Tuesday, 23 February 2010
George Mitchell Scholarship Fund (Amendment) Bill 2010: Second Stage
Seán Haughey (Minister of State, Department of Education and Science; Minister of State, Department of Enterprise, Trade and Employment; Dublin North Central, Fianna Fail)
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I am very happy to have the opportunity to bring the George Mitchell Scholarship Fund (Amendment) Bill 2010 before the Seanad. All Stages of the Bill were taken in the Dáil on Thursday, 18 February. I look forward to having an interesting discussion with Senators today. The Bill amends the George Mitchell Scholarship Fund Act 1998. It is short and relatively straightforward amending legislation.
Before outlining the provisions of the Bill, I wish to outline the general background to it. In 1998, in recognition of the pivotal contribution made by US Senator George J. Mitchell to the Northern Ireland peace process, the Government established the George Mitchell scholarship fund and in 1999 agreed to contribute an endowment of IR£2 million to the fund.
Throughout the long journey of the peace process in Northern Ireland we have benefited from the continued support of our friends in the United States. The Government considers that the agreement reached some weeks ago at Hillsborough provides the basis for the future stability and success of the democratic institutions in Northern Ireland. The stable and efficient operation of the Executive and the Assembly are clearly what the people of Northern Ireland want. In these challenging economic times the agreement should enable the Executive and the Assembly to deal with the pressing issues and concerns of the people of Northern Ireland, including jobs, investment, health care and education. The Government will continue to work closely with our colleagues in the Northern Ireland Executive to co-operate on these issues in the North-South Ministerial Council and to drive forward joint initiatives, including in the area of education. In the current economic climate it is more important than ever that we eliminate duplication at home and collaborate to compete internationally.
The George Mitchell Scholarship Fund Bill was enacted in December 1998 and empowered the Minister for Education and Science to establish the fund in the United States and enter into an agreement with persons to manage and control the fund. The 1998 Act provided for the creation of a scholarship fund to enable students from the United States to pursue a postgraduate year of study or research at certain universities and other institutions of higher education on the island of Ireland. Under the Act, the contribution of the Minister for Education and Science to the fund was the one-off endowment of IR£2 million.
The US-Ireland Alliance established a prestigious, competitive scholarship to enable American university graduates to pursue a year of study in universities here, North and South. The alliance is a non-partisan, non-profit making organisation comprising members from both Ireland and the United States which is based in Arlington, Virginia. A detailed agreement for the management of the fund was signed by my Department with the alliance in March 1999 and the endowment of IR£2 million was paid into the fund in April of that year. The alliance continues to manage the fund and run the scholarship programme.
The endowment paid into the fund by the Government was to fund two scholarships of US$11,000 per year and meet the administrative costs associated with running the programme. It is important to explain that under the terms of the original agreement, the Government's endowment is invested with the primary aim of maintaining its nominal value and securing a reasonable rate of return. Thus, it is the earnings and returns from these investments that fund the scholarships. The US-Ireland Alliance also secures additional funding from other sources which has enabled the programme to offer a further ten scholarships annually. The costs of these scholarships has been met through an endowment paid by the British Government in respect of two scholarships per year and through other contributions or sponsorship received by the alliance, including from the Government of the United States.
The first Mitchell scholars began their studies in the autumn of 2000. Each year since either 11 or 12 highly qualified university students in the United States have been selected as Mitchell scholars to come here to undertake postgraduate studies. There have been 117 scholars to date, with 28 attending universities in Northern Ireland.
In 2001 the nominal value of the George Mitchell scholarship fund, containing the Government's original endowment of IR£2 million, decreased due to losses on investments made during a difficult investment climate in the United States. A decision was made in 2003, in consultation with my Department, to rest the fund for a period by not making disbursements in respect of scholarships from the income generated from the fund, with a view to re-establishing its original value. This was facilitated greatly by a decision of the US Government to support the US-Ireland Alliance with significant financial contributions for several years. Thus, the alliance was enabled to safeguard the burgeoning reputation of the scholarship programme and continue awarding the full quota of scholarships. Since 2003 the full quota of 12 scholarships has been funded from other resources raised by the US-Ireland Alliance. In the same period the only expenses paid from the fund have been the costs of the annual audit of the accounts and investment advisory fees for the fund. All of this information is provided in the annual report and audited accounts for the fund that are laid before each House pursuant to the provisions of the 1998 Act.
In 2007 a decision was taken to secure the long-term viability of the George Mitchell scholarship programme by increasing Ireland's contribution to the fund for the programme by €20 million. This sum is to be paid over a number of years, conditional on matching funding raised by the US-Ireland Alliance. Such matching funding must not include funding from public funds in Ireland or Northern Ireland. It is envisaged that the increased future investment income from the additional funding of up to €40 million, inclusive of matching funding, will primarily meet the cost of bursaries for the successful students and the administration of the scheme.
