Posted tagged ‘Report of Special Group on Public Service Numbers and Expenditure Programmes’

Our country’s future: the fate of PRTLI

July 21, 2009

The publication of the report last week by ‘An Bord Snip Nua’ – the Report of Special Group on Public Service Numbers and Expenditure Programmes – has raised many issues and questions about the future of public expenditure in Ireland. Broadly speaking the report’s recommendations can be sub-divided into those that address bad value for money, or waste; those that identify expenditure that simply cannot be afforded in present circumstances; and those that claim to identify expenditure under policy principles that may simply be wrong, or at least no longer appropriate.

It appears that expenditure on research was seen by the Group as, at least in part, falling under the latter heading. A key claim in the report is that, as far as the Group is concerned, they could not find enough evidence that expenditure on science, technology and innovation had yielded sufficient economic activity (volume 1, p. 14). On that basis, the Group proposed savings of €27 million per annum on research programmes funded under the Department of Education and Science, and the termination of the Programme for Research in Third Level Institutions (PRTLI). Ironically perhaps, the latter recommendation was published on the exact day that higher education institutions had been asked to submit their detailed proposals under Cycle 5 of PRTLI, and shortly after the tenth anniversary of the initiation of the programme.

In fact, it would be difficult to over-state the historical and current significance of PRTLI. The whole programme would not have got under way at all in the late 1990s but for the financial support and the energetic prompting of Chuck Feeney and Atlantic Philanthropies. Before the first cycle of the programme, Irish universities were largely teaching-only institutions, without either the capacity or the expertise to provide backing for the development of R&D in Ireland. With the first cycle, a small but important number of key research groups were given the means to become internationally competitive and attract world class scientists and researchers. The impact of this was huge, as it allowed Ireland to be presented as a place where some cutting edge research was being undertaken, and this led directly to a new wave of inward investment. Many of the blue chip companies that subsequently invested in Irish R&D did so because of the changed circumstances of Irish research institutions. Furthermore, this R&D investment in many cases helped to secure the retention in Ireland of more general operations by those companies, with thousands of workers benefiting. This has continued right through the present decade. Even high value manufacturing jobs in the pharma sector have often owed their arrival to the backing made available through university research teams.

When the government announced in 2002 that it was suspending PRTLI due to temporary budget problems, the effect was immediate. I was at a gathering in the United States during that period at which American companies were being courted to locate knowledge-intensive operations in various countries. A spokesman for an Asian country suggested publicly at that event that US companies should now focus on Asia, and that Ireland in particular had now been shown not to be serious about R&D. The effect of this statement (and others like it elsewhere) prompted the government to re-start PRTLI, thankfully before the damage had become irrecoverable.

Right now we are looking down into the same abyss, and again we may be doing so because of our own actions. No matter what some may argue, a key element in future economic growth will be knowledge-intensive investment, whether by multinational companies or through indigenous firms. At this point countries in other parts of the world, including big ones like China and India, and smaller ones like Singapore, are competing aggressively for such investment. To shut ourselves out of this would be madness.

It may well be that we need to look closely at how research investment is determined and how well the money is spent. But to argue that such investment does not produce economic benefits is staggeringly ignorant. Not only must this particular recommendation be repudiated, it must be done so quickly and audibly. Our future is at stake.

Snipping the national research effort

July 16, 2009

Over recent months I have come across several commentators who were, in effect, suggesting that investment in university research has been a waste of money and has produced no results. Generally these commentators have been economists; and so, given the composition and chairing of An Bord Snip, it’s not absolutely unexpected that such comments make a come-back here. The key argument in the report is expressed as follows (p. 68, volume 2):

Research and development (R&D) funding for the third level sector is provided through the
Programme for Research in Third-Level Institutions (PRTLI) and the research councils.  An
allocation is made to HEAnet.  In general, the Group is strongly of the view that substantial
reductions in funding are warranted given the significant amounts invested to date, the lack of
verifiable economic benefits resulting from these investments and the inflationary impact of funding on research and administration salaries.

Research and development (R&D) funding for the third level sector is provided through the Programme for Research in Third-Level Institutions (PRTLI) and the research councils…  In general, the Group is strongly of the view that substantial reductions in funding are warranted given the significant amounts invested to date, the lack of verifiable economic benefits resulting from these investments and the inflationary impact of funding on research and administration salaries.

