Background documents prepared by the Department of Education and the Department of Finance for An Bord Snip provide a fascinating insight into official thinking on education spending. They are essential reading – and a key guide to the future direction of education policy
TEN DAYS ago, a series of background documents were published without any fanfare on the Department of Finance website. From an education perspective, the content could scarcely be more compelling.
There were two papers – running to more than 230 pages – from the Department of Education and one 50-page document from the Department of Finance.
Both documents – prepared in March of this year – outlined the main spending in education.
The Department of Education’s document, prepared by senior officials, assessed the implications of possible cuts in everything from special needs to school transport.
In this way, these documents provide a fascinating insight into the thinking of the most senior officials in the Department of Education into the various spending priorities – what could be cut and what should be protected.
Broadly, the Department of Education was very protective of current education spending. That, perhaps, is no surprise. But one striking feature of the Department of Education’s paper is its acknowledgement that the Irish education system remains grossly underfunded when compared to other OECD states.
The Department of Education acknowledges classes are too large in primary schools and it appears to accept that second-level schools are underfunded and often overdependent on voluntary boards of management.
In its paper, the Department of Finance takes a tougher line, arguing for swingeing cuts, including a 50 per cent reduction in support for fee-paying schools.
Overall, the documents give a snapshot into the kind of debate which will will take place between the Department of Education and the Department of Fiance in the run-in to the December Budget.
The following is an overview of the main points made in the documents.
EDUCATION – HOW MUCH DOES IT COST AND WHO WORKS THERE?
Public spending on education has increased by 34 per cent from €7.15 billion in 2005 to €9.57 billion this year.
Overall, education accounts for 15 per cent of Government spending.
In all, 77 per cent of all education spending is allocated to pay and pensions. The education sector has 95,554 full-time staff – that’s 27 per cent of total public sector employment.
Of these, 59,000 are teachers, 10,400 are special-needs assistants and 20,000 work in third-level colleges.
Since 2003, there has been a 24 per cent increase in the number of primary teachers.
The Department say population growth, hefty pay awards, immigration and “increasing awareness of individual rights and entitlements” are among a range of factors driving spending upwards.
Primary school numbers will increase by 50,000 by 2014, while second-level enrolment will be up by more than 33,000.
The number of students in higher education will also increase by 17,000 to 157,000 by 2014/15.
CLASS SIZE – “SECURING SAVINGS AND EFFICIENCIES”
It is clear from the Departments’ documents that official discussions on major savings in education spending invariably centre on class size.
Each one-point increase in the staffing ratio saves €18-30 million per year at primary and between €48 to 64 million at second level.
The Department of Finance says staffing schedule should return to 2006 levels (one teacher for every 29 pupils, up from the current ratio of 1:28) yielding €30 million in savings. It warns it may be necessary to allow average class sizes to increase still further given the pressure on the public purse.
The Department of Education says real savings cannot be achieved without significantly reduced retirement and/or redundancy to absorb the projected loss of 300-500 primary teaching posts and 800-1,000 at second level.
The only significant instrument available to the Department to secure a reduction in teacher numbers is retirement.
“In fact, the suspension of the early retirement scheme on foot of recent budgetary decisions will diminish the overall level of retirements. To harvest anything like the full benefit of retirements as a saving would require a highly effective redeployment arrangement . . . and new redundancy and early retirement arrangements.”
The Department warns that timing and pupil enrolment issues would have to be factored in. It cautions certain subjects cannot be withdrawn from pupils during the exam cycle.
SECURING SAVINGS ON SPECIAL NEEDS
The number of special needs assistants (SNAs) in primary schools increased by 73 per cent between 2003 and 2008 from 4,900 to 8,400.
At post-primary, the increase over the same period was from 443 to more than 2,000.
In its paper, the Department of Finance says spending on SNAs at primary level has increased by 85 per cent since 2005. It says the number should be capped at current levels, pending a value-for-money review now under way.
The Department makes a robust case in defence of current spending. It says: “It has to be borne in mind that SNA support is based on the specific needs of individual children.The State has a constitutional obligation to provide appropriate supports in primary education.”
Removal of SNA’s – even on a moderate scale – would, it warns, provoke a “significant rearguard action by schools. It may result in schools refusing to retain pupils with special needs and it would undoubtedly attract adverse public and media reaction. Previous experience in the special needs area indicates that – even where criteria are not met – removal of resources can be very contentious.”
CUTTING SCHOOL TRANSPORT
The Department of Finance does not pull punches on this issues.
