Kathleen Lynch (Cork North Central, Labour)
Link to this: Individually | In context

Question 110: To ask the Minister for Education and Science if, in view of the cash flow problems which aggravate the inadequate funding arrangements for primary schools, she will introduce a new administrative scheme whereby the capitation grant for primary schools is paid quarterly, in January, April, July and October, involving no additional or extra cost to her Department but ensuring a more effective flow of funding to the primary school system; and if she will make a statement on the matter. [6048/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

My first priority in relation to improving the cash flow for schools is to increase the level of funding to them. Improving the funding for schools is a central part of the education provisions in the Programme for Government. The Programme contains the commitment by Government that the capitation grant for primary schools will be doubled.

My Department will be paying around €167m to primary schools in 2008 to meet their day to day running costs. The improvements announced in the last budget taken together mean that day-to-day funding for primary schools will increase by €21 to €330 per pupil. As a result, a primary school with 300 pupils will receive almost €100,000 to meet their running costs.

The primary school capitation grant has been increased substantially in recent years. Since 1997 the standard rate of capitation grant has been increased from €57.14 per pupil to €178.58 from 1st January, 2008. This represents an increase of 212% in the standard rate of capitation grant since 1997.

Furthermore enhanced rates of capitation funding are paid in respect of children with special educational needs who attend special schools or special classes attached to mainstream schools. The current rates range from €457.00 to €880 per pupil — an increase of 42% from the rate in 2006.

Capitation grants in respect of a particular school year are paid to primary schools in two moieties. The first moiety (approximately 70%) is paid in January with the balance normally being paid in June.

The first instalment in January is calculated on the enrolment figure on the 30th September of the previous school year as the up-to-date enrolment data is not available in my Department at that stage. The balance of the grant is calculated on the enrolment figure on the 30th September of the current school year together with any arrears due from the first instalment.

Contrary to what the Deputy suggests there would either be once-off cost implications for the Department or, if not, then there would be initial negative cash flow implications for schools by changing the payments system to four equal instalments. For example, if the Deputy's proposal was implemented this year without any additional cost to my Department in 2008 it would potentially involve the balance of this year's grant that is normally paid in June being deferred to October. Similarly, if the proposal was being introduced from the start of 2009 then instead of the 70% grant being paid in January schools would have to wait for that element of it to be paid out in instalments during January, April and July. I would be concerned that during the changeover period this would further aggravate rather than help the cash flow in schools.

An alternative to that proposed by the Deputy would be to bring forward the January payment to pre-Christmas so that it is paid earlier in the school year. However, this would also have once-off cost implications for the Exchequer and my priority is to target all available funds to making real increases in the grant level instead.

I remain open to considering any proposals put forward on the payments structure that can be implemented without additional cost but given that the existing payment structure front loads 70% of the payment at the start of the calendar year it is difficult to see how this could be done without actually impacting negatively on cash flow for schools.