Universities say they face shortage of funds to pay existing staff this year

€92m hole in college finances due to unfunded pay awards for thousands of staff agreed by Government, says association

Universities say they are facing a shortage of funds to pay for existing staff this year due to a gap in Government funding to cover the cost of public sector pay increases. Photograph: iStock

Universities say they are facing a shortage of funds to pay for existing staff this year due to a gap in Government funding to cover the cost of public sector pay increases.

The Irish Universities Association (IUA), which represents eight of the State’s top-ranked universities, said a supplementary budget is urgently required this year to plug a €92 million hole in their finances.

Jim Miley, the association’s director general, said: “Each university in the State is faced with a shortage of funds to pay for existing staff this year. Collectively, this amounts to €92 million. That is what is needed just to stand still with a further €171 million required in 2025 to break even. It is now absolutely critical that the Government fully funds the pay awards negotiated by them as part of the national pay round.”

He said funding of the existing pay award will only maintain the current level of student-staff ratio which “seriously lags the EU average”.

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“It is critical that the necessary investment is made to enable universities to pay for the staff required to maintain a quality higher education for their students and to deliver the necessary support services. Under-pinning the quality and resilience of higher education is mission-critical to Ireland’s competitiveness,” he said.

The appeal comes at a time when some seven publicly-funded universities are running deficits, while president of Imperial College London, Prof Hugh Brady, has warned that underfunding is eroding the quality of the Irish university experience.

The Department of Further and Higher Education did not comment on the IUA’s statement, except to say that “funding in respect of public sector pay awards is sought as part of the annual budgetary process”.

It has previously said it has allocated additional core funding of more than €100 million over the last two budgets leading to increased staffing levels and enhanced support services for students.

This has formed part of the “Funding the Future” strategy, launched under then minister for higher education Simon Harris in May 2022, which aims to provide more than €307 million in additional core funding over successive budgets to boost the quality of provision.

However, the IUA maintains that many of the gains made by these increases in core funding have been “wiped out” by pay inflation arising from national pay agreements as well as other factors.

“While government provided some measure of relief on escalating energy costs over the last two years, the funding provided for nationally negotiated and agreed pay awards has fallen well short of the actual pay bill cost,” it states, in its pre-budget submission.

“There are a range of ‘standstill’ funding measures urgently required to allow universities to maintain the current level of service. These include additional pay costs arising from national pay agreements, new medical consultant contract terms and the costs associated with increasing student numbers.”

As of June 2024, it said, virtually all of the €100m increase in core funding since 2024 has been used to fund national pay awards for existing staff. As a result, it estimates the net gain in core funding is just €8 million.

In terms of core funding next year, the IUA said it is imperative now that the government provides not less than €120m in Budget 2025 to honour its “Funding the Future” commitment.

It said this would enable universities to improve staffing ratios, enhancing access to students from underrepresented groups; boosting student health, wellbeing and counselling services; and making further progress on enhanced pathways between further and higher education.

The IUA’s pre-budget submission also noted that a surplus in the National Training Fund — funded by a levy on employers — has “ballooned” to over €1.5 billion and will climb to €2 billion by this time next year.

The association has called on the Government to act on the commitment made by Minister for Public Expenditure Paschal Donohoe in last year’s budget to address the burgeoning surplus.

“It is inconceivable that the NTF surplus would be allowed to continue to grow while provisions for national skills needs go unmet,” the submission states.

Carl O'Brien

Carl O'Brien

Carl O'Brien is Education Editor of The Irish Times. He was previously chief reporter and social affairs correspondent