A key question, it says, is whether “it is still appropriate for the State to provide a school transport service at all”.
The scheme, which dates back to the 1960s, provides free transport to primary pupils living 3.2 km or more from their school. Post-primary children who live 4.8 km or more from their school are charged between €138 and €213 per year.
The cost of the scheme has increased almost fourfold from €50 million in 1997 to €194 million this year – even though fewer children (157,000) are now using the service.
Finance says circumstances have changed radically since the inception of the scheme when car ownership was very limited and there was real concern that pupils would not attent schools without State transport. Today, only five per cent of rural homes do not have a car.
The Department proposes the abolition of the scheme at second level and increased charges – and even a charge covering all costs – at primary level.
The Department of Education is currently reviewing the service.
CUTTING CAPITATION GRANTS
Capitation grants (covering the cost of heating, lighting etc) in primary schools have increased by 53 per cent to €190 million since 2005.
The Department of Finance proposed a reduction of 22 per cent, yielding savings of €25 million.
The Department of Education is clearly not convinced.
It points to the annual pressure from the education partners for increases in non-pay funding for schools.
It says problems are particularly acute in the primary sector, where representations have been received on behalf of boards of management in financial difficulty because the level of funding is insufficient to cover their overall running costs. Schools managers, it points out, have proposed a doubling in funding.
It also says the current economic downturn is leading to a reduction in parental fundraising for schools.
Education also points out that the percentage of its budget devoted to administration of schools is low by international standards due to the high level of volunteerism on boards of management and the role of the Churches in covering governance and administrative costs.
REDUCING THE NUMBER OF VOCATIONAL EDUCATION COMMITTEES (VECs)
Spending in the vocational sector has increased from €731 million in 2005 to €949 million this year. Some 87 per cent of this is teachers’ pay.
In all, there are 33 different VECs – 27 county, five city and one borough – each with their own administrative structure. Finance points out how the VECs vary in size, some with more than 20 schools, while others may only have two or three schools in their area. There is also a wide variation in enrolment in post-Leaving Cert courses and Vocational Training Opportunities Scheme (VTOS) enrolment in each VEC. Some have in excess of 10,000 students while others have fewer than 1,000.
Finance says there is clear scope for rationalisation of the 33 VECs by amalgamation of smaller VECs and the merger of county and city committees.
It recognises this proposal is likely to meet with strong local and union resistance.
The Department of Education appears to accept the case for rationalisation. It says the savings could be significant if a number of VECs were abolished and staff offered redundancy/early retirement or redeployment to other VECs. It says a single VEC structure taking on responsibility for the payroll of the entire sector could be implemented independently of a wider decision on rationalisation.
Education also points to local resistance with pressure for at least a county committee as a sub-committee of an amalgamated scheme. This, it says, could cut into potential savings.
Education by numbers
WHAT IT COSTS?
Cost of teacher salaries at primary level – €2.147 billion
Cost of teacher pay at second level including VECs – €1.96 billion
Cost of the university/IOT sector – €1.335 billion
Cost of in-career development for teachers up by 173 per cent since 1997 to €30 million
Cost to the Exchequer of primary teachers trained by Hibernia College, according to Department of Finance – Zero
Annual cost of supports to St Patrick's and Mary Immaculate teacher-training colleges – €40 million
Cost of pensions to former education staff in primary, second level and in IoTs. More than 22,700 are in receipt of these pensions – €862 million
Since 2002, there has been a 43 per cent increase in the number of teachers (other than VEC teachers) retiring.
WHO WINS?
28 per cent of "free" third-level fees go to homes with annual incomes of more than €80,000.
Staffing ratio at the Tipperary Rural and Business Development Institute. It has 300 full time students and over 100 staff – 1:3
Source: Department of Finance paper – Exchequer Expenditure on Education, March 2009
The Department concedes:
"There is an over-reliance in Irish education on pre-fabricated buildigns to meet accommodation deficits, including in areas of rapid population growth. This has been strongly criticised. ''
"While there has been significant expenditure increases, our performance in terms of spending remains modest by OECD standards.''
Source: Department of Education and Science Evaluation Paper, March 2009
Want to read more?
The Department of Education and the Department of Finance papers are on finance.gov.ie – the Department of Finance website.
To read the documents in full, click on "Policy areas and Publications" link in the toolbar on the left-hand side of the website's homepage.
Click "Reports" and proceed to July 2009 special group on public service numbers.
Follow "View More" link to the documents