This statement is made almost casually, as if it were not clear to the authors that it not only suggests a change in higher education funding policy, but a complete reversal of what has essentially been the cornerstone of Irish economic policy for the past three or so years. Ever since the government issued its Strategy for Science, Technology and Innovation in 2006, which was reinforced strongly in late 2008 as the recession set in when the government published its paper Building Ireland’s Smart Economy, national policy has been to develop and maintain a high value knowledge economy based on world class research capacity and expertise, so that this might help to attract foreign direct investment and stimulate indigenous start-ups. The assertion by An Bord Snip that there is a lack of verifiable evidence that this is working is heavily contradicted by just such evidence – most recently pointed to by the former IDA chief executive, Sean Dorgan, in an article for the Irish Times. Furthermore, when the PRTLI programme was paused by the government in 2002, we know that the impact on potential corporate investors in Ireland was huge, and some business was lost to the country.

The Group appears to be distinguishing between infrastructural research support as contained in PRTLI, and programme research funded by Science Foundation Ireland. But without the capacity provided by PRTLI, it would become impossible to carry out SFI-funded projects. The whole of the Strategy for Science, Technology and Innovation would fold.

It seems to have become an article of faith with some economists that university research does not stimulate economic activity. But this faith flies in the face of really very strong evidence. Furthermore, what is the alternative? Industry R&D will not happen in a country where it is not underpinned both by significant graduation rates of postgraduate researchers and by a critical mass of academic research. And as we well know, low value manufacturing is now beyond our reach, and while low-tech and old-fashioned services can provide some of the needed economic growth it is not the overall answer, and is moreover not a magnet for further investment in its wake.

I am not suggesting that there are no savings or efficiencies that could be found in the country’s research programmes. But this blanket dismissal of the value of academic R&D is, in short, ignorant and ill-informed. To date the government has been clear about its understanding of how we can secure economic growth in the next phase of our development. It is to be hoped that it does not now lose its nerve. As a country, we have nowhere else to go, and following this recommendation would be insane.

When the Group says that there is no evidence of any impact of the PRTLI programmes so far, I can only conclude that they never looked for or asked for any, because there is in fact plenty of evidence. Some of it is right here in my university. Some household names in global business have come to Ireland over the past ten years on the back of the work being done by PRTLI-funded (and SFI-funded) projects.

‘An Bord Snip’ – some general comments

July 16, 2009

First, maybe a word of explanation for any non-Irish readers. What has popularly been called ‘An Bord Snip Nua’ is in fact the ‘Special Group on Public Service Numbers and Expenditure Programmes’. This was established by the Irish Minister for Finance in late 2008 as part of the government’s developing strategy on containing public expenditure. As its main task it was asked to ‘identify specific options for reducing current spending and the numbers employed in the public service.’

The report was drawn up over several months and was (with more detailed appendices described as ‘detailed papers’) recently submitted to the government. At first it was unclear whether its content and recommendations would be kept secret, but at its meeting on Tuesday of this week the cabinet decided that it should be published, and this has now been done.

In essence the recommendations contained in the report set a framework for the development and containment of public services and administration in Ireland. The implications go far beyond the sums that may be saved, and move into both general strategy and policy and, perhaps, ideology. Whatever decisions the government now takes in responding to the recommendations will shape the Irish state for a generation to come.

This latter aspect – the frame of reference of the report – is something I will comment on on a later date. For now in the next two posts, I am going to focus on two aspects of the report’s recommendations on higher education: (i) staffing in the sector, and (ii) research funding. The recommendations on both of these have the capacity to change fundamentally our acquired understanding of the main objectives of universities and of the direction of the Irish economy.

But it is worth noting, in passing for now, that there are other fundamental issues raised, including the overall institutional shape and structure of higher education. I had already in an earlier post foreshadowed the recommendation on the Higher Education Authority – and the report now proposes to merge the HEA with the Department of Education and Science – and here my arguments from that post hold: I cannot see this saving any money whatsoever, while creating a much less enterprising context for the future. There are also recommendations on realignments and mergers in the sector, particularly effecting some institutes of technology. More on that another day.

But perhaps it is worth making one more general point. Overall, these are harsh and difficult recommendations, affecting the whole public sector in Ireland. There will be strong and indignant opposition to quite a lot of it. As it happens, to my mind there are quite a few recommendations across the report which disclose a poor understanding of the purpose of the public service and its potential. But there is another dimension to all this: we have no choice, money will need to be saved, and at this order of magnitude there are no easy options. Whatever is proposed, and regardless of who might be proposing it, it would be very very painful. What is probably instinctive to all of us – that we know we need to cut but really it shouldn’t affect us in our particular concerns – is not a viable position. So we need to respond constructively. And one way or another, the savings will have to be found.

These really are interesting times.

Snip!

July 16, 2009

The Report of Special Group on Public Service Numbers and Expenditure Programmes (‘An Bord Snip Nua’) has now been published, and there is quite a lot in it of relevance to higher education. I shall be looking at it this afternoon, and will post my comments on it overnight. Of course there is also much in it of relevance to other parts of the public sector.

More later today.


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