Education needs better support post-Brexit

Brexit, now that is is really happening, is going to cause a major strain on this country.

In that context, and accepting that we don’t want to steal their boots while the body is still warm, it behooves Ireland to take every opportunity presented to it to take business from the UK.

Much of the discussion on gains to be made has concentrated on the financial services area. In addition, there should be some potential for agribusiness to take up activities which are now UK-based exporting to the EU.

Behind all this however we have a sector which has evidenced potential for significant post-Brexit export growth where the State, far from encouraging it, is in fact strangling it. This is the higher education sector.

Every non-Irish student who comes to study is an export. Exports of educational services from Ireland represent a potentially enormous market.

Some 400,000 students enter the UK annually to study, many in the area of English language but as many for longer-term degree and diploma studies. Some 32,500 are in areas such as English language or private colleges. Ireland has approximately 12,500 students from outside Europe.

This is a large body of exports. It is responsible for approximately €1.75bn in value added per annum.

Two strangulations exist. First, we have a dreadful reputation in the English language school area. Despite this, the Department of Education has yet to fully implement its own recommendations and to put in place a statutory framework around quality in the area.

It remains essentially self-regulating, and we know this is a system which ultimately fails. Until these schools are regulated we cannot grow them in confidence.

Taking the State-related bodies, an even more bizarre issue hobbles them. In the financial crisis a regulation known as the Employment Control Framework was put in place on all universities and institutes of technology.

This had a dual effect — it controlled overall numbers of staff and also controlled the distribution of staff, academic and professional, as between grades.

The ECF, as it was known, was implemented from 2011 to 2014. Yet, as we come towards the middle of 2017, it is still being implemented.

It is being implemented due to the lack of the department again agreeing a new framework with the universities.

As a consequence, universities and institutes of technology cannot grow other than by non-Exchequer funds.

In the absence of a serious commitment by the Department — perhaps it should be renamed the Department of Primary and Some Secondary Education — for a stable financial system for higher education, the sector has moved decisively from State to non-State funding.

This is most evident in the university sector. Thus my own institution, TCD, in 2015-6, obtained €138m from the State, 38% of total income.

TCD is probably on track to have 25%-30% of its income from the State in the medium term, based on the trajectory of the last number of years. UCD in 2015 obtained just over 30% of its income from the State.

Over the last decade State funding has declined 25% while student numbers have gone up 25%.

But the State remains —via the Higher Education Authority, which provides less then 15% of income — the arbiter of not just staff numbers but staff deployment.

This strangles any opportunity post-Brexit to grow. More students need more resources. But if staff cannot be hired, then the system cannot grow. Exports are choked off. This makes no sense.

Brian Lucey is professor of finance at the School of Business, TCD.