I welcome our guests: Dr. Philip Nolan, vice president and registrar of University College Dublin; Professor Ferdinand Von Prondzynski, president of Dublin City University; Professor John G. Hughes, president of NUI Maynooth; Professor Paddy Prendergast, chief academic officer, Trinity College Dublin; Dr. James J. Browne, president of NUI Galway; Dr. Michael Murphy, president of University College Cork; Professor Don Barry, president of the University of Limerick; and Mr. Ned Costello, CEO, Irish Universities Association.

Before starting, I draw the delegation's attention to the fact that while members of the committee have absolute privilege, the same does not apply to our guests. In this context, the delegates should be careful in what they say, as anything uttered could be taken to be defamatory, but I do not anticipate such will occur. While they can make forthright comments, they should be careful in naming individuals. The same stipulation applies to members in that, while we have privilege, there is a long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.

Having gone through the preamble, I ask Mr. Costello to make a short presentation on the issues outlined prior to the meeting.

I will begin by setting out the overall context. Since the start of the new millennium, the strategic development of the universities has been marked by three significant developments, the first of which is a continuing expansion of participation in university education. There are nearly 100,000 students in our universities, including 15,000 postgraduates. Participation of under-represented groups is advancing at a steady pace. The second development is that the universities have been transformed from being predominantly teaching institutions into something much more comparable with the best universities in the world, as we now have a stronger research component and linkages between research, teaching and knowledge transfer in all of its dimensions. The third development is that universities have undertaken significant structural and strategic reforms in order that they can more effectively manage what are large, multifunctional institutions. This is being done to deliver services to learners.

These developments have taken place in the context of a concerted Government push to raise skills and develop what is widely known as a knowledge society. Both the national development plan and the strategy for science, technology and innovation, SSTI, expand on this overall goal. The appropriateness of this approach is underscored by the difficulties facing the economy which testify to the need to base future growth on innovation rather than speculation. The developments I have outlined are positive but the key question is whether we are resourcing higher education at a level that will allow it to deliver on this knowledge society and knowledge economy goal that has been set out.

The most reliable way to assess this is in the international context using data provided by the OECD in its publication Education At A Glance. Those data show a spend per student in third level education is approximately $10,000. The best performers are spending $14,000-$24,000. The OECD produces its data in dollars, adjusted for purchasing power parity. In GDP terms, we spend less than our peer group and, contrary to most OECD countries, and worryingly, our proportional spend on higher education has been heading in a negative direction. These data may seem counter-intuitive because, in simple volume terms, spending has been growing quite strongly. The previous Minister for Education and Science made this point to this committee in a previous sitting. Any seeming contradiction can be resolved in the context of growing student numbers and the growing support for research. These have pushed gross funding up but growing student numbers mean that the actual funding per student is decreasing. Although there is inflating resource allocation, the same positive gloss is not reflected in terms of what is needed to serve the needs of students.

We see this particularly in the core grant, which is the basic resourcing base for overall third level education. Students are effectively the consumers of university services and reduction in funding per student has a meaningful impact on the quality of the student experience. This is why OECD uses funding per student as its yardstick.

The specific issues the committee has asked us to address are the possible re-introduction of university fees, the outcome of the recent meeting between the university heads and the Minister for Education and Science and the issues of financial accountability and systems for measuring outcome. Regarding fees, we set out our position in our policy paper entitled Individual Financial Contributions to Higher Education. The text is included in our submission.

I summarise our position as follows. The question of whether there should be increased individual contributions to funding of higher education cannot be divorced from the holistic consideration of how higher education is funded. I refer to the public and private balance, not simply the private element. The universities believe there are rational grounds for sharing the cost of investment in higher education between the Exchequer and those individuals who benefit from their participation in higher education. This should be achieved through an investment plan that sets out agreed multi-annual levels of funding for the Exchequer and individual funding components. Such a plan does not exist. One of the things that bedevils higher education is that there is very little strategic planning for how we fund and grow our higher education system. In addition to the fee component, the investment plan should take account of other possible sources of non-Exchequer investment such as philanthropic donations. A private component is not purely about the individual student.

The most equitable approach to the individual contributions is via income contingent deferred loans and top-up fees. We have not proposed an implementation model for this because any system should be in a form appropriate to the specific circumstances obtaining in Ireland. It should be done as part of an overall investment plan, not simply an approach that decides to generate a certain amount of revenue and seeks this from students. Our policy paper outlines a number of key implementation issues to be considered. The issue is complex and needs to be dealt with in a carefully planned way. However, we are not in favour of a replication of the fees and grants system that obtained in the pre-1996 period, particularly for the reasons of inequity that led to its abolition.

Regarding the meeting with the Minister, the chair of the IUA, Dr. Hugh Brady, president of UCD, who cannot be here today, articulated the position I have described to the Minister. We also highlighted the more proximate concerns about funding cutbacks we are now faced with and the reductions in funding discussed earlier. We apprised the Minister of the likely consequences for services if the kinds of cutbacks referred to in the press in recent months come to be realised. We highlighted areas where there will be a real impact such as teaching and learning, infrastructure and services to students. We also discussed a slightly technical issue, which is important, of the overhead rate for research funding. That is at best 30% and should be raised to 40% at a minimum to reflect the real cost of research. Where the overhead is unfunded it must be picked up by the universities and this has an impact on the third level side of university operations.

We raised the need for improved fiscal incentives to encourage philanthropic donations and for targeted infrastructural investment, for example in student residences where there is strong demand. These issues are addressed in more detail in a submission to the Commission on Taxation and we would be happy to provide that to the committee if it is of interest.

Regarding financial accountability and outcomes measurement, there is an extensive financial and governance accountability system in place in the universities. This has been progressively strengthened in recent years. In the financial area, universities are subject to rigorous financial audit on an annual basis. A university's financial statements are audited both by university appointed external auditors and by the Comptroller and Auditor General, a double audit.

In respect of research funding activities, we are subject to a range of external audits by funding agencies, the EU and other sponsors. In addition, an extensive range of governance and accountability systems and measures are in place. As these are detailed in our submission I will not go into detail — I am conscious of time.

The key outcome is the provision of quality education to students. The growth in student numbers, the fact that our graduates rate highly on employability and high completion rates are testament to positive outcomes from higher education. The second main area is research. The SSTI strategy sets out a target of doubling PhD numbers by 2013. We are well on the way to achieving that. In line with the SSTI, we are radically reforming doctoral education, moving to a standardised duration of four years for a PhD and focussing on supplementing the discovery based core of the PhD with training and a wider range of skills aimed at enhancing the employability of PhD graduates and ensuring that this new cohort of PhD graduates we produce go on to work in industry and services as well as academia and have the transformative effect on the economy we are looking for.

