Mary Hanafin (Dún Laoghaire, Fianna Fail)

Gabhaim buíochas le Ceannaire an Tí as ucht an chuiridh theacht anseo chun labhairt ar an tuarascáil fíor-thábhactach seo faoi thodhchaí oideachais ag an triú leibhéal dóibh siúd a bheidh ag freastal ag na hollscoileanna agus ag na hinstitiúdaí. It is an important time to discuss the OECD examiner's report. I know several Members will have a particular interest in the recommendations made and how they can be progressed and, in the first instance, finding with which recommendations they agree. I look forward to the contributions of Members, which will enable me to give further consideration to the report.

The Organisation for Economic Co-operation and Development has a long and productive history of engagement with the Irish education system. I need only remind the House of its involvement in the 1966 report on investment in education. This landmark report not only provided the rationale for the creation of free secondary education but also fed into the deliberations of the Commission on Higher Education, which, in turn, led to the creation of the Higher Education Authority. Another OECD study, on technician training in Ireland, led to the establishment of the regional technical colleges, now the institutes of technology. These structures have been the foundation on which we have built our economic and social progress in the past 30 years. In recent years in particular, unprecedented levels of economic growth were made possible by the numbers and quality of skilled people produced by our education system.

Of course, growth on the scale we have experienced poses its own challenges. Ireland today is a very different place from what it was some 40 years ago. In 1965, some 21,000 students were in higher education. Now, there are over 137,000 students, pursuing a range of study opportunities that would have been unimaginable a generation ago.

The enormous strides we have made in the development of higher education are down to sustained investment by successive Governments and to the leadership and flexibility of those in the higher education sector who have responded to the demands placed on them for greater and wider provision of higher education opportunity. Having come through that period of sustained growth, it is timely to ask ourselves whether the structures and policies in place are still adequate to meet modern demands. What is working well and what is not? Have we structures in place to enable us to adapt as quickly as the pace of social, economic and technological change demands?

The world around us is changing rapidly. The nature of Irish society, the profile of global economic competition and the frontiers of knowledge are all advancing before our eyes. The role demanded of higher education is changing. It is no longer simply a third level educational tier, providing qualifications for professional careers or a platform for curiosity driven research. It is now identified as an essential engine of knowledge in a national innovation system.

At a broader level, higher education has key roles in promoting social cohesion, supporting individuals to achieve their life potential, promoting cultural and civic understanding and contributing to our overall quality of life. It is in this overall context that the OECD was invited to conduct an independent, wide-ranging review of our higher education system. A central purpose of the review was to identify current strengths and weaknesses in the system and to make recommendations that would support Ireland's strategic ambition of placing its higher education system at the front rank of OECD countries. As part of its deliberations, the distinguished team of examiners appointed by the OECD met with a range of bodies and individuals within and outside the sector during a visit to Ireland in February 2004. In addition, some 88 submissions were made to the review group.

The report makes 52 far-reaching recommendations. These address structural and institutional reform, as well as wider policy and funding issues, including financing, management and modernisation of the sector and the wider co-ordination of Government policy on higher education and research. It recognises the very substantial achievements of the system to date but states that Irish higher education is now at a crossroads. Our strategic national objectives for economic and social progress place a premium on knowledge, skills and innovation. These are the key foundation stones on which our future prosperity, and the wider social dividends flowing from that, will be based. Our higher education system is therefore a key piece of our national infrastructure for meeting the challenges of the knowledge era. The Government's enterprise strategy report and Ireland's national action plan for research and development to 2010 each emphasise that key role for higher education.

Recognising this central role the report makes a series of recommendations and I would like to use this opportunity to outline and consider them. The report identifies the need to create a national strategic agenda for higher education and to align this strategic agenda with policies for investment and funding. This is at the heart of the challenge for Ireland to successfully complete the transition from being a technology-importing low cost economy to a technology-based innovation one. Reflecting the centrality of higher education, the report recommends the creation of a national council for tertiary education, research and innovation to be chaired by the Taoiseach. This is intended to provide for a whole Government approach to the establishment of key national objectives for the sector.

