Mary Hanafin (Dún Laoghaire, Fianna Fail)
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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.

Terry Leyden (Fianna Fail)
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I call Senator Ulick Burke, who has ten minutes to respond.

Ulick Burke (Fine Gael)
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I understood I would have 15 minutes.

Terry Leyden (Fianna Fail)
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I understand that spokespersons have ten minutes.

Joe O'Toole (Independent)
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On a point of order, it was agreed on the Order of Business that spokespersons would have 15 minutes.

Terry Leyden (Fianna Fail)
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If that is what has been agreed, that is fine.

Ulick Burke (Fine Gael)
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I welcome the Minister to the House and I welcome the discussion on this important report. The Minister will appreciate the urgency of many of its recommendations, which need Government attention and need the Minister in particular to respond positively.

I welcome many of the indications given by the Minister today, in particular the fact that the re-introduction of fees is off the agenda. Members will recall that around this time last year we were discussing this issue as it was a recommendation of the Minister's predecessor. I am delighted it is now off the agenda.

I am also glad that the Minister involved herself in consultative talks last week with all partners in education at third level. That is an important and welcome development. She will be aware, from her meetings with those groups, that high, if not uppermost, on their agendas is the inadequacy of the funding available at third level. Many of those present at the meetings would have indicated that there is a near crisis in funding in many universities and institutes which is strangling them in terms of their hopes to advance and develop. I hope this report might represent the first step in, once and for all, putting in place a strategy and plan for the funding of third level education.

The OECD review of higher education in Ireland resulted in its publication last September of an important and detailed report. It was a comprehensive study of where Ireland lies in relation to other OECD countries. This document reaffirms the critical importance of education in all respects. The OECD report is clear that the importance of tertiary education to Ireland's economic and social development, which cannot be disputed, should not obscure its role in the intellectual and artistic life of the nation or the contribution it makes to citizenship and civil society.

The September OECD report clearly shows that educational attainment has expanded greatly in recent decades. For example, 77% of those between the ages of 25 and 34 have completed at least upper secondary education. This is a welcome development as it is above the OECD average. The figure, however, for those between the ages of 55 and 64 is only 37%, far below the average. This displays that Ireland has come a long way towards a position of relative strength from one of relevant weakness. Lifelong learning, widening participation and the encouragement of mature students to enter tertiary education have not been given much emphasis and must be reinforced in the future if Ireland is to capitalise on its success during the past decade.

It is clear that Ireland's economic strength and success are linked to investment in education not only at higher level, but at all stages. Some of the findings in the OECD's report should ring alarm bells in this regard. Ireland's investment in the education system, as a whole, is lower than the OECD average. In terms of public expenditure, it ranks 25th out of 30 OECD countries. Between 1995 and 2000, public expenditure declined from 4.7% to 4.1%. Furthermore, expenditure per student in tertiary education in Ireland is also below the OECD average. In that regard, we rank 14th out of 26 countries. The CHIU claims that direct State support per student in the university sector fell by €1,240 between 1995 and 2000.

Of considerable concern also is the question of expenditure in the area of research and development. As a proportion of GDP, Ireland's research and development budget is well below the EU and OECD averages. From a lifelong learning perspective, the OECD found that the proportion of mature students entering higher education is extremely low. On the question of educational disadvantage, it noted that great disparities exist in terms of the participation of students from families of different socio-economic backgrounds at third level. In 1997, the proportion of new entrants aged 26 and over to university level education was only 2.3%. This compares to a figure of 19.3% in other OECD countries.

Despite the great expansion in student numbers, to which the Minister referred, and the introduction of student grant schemes in 1968 great disparities continued to exist in the participation of students from families of different socio-economic status. This did not change significantly after the abolition of tuition fees for undergraduate studies in 1995-96.

The OECD's findings in respect of inadequate funding did not come as a major surprise to even casual observers of the Irish education system. The Conference of Heads of Irish Universities has frequently referred to the often precarious financial position in which those institutions find themselves and likened the decision of the Government to freeze increases in university funding in 2004 to an equivalent cut in funding of €800 per student.

The president of UCD, Dr. Hugh Brady, recently outlined that, for the first time in its history, the university is in the red. He indicated the serious consequences this will have for development and stated that UCD is €3.5 million in debt at present. This figure will continue to rise during the year. That is a clear example of an institution on the border of crisis. Nothing the Minister said earlier indicates that she will support universities and other educational institutions throughout the country that are in major financial difficulties. During last year, Trinity College made soundings similar to those of Dr. Brady.

It should be remembered that education at all levels requires enhanced support. We need to tackle problems such as early school leaving and absenteeism in order to retain the highest possible number of young people in education. The Government has made a commitment that by the end of this decade 90% of all people will complete the leaving certificate examination. Encouraging high achievement rates at second level will have a corresponding effect on third level participation rates and success. To date, however, the Government has made painfully slow progress in respect of this commitment. Each year, at least 18% of secondary school pupils leave school before completing the leaving certificate. It is an indictment of successive Governments that this high level continues to obtain. In addition, it is of serious concern that more than 1,000 children fail to make the transition from primary to secondary school each year. Participation at third level is hugely dependent on people's earlier experience of education. When children are lost to education at the ages of 11 or 12, it is a mammoth task to encourage them to re-enter the system.

There is considerable merit in the OECD's recommendation that a tertiary education authority be established. As envisaged, this would be a single funding authority for the universities and institutes of technology which at present come under separate funding arrangements. The current system is outdated and may stifle the further development of the institute of technology sector. I am anxious to hear the Government's plans, other than those outlined earlier by the Minister, in terms of progressing this recommendation. Governments all over Europe are devolving responsibilities and freedoms to educational institutions. This is balanced by tough accountability mechanisms which encourage them to act more innovatively and to be more adaptable and responsive to local opportunities.

On the question of the return of third level fees, many people who saw this as a threat will welcome the fact that the Minister has clearly outlined the position. Fine Gael, as the main party in the Government that abolished the fees in 1990, will not agree to their return in any form. The former Minister for Education and Science favoured their return, but such a response to the funding difficulties of the universities and the institutes of technology would only compound educational disadvantage. Furthermore, I believe that if the Government reintroduces third level fees in any form, this could then be used as a reason to cut its contribution to the higher level education sector. The net result would be to charge students tuition fees while leaving universities and institutes of technology in the same financial situation. It is absolutely unacceptable.

The OECD has already recognised this possibility and has made a key recommendation on page 28 of its report which states:

In order to incentivise HEIs to actively seek external sources of funding, the Government should make a clear statement that income they generate from the sources outside those provided by the State, will not be the subject of offsetting against State funding.

The Minister may have failed to do that but perhaps she will comment on this later. The Government should now make such a statement as higher educational institutions require greater stability in funding.

It has been noted many times that considerable damage is done to the work of these institutions when their funding situation is chopped and changed or is unreliable and piecemeal, as has happened in the past. There is something of a contradiction in the report as regards the fees questions. While on the one hand it does not insist that students should not share the cost of their tuition, on the other hand it recognises the difficulties that may be caused by these fees. On page 30 of its report, the OECD review group states:

Another important area is part-time education, which is normally seen in many countries as the established route through tertiary education for students, often mature students from disadvantaged backgrounds. In Ireland the attractiveness of such a route is dissipated by the fact that unlike full-time students, part-time students are not eligible for maintenance grants and have to pay their fees.

