Michael Healy-Rae (Kerry South, Independent)
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Question 165: To ask the Minister for Education and Skills if he will provide an itemised breakdown on all costs covered in the 13% fee that Bus Éireann charges his Department relating to school transport, which amounted to more than €18 million in 2010 and 2011; and if he will make a statement on the matter. [22887/11]

Ciarán Cannon (Galway East, Fine Gael)
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The factual position is that the school transport scheme administration heading, within the Bus Éireann school transport independently audited annual accounts, has in fact reduced from €18.7 million in 2009 to €16.7 million in 2011 (-10.7%). This categorisation is a legacy from the original 1970's agreement and originally it was a charge of 13% on certain defined costs. This figure covers some indirect costs, indirect support costs, indirect regional costs, property and a contribution. A more detailed breakdown of the administration heading is available on my Department's website and as set out below. I should add that the full school transport accounts for the 1999-2010 period are also available on the Department website.

Bus Éireann has committed to finding further cost reductions over the next three years.

SCHOOL TRANSPORT SCHEME "Admin Heading"

This categorisation and treatment is a legacy from the original 1970's agreement. Originally it was a charge of 13% on certain defined Direct Costs. More recently this charge has reduced following negotiations between the Department of Education and Skills and Bus Éireann. In reality this covers

1) Some Direct costs

2) Indirect support costs

3) Indirect regional costs

4) Property

5) Contribution It should in fact be described as a Transport Management Charge and Indirect Costs. This charge has been reduced from €18.7m in 2009 to €16.7m (10.7%) in 2011 and Bus Éireann has committed to finding further cost reductions over the next three years. An apportionment of the overall company total of these costs is allocated to the School Transport Scheme.

A detailed breakdown of 2010 costs is set out in the following table:

1. Direct Element

This includes direct costs not included in the School Transport Account , a significant amount of which is for pension costs but it also includes other direct costs such as insurance and support, security and development of Information Technology and Telecoms services. An apportionment of the company total is allocated to the School Transport Scheme.

2. Indirect Support

This includes indirect support costs such as Finance, Human Resources, non payroll costs of School Transport Head Office, PR support and communications, advertising and community sponsorship measures, internal and external audit, corporate governance, legal and regulatory affairs, vetting, training, planning, implementation of plans and review, development of cost saving measures, central industrial relations, disciplinary and grievance procedures, complaints handling, treasury planning, safety and risk planning / monitoring, accident investigation and follow up, strategic direction, severe weather planning and liaison, Irish language, data protection, Gardaí and emergency service liaison, quality of standards setting, ensuring implementation of International best practice, regional co-ordination, etc. An apportionment of the total charge to the company of these costs is allocated to the School Transport Scheme.

3. Indirect Regional

This includes indirect regional costs incurred at the eleven local offices throughout Ireland, which provide services for both road passenger and school transport services and administration which include costs as described above at a regional level and costs such as payroll and procurement, building maintenance, cleaning and security, rates, utilities, clothing, regional training, cash security, health and safety, postage, stationery and printing, telephone costs, Accident and Incident investigation and follow up, industrial relations, disciplinary and grievance procedures, complaints handling, fuel monitoring, severe weather planning and liaison, community liaison, local authority, Gardaí and emergency service liaison. An apportionment of the total charge to the company of these costs is allocated to the School Transport Scheme.

4. Property

Property is required throughout the country in order to deliver the service required for the operation and management of the School Transport Scheme. A significant amount of CIÉ property is placed at the disposal of Bus Éireann for this purpose. An apportionment of these costs is allocated to the School Transport Scheme. Properties used in the School Transport Scheme are in most cases shared locations used for both the School Transport services and administration and Road Passenger activities. In some locations the properties are also used by both Bus Éireann and Iarnród Éireann/Irish Rail.

In total there are 16 operational / administrative properties and 15 maintenance facilities throughout the country. School Transport is such a significant proportion of the activities of Bus Éireann that in the event that the company no longer operated the scheme, it is likely that all the company's property used for these purposes would have to be reviewed.

5. Bus Éireann Contribution

This provides funds for:

Specific capital investment in School Transport services and administration for example IT to deliver future cost savings.

Portion of general capital investment for example garage equipment that serves all three businesses – Commercial, PSO and School Transport.

Reduction of cost base through voluntary severance for schools staff (direct and support).

Return to risk associated with School Transport business.

Depreciation and Interest

This is the charge for Depreciation and interest on vehicles funded by the company. As at 31 December 2010 there were 578 vehicles in the School Transport fleet.