Research is also the subject of extensive peer review and auditing by research funders. The recent value-for-money review by Science Foundation Ireland, undertaken by Indecon consultants, is one example of this. There is a range of outcomes to which universities contribute in advancing the cultural life of the nation and supporting the democratic process through its provision of objective analysis and informed comment. These outcomes, of necessity, are difficult to quantify but remain important nonetheless.

I thank Mr. Costello. We will hear from the two lead Opposition spokespersons and then from other members of the committee or visiting Members. Then, Mr. Costello or the delegation can respond by addressing each point separately if possible because members will have follow-up questions. I ask the delegation to note the questions but first to address the fees issue.

I welcome my colleagues from the university sector to the committee. The witnesses told us the core funding per student decreased by 17% in real terms between 2001 and 2006. Information given to me by the Department of Education and Science yesterday, by way of a reply to a parliamentary question, is that in 2001, we had 85,000 students on full-time or part-time courses in the university sector and the core grant that year was €538 million. By 2006, we had 90,000 students and the core grant was €753 million. Either the witnesses are misleading this committee in the evidence they have given in terms of a real reduction between 2001 and 2006 or the Minister misled me in the Dáil yesterday. Which is it?

I think I can answer that question. I am at a disadvantage, Deputy Hayes, in the sense that I have not seen the interior detail of the Department's calculations. We are quite confident that our calculations are accurate and I would be quite happy to share them with the committee. If there is a difference then, perhaps the committee——

Mr. Costello suggested in evidence to this committee that, in real terms, funding has decreased by 17% between 2001 and 2006. The information given to me, by parliamentary reply in the Dáil yesterday, is that from 2001 to 2006, the core funding, which includes the grant in lieu of free fees, has increased from €538 million to €753 million. Therefore, in real terms, core funding has not decreased.

Our calculations, as I hope we made clear, are based the separate treatment of the core grant and the grant in lieu of fees. The Department has clearly dealt with those figures together——

Yes it has.

——which we would argue against. The Department has raised this issue with us previously and it maintains that both the core grant and the grant in lieu of fees are recurrent funding and should be treated the same. However, the funding is delineated separately in the Book of Estimates, is applied to different things and is distributed in a different fashion.

The witnesses have suggested in their written presentation that in real terms, over a five year period, there has been a 17% reduction in core funding but that is not true.

It is, by our calculations on the core grant.

The witnesses have suggested that each of the seven universities is currently in deficit. Can each of the universities put on the record of this committee, in public session, the current deficit position?

If the individual university heads wish to comment, they can.

A suggestion has been made that all of the universities are in deficit and I would like to know the scale of the deficit in each institution.

Allow Mr. Costello to answer, if he is able.

I will not answer for the individual universities but will make a point of clarification. We have said that a significant number of the universities are in deficit, not all.

Are the universities in a position to indicate whether they are in deficit?

I am informedby the bursar that our cumulative net deficit is approximately €13 million. Our capital deficit, if the committee is interested, is somewhere in the region of €30 million. Our cash flow is negative frequently throughout the academic and fiscal year.

What rate of interest does the university pay on its overdraft?

In terms of the ongoing cash flow situation? I do not have the exact figure with me but——

With respect, we cannot get into that level of detail. Does any other witness wish to respond to the question posed?

The deficit at the University of Limerick at the end of the academic year 2007-08 was €1.5 million, leading to a cumulative deficit over several years of €6 million. Our projected deficit for the academic year 2008-09 was €1.8 million, based on two assumptions. One was that the grant in lieu of fees would increase by 5.5% but it will only increase by 2.6%. The second assumption was that the State grant would increase by 1%, which is now highly unlikely to happen. It will probably be reduced. Therefore, my current guess, based on what I read in the newspapers and hear from the HEA, is that at the end of the academic year 2008-2009 we will have a deficit for that year of €6 million.

Thank you, Professor Barry. Other heads are not compelled to give the figures and may choose not to.

I may be bucking the trend here but DCU does not have a deficit, nor an accumulated deficit, although we have some loans outstanding for capital projects. However, in terms of the financial year just begun, it will be very challenging to maintain that position.

DCU is not currently in deficit, is that correct?

That is correct.

I ask witnesses to briefly indicate what the deficit or surplus is at present before we move on to a question from Deputy Quinn.

Our situation is the same as that of DCU in that we have no current deficit. However, our projections for this current year, given what we think will happen with the core grant, is that we will have a deficit of more than €5 million.

The situation in Galway is that we have no accumulated deficit as of now but this year's projection is €5.2 million, based on the assumptions that were made in the summer and the advice we received from the HEA regarding the 3% reduction in the labour element of our core grant.

The cumulative recurrent deficit reported by UCD to the HEA is €15 million. We have no capital deficit.

I thank the witnesses. That is very useful information.

A suggestion has been put about by the university sector that unless the issue of funding is resolved, there could be a flight of academic staff from the country. Where is the evidence for that, to date?

Some of my colleagues may be able to give examples of it but we know, at a general level, that the academics who have been hired here — many from overseas — in the past eight years, on foot of our investment in research, are highly mobile people. It took a great deal of intensive work on the part of the universities and Science Foundation Ireland to get several high performers to locate here. There is now a serious concern about them remaining, which we have articulated. I cannot say it is a fact because it has not happened yet, but it is a real concern.

I thank the Chairman and the witnesses.

I welcome the witnesses and express my gratitude and praise for the work the universities have done over different generations. In particular, I congratulate TCD and UCD for moving up the university league table, as reported in today's newspapers. Such things do not happen by chance or accident and the institutions are to be commended for their efforts.

Following on from Deputy Hayes's questions, has the grant in lieu of fees, as distinct from the core grant, been maintained at par from the time that fees were abolished? If not, what has been the percentage reduction? We are getting confused information, perhaps not without deliberation on the part of the Department.

Will the universities increase registration fees, as reported in one of the newspapers? If so, by how much and with what effect?

With regard to the Review Body on Higher Remuneration in the Public Sector and specifically, reports Nos. 42 and 43, are the universities now fully compliant with the requirements of that body or are any allowances still being paid to senior academic staff that are unauthorised and illegal?

I will deal with the first two questions. The third is specific to the individual universities, although I may make some general comments on it. Our calculations on the grant in lieu of fees from 1998 indicate that it has decreased by 5% in real terms.

Is that an accumulated 5% or a figure for this year?

Accumulated. The fall has been small and significantly smaller than the fall in the core grant. That is based on calculations we did on the unavoidable cost increases facing universities on a yearly basis and the actual fee increases each year. Deputy Quinn referred to newspaper reports on registration fees.

The informed source.

It is an interesting area because, according to the reports, the Government will increase the registration charge. The Deputy is correct in suggesting that any increase in the registration charge would have to be proposed by the universities and subject to the Minister's advice.

Has the Minister made such a suggestion to the universities?

No suggestion has been made to us.

In a nutshell, is the report accurate to Mr. Costello's knowledge?