That is one particular aspect that must be addressed by the Minister in the near future if we are to recognise the contribution that many people at work could make, by furthering their education along the steps of the ladder she referred to earlier, if they were given equal status with full-time students. I am aware of a foundation course in an institute of technology that failed solely because the students were forced to pay fees. Little recognition is given in the report to the fees students have to pay in another way, namely, registration fees. Nobody would have believed that these would have gone from the nominal fee as originally intended up to the current levels of €700 plus.

It is crucial that the question be asked whether the reintroduction of fees for full-time students might have the same negative effect upon education participation. There are recommendations that the educational institutions need to take on board as well as regards third level structures including outside experience in the college management equation. In addition, the report states clearly that Government bureaucracy should not frustrate enhanced co-operation and interaction between universities and institutes of technology. The OECD report refers to an attempt by University College Cork and the Cork Institute of Technology to develop a joint marine and nautical research and teaching centre. It finds that this initiative was frustrated by the inability to arrange complementary funding from national sources, within the work timeframe.

We know Ireland lacks a national strategy agenda for change in the third level sector. More than anything else priority in education demands that the Minister put together a third level plan for funding in particular. This would allow the third level institutions to progress with confidence, enhancing the solid foundation they have already established for themselves through their wonderful initiatives to give the Irish workforce an added advantage when we are competing for outside investment. If there is a doubt in anyone's mind that there is not wholehearted support from the State as regards funding for the management of third level institutions, that could precipitate a rot which will be difficult to redress.

Liam Fitzgerald (Fianna Fail)
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I welcome the Minister whose contribution I found interesting. Some points were more interesting than others. She emphasised at the outset that this was a major report into third level education. While I agree with some of its conclusions I have reservations about others. Senator Ulick Burke referred to a number of issues about which he has concerns. I am sure the Minister will address those in her concluding remarks.

As an independent review of higher education in Ireland, this is an important report. It is probably one of the most comprehensive evaluations made in a generation. It would be remiss not to compliment the OECD on the high-powered team it engaged to carry out the task, people of high calibre and international experience. This reflects the degree of seriousness it gave to the task as well as the central importance of higher education in the priorities of the Minister and that of her predecessor, Deputy Noel Dempsey, in charting future social and economic progress in Ireland. The Minister pointed out that Ireland was at a stage of transition as regards economic development and the world market and is facing rapid change. Our broad strategic objective is to make Ireland a world leading knowledge-based society. In that sense this report is timely.

For over 40 years, as the Minister said, the OECD has played an important role as a catalyst for change in Irish education. Its 1960s review is widely regarded as a defining moment in Ireland's recognition of the vital link between education and the social and economic development of the country. There is widespread consensus that the Celtic tiger would not have emerged in the absence of a well-educated young population. There were many other factors, but that one was of central importance. Even though the report identifies enormous challenges facing higher education in Ireland, it must be acknowledged that great progress has been made in recent times. The whole higher education landscape has changed beyond recognition, in many respects.

Ireland was one of the first countries in Europe to grasp the importance of the link between education and the economy. In 1965, for example, only about 11% of those completing second level education went on to third level. At present the percentage is in the order of 57%, so that a significant sea change has taken place. This change has been accompanied by an almost threefold improvement in average material living standards.

Although we have made great progress, the Lisbon Agenda and Ireland's strategic objective of placing its education system in the top rank of the OECD necessitated an in-depth evaluation at this time. We all acknowledge the critical role education, research and innovation have played in our social development. Our priority is to sustain education as the driving force behind the engine of that progress, socially and economically.

The report sets out the nature of the challenges that face the country, the Government and even the Minister. These challenges are to ensure that our education system is properly placed to perform its key role in the knowledge society. It tells us very clearly that higher education is at a crossroads. If we are to have the capacity to respond to the new challenges, notwithstanding the great progress that we have made, the system has to undergo a number of changes. One of these is the quantum leap in funding.

The funding issue is central to where we go and the obvious prescription put forward by the report is the re-introduction of fees. The Minister has taken that off the agenda. We had a big debate on that last year in the House. The Minister's predecessor was strongly in favour of the re-introduction of fees, but the current Minister has seen that there is no support for such a move. She has rightly decided to talk to the heads of education establishments about diversifying investment sources. That is very important and I commend her in that regard.

The recommendations are set out against the background of a high wage economy in Ireland. They make clear that if we are to retain our new found wealth, we must develop into an innovative, knowledge-based economy. We can no longer compete for high volume manufacturing jobs with the low cost economies of Asia and eastern Europe. We must therefore concentrate on attracting higher value activities rather than higher volume. Our ability to attract inward investment will depend to a growing extent on the ability to offer access to a highly skilled labour market. An example of this is the fast pace of change in the needs of the world market. We can no longer be sure of the skills we will need a few years from now. In the next decade, five out of six jobs created will be for third level graduates with degrees, diplomas or certificates. There will be a greater demand for degree holders and, by 2015, they will represent the largest group in the new economy. The pace of change means that skills and occupations can become obsolete within a few years.

The challenge for the higher education sector is its capacity to upskill its workforce. To deal with these changes, the higher education institutions will have to restructure internally. They will have to show enough flexibility to succeed in a new and constantly changing environment. A number of these institutions have already embarked on internal reform in preparation for the new challenges they are already facing. I commend the Minister on the way in which she is supporting them in their attempts to reform.

Senator Burke referred to UCD and the fact that it is in debt for the first time in its history. I commend UCD on the manner in which it is attempting to reform its structures. There are a number of institutes across the country that are doing likewise. This approach is consistent with one of Ireland's key objectives during its Presidency of the EU, which was the promotion of the Lisbon Agenda on competitiveness. It acknowledged that lifelong learning has a key role in ensuring that the workplace is adaptable and capable of reacting to frequently changing demands. Wealth creation for the future will be based on our ability to produce and to apply knowledge. The recommendations reflect those of the Government enterprise strategy group. People are of the view that there is no strategy, but I believe that the recommendations reflect the views of the enterprise strategy group set up by the Government, as well as the national action plan for promoting research and development until 2010.

The fundamental message coming from all sectors and from the report is the same. Our key competitive resource is knowledge and our higher education sector has a critical role in delivering that national resource. The call for a quantum leap in funding has been seized as a stick with which to beat the Government. It is claimed that inadequate action has been taken recently. That is totally contrary to the facts as we know them. There has been much investment in research and the development of infrastructure in the higher education sector. It has been transformed to an unprecedented extent since 1997.

Funding has doubled in the higher education sector. Student numbers have increased from 104,000 to 137,000. Participation rates have increased from 44% to about 57%. At the same time, the research and development programme has changed beyond recognition. The programme for research in third level institutions, which was launched in 1998, has funded 33 new research centres across a range of disciplines. To date, it has supported 1,400 research posts and 90,000 sq. m. of dedicated research space. In addition, the Government set up two new research councils — the Irish Research Council for the Humanities and Social Sciences and the Irish Research Council for Science, Engineering and Technology. These councils support individual research projects across the various disciplines and they have a combined annual budget of €23 million. Science Foundation Ireland was set up to fund strategic areas of research in ICT and biotechnology. Between 2000 and 2006, it has an investment budget of around €646 million.

Despite all this investment, the issue of funding the increasingly critical role of higher education has to be confronted. It is a central, critical issue and the report sets that out. The main prescription for that is the reintroduction of fees. Having considered that throughout last year, the Minister and the Government have quite rightly taken that off the agenda.

Joe O'Toole (Independent)
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We heard that last year.

Ulick Burke (Fine Gael)
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The Senator is on the record.

Liam Fitzgerald (Fianna Fail)
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Very cogent arguments were made last year in support of the motion that was tabled, which were contrary to the one-liner that was thrown at us by the Opposition. Nevertheless, I put up my hands and accept the political realities. That is where we are at and we have to go forward from there.

