Education Payroll Budget: A Public Sector Bubble We Can no Longer Afford.

I was interested recently in doing some research into education in Ireland wondering how had things changed since I left secondary school myself. What drew me to this task was the statement by John Gormley T.D. and leader of the Green Party, that the Green Party is the Party of Education. As a member of the Green Party myself I wanted to find out more.

What I found was astonishing. Here is a summary. There are today some 480,000 students in primary taught by 31,349 primary full time teachers, 337,000 students in secondary education taught by 27,236 full-time secondary teachers and 150,000 students in third level resourced with over 35,000 full-time academic and non-academic staff.

This can be broken down into 10,000 full-time academic staff, over 15,000 full-time contract research staff and over 10,000 non-academic staff employed.

This is why the Department of Education has the third largest budget of any Department in the State. When you see these figures its easy to understand why.

So how far have we come in the past decade with education?

Far more than we would ever realize. Lets look at the facts. In 1998 the number of primary school teachers in full time employment was 21,100, today it stands at 31,349 an increase of 10,249. The number of full time secondary school teachers in employment in 2000 was 24,600 and today it is 27,236, that’s an increase of 2,636.

I do not have the figures for employment in third level for 2000 but it is widely accepted that there are now a considerably larger number of staff employed full time compared to ten years ago. So what we have seen in the recent past is a massive increase in investment in education by the state that is not generally acknowledged by the public or trade unions.

To illustrate how significant this investment has been lets look a little deeper at the statistics.

In 1985 there were 552,528 students in primary education. Today there are 480,000, a reduction of 72,528 pupils. Within the same time we have seen an increase in the number of teachers by over 10,000 full time staff. So while student numbers have fallen significantly teacher numbers have increased by a roughly a third. But lets not forget this investment was necessary as we were making up lost ground to bring our standards up to our European neighbours.

The expenditure per student for primary, secondary and third level education has increased significantly in the past ten years from €3,313, €4,949 and €8,927 respectively in 1998 to €6,546, €9,447 and €11,368 in 2008. That's an increase between 100% for primary education to 20% for third level in the last ten years.

In every respect one has to acknowledge that in a short time we have come an enormous distance. The facts speak plainly when it comes to education; we have never had it so good.

The State has invested in education enormously over the past ten years. This money, however, has principally been spent on salaries and not on educational infrastructure. Hence, the substandard quality of infrastructure used by many schools around Ireland, which in some cases comprises entirely of leaky, cold and poorly insulated prefabs.

As with other sectors of the public sector we have seen a massive investment in human resources in hiring additional staff. In parallel with the huge increase in staff numbers has also come a significant increase in salary costs over the past ten years.

One of the problems that now confronts us is how we pay for this as a nation going forward.

If we cannot pay for it, what do we do? Do we cut numbers or cut costs? For in the next ten years we must find over €12 billion in savings to deal with the critical state of the public finances. This critical state has us borrowing €70 million a day to pay for our public sector costs alone.

If we look at what the situation is elsewhere it might help enlighten us as to how we may manage our costs in the difficult years ahead.

A typical secondary teacher in Ireland after nine years service earns approximately €56,000 and this figure rises annually thereafter; in the UK it is capped for life at €40,100 (save for annual inflation rises). In every respect after nine years service to be able to earn €56,000 is a very significant salary especially for a job that is also compensated with 18 weeks paid holidays a year. In reality what this means is that for someone who takes up employment as a secondary school teacher at 24, by the time they are 33 they will be guaranteed an income of €56,000, 18 weeks holidays and a guaranteed pension.

If we were paying similar wages to the UK for secondary school teachers, where they have a much greater tax base to pay for public sector salaries, we would see an approximate reduction of €433 million a year in operational staff budgets for secondary education alone. That's a lot of money. The figure for third level would be even higher approaching one billion euros as academics and lecturers in Ireland are paid significantly more in Ireland than their European counterparts.

The reality, which we don’t want to accept, is that we are a very small country and cannot really afford to pay the many very generous public sector salaries awarded in this country. It will be impossible to make significant savings in the education budget without impacting on services provided unless payroll costs are revised. This reminds me of a scenario I had as an employer back in 2002 when I wanted to take on additional staff and increase the salaries of new staff in my organization but did not have the budget available to do so. I knew that in order for the business to develop in difficult times something had to give. My response was not to take a pay-rise that was due to me but rather use this money to reward and keep the existing staff on my payroll. For me this was a relatively simple decision; I knew my job would be made a lot more difficult if staff left. How many I wonder in the public sector would be willing to take a pay cut to keep their colleagues in employment? From what we hear from the Unions, no one is willing to compromise. What we have seen in some public sector organisations, however, is part time staff losing their jobs by the hundreds and thousands while their full time colleagues get pay rises. Payroll costs have increased while numbers employed have decreased. This is a shocking indictment of our country and character.

What we need right now, more than ever, is national unity, which requires public sector employees and their unions to acknowledge reality. The taxpayer and the public sector must come to accept the reality that we have a public sector bubble that we can no longer afford. We all agree that we must invest in education and services but this does not mean that we go bankrupt doing so. Something must give and it has to be a reduction in salaries back to European norms.