It is not accurate in claiming that we have made a proposal. The question is bedevilled by the lack of clarity regarding the level of allocation in the Estimates.

No proposal has come from the universities to increase registration fees.

Not in the sense of saying that we want to increase registration fees by a set amount.

For the purpose of the committee, I ask Deputy Quinn to repeat his third question.

My third question concerned the worrisome comments made in reports Nos. 42 and 43 of the Review Body on Higher Remuneration in the Public Sector regarding unauthorised and illegal extra payments on foot of the sector coming within the remit of the public sector under the Universities Act 1997. The report suggests that universities were not fully compliant in some cases. Can we take it that they are now compliant?

On behalf of my university, we are now and always have been fully compliant. We have never made any such payment. I must add that it has been difficult to recruit people to key management positions in the competitive setting in which we operate, although this may become less of an issue in the period to come.

I can confirm that UCC is in compliance and concur with Professor Von Prondzynski that the constraints under which Irish public universities operate severely impede us from competing internationally.

It might help if Deputy Quinn had a specific question for an individual university.

I do not specifically — the records are there and I am deferring to the Chairman's request for brevity. The representatives know exactly what I ask.

I do not propose to ask every representative to respond. Dr. Browne has indicated his wish to speak and unless somebody else intends to admit non-compliance, we will leave it at that.

NUI Galway is completely compliant.

Trinity College is fully compliant. I also concur on the difficulty of recruiting staff while staying compliant.

Is any university experiencing difficulties with compliance?

UCD has entered discussions with the HEA regarding contractual obligations entered into and the authorisation around these.

We will leave the matter at that for the present but Deputy Quinn may return to it later.

I join other members of the committee in welcoming the representatives of the Irish Universities Association and thanking them for their written submissions and oral presentations. This meeting will be significant to the debate on third level funding thanks to the information we have elicited. The committee has taken on the objective this year of continuing its examination of the third level sector, particularly in light of the Government's announcement of a review of the entire sector. We hope to discuss issues other than fees in future meetings and plan to engage further with representatives of the third level sector in that regard.

Some of the publicity given to the fees issue has come on foot of the claims made by the university sector that it was facing serious financial difficulties and would go to the wall unless fees were reintroduced. It is now clear from our discussions that at least half the universities do not face any such financial problem. That is significant. In regard to those who have indicated that their respective universities are running deficits, I ask for the factors which have given rise to these deficits and the efforts made by the representatives, as managers of the universities, to overcome the shortfalls.

In terms of universities' cost bases, has any proposal been made on the potential for sharing costs, services and procurement either within the sector or between the sector and the institutes of technology?

I congratulate UCD and TCD for their high ranking among third level institutions globally and welcome the high completion rate at third level. What is the level of attrition among first year students and what measures are being taken to address this? Perhaps the representatives can also indicate where the problems arise.

What would the representatives like to see in the review for the national strategy on further education, apart from the fees issue?

The Deputy asked a considerable number of questions.

I have one more question, if I may ask it.

Is it brief?

Yes. In regard to the registration fee, which I understand is partly intended to fund student services, I am aware the HEA has on a number of occasions raised the issue of transparency in how that money is spent and the proportion invested in what we would consider to be student services. How do the universities invest in student services and what improvements have they made as a result?

On the issue of financial difficulties, it is important to consider this issue in the round. It is not simply a question of asking which universities are running deficits. A relatively recent HEA report on the financial stability of universities strongly recommended that they should run surpluses because it is not good for any business to break even every year just about with nothing put aside for a rainy day.

This point is also relevant to the forthcoming strategy on higher education because we do not want universities which are just breaking even. Do we not want our universities to be funded to a level which allows them to be internationally competitive and have a university system which is commensurate with our overall goals for our economy? The OECD data are relevant for this reason because, while we can focus on our core grant, the data reveals that our system is significantly under-funded relative to all our economic peers.

We are actively investigating the potential for shared services and we are developing a number of ideas in that area. We will bring these forward in the course of next year.

Can Mr. Costello elaborate on this?

They are largely in the area of procurement. We are considering a number of means by which shared procurement could yield better value.

What about shared courses?

Universities are now collaborating in a range of areas with the institute of technology sector. I will quote from our own area. We have joint degree programmes where we provide part of the degree programme in Cork Institute of Technology and part in University College Cork at both undergraduate and postgraduate levels. We have joint research programmes where we work together seeking funding from Science Foundation Ireland, for example. We share facilities for courses and we have a standing committee between CIT and UCC at all stages looking for opportunities to complement each other and co-operate.

I am not putting us forward as a paragon of virtue because I know those approaches are emerging and are in place already in some of our sister institutions. It is a very important element of our view of the national agenda to get best value for money from higher education investment in a broad sense.

We are also involved in many collaborations, with one example being the Dublin regional higher education area, where we collaborate under the Strategic Innovation Fund II programme with many universities in the Dublin region. We recently launched with University College Dublin a graduate programme in chemistry, in which our students move between the two universities.

We would like to do more of this and we realise it is a very good thing. I have given one example but I could go on for quite some time about how we collaborate on various schemes such as this.

I will comment briefly. It is ironic that the funding for that alliance has just been paused. We were very much down the road of doing that kind of thing and it was specifically competitively funded by the Higher Education Authority.

I asked about addressing costs and if rationalisation or sharing of services and courses could be engaged in to ensure a further reduction of costs rather than looking for additional funding. That was the purpose of the question.

We have also been doing it in Galway. I will give two concrete examples. The first is that for the past ten years there has been a joint programme with Galway-Mayo Institute of Technology for access to third level education. We have jointly run a programme allowing mature and disadvantaged students to qualify for university and GMIT entrance. I can point to a joint programme with Limerick and UCC in the area of masters courses run for the past six years. There are many examples of joint programmes and we would be very supportive of any collaboration across institutions, either a university or IT.

Could we briefly address the issue of student services and first-year attrition rates?

The student registration charge was introduced some time ago and had a particular objective. It funds quite specific aspects of student welfare, services, examinations and registration. The current position, giving my university as an example, is that we get an annual income of approximately €2.7 million from the student registration charge. The cost involved for the services, examinations and other aspects I noted a minute ago is just over €5 million. This means the student registration charge pays for roughly half of what it is there to pay for.

In answer to the Deputy's question, the accountability for that is made quite specific and our accounts set out very precisely what it is spent on and the total cost. It can be followed in the public accounts.

Is it the case that the HEA has written to universities on more than one occasion on this issue?

Is that in regard to accountability?

Yes, and transparency.

It is extremely transparent in the case of our accounts.

I welcome the witnesses. I want to see a sustainable third level sector in Ireland. This is required for our students and nation. It was mentioned that there are 100,000 students in universities at the moment. I wish to address budget outcomes and frontline services to students.