One of the other recommendations to address this issue was that of internationalisation. The Minister and her predecessor have been abroad to a number of countries to establish contacts and to make links. If the programme of internationalisation can be promoted further, it will help to generate revenue for Ireland and it will improve standards here as well. For it to be successful, we have to guarantee the quality of our education system in a way that will enable it to be recognised and validated internationally. We must have an international quality brand for our higher education system. I assume the Minister's recent trip to China was interesting in that context. I look forward to hearing from her about initiatives she took while there and the subsequent developments that have taken place.

One of the areas of focus for the report was our binary system at third level. The university sector is long established in Ireland, but the institutes of technology began in 1970 with the establishment of the regional technical colleges. They filled a vacuum that was there at the time and they have worked very efficiently under the remit that was given to them. In addressing this issue, the report acknowledges that there has been mission drift, with universities and institutes of technology taking over work that is more appropriate to the other at different times. There were proposals to dismantle the system and I would have concerns about such a move. In Britain, many polytechnics were promoted to university status with disastrous consequences. Our disproportionate share of US technology investment, when compared with that of England, owes as much to the contrast in our education systems as it does the differences in the incentives we give to these investors. That is very much a plus for the continuation of the binary system here. I support the report's recommendation that both sectors should concentrate on their defined and distinct functions and to an extent on those which are complementary.

The report recommends the unification of the third level funding system under a new tertiary education authority to prevent mission drift in any direction through the use of a funding approach based on individual institutional contracts. The report states that if Ireland is to become a world player as an information driven, knowledge-based economy, it will have to double its output of doctoral graduates by 2010, which is a significant challenge. The report also states that doctorate awarding powers should be confined to the universities, a view with which I tend to agree.

Among the strongest criticisms of the report is that it pays little or no attention to the humanities and the arts. I agree with the Minister that there is a major social dividend to be derived from the progress of education through economic development. There is no conflict between the humanities and arts sector and industry, research and innovation, which are quite complementary. I compliment the Minister on the proposed initiatives she outlined today and those she has already taken in the short few months since she came into office to implement the recommendations of the report. Significant challenges face the Minister which I have no doubt she will embrace as opportunities rather than consider daunting prospects.

Joe O'Toole (Independent)
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I welcome the Minister to the House and thank her for participating in this debate. The report is staid, unimaginative and uninspiring and the Minister should ignore most of it. I will guide her in my contribution through those aspects of it about which she needs to think. I am sure she can produce something a great deal better on her own than the contents of the report.

I was delighted that Senator Fitzgerald, the Fianna Fáil spokesman on education in the House, referred to the extraordinary manner in which the report disregarded the arts and humanities. It worried me to note a point in the Minister's speech which implied she bought into the report's perspective in this regard. She referred to the continuing need to distinguish between the need to develop research leaders and labour market needs. While I have no objection to that approach, if it is the whole story, we will produce a generation of robotic Gradgrinds who do not know how to run a country. Hand in hand with that approach, we want a policy which seeks to create a generation of innovative, creative, strategic and tactical young people with leadership qualities. The great flaw in the report is its failure to consider this model.

The report is political as evidenced by the fact that its most significant point was that our investment in education as a percentage of gross domestic product is not only reducing but less than that of the other OECD countries listed. I hope it is a matter the Minister will bring to the Cabinet's attention. The statistic represents perhaps the only value the Minister can derive from the report as she can flag the fact to Government. We cannot do the business with such a low level of investment in education. The Minister touched on some of the important points made in the report which we should take on board. It described the institutes of technology as like a curate's egg in that they are good in parts. While the report is patronising to the institutes on one level, it is supportive of them on another. We should take note of what is positive.

As the Minister said, the report suggests it is crucial to create one tertiary education authority to deal with universities and institutes of technology, which the report describes as institutes of tertiary education. While the terminology is unimportant, we should support the recommendation and I call on the Minister to do so. I acknowledge that there is a process to go through first, but the Minister was overly coy in her speech. I would like to hear her say that is her view. If it is her view, she by ministerial order or the Government by statutory instrument can create circumstances in which institutes of technology can come under the HEA. That is my understanding of the legislation, although I see the Minister shaking her head.

While most of the report's recommendations on the structures and governance of colleges would require legislative changes to implement, I thought from my reading of existing legislation that it would be possible by order to make changes on funding arrangements. It is a matter I would like teased out. While I would not expect her to provide it today, perhaps the Minister can make available legal advice in her own time. I would like to know the ins and outs of the matter.

Whether one's idea of the university accords with the medieval thinking of Peter Abelard, that of Cardinal Newman 100 years ago or modern thinking, autonomy within a third level institution is crucial. It is nonsensical, as the report points out, that an institute of technology must obtain the permission of the Department of Education and Science to establish a degree course. The practice has never been sustainable, but as a gap needed to be filled 20 years ago, we had to put structures in place quickly. As she is an educationalist herself, there are certain matters on which the Minister does not require a great deal of advice. This is one of them. Everyone here knows the practice is wrong. I suspect that in providing institutes of technology with autonomy and bringing them into the same funding structures as universities, the Minister's greatest problem will not come from her Department but from Merrion Street. We should take on the officials from the Department of Finance and bring them here to defend their point of view. From an educational perspective, what they are trying to do in this area is unacceptable.

The seven universities and the 13 institutes of technology should be brought under the same authority. Clearance systems would have to be established in the structure whereby any course it was intended to establish achieved a certain level of quality. That has always been the case in universities and it should continue. The report states that one of the difficulties institutes of technology face is the lack of a quality assurance scheme. However, it also states that we should not rush ahead while we are waiting for the Bologna declaration to be implemented all over Europe. It will be some time after the Minister has been re-elected for another term before the Bologna declaration comes into effect around Europe. We will still be arguing about whether a degree takes three or four years to complete and whether four years in an institute of technology is equivalent to three years in a university. We should ignore the process. If we need quality assurance, we should have it. If we had introduced it previously, one of the most serious rows in third level education in recent times would have been avoided.

The point brings me neatly to another of the great failures of the report. While it referred to the knowledge society, of which Senator Fitzgerald spoke also, lifelong learning, globalisation and the international context, it made no reference to e-learning. Does it contain anything about e-universities or the selling overseas of courses based in Dublin? Who are its authors? They must constitute the most unimaginative group to manage to write a full report on internationalism in third level education without dealing with e-learning and e-knowledge. It is astonishing that this has been produced by the OECD. The authors should be kicked out of its base in Paris to see something of the world. They seem to be retired people, although I do not want them to take this personally. However, they were simply having a couple of days' enjoyment in Ireland. I certainly did not see any fresh thinking or new learning. They avoided the political issues, because the OECD is so political. They point out that we have a huge gap in investment, but do they say we should put more State investment into the system? No. They talk about the need to improve private income stream and fund-raising. They make a valid point that universities, third level institutions and institutes of technology which manage to attract research funding, fund-raising and donations should not be penalised in any way in terms of what they get from the State. In fact, if anything, they should be rewarded. I would go along with that assertion.

These people are politicians and therefore avoided any embarrassment to their Government by going back to whoever might be in Paris next year at the next meeting of the OECD to ask, "Who are those people to tell us we should put more money into education?" However, we should say it, the Minister should say it and we should do it. If the Government decides it will not do so, at least we will know where the difficulties lie.

