Extra funding for third level should take priority over cuts to fees, says Varadkar

Tánaiste says it would be a mistake to cut €3,000 student charge and only leave ‘small bit’ for core funds

An increase in core funding for higher education should be prioritised above cuts to student contribution charges or increases in grant aid, Tánaiste Leo Varadkar has said.

Speaking at a conference organised by the Irish Universities’ Association, he said it would be a mistake to reduce the €3,000 student contribution charge, improve Susi grants and only leave a “small bit of money” for core funding.

“Core funding should be the priority of those three areas in my view because of the return on investment you get and the long-term value to students in terms of increased earning power,” he said.

“There will have to be an element of all three, realistically, and that does require choices to be made.”

Government sources recently indicated that a new funding package for higher education is due early this year, including a potential cut to the student contribution charge and an expansion of student grants.

However, Mr Varadkar said these issues will need to be decided “between now and October” – a reference to the 2023 Budget – and any package will “definitely” include an increase in core funding.

He said he has asked officials in the Department of Finance to examine whether funding can be drawn from a €1 billion-surplus in the National Training Fund.

He said employers had “not complained” over recent increases in the PRSI levy on the basis that they saw the value in investing in higher education and training.

“But they say to me, legitimately in my view, that it’s unreasonable to ask them to make a further, higher contributions while we maintain such a large surplus. I think that is one of the areas we need to examine between now and budget time,” said Mr Varadkar.

Future funding

The focus on higher education funding follows the completion of a report into the future funding of the sector by the European Commission.

The unpublished report is understood to estimate that core funding of between €350-400 million is needed for higher education, over and above existing levels of funding.

Mr Varadkar said it should be noted that there has been a 40 per cent increase in funding for higher education over the past decade but accepted that student numbers have also grown significantly over the same period.

He said the €2 billion higher education budget was “not small” and was double that allocated to the Department of Enterprise, Trade and Innovation.

One of the dilemmas of being in Government, he said, was the number of “excellent” funding proposals for various sectors .

“If you have 10 reports saying what’s best for each sector, there’s no way you can possibly fund all 10. There just isn’t the money. . .” he said.

“So, as a government, do you spread it thinly, or pick winners and losers, with areas that you’re willing to cut back in order to increase in other areas . . .That is a very hard decision for any elected politician to have to make.”