Thomas Byrne (Meath East, Fianna Fail)
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377. To ask the Minister for Public Expenditure and Reform the reason there is no borrowing framework in place for institutes of technology, as there is for universities (details supplied); if he will outline the barriers that he considers exist to putting in place such a framework to enable institutes of technology to borrow independently. [19106/16]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy will appreciate that a very important consideration in considering the scope for independent borrowing by institutions in the higher education sector is whether that borrowing is categorised as falling within the General Government sector or not.

Universities have traditionally had autonomous borrowing powers as they are classified as outside General Government. Ultimately, the outside General Government status is determined by EUROSTAT. This outside General Government status is determined by a combination of the traditional autonomy that such institutions have historically enjoyed and their capacity to generate own income, so that they meet the 'market test' applied by EUROSTAT, that is, that Government funding represents less than 50% of their overall income.  As such, borrowings by Universities are 'off-balance sheet' and do not impact on, for example, the level of General Government Debt - a key measure of fiscal performance.

These considerations do not apply in the case of the Institutes of Technology.  IOTs, unlike Universities, are currently classified as inside General Government. Consequently, expenditure by the IOTs impacts on the General Government Balance (GGB) and borrowing by the IOTs contributes to the General Government Debt (GGD). 

The Deputy may wish to note that the question of the borrowing capacity of IOTs is currently under examination by the Department of Education and Skills, in consultation with my Department in light of proposals for increased provision of student accommodation as part of the Government's response to the housing crisis.