If we had quality assurance in education, together with e-learning proposals and plans, we would not have had a row last year with regard to Hibernia College and the colleges of education. The colleges of education are good, e-learning is great and e-qualifications are a brilliant idea. Before there was any row, we all thought it was great. Now we have a situation whereby somebody has started to provide e-learning and there is significant opposition. Is that right or wrong? There is only one way we will know, which is through quality assurance. We got into a debate that opposed e-learning. My instinct is to support e-learning until somebody tells me why I should not do so, whereas most of the educational establishment oppose it until somebody tells them why they should support it.

We need to keep moving on the issue, and the only way to do so is through quality assurance. If quality assurance was in place and somebody came to the Minister or her predecessor and said they had compared e-learning and the traditional way and found no difference between them in that one was as good as the other, then we should carry on. If they said that one was better than the other, then we would have a problem. Which is better? Which comes up best in a comparison? People must allow the decision to be made. The issue of e-learning is another gap in the OECD report and the matter should be raised and returned to.

How dare these people tell us about our regional programme. I refuse to discuss this simply on the basis that it is an educational document from the OECD. I will tell the Minister one thing and she can come back to me on the matter: if we implement what the report is suggesting there will be no university north of a line from Dublin to Galway. That is what it means. The BMW region, with the exception of Galway in the south west of the region, will not be entitled to seek a university, never mind places such as Waterford which has made a substantial case. It is anti-competitive, to use the OECD's type of language, to state that institutes of technology cannot award degrees. It is anti-competitive for the report to patronisingly state the institutes of technology are not good enough to offer doctorates. It is also quite patronising to state we should have doctorates in universities and perhaps a sidekick supervisor also based in the institutes of technology. I see no reason for this. If an institute of technology focuses strongly on an important aspect of education, learning or technology and wants to bring that to doctoral standard, it should do so. We should not place artificial restrictions on where a university might be situated. That is not what it is about, neither does it fit into our spatial or gateway strategy or review of the BMW region. It is unacceptable that the BMW region would not be entitled to develop university education in its own way.

The idea of waiting for the Bologna process to come into play will only slow us down, and the Minister should ignore that idea. The issue of overseas and international students also ties into what I said regarding the importance of e-learning. However, it does not just relate to e-learning. In terms of getting more people into third level education, the report ignores whole groups in society. What is our strategy? Let us take an example of a woman in her home in north-west Mayo who would like to go to university and get a degree but has domestic responsibilities. She is bright enough to easily get through a degree and make a contribution to Ireland's economy and social capital. E-learning is the way for her to achieve this. Harvard can do it, so why can we not do likewise?

Why can we not sell Irish literature programme degrees based in Dublin to Boston? They do so in the United States. Canada sells such degrees into Chicago. What we are doing here is restrictive. These people are not opening their eyes. They are probably restricted by national boundaries. They are absolutely right in their criticism that we have not sufficiently opened up to international students. However, one codicil to that criticism is that we have had difficulties with the Royal College of Surgeons in that some would say it is allowing in too many international students to the detriment of Irish students who should take priority. There is no doubt about that. However, that goes back to the fundamental point that we do not invest enough in tertiary education. My understanding is that the Royal College of Surgeons does not have enough money to extend places and it is very much reliant on the income stream it gets from international students. That is a catch-22 situation and we cannot allow it to happen. The Minister must hammer the Cabinet table and say it cannot be done. If we want more GPs and consultants, this is a problem which we must unblock. That is where we go.

E-learning would similarly bring mature students into the system. If somebody is working in a job in the BMW region, far from a university, and he or she wants a university qualification, he or she should be able to do so through e-learning.

The Leas-Chathaoirleach is getting edgy.

Paddy Burke (Fine Gael)
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The Senator's time is up.

Joe O'Toole (Independent)
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I should look at my script. I have pointed out some of the issues which I thought the report dealt with well. I am sure the Leas-Chathaoirleach will agree with one of the issues, and spoke about it last year. The report states there should be no distinction in terms of fees between part-time evening students and full-time students. That is only right and proper. There is a sense of inequity in that area which offends us all.

The OECD made points regarding doctoral awards, not allowing doctorates at institutes of technology and not allowing such institutes to become universities. However, these points are not proven in its report.

Regarding the implication that there would be no university north of a line between Dublin and Galway, Senator MacSharry recently talked about the importance of developing an educational strategy. I am sure he will say more about that today.

I did not get a chance to address the issue of research and development. I am absolutely appalled to learn from the report that two thirds of the money invested in research and development in Irish universities comes from foreign non-nationally owned companies. That will kill our future. Fifteen years ago we were the worst among our European colleagues in terms of investment in research and development. I thought the situation had improved, but that simple statistic bothers and worries me. We should insist that indigenous industry gets involved in research and development and that two thirds figure should be inverted as quickly as possible.

I wish the Minister well and thank her for coming into the debate. I hope she takes some points on board, in particular that the institutes of technology should be moved into the same funding arena as universities, that they should not be restricted in their development, that they should be given a quality assurance scheme to allow them to develop, and that they are not restricted from developing in the direction of becoming universities if they so wish. The latter is not a necessity unless it suits them. The famous Massachusetts Institute of Technology has never found it necessary to become a university. I am not putting this forward as an issue regarding status. It is about what they feel they need for their community, students, area and regional development. The people from the OECD who tell us about regional development have much to learn. The Minister could tell them a lot.

Ann Ormonde (Fianna Fail)
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I welcome the Minister to the House. It is my first opportunity to wish her well with her new brief. I know, perhaps more than many, that she will do a very good job.

The OECD report on third level education represents a sort of brain-storming exercise. It is perhaps also a foundation for policy making. As the Minister said in her speech, it is something on which the future of higher education will be based. I compliment the team that produced the report because it made me reflect on what is involved. I would welcome another opportunity to discuss this report. I began reflecting upon it over the weekend along with other activities but my thinking is somewhat scrappy and I am not sure I have got it right in my own mind as to how the report's various recommendations should be handled.

I welcome the opportunity we now have to move third level education into the 21st century. The structure of tertiary education has not changed much over the years since I was in college, which was neither today nor yesterday. The governing bodies have not changed very much and neither have the heads of departments. The key recommendation on changing structures is a good starting point because when one implements any policy one must examine the existing structures. Unless those structures are altered, one will not have a fluid operation within the system.

The Minister is to establish a new tertiary authority, with policy-making and funding roles, which will incorporate the universities. The university sector has changed over the years. At one stage there was only the National University of Ireland. When Maynooth became a constituent college it comprised four universities. The Royal College of Surgeons is also part of the sector.

We started off with regional technical colleges, which became institutes of technology — a plethora of which have since been established all over the country. Within the past 25 years there has been a sea change in the development of third level education. Access to such education must now be re-examined. I am glad the tertiary authority is to be established as it will define the divisions between universities and institutes of technology.

The Minister is also establishing two committees to supervise the management of universities and institutes. However, there is to be only one chair, so I wonder how that will work. I am worried about whether it can work. Perhaps I have not read the report properly but that proposal appears to be somewhat clumsy.

The report recommended a reduction in the number of governing bodies and that their composition may change from 36 to 22 members. The report also recommended an emphasis on the non-academic membership of governing bodies but I am concerned about how such a change might be implemented. I am all for outside representation on governing bodies, which reflects the views of the public, but one also needs heads of departments to be represented. The balance between academic and non-academic staff in the composition of governing bodies must be right. I would like the Minister to clarify what she proposes by changing the numbers and composition of such bodies.

I agree totally that we should change the management structure relating to departmental heads whose role should rotate. Heads of university departments can often become staid in their thinking so opportunities should be provided for new people with experience and skills to enter the system and alter course content. I would welcome such movement in the composition of university departments and those of institutes.

