Universities receive additional funding in giveaway budget

Universities in Ireland have welcomed additional funding announced in this week’s giveaway budget – the latest budget introduced by the government which is under strong pressure to call a general election before Christmas rather than wait until its term of office ends next March.

The universities are to get additional core funding, rising from €50 million (US$55.1 million) in 2025 to €150 million extra by 2029. They will also get an extra €102 million next year to cover agreed national pay agreements – this will increase incrementally by €10 million per annum over subsequent years.

Over the next six years there will also be €150 million to provide training facilities in veterinary, nursing, medicine, pharmacy and dentistry. Similar amounts will be provided for research, for the decarbonisation of tertiary campuses, and for the further education and training sector.

An additional €235 million will be provided for the tertiary sector as once-off current funding for skills and apprenticeships.

Student support

Minister for Further and Higher Education, Research, Innovation and Science Patrick O’Donovan said: “We have been able to increase standard rate maintenance and student contribution grant thresholds by 15% while also putting more funding towards student accommodation projects, increasing the Rent Tax Credit to €1,000 (from €750) and delivering on our promise to increase PhD stipends from €20,000 to €25,000 per year.”

Students, many of whom work part time and during their holidays, will benefit from extra income tax reliefs announced in the budget which provided €2.2 billion for cost of living help for families, including energy credits and child benefit bonuses.

Peak universities body the Irish Universities Association (IUA) welcomed the package of funding measures, saying in a statement the additional core funding would enable universities to “invest in the necessary staff and support to underpin the continued delivery of high-quality graduates for the workforce”.

However, the IUA said the full €307 million funding gap identified by government in 2022 will not have been “fully closed” and said it was important future budgets address this.

It said additional funding from the National Training Fund – which it had “long campaigned for” – would enable “necessary capital investment in extra healthcare student places and in research infrastructure and PhD training”.

The IUA said while the allocation of €102 million in 2025 to cover government-agreed national pay awards was very welcome, as was the decision to increase this incrementally over subsequent years, it was critical that national pay agreements were “fully funded by government” and urged the government to ensure that the €72 million shortfall in pay budgets for the current year is “fully provided for in the Supplementary Budget”.

President of Dublin City University Professor Daire Keogh said the budget was a recognition that the system required additional support across all fronts if the quality of Irish graduates and research was to be maintained.

While he welcomed the forthcoming multi-annual increases in the core grant he echoed IUA concerns about the €307 million underfunding identified the government report published when the current Taoiseach (Prime Minister) Simon Harris was minister for further and higher education.

The report was entitled Funding the Future and Senator Ronan Mullen – who represents alumni of the National University of Ireland in the Senate (the upper house of the Irish Parliament) – suggested that it probably should have been called Funding the Distant Future.  

State coffers

The state’s coffers are currently awash with money and there was plenty to splurge about in the €105 billion budget. Income tax receipts are rising steadily and so too are Corporate Tax receipts, mainly from multinational companies based in Ireland. They paid over €26 billion last year, more than a quarter of total tax receipts.

Most of the corporate tax comes from 10 Big Pharma and Big Tech companies. This includes Apple which has just been ordered by the EU to pay a €13 billion ‘windfall’ tax bill plus a further €1 billion in interest and penalties to Ireland.

The Court of Justice ruled that the country’s approval of beneficial tax positions dating back decades amounted to illegal state aid – preferential tax treatment given to a company over others.

Neither the company, which has had a base in Cork for over 35 years, nor the Irish government were happy with the ruling. The government is worried that the EU might go after other ‘sweetheart’ deals with overseas companies, but it has changed its tax arrangements with these companies following pressure from the OECD and EU.

Apple, like many major employers in Ireland, is concerned at the country’s underdeveloped infrastructure. Minister for Finance Jack Chambers said the Apple money had the potential to be “transformational” as the government sought to “nurture” further foreign direct investment by prioritising public infrastructure spending in areas including housing, energy, water and transport.

He also announced that the government would spend a further €3 billion on the country’s water system and the ageing electricity grid, which will be paid for by the sale of shares in Allied Irish Bank, one of the banks bailed out more than a decade ago. Since that time the Irish economy has rebounded dramatically.