Written answers

Wednesday, 13 May 2020

Department of Education and Skills

School Transport Expenditure

Photo of James BrowneJames Browne (Wexford, Fianna Fail)
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189. To ask the Minister for Education and Skills the amount spent, including expenditure from the Bus Éireann surplus on services (details supplied) with a value of over €25,000 for each item; if the expenditure went out to public tender under legislation or guidelines in each of the years 2005 to 2019; and if he will make a statement on the matter. [4241/20]

Photo of John HalliganJohn Halligan (Waterford, Independent)
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School Transport is a significant operation managed by Bus Éireann on behalf of the Department.

In the current school year over 120,000 children, including over 14,200 children with special educational needs, are transported in over 5,000 vehicles on a daily basis to primary and post-primary schools throughout the country covering over 100 million kilometres at a cost of over €219m in 2019.

The 1975 Summary of Accounting Arrangements forms the basis of the payment to Bus Éireann for the operation of the School Transport Scheme. The school transport scheme is a demand-led service based on the number of eligible children who apply to avail of transport. Reimbursement to Bus Éireann is on a cost recovery basis on the costs associated with the School transport Scheme.

The Department works with Bus Éireann to analyse costs to the scheme on an on-going basis and each year the company produces an audited statement of account. This ensures that the financial information provided by Bus Éireann is in accordance with the relevant summary of accounting arrangements. Actual expenditure is finalised in the Bus Éireann annual statement of account which is independently audited by the Bus Éireann auditors in accordance with the 1975 Summary of Accounting Arrangements. Balances, where they occur, are accounted for in the following year’s projected cost.

The nature of the arrangements with Bus Éireann in respect of the School Transport Scheme involves the Company recovering direct and indirect costs. These costs are referred to as the Transport Management Charge (TMC). The TMC was designed to compensate Bus Éireann for costs involved in running the School Transport Scheme which are not billed separately to the Department. The reason that these costs are not billed on a standalone basis is that significant indirect costs are not as easily identified as they are shared across business units and therefore had be allocated to each business unit on a fair and equitable basis.

Based on the 1975 Arrangements this Transport management charge was set at 13% of certain direct costs, which meant that any increase in the direct cost base resulted in an increase in indirect costs payable by the Department to Bus Éireann. This resulted in a surplus on the uncommitted reserve for the school transport scheme when the actual charges were lower than the agreed TMC in any one year. In any given year this balance was ring-fenced entirely for expenditure on the school transport scheme for investment on enhancements in a number of areas of the scheme in recent years, including IT, customer service and investment in fleet. Bus Éireann is obliged to tender all works, goods and services in line with the European Directives on public procurement.

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