In order to widen access to universities and institutes of technology, we must examine the three leaving certificate formats, namely, academic, vocational and applied. Some students may wish to improve their skills by attending a post-leaving certificate course. From there, they can progress to certificate and diploma courses before eventually obtaining a pass degree. The plethora of courses coming on stream is mind boggling.

Access to third level education must be examined in light of the participation of part-time students, the phenomenon of lifelong learning and the provision of structures for those opting for an indirect route to university. There is a knock-on effect involved in such developments. Students who try so hard to gain access to third level courses — sometimes sitting the leaving certificate four times — but fail to do so, should be allowed greater access to tertiary education. The Minister should examine that matter carefully to see what she can do about it.

The Minister is proposing the establishment of a new council because the institutes of technology are so fragmented. Courses are also duplicated and I am worried that in some places we will see courses in dish washing being offered. We should not take the route of some American colleges because I want to see courses on offer here with a high quality of content. From attending such courses students will be able to shape up and obtain access to degree courses. Postgraduate studies will also evolve naturally if the fundamental principles are correct. I would encourage that approach in order to harmonise courses offered by the institutes of technology, thus avoiding fragmentation. Such a development would involve not only the Department of Education and Science but also the Department of Enterprise, Trade and Employment.

As regards third level funding, we need to develop further the knowledge-based system which has boosted our economy over the years. The humanities must not be forgotten, however. I come from that background and I would hate to think that I would not be considered as good a manager because I did not have a degree in science and technology. I would like to think that the Minister will not overlook the humanities in her consideration of tertiary education.

There is a big challenge ahead but the Minister is able for it. As regards change, she must take into account the current composition of universities as well as the fragmentation of the institutes of technology. Business and community links must be developed also when it comes to providing funds for third level education.

The OECD report is a brain-storming exercise which has forced me to reflect on many current issues facing tertiary education. Before the Minister formulates any major new educational policies, I hope she will afford us the opportunity of debating them.

Joanna Tuffy (Labour)
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I wish to return to a section of the OECD report on page 30 which has already been cited by Senator Ulick Burke. In the context of part-time education, the report states that in many countries it is normally seen as an established route through tertiary education for students, often mature students from disadvantaged backgrounds. As Senator Ulick Burke stated, the report underlines that the attractiveness of such a route is dissipated by the fact that unlike full-time students, part-time students are not eligible for maintenance grants and have to pay fees. Tallaght was given as an example of an industrial area where there would potentially be a significant market for part-time programmes if fees were omitted.

It strikes me that the OECD is trying to have it both ways on the fees issue. It states that fees are a disincentive to part-time study while at the same time calling for one regime for part-time and full-time students. It is ludicrous to suggest that fees are a disincentive but if they were brought in for both full-time and part-time courses they would be less of a disincentive. That does not make any sense.

The initial reference I made to the OECD report brings me to a point I have made a few times in the Seanad, namely, that looking at and dealing with inequality in the education system involves not just the most recent year's group of school leavers. Approximately 50% of school leavers do not go to college. In the 1980s that figure was in the region of 80% and the percentage before then was higher again. In 1992, 64% of school leavers did not go to college. School leavers who left school in 1980 are in their 40s now and those who left school in the early 1990s are in their 30s. Most of these people are either actually or potentially in the workforce. They should have expectations to be in employment for many years to come.

I recently analysed some figures from the Central Statistics Office regarding educational qualification levels of adults in the workforce. They show that 46% of people aged between 40 and 54 left school with, at best, a junior or intermediate certificate. Of those aged between 35 and 45, only 36% left school with only either primary or lower secondary level qualifications. A substantial part of our workforce is disadvantaged in regard to their educational qualifications. We need them in our workforce but in order to have a competitive workforce we have to improve their qualification levels. That is a very central part of what we need to do in addressing the OECD report and the many other reports that have referred to the area of lifelong learning.

The promotion of lifelong learning is essential in tackling disadvantage. In addition to helping those who have lost out on our education system in the past it would also help those who cannot access third level education in the traditional way. The leaving certificate should not be the only route by which one can get into college and the traditional model of three to four years full-time study should not be the only way to pursue further education. If lifelong learning was central to the way third level education was delivered, we would not have the same pressures to get leaving certificate points and the points race would not have the pre-eminence it currently has in determining access to college. The most important part of the OECD report is the need to implement our White Paper on lifelong learning.

In order to put lifelong learning at the core of our education system, we must remodel the way third level education is provided. Third level institutes must be encouraged to provide a more flexible model of education that is credit-based. People should be allowed to study part time during the day or at night, go back to study or go from one level to another.

I have a small amount of experience in education in that I worked as a clerical officer in the admissions office of Bolton Street college which is part of the DIT. One of the things which most impressed me was how one would see students who started in the college doing a part-time certificate programme at night but who ended up doing postgraduate studies, having progressed through diploma stage and the full-time degree programme. The institutes of technology have led the way in that regard but much more needs to be done. UCD recently introduced its horizons programme which is based around the idea of building up credits. It is a flexible system which allows one to do different types of subjects, such as biology with an arts degree or whatever. I welcome that type of initiative. That has to become the way in which our education system is delivered.

The Department of Education and Science must do more to force the education providers to offer a flexible model of education. One way to do that would be to fund education courses on the basis of their provision of credits as opposed to the provision of years. The effect of that would be to blur the differentiation between part-time and full-time education and encourage mature students into the system. This would allow all students to be treated in the same way in regard to fees. Thousands of full-time course places that are currently vacant could be filled by part-time students if the provision of third level education was looked at imaginatively.

That type of model would also help reduce the number of people who drop out from college. If students could go from a full-time degree to part-time study along the way perhaps they would stay within our system. In the past it has very much been the case that if a person left a full-time degree course there was little chance of he or she returning to complete it. That was certainly the case when I was in college.

I very much welcome the Minister's statement that fees are off the agenda. I hope she will continue to take this approach. It is a Labour Party initiative that I do not want to see taken away. It has been an important step in improving access to third level institutions. Although a great deal of evidence is not yet available to show how participation levels in education have improved, the figures that exist point to an improvement and that is the important thing.

I hope next year's Clancy report will show increased levels of participation since 1998 when the last Clancy report was published. Even if it does not, different factors have to be taken into account such as, for example, the many school leavers who would have been encouraged during the healthy Celtic tiger economy to earn money for their families rather than enter third level education. In dealing with access it is important to look at the way education is provided as opposed to whether there are third level fees.

The Minister stated that the OECD report identified the fact that it now costs much more than it did in the past to provide third level education. It should be borne in mind that it is not the provision of third level education that has contributed to its increasing cost but the increasing demands placed on third level institutions, especially in regard to research and development. Business benefits in that regard. Those are the people we should look at in terms of providing more funding for the education system if the State cannot do so. Third level students are the State. They and their parents pay the taxes that are used to fund the third level sector. Students are not contributing to the increasing cost of third level education and they should not be landed with the burden of having to pay for those increasing costs. The business sector needs to be brought on board in that regard. A number of people in the institute of technology sector have told me that, in implementing this document, we must recognise the importance of the institutes of technology and the role they can play in delivering improvements in research and development. They have a great record of providing education which is based around applied sciences and can play an important role in delivering applied and enterprise-based research. However, they need the funds to enable them to do so.

Marc MacSharry (Fianna Fail)
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I wish to share my time with Senator Kenneally.

Rory Kiely (Fianna Fail)
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Is that agreed? Agreed.