The report also recommends the creation of a new tertiary education authority, which would have responsibility for both the university and institute of technology sectors. The new authority, replacing the existing Higher Education Authority, would be centrally positioned to develop funding and other mechanisms to promote unified strategic planning for the sector in support of the national strategic agenda.

Continuing distinct roles for the university and institutes of technology sectors and a clear differentiation of mission between them are recommended. This is intended to ensure a continued provision of a progressive range of awards — from certificate through to PhD level — needed to meet the needs of individuals, society and the economy. A particular role is recommended for the institutes of technology in promoting regional development.

The thinking behind these recommendations is based on a clear logic. Higher education is central to a range of Government objectives. There is a need, therefore, to harness wider inputs into the development of the key national objectives for the sector. The mechanism proposed — a national council — is one of a number of possible options for achieving this.

The importance of aligning the key strategic objectives with policies for investment and funding is of course crucial. The recommendation for a single policy and oversight body for the university and institute of technology sectors is consistent with long-standing policy thinking. The recommended single authority would have a crucial role in ensuring that the overall strengths and potential of the system are maximised through the promotion of greater inter-institutional collaboration. It would also be well placed to ensure that individual institutional strategies complement one another and are consistent with regional and national social and economic priorities.

As the report outlines, the institutes of technology have brought great strength to the Irish system through their differentiated focus on supporting regional development, the applied nature of their roles and their emphasis on sub-degree provision. This diversified model has been extremely successful for Ireland in meeting the varying needs of students, the economy and society and I welcome the report's recommendation that it should be maintained into the future.

It is important to ensure that higher education opportunities continue to be available on a regional basis at all levels. This is necessary to promote access to higher education through providing a foothold on a ladder that can lead to further progression through the levels. The development of the national framework of qualifications by the NQAI has been a major breakthrough in opening up new possibilities for progression and transfer. Its potential is based on the availability of adequate opportunity at every level. The needs of industry and regional economies are also relevant. These suggest that there will be a continuing need for a distinction of institutional mission between those that will seek to develop as research leaders and those that will primarily focus on the provision of the human capital skills required for the labour market of the future.

In the interests of the ability to respond to opportunity and change, the report recommends major internal structural reform within higher education institutions. It recommends that the size of university governing bodies should be substantially reduced and that the governing bodies of all third level institutions should contain greater levels of representation from wider stakeholders. The need for greater flexibility in salary structures and a concomitant need for greater rigour in processes for obtaining academic tenure are identified, together with a range of measures aimed at ensuring greater internal managerial effectiveness within institutions. These are complex issues that will need to be worked through in partnership with leadership in the sector, my Government colleagues and other interests.

A number of institutions are embarked on far-reaching programmes of internal restructuring and reform and some have already made significant progress on this front in recent years. These are very welcome efforts to confront the issues faced in creating, on an agreed basis, the structures and processes necessary to develop institutional capacity to meet the challenges ahead. It is important that these modernisation objectives are supported. I have previously stated that I see an important role for the funding allocation mechanism in supporting and promoting reform efforts that support national strategic objectives. This will form an important element of my approach to the implementation of the report's recommendations.

The funding allocation mechanism is also critical to promoting progress on a range of wider key policy objectives. The report recommends a new funding allocation model that would align funding to the achievement of key policy objectives to a much greater extent. Work is already being advanced by the Higher Education Authority on the basis of these principles,

The examiners recommend a continuation and strengthening of measures to improve access for disadvantaged groups and mature students. The recently established National Office for Equity of Access to Higher Education has an important contribution to make to the development and implementation of policy in this area. A particular need is identified to substantially increase levels of part-time provision across the sector, in a lifelong learning context, to meet the skills needs of the economy and to promote social inclusion. There is some important thinking to be done in identifying potential funding mechanism approaches to promoting progress on this front.

Clearly, higher education's role in research and development is now critical to our national economic development strategy. The OECD report acknowledges the huge strides made in the provision of public funding for research and development in recent years through measures such as the programme for research in third level institutions, PRTLI, the establishment of the two research councils and the creation of Science Foundation Ireland. Substantial ground has been made up over the past seven years. However, that investment will only yield dividend if the commitment to funding is sustained. The Government's action plan for promoting investment in research and development to 2010 has spelt out the challenge.

