Kathryn Reilly (Sinn Fein)
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I thank the Minister of State for taking my Adjournment matter on third level fees. Today 58,795 students across the State sat down to their leaving certificate and leaving certificate applied examinations. Six years ago I was one of those students. With my CAO form completed and submitted, I could prepare for college because the absence of third level fees opened up endless possibilities for me, just as it did for hundreds of thousands of students. I call on the Minister for Education and Skills, who last week refused to rule out the re-introduction of college fees, to honour the commitment he made to the thousands of students who are starting their exams today so that they can have confidence in their future. Prior to the election, he told students that he would oppose extra charges. On 17 February of this year he stated:

A knowledge economy begins with a knowledge society, not the other way around. Labour is committed to putting universal education, from the cradle to the grave, at the heart of the next Government.

On April 8 2008, the Tánaiste asked the following important question: "We should ask ourselves whether the third-level sector is under-funded because fees were abolished, or because the abolition of fees was successful, in part, in encouraging greater numbers into third level - numbers were not matched by appropriate levels of Government funding."

The re-introduction of fees will coincide with huge financial problems for families and prospective students. These are the families who are facing the universal social charge, the new levy on private pensions and reduced social welfare benefits. Some of them will be graduates who have already borne the brunt of cuts to their student grants. I hope the Government can at least provide young people with the possibility that comes from an education, having deprived them of so much else.

We need a well-educated and skilled workforce if we are to deliver economic growth. The Government recognised this when it committed in the programme for Government to increase the number of places in further education and to provide a range of initiatives to increase access to further and higher education for the unemployed. However, we now hear that the Government is considering the re-introduction of fees. The introduction of fees will be a disincentive for people to enter or return to higher and further education. For most young people it will offer only a choice between hardship in education and an uncertain future of the dole or emigration. That is not a choice to put before our young people. For many the choice will be simple and we will ultimately bear the cost.

We should not forget those who want to return to education to gain new skills. The recent report by the expert group on future skills needs found that jobseekers with third level qualifications coupled with work experience and foreign language skills were the most successful in finding employment, even during the recession.

What is needed now is an appropriate use of the resources we can afford to devote to third level, appropriate levels of pay, less duplication across institutions and a concentration on undergraduate provision in the subject areas that offer the prospect of delivering economic development. The Hunt report recognises that greater investment in higher education is required but suggests that it should come in the form of higher fees. Nowhere does it reveal an understanding of the impact that investment in higher education has on Government finance. The OECD document, Education at a Glance, highlighted not just the individual benefit from investment in third level education but also the benefit to the Exchequer. On average across OECD countries, a man with third level education will generate $119,000 more in income taxes and social contributions over his working life than someone with an upper secondary level of education. The returns to governments arise from higher income taxes and social contributions, as well as a lower likelihood of unemployment and associated costs to the public purse. Graduates clearly benefit personally from a third level education. Over their lifetime they will be paid over 60% more than someone whose education ceased at second level but a progressive tax system should recognise that by taxing higher earners.

Earlier today I pointed out that increasing our competitiveness was crucial to promoting economic growth. The World Economic Forum identified under investment in education and research as key factors that undermined our competitiveness. We cannot gain competitiveness by lengthening dole queues or forcing our young people to emigrate. Now is the time to invest in our education system and in our people. It is not the time to take a policy step backwards nor is it the time to introduce third level fees.

Kathleen Lynch (Cork North Central, Labour)
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I am taking this Adjournment matter on behalf of the Minister for Education and Skills, Deputy Ruairí Quinn. I thank the Senator for raising the matter and will begin by outlining the background to the reform programme that is being undertaken in the higher education sector. The national strategy for higher education to 2030, which was published earlier in the year, provides a working blueprint for enhancing and developing the system to ensure it can meet the challenges of the future. An implementation group is already in place to oversee and co-ordinate the strong partnership effort that is now required across the academic community, higher education leadership and the various agencies and interests that interact with various parts of the system.

It is estimated in the national strategy that an additional €500 million will be needed by 2020 and a further €450 million by 2030 just to maintain current levels of resource per student given the projected level of increased demand for higher education. It is estimated that demand will grow by over 70% over the next two decades. Given our current fiscal difficulties, it is clear there will be resourcing issues if we are to meet projected demand. If we are to maintain and enhance standards of quality in higher education we must now examine closely the sustainability of funding arrangements for the system. We have to reconcile future demand for participation growth with limitations on public resources and a need to protect and enhance core quality. Although the nature of these difficult trade-offs are described in the national strategy, more detail is required with regard to a detailed comparative analysis of international benchmarks for sustainable funding levels in this context. We need to know more about how the three parameters of numbers, funding and quality interrelate so that we can manage the tensions and trade-offs involved. This will allow us to support realistic and sustainable levels of growth in numbers and inform better choices on policy options for future funding.

The programme for Government provides a commitment to undertake a full review of third level funding with a view to introducing a funding system that will provide third level institutions with reliable funding but does not impact on access for students. We also need to ensure that we are extracting the full value and potential of all of the existing resources available to the sector to do better with less. In this regard, the Minister has asked the Higher Education Authority to undertake further work on the sustainability of the existing funding framework over the course of this year.

As the Senator will be aware, the previous Government introduced a new student contribution charge of €2,000 with effect from the 2011-12 academic year to replace the existing student services charge of €1,500. This increased charge will come into effect in the autumn. The Minister will be considering all the issues involved as part of the wider consideration of the implementation plan for the higher education sector. I thank the Senator for raising this matter.

Kathryn Reilly (Sinn Fein)
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Students will be charged €2,000 again this year but there is uncertainty about what will happen in 2012 and 2013. The Minister of State said the HEA is working on a report which the Minister commissioned. Will the Minister outline the terms of reference for the new report to both Houses of the Oireachtas, given the Hunt report has already been published? It would be beneficial to all involved if we could see the terms of reference. Furthermore-----

Paddy Burke (Fine Gael)
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The Senator has asked a question. There is no provision for questions at all. The Chair is giving a little discretion.

Kathryn Reilly (Sinn Fein)
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Will the Minister of State ask the Minister to outline the terms of reference to the House? Will he consider opening a consultation process on the findings of the report?

Kathleen Lynch (Cork North Central, Labour)
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I will convey the Senator's request to the Minister. The proposal that the HEA takes a second look at this issue is about consultation but I will convey her concerns to the Minister.