Marc MacSharry (Fianna Fail)
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I am grateful for the opportunity to make some points on this issue. I welcome the OECD report. It is timely to have a review at this stage. Moreover, there is no better person in either House than the Minister for Education and Science, Deputy Hanafin, to make the necessary improvements and changes as Ireland evolves and requires more specific and strategic planning. It is clear from speaking to the IDA, Enterprise Ireland or any other agency that human resources are the most valuable currency in the procurement of foreign direct investment into the future. We must seek to breed, create and attract more intellectual property. In order to do so effectively, it is clear many of the recommendations of the OECD report will have to be adopted.

I have some concerns regarding the institutes of technology. As Senator O'Toole rightly pointed out, I would like to support the possibility of a university, or a group of institutes becoming a university, being established north of the line between Dublin and Galway, particularly in the context of the national spatial strategy. It is vitally important that, in any implementation of any of the plans in the OECD report, the institutes of technology have equality of status with the seven universities. The proposal for two committees with one chair under the new body which is to be set up is a good one. However, if statutory instruments are required to establish the committees they should not be too rigid in order that institutes of technology could respond in terms of fulfilling their remit by reacting to the needs of the students and by filling the various voids in the regions in which they operate.

The term "mission drift" is one of those new phrases like "going forward". In the case of mission drift, the mission should not be too clearly defined in terms of either type of college. I fundamentally disagree with my colleague, Senator Fitzgerald, that doctorates should only be within the gift of universities. That feeds into the issue of the area north of the line between Dublin and Galway. There was a very heated debate about St. Angela's College in this House but there is no constituent college of the NUI north of the line between Dublin and Galway. We are very proud to have St. Angela's in Sligo, we have excellent institutes of technology in Sligo and Letterkenny, as well as GMIT. We could also examine the possibility of cross-Border institutes, taking in Fermanagh or Derry, as well as St. Angela's College to establish a group of campuses to form a north-western university or something to that effect.

I realise that may be difficult but it needs to be acknowledged as an aspiration and we should seek ways in which we can make it a reality. If we are ever to achieve our aspirations under the national spatial strategy, we will have to examine the issue of creating critical mass in the region and, in order to do so, we must have the full range of educational facilities available which includes university status of sorts.

I would like to see the institutes of technology having increased autonomy in terms of expenditure, specifically in terms of how that expenditure is used on infrastructure. A number of the institutes of technology have driven good initiatives through their own strategic plans and we should examine and salute the many positive developments which have derived from them rather than knock them down. Traditionally, there has been an issue with the elitism of the universities being compared with the innovation of the institutes of technology, thereby creating two tiers. We need to move away from this view.

Although this is a debate on the OECD report on third level education, Senator Ormonde referred to second level, the points system and how many people have to sit the leaving certificate several times in order to qualify for a course they want to study. I did not attend a third level institution because I did not achieve the points required for the courses in which I was interested. No other facility was open to me. I know people who studied medicine because it required the highest number of points. Although such people might have had the academic ability to achieve those points, they had the acumen of librarians.

While we are examining second level as part of a bigger plan, we need to seek to introduce a greater focus on nurturing and harnessing the natural entrepreneurial flair which exists in young people and which we are losing. If we could do that, we could breed our own icons and role models, rather than always looking to the likes of Michael Dell or Bill Gates.

Brendan Kenneally (Fianna Fail)
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I thank Senator MacSharry for sharing his time with me and welcome the Minister to the House. I had wished to speak about the issue of fees in regard to third level funding but there is inadequate time to do so. Some sort of incentive is required whereby third level institutions which are performing well are rewarded. I do not agree with much of the OECD report. However, I agree with a section which states:

The success of the institutes sector needs to be nurtured and celebrated so that its differentiation from the university sector is not seen as conferring lower status but defining it as an equal partner in a dynamic higher education system which covers a diverse range of functions but, if it is to be fully realised, some of the organisational disadvantages of the present structure need to be addressed.

When the Minister visited Waterford Institute of Technology she informed me that she is well-disposed towards changing the way in which funding is allocated because institutes of technology are suffering. One of the recommendations is that the differentiation of mission between the university and the institute of technology sectors is preserved and that, for the foreseeable future, there will be no further institutional transfers into the university sector. As a representative of Waterford and the south east, I cannot accept that view. We have been making the case long and hard. There are deficiencies in the area which can only be addressed through the provision of a full university.

In making the case for my own region, I am using some of the data from a recently-published IBEC south-east document entitled Time for Action, which is a strategy document on the infrastructural needs in the south east. It is generally recognised that the south-east region is underperforming in terms of the economy, enterprise and employment. However, the potential for growth in the region should not be underestimated. With a young population, the south east already has one fundamental element in place. The challenge is to put in place the necessary infrastructure without delay.

The south-east region has much to offer but it now needs the essential infrastructure to enable it to capitalise on this potential in terms of economic growth and employment generation. One of the priority projects for implementation is a university for the south east. To meet the Government and EU-stated policy objective of creating a knowledge economy, new regional higher education networks which generate and sustain new ideas, people and business are paramount. Education has long been accepted as a critical basis for economic growth and regional development. OECD figures suggest that each additional year of education raises output by 6%. Regions with strong autonomous learning institutions economically out-perform regions without such institutions. However, the south east has a clear deficiency of third level infrastructure. The population estimate for the western part of the country for 2004 was 394,300 people. That part of the country has a university. The estimated population of the mid-west is 345,400. It, too, has a university. The south-east region, however, with an estimated population of 440,400, which is bigger than the population in either of the two regions I mentioned, does not have a university and, if this report were to be taken on board, it will not get one in the foreseeable future. I cannot accept that.

The south east also fares badly in terms of participation levels in third level education. The proportion of the population over 15 years of age with a third level degree or higher is 6.53%, while 8.17% have a third level non-degree education. The OECD report also shows the relatively low level of expenditure on research and development in this country. The percentage of national research and development grants going to the south east is 0.69%. That puts the region further behind. This must be addressed.

I cannot accept the recommendation regarding further education needs in the south east. Our campaign for a university for the region will continue.

Maurice Cummins (Fine Gael)
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I broadly welcome the report, which offers us the opportunity to discuss higher education. The report provides a framework for ongoing development and outlines parameters for legislative provision. It also suggests constructive pathways forward in terms of governance, the size of governing bodies, the need for greater flexibility in salary structures and so forth.

However, the report does not select the right options in a number of key areas. As Senator O'Toole pointed out, there is no mention of e-learning in the report, which is unbelievable. Parity of esteem between the institutions of higher education must go beyond the rhetoric in the report. An inclusive legislative framework is required to underpin and structure institutions in a way that is inclusive and equitable. The tertiary education authority recommended in the report is the principal device by which inclusivity can be accomplished. It is important that the institutes of technology and the universities are not set apart from each other, as the report recommends. Other speakers referred to the situation with doctorates. That is crazy. If the report's proposal were to be implemented, it would be divisive and unworkable in the long term. It smacks of a partitionist mentality.

My colleague, Senator Kenneally, spoke about Waterford and the south east. Recommendation No. 1 in the report is unacceptable, although there may well be circumstances in the future which we cannot anticipate now which would change this perspective. The south east is the only geographical region without a university. Are we now to accept that Waterford and the south east will never have a university? Such a recommendation goes against the grain of democracy. It is a cause of concern for the people of Waterford and the south east.

The deficit of higher education provision in the south east has long been recognised in previous officially commissioned reports, particularly the Sexton report. Waterford is the only gateway city not to have a university and an institute of technology. The region is dependent on traditional manufacturing and agriculture for much of its employment. With those sectors in decline, however, the region must create knowledge-based industries if it is to create sustainable employment. This cannot happen without the appropriate research infrastructure. A university is required to provide it.