The purpose of the Bill is to amend the George Mitchell Scholarship Fund Act 1998 so as to enable the new financial and necessary accounting arrangements to be put in place, by creating an amended legal framework that is appropriately broad and enabling. It is intended that the Bill will be complemented by and also provide legal underpinning for a detailed new funding and management agreement between the Minister for Education and Science and the US-Ireland Alliance. Such a new agreement is necessary to give effect to the provisions of the Bill and provide for the putting in place of appropriate governance structures. Following very detailed negotiations, the terms of a draft new agreement in that regard have been agreed between my Department, with Department of Finance approval, and the alliance. This new agreement specifies detailed management and reporting arrangements in regard to the fund. The new agreement will be executed when this amending legislation has been enacted.
A provision of €2 million is included in my Department's Estimates for 2010 in respect of the George Mitchell Scholarship Fund. When the amending legislation has been enacted and commenced and the new management and funding agreement between the US-Ireland Alliance and my Department has been signed, my Department will arrange for an appropriate payment to be made in accordance with the terms of the legislation and the agreement. The amount of the payment to be made in 2010 will have regard to the matching funding already raised by the alliance.
This additional funding further emphasises the Irish Government's deep and abiding gratitude for the key role that Senator George Mitchell played in the Northern Ireland peace process. The Government also believes the additional endowment demonstrates our clear support for the development of our special relationship with the United States.
We strongly believe that from a strategic viewpoint the Irish Government's additional endowment will achieve several significant outcomes as well as helping to secure the long term viability of the programme. The additional funding will enable the US-Ireland Alliance to strengthen further its support for and promotion of United States-Ireland and North-South relations. The Mitchell scholarship programme ties in very well with the objectives of the strategic review of Ireland-US relations, Ireland and America: Challenges and Opportunities in a New Context, launched in early 2009.
The strategic review highlighted that there are some 10 million Americans under the age of 18 who, while not Irish, have an interest in Ireland. They, along with our own young people, will shape the future contours of our relationship with the United States. We must work pro-actively to maintain their interest and link with Ireland.
There is perhaps no more fundamental or sustainable way to engage that interest than by giving these young people the opportunity to study in Ireland. We know that people who have studied in Irish institutions, and who have had a positive experience here, go on to become privileged friends of Ireland. The young Americans who study here will be advocates and agents for the strong US-Ireland relationship among the next generation.
We have recently put in place a new framework for the promotion of Ireland as a centre of international education. As part of this the Minister has established a high level group on international education which is currently developing an action plan to enhance Ireland's performance in this area. The high level group will be examining where our priority markets will be and what co-ordinated activities we should be undertaking in those markets. The United States will clearly be one of our most important strategic partners in this regard. We have indicated to Enterprise Ireland, to which we have given responsibility for promoting and marketing Irish education, that this is a priority for this Government and that we want to lead from the front in strengthening links with the United States.
There is no doubt that the Mitchell scholarship programme will be a key plank in our efforts to develop the education links with the United States. It will allow high-calibre students from American universities to study as Mitchell scholars on a wide cross-section of postgraduate courses at universities on the island of Ireland and it will also increase the profile of Irish institutions internationally. This programme is successfully competing to attract participants with a number of other highly prestigious and influential scholarship programmes, such as the Rhodes scholarships scheme that is operated by Britain to bring American students to Oxford University.
As well as the direct financial spin-off benefit to the Irish economy, these Mitchell scholars are likely to later occupy positions of influence in the United States, whether in politics, business or the professions. We hope their period of study on this island will create an enduring legacy of goodwill towards Ireland amongst the scholars and be of significant benefit to Ireland in the future.
I shall outline the main features and provisions of the Bill. Section 2 amends section 1 of the 1998 Act by adding a number of new definitions relating to key terms used throughout the Bill. Section 3 amends section 2 of the 1998 Act. In essence, it provides legal underpinning for a number of core provisions in relation to the fund that are contained in the funding and management agreement between the Minister and the fund manager.
Section 4 amends section 3 of the 1998 Act. The 1998 Act made provision for a one-off payment of £2 million by the Minister into the fund. Section 4 amends section 3 of the 1998 Act to provide that the Minister shall pay a total Irish Exchequer additional funding sum not exceeding €20 million into the fund. Payments by the Minister will be subject to matching funding having been raised by the fund manager and subject to a maximum payment of €4 million in any financial year.
Section 5 amends section 5 of the 1998 Act by substituting an amended provision for that section. This arises as a consequence of the enhanced annual operational and financial reporting obligations being imposed on the fund manager in section 3 and I shall refer to those obligations in more detail on Committee Stage. Section 6 provides for short title, collective citation and commencement.
I commend this Bill to the House.