15 January, 2018 - Cornerstone Reform of Higher Education - Minister Bruton & Minister Mitchell O’Connor

New competitive fund for innovation to be introduced, extra funding for multi-campus institutions

More funding for delivery of STEM courses, financial penalties for breaches of governance

The Minister for Education and Skills, Richard Bruton T.D. and the Minister of State for Higher Education, Mary Mitchell O’Connor T.D. today announced reforms which will link funding of higher education institutions to the delivery of key national priorities, including better alignment to skill needs of the economy, higher levels of  performance and innovation, expansion of research; particularly with enterprise partners, better access for students at a disadvantage and improving lifelong and flexible learning opportunities.

This will be done by tying funding explicitly to delivery in these areas and by developing 3 year compacts with each college designed to deliver new System Performance targets, also announced by the Ministers today.

A high quality, responsive higher education system is crucial to delivering on our ambition to make Ireland’s education and training service the best in Europe by 2026. Today’s announcement ensures that our higher level institutions support innovation, are responsive to the changing needs of the economy and society.

Key changes to the funding formula being announced today include: 

  • Increased money for the delivery of higher cost STEM courses.
  • Increased weighting to students who come to education at a disadvantage, emphasizing Government’s commitment to tackling educational disadvantage.
  • Life long, part-time and flexible learning opportunities to be incentivized.
  • Better alignment between the outputs of our Higher Education institutions and the skill needs of the economy.
  • The introduction of an Innovation Fund and a performance fund to reward institutions who excel in particular areas.
  • Removal of rigid 60/40 split of funds between universities and IOTs.
  • The introduction of a financial penalty for breaches of governance by institutions.
  • New funding streams for research.

 Important reforms that will be prioritized in 2018 include the following: 

  • Increasing the proportion of funding that is allocated to universities (via a ‘top slice’) on the basis of research performance from 5% to 10% in 2018.
  • Establishment of a competitive Innovation Fund to support innovative proposals from institutions with potential application across the system.
  • Additional funding of €250,000 for institutions with multiple campuses (must meet certain criteria as proposed by the Review Panel).
  • Demonstrable impact of new funding on key skill gaps.
  • Consultation on a potential rewards based approach to performance funding to incentivise and reward institutions who excel in particular areas.
  • Design and introduction of a financial penalty system for serious breaches of governance.
  • Development of an online tool to clearly communicate how funding is allocated, the outcomes it generates and the ways in which it supports the range of objectives set for higher education.
  • Establishment of an Implementation Group to monitor progress and advise on particular recommendations.

 Key new targets for the next 3 years include: 

  • Increase by 10% the number of those aged 25-64 engaged in lifelong learning by 2020 and by 15% by 2025.
  • Increase by 25% the total number of students studying on a flexible basis.
  • All students will have the opportunity to undertake a work placement by 2025.
  • Increase engagement with enterprise by increasing spin out companies by 40% and licenses by 20%. Double overall higher education research income derived from industry to €48m.
  • Increase entry coming from disadvantaged and disability streams and ensure every DEIS school partakes in HEI led accessprogramme.
  • Implement 2018 Higher Education Gender Equality Task Force Action Plan.
  • Expand alternate pathways by doubling apprenticeships, increasing Springboard by 30%.

Making the announcement, Minister Bruton said, “These are really important reforms, which provide clarity on the expected outcomes for higher education over the next three years and on how funding will be allocated to our institutions to deliver on those outcomes.

Shortly after being appointed Minister for Education and Skills, I set out that we must introduce new performance-based funding mechanisms and new targets for improved outcomes for the users and funders of the service.

“A high quality, responsive higher education system is crucial to delivering on our ambition to make Ireland’s education and training service the best in Europe by 2026. Today’s announcement will ensure innovation, good governance and excellent research are prioritized by our institutions, in line with our overall national goals. I’m particularly excited about the renewed emphasis on rewarding innovation. It is so important to reward and encourage leaders to try new, exciting things and I believe our new competitive innovation fund will have a really fantastic impact on the ground.

Minister Mitchell O’Connor said “The Government provided additional funding for higher education in Budget 2018. Higher education, further education and training funding is more than €100m greater in 2018 compared to 2016.  We’re committing today to transition towards a reformed funding model that is more transparent, consistent across higher education institutions, that incentivises actions in key strategic areas such as research and STEM provision, and supports improved accountability while also respecting institutional autonomy. This will ensure that the additional funding that has been made available for higher education is targeted effectively and that institutions are held accountable for how they use public resources.

