Mary Coughlan (Donegal South West, Fianna Fail)

The Exchequer expenditure figures for October 2010 were published last week. Education capital expenditure of €456 million is running €102 million behind profile at present.

The school building budget is less than €50 million behind profile. The substantial reduction in construction prices has meant that my Department is achieving greater value for taxpayers' money. Contract prices are now sometimes up to 40% lower than when they were at their peak and a significant proportion of this is an additional reduction on 2009 average prices. Furthermore, difficulties within the construction industry linked to very low tender prices are creating delays, for example, confirmation of the availability of a bond prior to a contract being awarded is taking much more time. In addition, the costs of sites have been reducing and there have also been some delays in completing planned site transactions arising from legal and planning issues.

There are 32 major projects commencing on site in the second half of the year. This is a significant number of sites progressing through tender and to construction. In total, it is expected that by the end of this year 53 new schools will have commenced on site. This compares to projects for 34 schools going on site last year.

As I mentioned at a meeting of the Oireachtas Joint Committee on Education and Skills in June last, I had asked my officials in June to draw up possible contingency plans in the context of the expenditure challenges. I am looking at possible revised expenditure allocations to compensate for the softening of expenditure on schools capital within the Department's overall capital budget.

The Department's current budget is tight this year and there is little contingency available if unexpected expenditure arises in the next eight weeks. This may arise in the area of pensions, for example, where a number of late applications for retirement may be received. Therefore, it may be necessary for me to take a prudent approach and set aside a small amount of the capital budget to cover for recurrent spending contingencies. This will be kept under constant review.

The main other areas where the Department's capital expenditure is running behind profile are ICT grants and higher education. In terms of ICT grants, €24 million was allocated to almost 3,300 primary schools last week and the funding has issued. There is no underspend in this area. The budget for higher education institutions is some €32 million behind profile. This is a matter of the timing of the issuing of payments.

It would not be expected at this time of the year that the entire capital budget would be spent. The Government is continuing to roll out a vastly improved infrastructure for those at all stages of their education.

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