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Millions in cash may now have to be returned as Mary spends only half of this year's school-building budget

MARY Coughlan's Department of Education has yet to spend almost half of its 2010 budget for building new schools and classrooms.

Only €381m of a total annual allocation of €712m has so far been spent on capital projects by the department this year.

With less than two months left in 2010, much of the remaining amount is expected to be returned to the Department of Finance.

Some 10pc of the surplus can be carried over to 2011 but any remaining funds will be returned.

Education chiefs have attributed the shortfall to massively reduced building costs.

Similarly, the Departments of Transport and the Environment, both with large capital budgets, have also under-spent to a significant degree.

Capital funding for education projects was maintained at high levels in last year's budget, despite the recession.

The reason was the need for new school buildings following a surge in births in recent years.

It is not clear what, if any, effect the returned surplus will have on planned spending cuts at the Department.

The size of impending cuts is expected to see promises made in the revised Programme for Government not kept.

The €400m adjustment over four years in current spending will not affect public sector pay and pensions, which are protected under the Croke Park deal. Areas targeted for cuts include capitation grants, teaching staff, special needs assistants and language support.

Moves to increase class sizes in primary and secondary schools have already sparked fury among union leaders.

The Greens want to keep pupil/teacher ratios at current levels and appoint 500 extra teachers, in accordance with commitments in the revised programme.

But Fianna Fail ministers are understood to be insisting everything is on the table for cutbacks in the Budget.

The Irish National Teachers' Organisation said increasing class sizes would affect more than 500,000 children.