Mairead Farrell (Galway West, Sinn Fein)
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59. To ask the Minister for Education and Skills when the technological universities’ new borrowing framework will be put in place. [26572/24]

Mairead Farrell (Galway West, Sinn Fein)
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Will the Minister update us on the plans for putting in place a new borrowing framework for the technological universities?

It has been a topic of conversation for some time - realistically since the TUs have come on stream. What is the update on this issue?

Patrick O'Donovan (Limerick County, Fine Gael)
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As the Deputy will be aware, there is currently no borrowing framework in place for the technological university sector. Housing for All contains a number of key actions relating to student accommodation, one of which involves the examination of a borrowing framework and financing options for the technological universities.

The TU study is progressing in tandem with the standardised design study I referenced a while ago for student accommodation to enable a viable design model for State-supported student accommodation based on regional needs and feasibility assessments.

My Department is working with the sector to develop proposals for student accommodation. This work is progressing in tandem with an assessment of a range of funding and delivery mechanisms for student accommodation. We are also progressing large teaching and learning capital developments with the sector through Exchequer-funded supports. The impacts, risks and responsibilities arising from such funding and delivery mechanisms are key considerations in this context. Safeguards will be required to ensure that projects would not adversely impact the resources or financial position of technological universities, or the wider public finances. Stated requisite oversight, risk evaluation, project management and attendant governance and regulatory processes are essential. Any framework proposal would require approval by the Government.

The Higher Education Authority's output report and evaluation of the TU proposals is due this month. Work on shortlisted proposals will progress throughout 2024, with final options to be presented to my Department in quarter 1, 2025. Funding options, including but not limited to, a borrowing framework will then be considered.

It is anticipated that any borrowing framework, subject to approvals for the TUs, would in the first instance prioritise the provision of student accommodation in line with the commitments given in the Government's Housing for All plan.

Mairead Farrell (Galway West, Sinn Fein)
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What I understand from what the Minister is saying is that TU proposals are coming in at the moment and there may be potential delivery in quarter 1 2025 or that will be when a decision will be made. I raised this matter earlier this year with the previous Minister, who is now Taoiseach, and he indicated to me there would be a change in the initial approach. Rather than having institutions move off-balance sheet by being deemed autonomous public sector bodies like other universities they would instead be allowed to develop housing through public-private partnerships, PPPs. As the Minister knows, the value of PPPs has been questioned. It seemed that any kind of review to allow TUs to progress to borrow off-balance sheet was not happening. Is the Minister saying that borrowing is still being considered as a viable option for TUs and if so, what stage of the process are we at in getting that permission?

Patrick O'Donovan (Limerick County, Fine Gael)
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All options, including but not limited to a borrowing framework, will be considered in this regard. I visited the Munster Technological University in Kerry last week to look at the science, technology, engineering and maths building that is in bundle 1 of the PPP. This is not exclusively about borrowing capacity. It is important to point out that direct Exchequer funding is being used by a lot of the TUs at the moment together with the PPP model. We are delivering a substantial capital investment in the TUs at the moment. Now as we are about to have a new Minister for Finance, this is one of the issues I will be anxious to speak to him about. All of the borrowing by TUs, if there were to be borrowing into the future, will go onto the State's balance sheet so I am conscious of that. At the end of the day, it is not about getting sidetracked into a cul-de-sac that it has to be a borrowing framework only. There are other methodologies, including the PPP option, and direct Exchequer funding, which we are using in the TUs at the moment and has been quite successful.

Mairead Farrell (Galway West, Sinn Fein)
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The point I am making is that there would have to be a review by the CSO and approval by Eurostat in order for technological universities to be able to borrow off-balance sheet. The premise of my question is whether that is currently in train rather than it being on-balance sheet. I am referring specifically to student accommodation because it was my understanding that Ts were promised at the time that they would be able to borrow specifically for that. The concern about PPPs is, going back to our earlier discussion, student accommodation being affordable for students. With regard to the ability for the TUs to borrow and to deliver their own student accommodation, if the Minister wants to give them loads of money in the budget for direct builds and fund TUs that way, that will be all well and good.

Patrick O'Donovan (Limerick County, Fine Gael)
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PPPs have their place in the economy as well as direct Exchequer funding for capital works. In a previous role we would have discussed this topic at length. PPPs have their place and are important. The structure of them, how they are laid out, the impact they have in terms of cost for the service user, in this case the student for accommodation, and site acquisition are something that ultimately the learner will be the principal beneficiary of.

Direct Exchequer funding is also a route and outside of the TUs, the European Investment Bank has been a very strong collaborator in the delivery of not only student accommodation but also significant capital investment in the university sector for what I call the "older" universities. I met them recently with the Minister for Fnance, Deputy Michael McGrath.

It is not a binary question; there are a number of different facets. The question the Deputy initially asked was if there is consideration being given to a borrowing framework and the answer is "absolutely". There is further work to de done on this with the Department of Finance, the HEA and with our own Department and is certainly something we are keeping going.