Participation in education is a cornerstone of the development of a sustainable workforce. However, under the OECD report the opportunities to participate would be severely limited for regions which do not have university access. Waterford Institute of Technology, although successful, cannot continue to provide for all the imperatives within the current legislative and resource boundaries. It must be given university status to enable the region to maximise its economic growth potential. The region is well below the national average in many economic indicators, such as employment in advance sectors, disposable income, university participation rates and research funding.

The south east does not want a replica of other universities. It needs a different, regional model which is inclusive rather than exclusive. A university model that is inclusive of all the needs and purposes of the region should be planned and supported. It should be a model for future inward investment, a sustained instrument for economic growth, a key factor in widening participation in third level education and, indeed, a core component in meaningful plans for decentralisation and the decongestion of Dublin.

Only 22% of the south-east region's workforce has a third level education, compared with a national average of 30%. Disposable income per capita in the south east is the lowest in the country, even lower than that of the BMW region. It is the first destination for only 3% of graduates. Employment in advance sectors in the south east is only 25% of the workforce, compared with 62% in Dublin, 54% in the mid-west, 51% in the west and 46% in the south west. Less than 1% of research grants are awarded to the south east. This is a scandal. People might think that the south east is prospering but these are the facts.

The campaign for a university for the south east is irreversible. The case has been made and the facts are irrefutable. Leading academics, even in the university sector, accept this privately and, in some instances, publicly. Now is the time to end this injustice to the people of the south east.

Some of the recommendations in the report should be considered but the recommendation in this regard should be binned, like several others. This point was made by Senator O'Toole and other speakers. While the report addresses certain important matters it cannot be considered, and should not be taken as, a blueprint for third level education in the future.

Martin Mansergh (Fianna Fail)
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I will try to be brief so I will not stymie the university voice in the House.

David Norris (Independent)
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The Senator is very gracious.

Martin Mansergh (Fianna Fail)
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Over the past 40 years the OECD has played an important part in stimulating the development of third level education and, indeed, science policy. The Minister cited figures that illustrate the enormous expansion in third level education. It received a new wind in the late 1980s. I recall attending some of the meetings at the time between the then Minister, Senator O'Rourke, and the then Taoiseach, Charles Haughey. The expansion that started or restarted in the late 1980s was very much economic policy driven. At a seminar held in the Royal Irish Academy in 2003, Dr. Frank Rhodes pointed out that universities — this applies to all third level institutions — now act as gateways to professional practice, primary agents of scholarship and research and great agents of social mobility. Tremendous investment has been made in the infrastructure of our universities and third level colleges. If one visits them at an interval of four or five years, one is liable to get lost among the new buildings that have been erected. There are similar plans for the future, including the move of the DIT to Grangegorman.

I strongly endorse the comments of Members from the south-east region, including Senators Cummins and Kenneally. It is essential from a regional policy perspective that some of the expansion of the universities and third level institutes takes place in the south-east region. I appreciate much has been done in broadening the Waterford Institute of Technology by spreading outreach programmes to Kilkenny, Wexford and so on. Equally, I appreciate the establishment of the Tipperary institute in the Minister's home town of Thurles and Clonmel, where there are further welcome developments such as the establishment of a facility of the institute at Ballingarrane House. However, the Government needs to open its mind in regard to the south-east region which has, compared with most other regions, fallen somewhat behind in terms of per capita income.

Another welcome development was the establishment of the research councils for science and the humanities in the past two years. There was a check a couple of years ago when a significant cutback in research funding occurred, although this was to a large extent restored last year. If I understood the Minister correctly and there is an ambition to double the number of people studying for PhDs by 2010, the money for this must be provided. I would not have as negative a view as Senator O'Toole in regard to private funding for research, particularly in the area of science. It can and should play a valuable role.

The Minister's predecessor did much to try to improve equality of access by increasing maintenance fees. However, we live in a democracy and the people's will counts for something. Whatever reservations we may have had about the abolition of fees, the decision has been taken. I do not see it as reversible or that there is any public support for such a move. The disadvantage is, as some heads of universities never cease to remind the Minister, that it makes third level colleges exceptionally and directly dependent on State funding. As the Minister stated, this sector must fight with other priorities, although given a choice between improving a road or any part of our education system, it would be my priority to improve the education system and wait another five minutes in traffic. One of the ways out of the situation would be to attract full-fee-paying foreign students but I hope this would not be at the expense of Irish students.

We must make academic careers attractive to young lecturers who are to spend their lives in the university system. At present, young academics move from six to 12 month contracts and getting onto the ladder seems very difficult. It is easier in many careers to get onto the ladder and have a reasonable degree of security. There is intense insecurity among young academics and this may be prejudicial to quality. One needs to be very determined to make an academic career these days whereas there was a security of tenure 30 years ago.

I appeal to the Minister to avoid the mistake made across the water and not to over-bureaucratise matters by constantly hassling and harrying lecturers with performance tests so that they spend half their time responding to them. By and large, staff in these positions are highly motivated and should be allowed to get on with the job.

Although I do not propose a solution, I wish to reflect on a major dilemma — a problem common not only to Ireland but to the whole of western Europe. This is the competition with the highly funded American system of higher education. The Americans have no hang-ups about elitism and money buying education. It was said to me that middle class parents in Europe try to pay off their mortgages whereas in America they pay for university fees of up to $35,000. The problem is that there has been a brain drain to America. The best professors and lecturers get offers and many of them go to America. How do we compete? Is there a case for us to encourage the establishment of a private university with some guaranteed State access for disadvantaged groups? While I do not know the answer, the question must be posed.

Mary Henry (Independent)
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I wish to share my time with Senator Norris, by agreement.

Rory Kiely (Fianna Fail)
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Is that agreed? Agreed.

Mary Henry (Independent)
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I welcome the Minister to the House. She will certainly go home with food for thought, having had this report ripped apart. I also take issue with a fair amount of it. The first point with which I took issue was that the humanities and social sciences were totally disregarded, apart from subsuming the Irish Council for the Humanities and Social Sciences into Science Foundation Ireland, which was ridiculous. Having listened to Senator Mansergh, this is sending us into the area of American universities, which are research based with very little emphasis on learning and teaching the spirit of inquiry. I understand the complaints of Senator Cummins and others in regard to the way regional institutes of technology are to be denigrated so that they will do little more than teach technicians while keeping away from research. How can good staff be retained if this is the case, never mind that one cannot have tenure until one has worked in an institution for five years?

Ireland has made huge economic strides because far more people were involved in third level education, including far more women, who are now in the workforce. However, despite the free fees, we have not done well in getting people from lower socio-economic backgrounds into the workforce. I accept the free fees policy has only been in place for ten years and the Minister is right not to scrap it. However, it shows that for these areas of society we must invest far more at pre-school, primary and secondary level because if one does not get through those levels, one will not get to university.

An area to which reference was not made is the failure rates for some courses, with which I am very concerned. For some first year courses in universities, particularly science courses, failure rates are close to 30% and for some regional institutes are close to 50%. Overall, only 10% of those who go to university do not finish but this figure is as high as 30% for some institutes of technology.

I am glad Senator Ormonde, with her background in counselling, is present because this problem apparently arises due to students choosing the wrong courses. We need far more counselling of students at school because too often students who applied for various courses told me when they were successful that they did not know why they had applied for them. Students never consider that they might get their fourth choice. I am delighted with the idea of bringing in more international students, especially at postgraduate and post-doctoral levels. It is important to remember that we will be competing with some non-English speaking countries now running these courses in English. We must have a sufficient number of Irish graduates in disciplines such as medicine. Not even one third of the number required are graduating. All that is needed is money. There was not a single application for a consultant post in this country from a non-EU graduate recently.