We all face the reality of living within budgets, difficult as it is. I am delighted to hear that Dublin City University, National University of Ireland, Galway, and National University of Ireland, Maynooth, have indicated they have no deficit, although there may be one coming up. I know the ITs in the country manage to live within budget, although it is difficult. All these institutions get the funding from the same source. Why can the universities outside their budget currently not stay within budget? Are they expecting a bail-out at this point?

The budget cannot be divorced from outcomes. I am especially aware that 85,000 of the students in third level education are undergraduates. As a former educator, I am especially concerned about the reports I am getting about the quality of teaching at that level. It was correctly stated in the report that with regard to research, any action came from a standing start, and it has really been bumped up. This has been to the detriment of teaching quality, which concerns me greatly.

Will the witnesses talk about who audits the teaching quality for students? We have much graduate assistance doing the work lecturers used to because the lecturers have now gone into research. The competitive international environment with regard to the working together of research, teaching and learning has been mentioned but I am not convinced that teaching is not suffering. This in turn has an effect on the quality of learning of the student.

Based on current levels of funding for universities being retained, what frontline services to students, if any, are under threat? For example, are library services under threat? I may have another question later but I will stick with those for now.

I will speak for a moment about the budgetary matters raised by the Senator and Deputy Brian Hayes. There is not much of a contradiction between what we say and what was heard in the Dáil yesterday. My memory of what was said was that between 2001 and 2006, the number of students increased from 85,000 to 90,000 and total State funding went from €538 million to €753 million.

We regard that as a drop in real terms, which is to adjust for inflation. We estimate that the unavoidable increase in cost to universities, based on more than 70% of cost being pay, is of the order of 40% between 2001 and 2006. I would not want to be held to that figure. When we say "real terms", we do not mean actual cash amounts but rather the adjustment for inflation. That is where the figure of 17% comes from.

Is that an education multiplier? Is that inflation across the economy or inflation within the sector?

It is inflation within the sector. We pay national wage agreements and benchmarking. Every cheque that goes to an employee of the University of Limerick comes from the University of Limerick bank account. We are not like primary schools. If there is a 5% increase under a national wage agreement, that is added to our pay bill.

Will Professor Barry comment on the broader issue raised by Senator Healy Eames on the outcomes given the budget constraints?

What do we do to try to control costs? This refers to Deputy Behan's questions as well. We hire fewer people so we have larger classes in lecture theatres and tutorials. We have fewer hours for tutorials per week for our students. That is the main way we seek to control costs and it has a negative impact on the quality of the student experience.

Are the universities staying within budget doing that more than the University of Limerick, for example? I doubt it.

I should remind everyone that universities have not come from the same starting point. Until very recently, there was very little or no transparency in the manner in which the budgets were being assigned to different institutions. It is only in the past three years that we have had a resource allocation model. That showed the historical approach had brought about differences in the funding being made available to different universities.

If I look back 15 years in my institution, we had accommodation and buildings which provided a square metre area per student which was 25% below the national norm. Historically, we have had different land banks and endowments and different treatment. All that has emerged now is that universities which got less previously are now being brought up to an appropriate level of funding.

In order to give our students in Munster the same experience as they might expect in Leinster, we needed to address aggressively the difference in experience, and that meant capital expenditure. Members will have to realise that we have been trying, in a much more transparent world, to take decisions to make sure the student experience complies with the Constitution across the country — that is, that we treat all our children equally. That costs us, and we had to take risks to achieve that parity.

Why can universities not stay within their budgets? We need to take a medium-term view of this. As I said, this year UCD has a €15 million deficit. We have a plan to eliminate that deficit and fund the cumulative over the next five years. Why are we in this position? It has been put very well by other speakers. The rate of pay inflation — pay accounts for a little over 70% of our costs — exceeds the rate at which the income is inflated. The income is 90% controlled by the State. There are differentiators across the sectors, as Dr. Murphy alluded to. A second and important reason is that research activity has increased. The direct cost of that research activity is paid for, but the overhead has not matched. They are the two contributors to the deficit. The management actions required, as Professor Barry outlined, are to reduce non-pay costs through doing less of something or doing it more efficiently, and to employ fewer people. However, if we employ fewer people there is inevitably a reduction in the quality of service to students.

There is an issue that is not being addressed here. I would like DCU, NUIG and NUI, Maynooth, to outline how they do it, given that the NUI colleges are under the same restraints. For example, I am sure they will argue they are offering courses of equal quality, yet they have managed to stay within budget.

Galway is within budget for two reasons. First, our staff-student ratio was the worst in the country until recently. That has been shown by various league tables and so on. We needed to address that and we have done so in recent years. We have, in a sense, anticipated flows to the university from the resource allocation model. We were underfunded until recently compared to the other six universities. That has been shown in recent times by the HEA model. We were getting some benefit from that and, anticipating that benefit, we have increased our staff-student ratio. We did this in a managed way to bring ourselves up to the norm.

The second reason is that Galway has a very poor infrastructure. For example, the engineering building is 200 years old, although we teach modern engineering. This is in the middle of the city. It is a catastrophe for the west in terms of, for example, attracting students to engineering or to science. How do you attract students to a building which is an old mill constructed in the 19th century?

What steps have been taken to improve things?

We have fought this issue for the last ten years. At the moment we have a proposal before the Minister in which we ask him to release the money committed to us three years ago. We have private funding for that building. We are asking for €30 million out of a total cost of €55 million. We are covering the remainder ourselves. There is a risk associated with some of that private money because of our failure to use it. However, we cannot use it until the State releases to us the money promised for that building.

Each university is different. Each of us is coming from a different base. In some cases — certainly in Galway's case — we have had a major infrastructural deficit which we are trying to rectify now. That is why we have not made capital investments which we should perhaps have made. We will have to make them now if we are to offer a service to our students and to the west of Ireland.

I emphasise the point that every university is different. Maynooth is the smallest university and it is difficult to compare Maynooth with UCD, for example, which is almost four times our size. Like Galway, we have a very high student-staff ratio — somewhere close to 18 to 1. We have historically been underfunded, but that has improved to some extent through the recurrent grant allocation model which the HEA has introduced over the last three years. That has allowed us to improve front-line services in particular. In Maynooth we have concentrated particularly on front-line services to students. For example, we have a very active access office dealing with students with disabilities, including learning disabilities. We have tried to use the additional budget we have had over the past few years to improve undergraduate education, but that has inevitably meant that we have not competed to the same extent in some areas of research. We have had to be very selective in those areas of research that we have supported. The issues mentioned by Deputy Joe Behan——

How has teaching quality been maintained in the face of those restraints? I am not getting this from either of the two speakers. They have told us how they have been underfunded historically.

That in itself would be another question.

All of the universities have embraced new technologies in recent times in order to improve the efficiency of teaching. These include web-based support technologies. A wide range of efficiencies have been introduced to deal with the fact that we are not properly funded for the numbers of students we are currently dealing with. The major increase in student numbers has not been matched by resources and thus we have had to become much more efficient at what we do.

