September with their teacher allocation that has already been approved. Deputy Hayes should take note of that.

In line with the Government decision that administrative efficiencies must be achieved across the public sector, the education sector must achieve reductions in spending on consultancy services, advertising and PR this year, by at least 50% in 2009. My Department will inform all its agencies and bodies of budgetary adjustments that will be necessary immediately and the measures that must be taken to ensure they achieve the payroll reduction of 3% in 2009.

In the higher education sector the detailed apportionment of the savings between institutions, core funding and funding for the strategic innovation fund and research programmes will be communicated to the institutions by the HEA following consultation with my Department. All the relevant budgets for 2009 will be framed and allocations will be determined on a basis that takes full account of the required 3% reduction. Over and above the specific measures decided by the Government, I must ensure I deal with any emerging pressures. I will need to exercise tight budgetary control until year end and deal with pressures as they emerge by taking any other measures needed to underpin the Government's overall fiscal requirements, particularly with a view to preparing the budget for 2009 in the context of the new realities we face.

This Government has prioritised, and will continue to prioritise, education. I repeat the reductions to be achieved represent 0.07% of my Department's overall allocation. I emphasise there is no reduction in capital investment.

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