Lifelong learning is incredibly important but we are currently paying it lip-service. People must be considered for part-time release from work if they are to upskill and progress in their industries. Having worked as a researcher, I am glad to see basic research promoted. During the debate on Science Foundation Ireland I nearly had to drop to my knees in search of information on this subject. Quoting the Scandinavian educationalist Skoie, "Squeezing research out of people that have no training, aptitude or inclination for it inevitably generates tensions." It is essential that the teaching and pastoral care of third level students are given importance.

David Norris (Independent)
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I thank my colleague, Senator Henry, for making time available and Senator Mansergh for his courtesy in cutting short his interesting remarks to allow us to participate. I welcome the Minister to the House. It is appropriate as, like me, she was a teacher.

I have read a report of a speech made in Cork by one of this report's principal authors, Professor Shattock. He highlighted two major issues, namely, the massive increase in funding and the large-scale internal reorganisation and restructuring of universities. The first may cause difficulties for the Minister and the second may cause difficulties for academic staff. It is true and has been acknowledged on the other side of the House that there was a period of cutbacks totalling 14%, 6% of which has been recouped. We are still in a situation of shortfall.

The figures are stark. We are 14th of 26 OECD nations. We are often told about our wonderful educational system and spending but this ranking is factual. Overall investment in education is below the OECD average and investment in research and development taken as a percentage of the wealth of the State lags well behind both OECD and EU averages. The report points to low numbers of international mature students and students from traditionally disadvantaged areas. We must either make further investment or adjust the way in which finance is used.

This review coincides with a readjustment of university management structures. This will cause concern as increased business presence in university governance is called for. Expecting universities to be efficient and to take account of the so-called "real world" are issues but if they are driven too far in that direction there will be considerable dangers. What is the cost-benefit analysis of imagination, for example? In the old days it was the university versus the marketplace. Perhaps that was wrong and we should try to ride both horses simultaneously but it would be disastrous if we simply introduced the values of the marketplace wholesale to universities. There are examples — Queens University, Belfast, closed its department of classics and music departments are suffering the same fate in Britain. The president of the students' union, Francis Kieran, said: "We must be aware of the commercialisation of third level education as, at the end of the day, attending college — sentimental as this may sound — is meant to be about broadening the mind and experiencing new ideas." He is absolutely right. We must find a way to combine these ideas.

A problem exists regarding fees. There are no free fees, regardless of the intention to abolish fees. If the point of this was to encourage individuals from lower socio-economic areas into universities, it has been a disastrous failure. The rate of increase of participation in Irish higher education by lower socio-economic groups has actually slowed compared to the 1986-92 period when targeted student grants were the policy instrument. In other words, if they are targeted then the disadvantaged are reached. A recent report entitled Supporting Equity in Higher Education shows a disparity of almost five to one — 79% to 21% — between the higher, professional socio-economic group and the unskilled manual work group in total participation in third level education. The current approach is not working. When considering the result of money directed from taxpayers, the benefit to the individual student is a benefit to society as a whole.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I anticipated there would be a good debate on the OECD report. I thank the Senators for their contributions. It is useful to hear from people with first-hand experience in the third level sector as students, lecturers or so forth. It affects us all.

It is evident that people have spoken from regional perspectives as well as with regard to issues of access. Much of the debate resolves around the institute of technology-university divide. It is important to reiterate that maintaining their equal status as part of a higher education structure, but with different roles, is envisaged in any changes. Both are essential to our higher education for progression and regional development, as well as for degree, postgraduate, undergraduate, certificate and diploma levels. The aim of each of the sectors and all of the institutes in the country is to continue to improve, upskill and upgrade.

There are seven universities in this country and nine on this island. I can envisage everyone taking advantage of this fact through further co-operation, a greater mix of students and staff and sharing experiences. Each region desires a top quality, third level education and institution. This will improve student participation rates, attract industry and ensure a regional balance throughout the country. One institute that has been mentioned, Waterford, is well known for the top quality progression and courses it offers. On behalf of the institutes, the director of the Waterford institute made the presentation at the round table talks during our recent visit to China. The institutes have carried out good work.

It is interesting to note that GMIT is a world-class university but is not a university, as was stressed by Senator O'Toole, neither are the Geneva Institute nor the London School of Economics. What is important is to have quality education and access to it for as many people as possible.

I accept Senators' comments on the humanities and the arts. We did not particularly ask the OECD to examine these areas. We did not ask it to avoid examining them, hence they should not have been ignored completely. I have a humanities background and, in the context of a broad education where students can reach their potential and gain a balanced outlook on life to contribute to society and culture, we must have an advanced humanities and arts programme. I will not accept the proposal that the humanities council will be subsumed into Science Foundation Ireland. We could not hope for it to retain its identity if that occurred. I see no threat in this report to humanities and the arts in institutes and universities.

I, too, met one of this report's authors and told him he had given me the blueprint for higher education. He replied that he had not but that he and his colleagues did give us a set of proposals from which to choose. There were many discussions on funding, which is crucial. There were some discrepancies in that people said that on the one hand the universities need to be funded but, on the other, requested that there be no fees for evening and part-time courses. A balance has to be found. It is important to note that funding has increased by 90% in the universities sector in seven years.

Joe O'Toole (Independent)
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It has been reduced in proportion to the money given to the institutes.

John Gerard Hanafin (Fianna Fail)
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Funding has increased by 102% for the institutes although student numbers have increased by only 28%. The level of research has also improved. Under the national development plan, €2.5 billion is being spent, with €605 million of that figure going on the programme for research in third level institutions, PRTLI.

One of the key proposals talked of was the idea of placing the institutes under the HEA. Subject to the approval of Government, it was my intention to do so immediately in terms of their administrative basis to give the institutes the status and recognition. However, as I indicated to them at the colloquium last week, the legal advice is that I cannot do so without legislation. In the next few weeks we will be bringing a document to Government regarding how we might move ahead on the OECD report but unfortunately I cannot move on the issue in question as quickly as I would have liked, although the intention was there.

Internationalisation was mentioned. E-learning was not covered, but that is a whole new ball game which will develop separately but also as part of the development of the third level institutes.

Regarding internationalisation, we had a very successful visit to China. We are encouraging and attracting people on the basis of a quality education. We are not looking for many thousands of students but for top quality students to come and receive a top quality education. We want to ensure that we can meet our targets on the Bologna process but also to guarantee that Irish students will not lose places simply because we are trying to attract foreign students.

All Senators have noted the importance of access and the ladder of progression. Senator Henry talked about the investment needed at pre-school level. Senator Ormonde spoke about second level and Senator Tuffy spoke of disadvantage at that level, which we are currently working on, drafting and redrafting proposals. We will shortly come back to that matter.

Access has been improved. What I am concerned about in the third level sector is retention and supports for people. There seems to be an attitude in some of the institutes that once they attract students who are deemed to be disadvantaged for whatever reasons, those students can survive on their own, when in reality they cannot do so. I have to challenge the universities and institutes to ensure they have proper support programmes in place for these students when they attract them to their institutions.

This important report has raised a range of topics. I do not intend implementing it word for word but I intend to implement the key recommendations which can allow Ireland to further develop the quality third level education we have in this country with a view to fostering the type of industrial spirit we have, to foster the knowledge economy, to ensure we can meet Ireland's future needs in the world economy and also to ensure that all students are given an opportunity to reach their potential whether it be in the humanities, arts, sciences or medicine.