As has been said by the other speakers, every university is different to some extent, and DCU is possibly more different than many. We do not have the range of subject areas that most of the other universities have. We are more specialised and prioritised.

Since I became president I have had a strict policy of not running a deficit. That has consequences, and to make a connection with the point made by Deputy Behan earlier, even though DCU has kept within balance that does not mean we do not have a financial problem. The financial problem, in fact, is significant, because we have under-invested in a number of things as a result of the requirement to keep to the budget. I have tried to ensure that the student frontline experience is not affected, or is affected to the least possible extent. That means we have not tended to save on necessary academic staffing and on the direct experiences that students will have, but we have significantly under-invested in maintaining the infrastructure and capital facilities of the university. That has perhaps not become too evident to the users yet but it will soon. Some of it is evident; water is coming in through roofs and ceilings and we can do nothing about it because we do not have the money.

There are similar problems hitting us at the moment. The students will, as time goes by, experience that more and more because to some extent we will no longer be able to protect students from the consequences. Even though I will continue to say that if at all possible we will not run a deficit, the consequences of that will be visible. It would be nice to promise otherwise, but I cannot.

I will connect this also with the area of research. We have had a significant research programme in DCU over recent years. That too has put pressure on the rest of the system. However, I would argue with the point that this has been to the detriment of teaching. One of the consequences has been that students have access to world-class figures who teach, because in DCU every researcher teaches. We do not allow anybody to take a holiday from teaching. As a result, students have access to people they would not otherwise have had access to.

Is that the same in every college? I have had reports that postgraduate research students and teaching assistants are doing the teaching.

One of the consequences of the financial pressures — this is unrelated to research issues — is that staff-student ratios deteriorate, and in order to try to protect students from that to some extent, one may start to use postgraduates or others. That is not because resources are being redirected into research but simply because the resources are not there.

I want to make one point on this issue, and then I want to address the issue of teaching quality, which is important. It is important to distinguish between what we do and what we do not do. We do not have graduate research assistants doing teaching. What we have is graduate research assistants supporting teaching. They take tutorials, for example, under the direction of more senior members. That is a good thing. It links the research activity and scholarship of the university into the teaching programmes of the university and keeps them current.

It does not have an impact in terms of the students' experience?

It is a very positive thing. International research——

That has been the practice for some decades, has it not?

Absolutely. What we are seeing is that there are more such people within the university because of the growth in research activity.

It is good in theory, for sure. I have been one of those graduate assistants in the past.

No doubt it was of great benefit.

There is a benefit. I want to know who is auditing teaching quality. Who is the external auditor?

There is a robust system of quality within the universities. This comprises a unit review, whereby each department or school is regularly audited by external peers, people from outside the country, according to a statutory process. Another form of quality assurance is, in most institutions as in ours, students sitting on all the governance bodies, from the board which oversees the programme to the university board and the governing authority. We receive direct feedback from students into the governance structure immediately if there are any local quality issues in the programme. A further system which most institutions have in place is regular feedback from students on the quality of courses provided. When one looks at this, it correlates——

What form does that feedback take?

There are questionnaires on the quality of teaching.

Do students put their names to them?

No. The questionnaires and examination papers are marked anonymously. It is a very open system and student representatives believe they can feed directly into the governance structures of universities.

That is the feedback I have been getting from students. I have taken large groups——

One is not getting that feedback elsewhere.

That is the point. That is the feedback I have been getting about the quality of teaching declining, because everybody is moving towards a research focus.

With due respect, the question has been answered and Deputy Burke has been waiting patiently to ask some questions.

I welcome the heads of the universities and wish to be associated with Deputy Quinn's words of congratulations to the universities for the progress they have made in the international leagues. This success in the current climate is very important. In the past decade or more individual universities and faculties within them have clearly made strong links with industries. They have received financial assistance in the absence of departmental funding. Is there any indication that that source of funding will be reduced in the current climate? I want to link that question with specifics mentioned on outcomes. Medicine and information technology — the IT sector has been very supportive of University College Limerick and Galway — are core areas where we would expect development to continue at a rapid pace in terms of specific skills initiatives.

I will take the first question. Is the Deputy focusing on bilateral relations between individual companies and universities?

Yes.

That question would probably be better answered by my colleagues. What is encouraging is, if one looks at IDA and Enterprise Ireland job announcements, that projects are heavily research intensive, as a result of a combination of SSTI investments in the universities and the work done on the research and development tax credit. It is source of encouragement. However, global turbulence may start to hit. There may also be a major downturn in the USA, but at least there is a positive sign amid the doom and gloom. I will pass the question on bilateral contacts with firms to my colleagues.

One of the things on which I have worked hard since becoming president at Maynooth four years ago has been forming links with major industries, particularly multinationals in the area, of which there are many, notably Intel and Hewlett-Packard. The links the universities form with multinationals help to anchor multinationals in the area. The relationship we developed with Intel was highlighted by its vice president for technology as world best practice for any Intel plant around the world. We not only act to attract new jobs, but we also help to anchor multinationals. In the current climate that will be absolutely crucial to keeping such companies in Ireland.

We must move on. There are time constraints. We also have representatives of IMPACT coming in to discuss the school completion programme.

The issue of front line services is important for students. What front-line services are threatened if current levels of funding only are retained?

We will get to that question, if someone else wants to follow it up at the end.

I welcome the university heads, in particular Dr. Browne and Professor Von Prondzynski from my almas mater. I am glad Senator Healy Eames raised the question of teaching quality. A predecessor of Dr. Nolan said that what was happening in a lecture was a great mind communing with his subject, with the students as privileged eavesdroppers. I hope that is not the case; it would not meet today’s quality control requirements.

I want to ask a question on the specific issue of access regarding the proposal on free fees and whether the proposal has been access-proofed. Has the delegation considered if there would be implications for access for sectors of the population currently under-represented in higher education? Would people be put off by the prospect of securing a loan, even one with generous terms? Has the delegation met the council of directors of the institutes of technology? I teach in one and wonder if they share the delegation's views.

There was some work done by the ESRI recently that indicates that people from lower socio-economic groups tend to be more debt-averse and that this would have to be considered as part of any system involving loans. There is, however, another side to the coin. Since the recurrent grant allocation model is a distributive one, if one does more in terms of access, it is lost elsewhere in the grant. There is little discretionary money available to support access. We have a significant project under the strategic innovation fund which we hope will continue which is focused on increased access and extending the higher education roots to access scheme nationwide. That will have significant funding implications and is an example of where if one had more resources going into the system, more could be done proactively to increase access. We see increased access as a central part of any funding system.

On the point——

Leeway has been given. Visiting members to the committee are last. I must show deference to other members of the committee.