The OECD report points out that international experience strongly suggests that research needs to be institutionally concentrated in order to build critical mass and develop world standards of excellence. It recommends that the role of the institutes of technology should continue to be primarily focused on applied research and should act as technology development partners with industry. On the challenge of achieving the Government's investment objectives for 2010, the report identifies the need to double the number of PhD students in our universities within that timescale. This requires a much greater concentration of efforts and investment in postgraduate support than hitherto.

The importance of co-ordinating structures for research funding and policy in supporting a sustainable research culture is emphasised. Important recent progress has been made on this front with the appointment of the Government chief science adviser, Dr. Barry McSweeney. I was very pleased last week to attend the first meeting of the Cabinet Committee on Science, Technology and Innovation. This committee, which is supported by a high level interdepartmental group of officials, will co-ordinate strategy across Departments, review departmental spending plans in the areas of science and technology and address any co-ordination and cohesion issues arising. It will have a vital role in advancing progress towards the 2010 goals.

Underlying the overall OECD report is the need for further investment in higher education. Given the economic and fiscal realities facing Ireland, the authors do not believe that it will be possible to create a globally competitive higher education system and research capability by relying on State funding alone. The report argues that higher education institutions are constrained by their over-dependence on State investment and that the quantum leap in funding that is required can only be met through the re-introduction of an enlarged student contribution. It recommends the re-introduction of tuition fees for undergraduates, accompanied by a targeted grant scheme to assist low income and other special needs students.

The recommendation for the re-introduction of fees has been clearly rejected by this Government and is off the agenda. The need for greater investment and the challenge of identifying potential means for realising that remains very much on the agenda. This is a significant implementation challenge. In addition to the major strides on research and development funding, the Government's commitment to higher education has seen day-to-day funding for the sector more than double since we took office.

I have previously stated that higher education funding will be a priority for me in the future. However, as Members appreciate, there are many competing demands on the Exchequer that inevitably limit the ability to make a quantum leap in funding for any one sector, whatever its strategic importance. The challenge of securing increased investment for higher education is one that must be shared between Government and the sector itself. Clearly there is a need for institutions to diversify their funding sources. The report identifies some potential avenues. Equally importantly, there is a need for Government and the sector to work closely together in ensuring that the conditions for diversified funding are facilitated. I intend to work closely with the sector in exploring possibilities in this regard.

The authors of the report clearly took a great deal of care and attention in arriving at their recommendations. The report was informed by a comprehensive consultation process and by the distinguished expertise of the examiners themselves. It clearly behoves us to take the recommendations seriously. There can be no disputing the central thrust of the report, which is that we must "up our game" on a number of fronts if we are to forge ahead in an increasingly competitive global market.

We have a higher education system of which there is much to be proud. It has contributed in huge measure to our economic success and social progress over recent years through its ability to absorb a huge growth in demand for participation. We do not have the option of standing still. The world is rapidly moving on and we need to anticipate and respond to the demands of tomorrow. The challenge is to ensure that our higher education system has the capacity and dynamism to lead and respond to that change. The importance of this extends far beyond the field of "education" as narrowly defined.

I will be working closely with a number of my colleagues in Government on the agenda that the OECD has presented. I will also be working closely with the Higher Education Authority, leadership in the sector and the wide range of other interests that have a stake in our successful progress. Only last week, along with officials of my Department, I met representatives of the Higher Education Authority, the Conference of Heads of Irish Universities, the Council of Directors of Institutes of Technology and the DIT to consider in depth a number of the report's key recommendations. This meeting is part of an ongoing dialogue with interested parties that will inform the approach to key priority actions that I will be seeking to advance over the coming months. I will be reporting back to the OECD on implementation progress in two years' time — when I hope I will still be Minister for Education and Science. In the meantime, I am delighted, as Minister, to have this report available to me as a crucial instrument in developing policy for higher education in Ireland in the 21st century.

I am glad of the opportunity to share some preliminary thinking on this subject and I look forward to the contribution of the Senators, many of whom have first-hand experience of the third level sector. Their contributions will enable me to formulate my further thinking on this important report.