Progress on funding for higher education
Social Justice Ireland welcomes recent publication of ‘Funding the Future - Investing in knowledge and skills: Ireland’s competitive advantage’ by the Minister for Further and Higher Education, Research, Innovation and Science. In the paper Government commits to a multi-funded model of additional Exchequer investment and employer contributions through the National Training Fund. Student loans will not form part of the future funding model. The paper also commits to gradually reducing student contributions. Social Justice Ireland has consistently advocated over many years for Government to develop and commit to a long-term sustainable funding strategy for education at all stages, recognising the importance of a life-cycle approach to educational support. The publication of ‘Funding the Future’ is a welcome first step.
The paper has identified an immediate core funding gap of €307 million which must be funded. This core funding gap of €307 million is the increase in funding which the Department of Further and Higher Education, Research, Innovation and Science and the Department of Public Expenditure and Reform have determined is required to deliver enhanced performance, strategic reforms and strengthened quality of outcomes. This figure is based on a technical assessment by both departments of an Economic Evaluation carried out as part of the Structural Reform Support Programme based on 2018/19 data which indicated that €317m of additional funding would be needed per student cohort to reinstate a sustainable level of core funding to the higher education sector.
The updated €307m figure does not take account of funding that will be required for:
- future demographic increases;
- pension costs;
- implementation of future pay and industrial relations agreements;
- implementation of certain reform measures for the higher education sector including those related to the Technological University transformation agenda.
The report indicates that this funding gap of €307m will be closed over a number of budgets, but a timeframe is not specified. This means that the sector will continue to experience a shortfall in required funding over a number of years at least.
In a welcome and positive addition to the annual budgetary process, the Department will publish a paper in advance of each year’s Budget paper outlining potential options and impacts related to the cost of education. The Student Grant scheme and other programmes related to student supports and costs of higher education, will be reviewed taking into account the priorities identified in the Student Grant Scheme Review.
Funding the higher education sector – an ongoing challenge
Full-time enrolment in higher education has increased by almost 33 per cent in the last decade to 186,890 students (and numbers are projected to reach 222,514 by 2030. An increasing population of school-leavers demands that considerable investment is required to ensure that the higher education sector in Ireland can continue to cope. However public funding for higher education in Ireland has been decreasing since 2009 despite steadily increasing enrolments both full and part-time. The Parliamentary Budget Office, in a recent report on tertiary Education Funding in Ireland estimates that funding per undergraduate student (full-time, part-time, remote and FETAC) enrolled in 2019 was 50 per cent lower than in 2008. The report presents a clear and detailed outline of the challenges facing the sector. The report recommends that any increases in State funding are accompanied by the recommended administrative reforms. Crucially it recommends that funding be sourced from sustainable revenues to prevent a repetition of the cuts to funding seen during the last economic and fiscal crisis.
Higher education is facing a significant funding shortfall and future resourcing of this sector is a key challenge currently facing Government. For Higher Education, the Final Report of the Independent Expert Panel points out that funding requirements for higher education should be benchmarked against the funding in those countries we aspire to emulate and compete with. This is critical if we are to maintain our skills base while fostering innovation and upskilling the labour force. Social Justice Ireland welcomes innovation in funding allocation and a move towards a more demand-based system to support students in their chosen careers.
Increasing demand for places combined with significant cuts in funding between 2010 and 2015 imply that it would be extremely difficult to fund the sector with a combination of limited public expenditure and student loans, meaning one of the recommendations of the HEA Report to supplement funding by way of ‘income contingent loans’ is no longer feasible. Investment in higher education will have to increase significantly over the next decade, regardless of which option or funding model Government decides to implement. Government should develop a framework to deliver sustainable funding revenues for higher education over the next five years with a roadmap to 2028. This framework should have clear medium and long-term targets.
This is the first time significant progress has been made on the issue of funding for the higher education sector since the publication of two separate reviews into the issue. The final report of the Expert Group on Future Funding of Higher Education in Ireland (2016) recommended three funding options for consideration by Government: (i) a pre-dominantly state-funded system; (ii) increased state funding with continuing upfront student fees; and (iii) increased state funding with deferred payment of fees (student loans). The report concluded that an additional €1 billion in annual funding would be needed by 2030 to sustain and improve provision of higher education in Ireland, with €600m of this required by 2021. Despite increases in funding in recent Budgets an additional €600m has not been invested in the sector in 2021. An estimation of the value of the higher education sector to the economy found that every €1 invested generates a return of approximately €9.
‘Funding the Future’ commits to closing the funding shortfall of €307m but does not give an indicative timeframe, nor does it indicate the amount of additional funding required to deal with demographic change. A further report on demographic change and implications for expenditure is due to be published later in 2022.
Social Justice Ireland welcomes the publication of ‘Funding the Future’ and the commitment to delivering the required funding for the sector. We also welcome the commitment to broadening access routes to higher education in the strategy, this is something we have consistently advocated for to support people and communities in climate transition, and as the future of work and employment changes
We look forward to Government delivering on the commitment to ensure sufficient and sustainable revenue streams for the necessary investment in higher education (including addressing current funding shortfalls) on an annual basis. Without certainty regarding funding, the necessary reforms and innovations required in further and higher education will not succeed.
‘Funding the Future’ and supporting technical reports on funding for higher education (including a review of the students grants scheme’ can be accessed here.