I welcome the delegation and will be brief.

The undergraduate is the most important person in any campus. Will the delegation tell us what percentage of the money invested by the Government filters down to undergraduate services? There are administration costs, but what actually goes to the student?

Deputy Behan mentioned comparisons with other universities. How do they compare on service delivery and outcomes? In particular, I raise the question of retention rates. Approximately 75% of second level students will go on to third level after the leaving certificate, but is there scope to achieve a greater retention rate? I am wondering about the levels at the end of first year.

We have heard a lot about different universities and their different practices. I agree there are no two the same. Would the delegation be amenable to having a forensic-type audit of all services in the universities? It would help the debate on the future of university education provision.

Senator Healy Eames mentioned lecturers and professors engaged in research. Research is very important and the money that goes into it is very necessary. I am concerned about the issue of consultants. When people are away, be they professors, lecturers or working on a consultative basis, that is an opportunity cost for students. When people are gone on a consultancy basis, is there any take coming back into the universities? I appreciate that universities are first and foremost educational establishments, but there are also the issues of the business and management of education. I would like to hear some thoughts on that.

Professor Barry and Dr. Murphy mentioned the forensic audit, so they can come in, and then Mr. Costello.

It is extremely difficult to answer questions on services because we do not have a common understanding of what the word "service" means. The primary service any student receives in a university is a teaching and learning experience. There is also a myriad of support services like counselling, health, welfare, career guidance and so on, so it is difficult to answer the question specifically. In essence, we have no problems with an audit, because we are confident that no matter what audits have, or can be, done, we will be shown to deliver good value for the money the taxpayer invests. That is a political assertion.

The issue of retention is hugely important. We do not want to see any student waste time in university, both in terms of taxpayer and individual costs. Approximately 11% to 12% are defined as dropping out in first year. In our institution we have appointed a first year student officer to deal with the first year experience. We have done a lot of work in this area, and one thing that emerges is that the biggest cause of first year dropouts is that the student enters the wrong course. We spend a lot of time investing in working with career guidance teachers in the secondary system to try to improve the choices made. It is not necessarily the fault of the universities that people change their minds at the end of the first year; it is a multi-factorial matter that requires intense management.

These are good questions. Retention is an issue. We did our own analysis of retention from first year when the student goes in, to how many students come out after a four year degree, and it can be surprising how many people leave the course. They may drop out, do not pass first year, or leave and we do not know why they left. It is right that this is raised. It is related to student services. It is an issue that will become important if these cuts bite on student services. It will increase, rather that deal with, the issue of student retention.

It was stated that the undergraduate student is the most important person in the university. One-third of our students in Trinity College are postgraduate students, and we do not say one student is more important than another. We need to recognise postgraduate students are also important, and the quality of the courses they receive must be something we continue to pay attention to. One in ten students in Trinity College is a PhD student. We are determined those students receive student service and the support they need to prosper in their PhD work. Let us not create hierarchies of importance of students within the university. We must provide student and academic services for all components of the student body.

That point was well made.

I thank the delegation for their presentation. We started discussing fees and the possibility of the reintroduction of fees. That is the topical question in the country with students and parents, mainly in the middle income bracket that would suffer. The impression I have after the discussion is that fees would not solve the funding difficulties in universities. Is the delegation suggesting that the reintroduction of fees would solve all their problems? My impression is that would not happen.

If fees are not introduced, and the delegation return here in a couple of years, what kind of universities or difficulties would they be describing to us?

I want to intervene. To save time on the related question regarding fees, the proposal to the Ministers is different. I say this in a personal capacity. There are valid issues being raised by the USI and other groups on the proposal of a graduate tax or surcharge. The delegation has mentioned a brain drain of lecturers within universities. What about the brain drain of students? We have seen in Australia and New Zealand that there has been a crisscrossing of students to avoid paying tax on their student loans. Would that happen here? Would there be a brain drain to Scotland and England? I would like some comments on that.

I will take these two questions. If one looks at the number of students who go to the UK, it is not decreasing and remains quite high. About 10,000 per annum go into the UK system of top-up fees and contingent loans. Looking at that empirical example, it does not seem to be a deterrent.

The other question from Deputy O'Mahony concerned the system. If we continue to have a progressively underfunded system, will we have a system that is attractive to students from Ireland or England? One may see a different kind of brain drain, because our system is not good enough and people are prepared to go elsewhere. That is a serious concern.

Regarding fees, and the question of whether they would solve the problem, as we stated at the start, they can only be considered as part of an overall strategic investment plan for higher education, a plan that does not exist currently. It is correct to say that conjecturing on fees in the absence of looking at the overall funding situation, one cannot answer the question of fees solving the problem.

A clear difficulty with the pure fees system is that if it is to be equitable, a high threshold must be set. There are different views on what constitutes a high threshold, and who is or is not wealthy. If a high threshold is set for fees, it will impact on the yield. One may end up with a system where there are fees, and they are levied on a small number of people and generate very little, or high fees are levied on a small number of people and it becomes a punitive tax. It is a system that has significant difficulties, and that is why we feel a loan system is a better approach. It is not necessarily a simpler approach, but it is better.

What is Mr. Costello's view on an overall increase in taxation to fund education, given that society benefits not just the individual student?

We have said in our policy paper that the difficulty with the total funding of higher education from general taxation is that there is an element of regressiveness there in terms of not all benefitting. That is the difficulty with it.

Surely if the Government has set a target that we want to become a knowledge-based economy, if pension funds are not performing well in current stock market terms that every taxpayer approaching old age, irrespective of their own particular circumstances has a vested interest in the pension fund that is the knowledge-based economy of this country. Therefore, those people whose children have gone through the system or who do not have children have a serious, direct, linear relationship to a knowledge-based economy that is basically coming out of the classrooms and lecture halls of universities.

The question of raising taxation in order to meet a particular need in higher education might work in theory but I do not think it would be easy to introduce a ring-fenced system of taxation whereby an increase in taxation would be allocated to higher education so that Governments could not vary it. There is no tradition of that.

No Minister for Finance would accept ring fencing.

That is what I am saying, that will not happen. If one looks at the practice around the world, the moment economic conditions get tough, one of the first targets of government cuts is higher education. That is evident in a number of countries, including this country. The problem with the current system is that the taxpayer as the sole funder of domestic higher education is a very unreliable funder.

The initial submission and the detailed documentation that was sent to the committee have demonstrated clearly that we are way below the norms of OECD peer group funding. What we are talking about is the need to get up to that level rather than to increase it above the norm.

I would like to hear otherwise but I am not confident that this is about to happen in the current environment.

Currently, the State supports 55% of students to go on to third level. The intention is that it should support 73% of students but that is simply unachievable from the tax take.

Education is a benefit to the individual and to society and I believe the cost needs to be shared.

What proportion of the cost?

That is a question to be debated.

It is called 41% income tax.

