The Estimates 2005 provision for universities has to be viewed in the context of cumulative cuts of 14.5% in core state funding of universities over 2003 and 2004. Against a rise of 9.5% in stand-still costs the 6.3% increase is effectively a further 3.2% cut in university funding for 2005. The impact of the 2005 provision will be more cutbacks in quantity and quality of services and deficits incurred by the universities. The further degradation of services will worsen Irish universities already mediocre international standing and competitiveness.
Perceptions, openly expressed by politicians and officials, that universities had cash stashed away undoubtedly influenced decisions about university funding over the last two years. Those unfounded views have now been roundly rubbished by a review of the financial situation of universities by independent experts commissioned by the Higher Education Authority. The Report – “The Financial Position of Irish Universities” found that universities were badly under-funded and had insufficient reserves, a finding that supports the conclusions of the OECD Review of Higher Education in Ireland.
To achieve government objectives for a sustainable knowledge-based society the OECD Report advocated a quantum increase in investment in universities, part of which should come from the payment of fees by students. The Government reacted by declaring that the reintroduction of fee payment by students, which would produce a 22% increase in funding for universities is off the political agenda. Minister Dempsey, faced with this response, stated that he would be seeking the extra investment from government to be paid by the taxpayer. The government’s answer in the Estimates is to defy the OECD recommendations by effectively cutting university funding for the third year in a row and driving the Irish university system further down the international league table. Through the combined cuts over three years the universities are being made to pay most of the cost to the exchequer of the so called “free fees”.
C.H.I.U. acknowledges that Minister Hanafin is convinced of the need for increased strategic investment in universities as advocated by the OECD. Indeed, the Taoiseach in his meeting with C.H.I.U. in July 2004, emphasised the importance that he, and his government, attached to the OECD Review of Higher Education. He saw it as a means of clarifying the reforms and investment that were needed in higher education to meet government objectives. However, the critical significance of the OECD Report’s recommendations to the country’s future development does not seem to have penetrated the blinkered, expenditure-control mindset that drove the Estimates 2005 process.
The one-dimensional, “envelope” approach to the Estimates reveals a serious failure of co-ordination and oversight at the centre of government to ensure that funding provision is made for the strategic investments required to develop an internationally competitive knowledge-based economy, the declared government objective. The disconnect between the government’s grand aspirations and incoherent actions, highlighted by the OECD, seems still to prevail.
The OECD and the Enterprise Strategy Group have pointed the way forward but it is clear that in the Estimates process Minister Hanafin has not been supported by the Department of Finance or her government colleagues in her quest for the level of investment required to deliver the reformed, world-class higher education system on which Ireland’s future prosperity and well being largely depends.
The Minister for Education and Science, the university system and ultimately the country’s future have been short-changed in the Estimates. It is imperative that urgent action is taken in the Budget to provide the investment required for the strategic development of the higher education system as recommended by the OECD.