Friday 30 September 2016

Incoming government will have to grasp nettle quickly

John Walshe

Published 29/10/2015 | 02:30

Peter Cassells: 'The status quo is not sustainable – current funding levels are insufficient and the funding model requires reform'
Peter Cassells: 'The status quo is not sustainable – current funding levels are insufficient and the funding model requires reform'

Higher education got short shrift in the recent Budget and the amount set aside for college buildings was derisory.

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All the Budget did was postpone the day when serious investment will have to be made - up to €1bn annually - within a relatively short time, an increase of 50pc on present funding, according to a new report.

It's one of three documents going to a gathering of people from the education sector and beyond, who will be asked their views about how the expanding system should be funded.

It's easy to work out the options - more money from the State; higher student charges; a graduate tax or a loans scheme; a greater contribution from employers or other sources such as philanthropy.

The first one is unlikely as public spending will still be constrained in the next few years, while philanthropists and employers tend to give money for buildings, not for day-to-day spending.

So it's likely down to the students, either on their way in to college through higher fees and/or when they graduate and start paying back a loan.

The Expert Group on the Future Funding for Higher Education, to give it its full title, has examined how loans work abroad.

If they were introduced here, somebody would have to put the money up front - if it's not the government, can the European Investment Bank do it? And can it be done 'off balance sheet' is the real question for a government operating within tight EU fiscal rules.

One of the concerns will be that higher fees and loans will keep 'risk adverse' groups out of college. But the report says that research by the European Commission and others indicates that, when balanced with student support of various kinds, increased fees do not necessarily have an overall negative impact on enrolments in higher education. The experience to date in the UK after the recent rise of fees to £9,000 is consistent with this.

Whatever option the Government goes for will have political consequences as it will mean either more taxes or more money from families. But doing nothing is not an option.

The chair, Peter Cassells, is very blunt in his assessment that "the status quo is not sustainable - current funding levels are insufficient and the funding model requires reform".

The report reiterates that we need to create 29pc more places to cater for rising demand. However, research shows that simply increasing graduate output does not lead to economic growth - what matters is the quality of the graduate output.

And that is at risk because of the pretty serious cuts for the best part of the past decade. Core funding per student has dropped from €11,750 in 2008 to a current €9,250.

Staff student ratios have worsened to way above the OECD average. The report acknowledges that some colleges have fallen into deficit.

The question will inevitably be asked - why don't we 'cap' student numbers if we can't afford further expansion.

But this is answered in the report, which quotes projections showing that the labour market's demand for graduates will continue to grow.

Under the best case 'recovery' scenario, an extra 160,000 graduates will be at work in 2020 - an additional 20,000 a year over an eight-year period. .

The Cassells group is working towards having a final report before the end of the year. Even if it makes that deadline, nobody expects the outgoing Government to take the hard decisions.

A period of reflection and further consultation will, doubtless, take place.

It will be up to the incoming government to grasp the nettle. It should do so early in its term of office.

John Walshe is a consultant and was special adviser to former Education Minister Ruairi Quinn.

Irish Independent

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