I do not believe that is a fair statement. It is important that the individual who is availing of a service makes some contribution to it in the interests both of fairness and——

People are contributing through their income tax.

—— — point taken — in the interests of the individual taking ownership for the good he or she is acquiring. Universities and students would benefit from individual students making some contribution to their education.

Third level education is not free.

We see it with American students coming to Galway, who clearly know what they are paying for their programmes and are demanding in terms of quality assurance. Issues such as access, quality assurance and fees are all related. Private contributions would support access, if it were administered correctly, and quality assurance.

That is the net issue here. Whatever model of funding we move to is secondary to the first principle of finding a new model of funding.

To return to something Professor Barry said, I do not think one can persuade this committee, the Government or anyone else for that matter, simply by arguing that this is a gigantic issue of class size and that the solution is to put more academics into the field to reduce the size of tutorials. That is not good enough as an argument by itself. It is a bit like the argument on class size in primary schools being extended to class size in lecture theatres in third level institutions. If one is persuaded to move to a radical new model in terms of funding, whatever it is, what would universities do differently in terms of the student experience? What else would universities offer to students that is currently not on offer? Professor Barry put it very neatly, that this is about lecturers and tutorials but I do not think people will buy that argument if it is about plugging a financial hole that some colleges are experiencing.

Are the universities contemplating tapping into what is recognised as a very lucrative area, attracting foreign students, especially Asian students? It seems the percentage of such students is very small relative to Great Britain where there is a huge intake from that area.

I will note the point but it does not relate specifically to this matter.

It relates to the money available to colleges.

Does anyone wish to respond on the issue of the income potential from foreign students?

All of us are trying as hard as we possibly can to attract more foreign students, especially because of the benefit they give in terms of additional income. The reason British universities do so much better is that they invest collectively in selling the brand, British education abroad, which they do through the British Council. Ireland has no equivalent to that and what happens is that each university works individually. NUI, Maynooth, has an office in Beijing and has been striving to increase the number of foreign students.

Is it possible to have a common brand?

It is, but we do not have it at the moment.

I was struck by what Dr. Browne said about student ownership and taking responsibility for their own education. That raises a very serious issue. Have the past 12 or 13 years of free fees been a good experience for students and has it given them ownership of the education system? Have students owned their education less because it has been free?

That is too difficult a question to answer. One must recognise that the participation rate is at 55%. If it is to increase to 73% the State simply cannot afford to cover the cost because the differential primarily relates to students from lower socio-economic backgrounds and students who are less-well qualified and who will need more resources. If we intend to be fair in society and to achieve a participation rate in third level of 73%, including people from lower socio-economic backgrounds, we will not be able to afford that as taxpayers and we will need to find a source to pay for it. While free fees have opened up education, it was primarily for those who could afford to pay for it. That is the reality and that is borne out by the data. I do not say that is a bad experience.

Is it the very same with the current funding? Nobody has answered the question yet of whether it will be the same students who will continue to suffer. I heard worrying comments about access. Who are the students who will suffer?

It is perfectly possible to create a system that provides, for example, for derogation from fees for individuals who are socio-economically disadvantaged. It is possible also to create a system where individuals pay and some of that funding is used, in effect, to cover the cost of those who cannot to pay.

I have been waiting for some time to contribute and I appreciate the opportunity to speak. I wish to comment on a number of issues that have been discussed. I will keep my points brief and specific.

The first issue relates to staffing costs and the financial burden that may be placing on universities and how it is being addressed. The Irish Universities Association has acknowledged that the student-staff ratio in Ireland continues to exceed 1:20, whereas in the UK it is 1:17 and the OECD European average is 1:16. What percentage of overall expenditure do the universities attribute to academic staffing costs?

The second point was referred to by another speaker. The university sector has proposed a student loan system. However, does it foresee that this would result in students choosing to enter employment directly after the leaving certificate rather than continuing in education? From speaking to students and young people I believe that would occur. Various organisations and groups, including USI, have indicated that would be the case.

Third, reference was made to non-EU students. In this regard, Dr. Browne referred to the fees of American students. Non-EU students must pay much higher tuition fees. How can Irish universities increase the number of students coming from non-EU countries significantly? Are marketing opportunities not being addressed? Is there potential to attract non-EU students, thus bringing in private tuition fees from outside the European Union?

I cannot give the Senator a breakdown of the cost but can state the ratio of academic staff to non-academic staff in Irish universities is approximately 1:1. This is low by comparison with the United Kingdom. UK universities tend to have more non-academic support. There is a tendency to say a university is all about academics but it is not because it is about all the people who provide the educational experience in the university, including student counsellors, medical staff and access staff who are not necessarily academics.

On the question of loans serving as disincentives, marketing may be required because one can say clearly to those contemplating going to university that their chances of employment will be much higher and that they will earn significantly more money over their lifetimes than they would otherwise earn. Such earnings would amount to significantly more than they would ever owe on a loan.

I do not want to speculate on the quantum of a top-up fee but, if one were to have a reasonable quantum, it might amount to the cost of a car over a four-year course. Significant numbers of students drive to university and even to secondary school. It is important to have perspective and this will have to be achieved if a system such as that proposed is introduced.

On the last question, all the universities are working strongly on recruiting non-EU students, be they from the United States, Asia or elsewhere. However, it is necessary to issue a few warnings in this regard. First, if one increases the proportion of students from non-EU countries by a very high percentage, it might have an impact on the student experience that would be regarded as negative, including by non-EU students. Chinese students say they do not come to Ireland in order to study among Chinese students. One needs to be very careful in this regard.

The premise of the Senator's question focused on whether we should be recruiting more overseas students to deal with the financial problem. If that premise were to be released to the students we are trying to recruit, with the resulting message that they are being asked to come here to subsidise Irish students, our marketing capacity would collapse. This tends to be the case when the percentage of overseas students becomes too high. Even if one says nothing in this case, suspicion enters the system and has a very negative impact.

Experience in the United Kingdom and elsewhere shows there are not much empirical data to support the claim that students put off studying if faced with loans. When the top-up fee was first introduced in Britain, there was some evidence that there was a minor effect in the first year, but not subsequently.

On a related issue, medical students are paying their fees to the university, generating welcome revenue, but at the same time they are intrinsically valuable in our health care system. Anecdotal evidence suggests too many of them go back to their own countries rather than staying in Ireland to work. Are other incentives available that could keep medical students in the country?

This is a good example of what can be done. In the past 15 years medical schools in the four traditional universities have worked together to attract students to the country, from Malaysia and south east Asia generally. This, in effect, has paid for medical schools in Ireland. The students are paying in the order of €25,000 each to come here to be trained and their income has kept our medical schools afloat. However, with the growth in medical education planned by the State, we have been required to cut back on the number of non-EU students. The deal entered into with the Higher Education Authority requires this reduction to create places for Irish students.