“As we strive for even greater inclusion, access and diversity within our higher education the new System Performance Framework provides an ambitious programme of work for the higher education sector. These frameworks have changed the nature of the States interaction with our higher education institutions, from a largely budget driven process to a broader approach encompassing objective setting, and accountability by the sector.

Both Ministers expressed their thanks to the members of the Independent Review Panel for all of their work on producing the Review.

The Review of the current funding allocation model (RFAM) was produced by an independent expert panel, appointed by Minister Bruton in 2016 and chaired by Ms. Bríd Horan. The Panel made 33 recommendations to reform the model by which funding is currently allocated to higher education institutions.

Download: Higher Education System Performance Framework 2018-2020 

Download: Review of the Allocation Model for Funding Higher Education Institutions


Notes for Editor:

System Performance Framework 2018 – 2020

The new System Performance Framework outlines the Government’s key objectives for higher education for the period up to 2020 and sets out how institutions are to be assessed during these years.

The six key objectives can be summarized as follows: 

  1. Provide a strong talent pipeline, responsive to the needs of the economy and society. 
  2. Create rich opportunities for international collaboration. 
  3. Become an Innovation Leader in Europe. 
  4. Significantly improve equality of opportunity, break down cycles of disadvantage. 
  5. Demonstrate consistent improvement in the quality of the learning environment with a close eye to international best practice. 
  6. Demonstrate consistent improvement in governance, leadership and operational excellence.

The Systems Performance Framework provides key metrics on which the system as a whole and the institutions can be monitored and evaluated.

The new System Performance Framework 2018 to 2020 builds on the previous higher education sectoral frameworks. For this period, the six key objectives, in full, on which the higher education sector performance will be assessed are: 

  1. Providing a strong talent pipeline combining knowledge, skills and employability which responds effectively to the needs of our enterprise, public service and community sectors, both nationally and regionally, and maintains Irish leadership in Europe for skill availability.
  2. Creating rich opportunities for national and international engagement which enhances the learning environment and delivers a strong bridge to enterprise and the wider community. 
  3. Excellent research, development and innovation that has relevance, growing engagement with external partners and impact for the economy and society and strengthens our standing to become an Innovation Leader in Europe. 
  4. Significantly improves the equality of opportunity through Education and Training and recruits a student body that reflects the diversity and social mix of Ireland’s population.
  5. Demonstrates consistent improvement in the quality of the learning environment with a close eye to international best practice through a strong focus on quality and academic excellence. 
  6. Demonstrates consistent improvement in governance, leadership and operational excellence. 

These key objectives, as set out by Government, will form the basis of the next iteration of strategic dialogue process between the Higher Education Authority and the higher education institutions. 

This report, which is now being published by the Higher Education Authority, reviews the performance and progress of the higher education system with reference to the previous performance based framework, published by the Minister in 2013. Implementation of this framework was overseen by the HEA through a process of ‘performance compacts’ and ‘strategic dialogue’ where higher education institutions set out a set of strategic and performance objectives which are formally agreed with the HEA. 

The framework and associated dialogue process emerged from the development and implementation of the National Strategy for Higher Education to 2030, published in 2011, which recommended significant reform of the higher education sector.

Review of the Allocation Model for Funding Higher Education

An independent Expert Panel was appointed by Minister Bruton in 2016 to review the current allocation model for funding higher education and to make recommendations on the most appropriate funding model for the future. The expert panel comprised: 

  • Ms. Bríd Horan, Chair, currently Chair of Trustees of Bank of Ireland Pension Fund, member of DCU Governing Authority.
  • Professor Philip Gummett, retired Head of the HE Funding Council for Wales
  • Professor Sir Ian Diamond, Principal and Vice Chancellor of the University of Aberdeen.
  • Ms. Mary Kerr, former Deputy CEO of the HEA

The terms of reference for the panel were as follows: 

  • To review the existing approach to funding higher education institutions by the HEA in terms of its effectiveness in delivering on national objectives; reinforcing mission diversity; ensuring sustainability and quality; and driving performance; 
  • Identify and consider options regarding how that approach is developed in order to reflect the principles which must underpin future funding of higher education, including the appropriate balance between the three different components of the current funding model; 
  • Make recommendations on an appropriate future approach and on an implementation timeframe to protect short-term financial stability.

The review process began in December 2016 and involved research and analysis and extensive consultation with stakeholders, including bilateral meetings. The review is informed by 11 Working Papers which examined inter alia, the key issues and questions, the cost drivers and the costing system underpinning higher education and international funding allocation approaches.