On the Deputy's point about non-EU students not remaining in the health service, those students pay a very high fee which is paid in many cases by their governments. It is unreasonable for us to expect their governments to pay their fees and have them remain here to work in our health service.

Our labour market has grown and the feminisation of the medical profession is such that if we do not increase output, we will have a crisis in GP care, not to mention consultant care. This is a separate issue. If one considers the profile of Dr. Browne's medical school and the crazy anti-work practices the Government is pursuing with regard to child care and maternity leave, one will realise this constitutes a train coming down the tracks that will wipe us all out in approximately 15 years, if not sooner. That is a totally separate issue to that of funding.

On Dr. Browne's point, students are working harder than they ever worked. Semesterisation, continuous assessment and such pressures constitute an experience one million miles from that enjoyed when I was in UCD studying architecture. First Arts was the first exam and third Arts was the other and one could swan around when not studying for them. The experience is now totally different in terms of pressure and IT requirements must be borne in mind. To suggest, as Dr. Browne did, that if students do not put their hands in their pockets, they do not own their education is offensive. There is no such thing as free education. The fee barrier has been removed but the cost to students and their parents is enormous, as is the number of students doing part-time work. The commitment they make to earning enough points in the CAO system is surely an indication that they are committed to education.

It has not yet been stated parents are meeting the costs incurred by students. If the cost is passed on to students, more private second level schools will come into existence. Since third level fees were abolished, the access problem did not improve. This starts at primary and pre-school levels. In the context of imposing a new tax on students, a student who begins next year will obviously be at a disadvantage to one who just finished this year.

Let me return to the question of the brain drain which I do not believe was answered adequately. As soon as the graduate tax is introduced, students will go to Scotland and England, or any other English speaking country within a short transit area. How can this be addressed and how big will the brain drain be?

Every member of the committee, irrespective of his or her party, would sympathise with the idea of funding through the tax system. I take Dr. Browne's point that students sometimes believe they have a free ride and would take matters more seriously if they had to pay but, in general, the more they will earn, the more tax they will have to pay. They will have to pay anyway and nobody will leave Ireland because of its tax system if he or she has job opportunities after getting a good education.

When I asked about non-EU students, I did not do so with a view to suggesting we should be inviting them here to subsidise Irish students. The universities are operating according to a business model, whereby they believe the issue must be examined in a radical way. One suggestion should be to consider non-EU students. I studied at a university in Northern Ireland and 35% to 40% of the students in my class were from beyond the European Union. This did not diminish our educational opportunities in that we all had the same ones. I was from County Donegal and there were students from Northern Ireland and others from non-EU countries, but I would not interpret this in a negative way. If we are examining this as a business model, all these options need to be taken into consideration, including the issue of lower levels of students attending third level education if the deferred loan system is introduced. A young person from a difficult financial background will be forced to choose between working in a local factory and going to university, an issue concerning many parents.

If some of our best lecturers are researching rather than lecturing, how does this affect undergraduates?

I have stood before classes for 25 years. The most impacting statement I can make as a teacher is that the information on the screen was produced by me and my colleagues. That is the "wow factor" whereby students acknowledge they are being taught by the expert in the field. It is a much more positive educational experience than someone just mouthing from a textbook. The integration of research and teaching is what determines teaching quality. We must work strenuously to see both as symbiotic rather than the present situation where it is seen as competition because of a flawed funding model for the research element.

There will be different opinions on funding. It is useful to get everyone's opinion.

What Senator Ó Domhnaill has said on the brain-drain issue is conjecture; he cannot prove or disprove it. The economy is undergoing a profound transformation. The construction industry is collapsing. Large numbers of apprentices have been trained for an industry which will shrink significantly. Not that there is anything wrong with apprenticeship as a mode of formation but it will send a strong signal to people about where they need to go with their skills. Agriculture is also shrinking, with what we would broadly call industry. Traditional manufacturing extends from basic manufacturing to high-tech companies. Job losses have occurred in these sectors and the profile of industry is changing. The industries of the future will be service companies and technology-intensive manufacturing firms. The difficulty with this is that if we want to educate people for these industries, it is a different process of education and it costs. That raises the question of from where will the funding come. As this is happening by accretion, one does not necessarily see it. However, it is becoming more apparent. That is a message that we as a sector and society must send. This is what is behind increasing participation rates. The only future for sustainable growth and employment is based on high levels of skills provided by universities and institutes of technology.

I thank Mr. Costello. I am sure the debate will continue elsewhere.

Overall, this has been a very useful discussion but we have an awful lot more about which to talk. We have not looked at research outcomes and how they impact on job opportunities. Many students have contacted me concerned about the reintroduction of third level fees. A large student protest was held in Galway last week. Based on current levels of funding, what frontline services in the universities are threatened next year?

We are postponing the appointment of academic staff, both lecturers and professors. We are cutting back on library opening hours and not investing in health and counselling services. There is a list of the services that will be affected in our submission to the committee.

The same areas will be affected in University College Dublin. There have been enormous improvements in services in the university in the past ten years, but we are looking at not being able to maintain them. We are going back to our pre-2003 library opening hours. What more are we going to give to justify increased investment? We should look at the track record of reform and improvement in the universities in the past five years and maintain that trajectory. There will be cutbacks in library opening hours, postponement of appointments, student medical services and other frontline and backroom services.

If students are asked to pay vast sums of money for a university education, they will ask what extras they will receive in their relationship with the university. It becomes more of an adult relationship.

If the State reduces its role in higher education funding, income derived from other sources will be used to maintain current levels of service before we talk about adding services which will produce additional costs.

Nobody has suggested we need to introduce fees at second level but the reality is the basic undergraduate degree has become the new leaving certificate. People pay part-time fees and graduate fees. We must convince those who do not see a future in farming or industry that to get to where we want to be will cost but that we will be much richer and more permanently employed. We must agree in principle to spend that amount of money. How we raise it is a secondary matter. It is the commitment to have a 6% of GDP spend in education across the three sectors. We must win this argument together. While the heads of the universities have an instructive role to play, with all due respect, they could play it better.

As a sector, we agree and have consistently stated we need an investment plan. Its funding is the second question.

I agree with Deputies Hayes and Quinn that we need to articulate the case. One difficulty is that people tend to be blasé about university education. They feel it just happens and that they will get jobs after graduating. However, it does matter. College is not just about going to lectures and accumulating information. That is why better teaching, learning and student services will improve the overall experience of going to college. Going to college is about the totality of experience that forms one for life. It is a hard idea to articulate but we are willing to do more on that front.

I thank the contributors. We have had an expansive discussion, with some areas of agreement and some of disagreement. This is the first meeting of a process which will include representatives from the Department of Education and Science, including the Minister, on the funding issue. I hope the delegation can provide more knowledge for us, which will be of benefit. I thank the witnesses for being so willing to respond today.