Friday, 17 July 2009

The cuts and children

“There’s a definite stink of class war off these documents.”
An tSaoi: So commented “ec” on Irish Economy at 3.34 p.m. yesterday this afternoon. This is a fair summary of the cumulative waves of cuts, proposed by Mr. McCarthy and the rest of his committee.

However, get used to it. The Commission on Taxation will report very shortly and is likely to produce more of the same. The two groups have a common member, Ms Mary Walsh a former partner in PWC. Those with long memories may remember her from appearances in front of the Public Accounts Committee as Tax Advisor to AIB.

Rather than look at Mr. McCarthy’s reports in their entirety, I want to consider the way it will affect just one group, children. Children are proposed to take hits under various headings, some small others much larger and more public, but all moving in one ideological direction.

Sport: Irish children already have poor participation rates in sporting activities, whether at school or through community clubs. Sport in schools was already under severe pressure from staffing adjustments in place and many schools are dependent on Development officers working with local clubs, but employed through their parent bodies. There is a suggested cut of 34% (page 16, volume 2) in current funding proposed, which would wipe out this service, as the sports bodies are not in a position to cover the complete cost. Sport for all becomes Sport for all who can afford it.

Education: The total reduction in spending proposed is €746M. The report validly asks many questions about the management of Irish education, which as a current member of a Board of Management of a 2nd Level school and a former member of a BOM of a Primary School, I have asked myself in the past.

One third of primary teachers are not assigned classroom teachers, but rather have a variety of other functions, leaving a substantial discrepancy between the ratio of teachers to pupils and class size. There is also a considerable discrepancy between the pupil teacher ratio and class size between urban and rural areas.

The proposals therefore to merge many smaller schools makes sense and will improve the educational experience for children. I would go perhaps slightly further than Mr McCarthy. My own view is that the optimum size of a primary school is in the region of 200 – 250 pupils. There will always be areas where distance, cultural and religious issues will make that impossible, however they are the exception.

At secondary level, he proposes cutting 25% of the €101M subsidies provided to fee paying schools. I would suggest that it is time to go the whole way. Likely savings are perhaps just €50M, as children and perhaps some schools would return to the voluntary free sector, but this is surely about fairness.

Cuts which have no logic and will hit children include:

• Reducing capitation grants by 10% to save €25M will cost more in the long-term. Schools in poorer areas will not be able to cover the additional by fund-raising.
• Cutting the numbers of Special Needs Assistants by 20% to save €60M and increasing class sizes will substantially dis-improve the educational experience for the whole class. It will also prevent school trips by reducing the number of adult supervisors.
• I understand that the Dept. of Education’s existing projections are based on the wildly optimistic hope that 50% of the children of migrants are going “home”.

Social Family Affairs (SFA): Approx. 35% of the total cuts are expected to come from this area and, as many of the payments are related to children, they are clearly in the firing line.

There is a proposal to cut Child Benefit by 18% for the first and second child and 33% for third and subsequent children. This is a simple clean standardising cut and far less bureaucratic than most of the other proposals including taxation.

Let me make an alternative proposal. There are approx. 100,000 children who are put on their parents’ payroll to obtain single tax credits. That family therefore can benefit from both the tax credits and child benefit. I would suggest that we do away with Child Benefit completely and allow for the refund of the single person’s tax credit for all children, Under 18, resident in the State and in full-time education. No double claiming by the business classes would save approx €200M, and as the payment is not a SW payment anymore, it would not be covered by EU Regulation 1408/71, saving payments for children not resident in the State.

Mr McCarthy does state “Care will need to be taken to avoid the inadvertent accumulation of measures in individual cases,” but his approach is likely to make the position of many families with more than two children significantly worse, without providing any encouragement for one or both parents to return to the formal workforce. A universally paid Child Benefit is neutral in that respect. I have always been suspicious of the operation of Family Income Supplement and I am surprised that he has not looked at the streamlining of payments into a single universal payment for children, which would not negatively distort the workplace market.

Conclusion: This report is an extremely good example of the complete lack of joined up thinking in relation to Government expenditure. The proposed adjustments may make short-term savings but will only lead to increased problems in the future. I have no doubt better use could be made of resources, but this report provides little by way of proposals to do so. If implemented, it will ensure that we remain one of the most unequal societies in Europe.


Irish Mammy said...

I couldn't agree more, excellent post. Children are constantly being put in the firing line and we have seen from OECD reports, CSO figures our statistics on caring for our children is nothing at all to be proud of. Today we hear again (13.10.09) that ESRI supports a 20% cut to child benefit this follows a litany of other economical "experts" whose independence on the matter needs to be called into question.

We have gathered over 15,000 signatures from parents in Ireland calling on this maddness to stop - leave child benefit alone!

Irish Mammy said...

Actually I re-read this now and do not agree with abolishing child benefit unless you have in its place the following:

1. Heavily subsidised childcare/creche facilities or tax credits that reimburse working parents to help them with the cost of childcare (we are at the top of the EU as regards these costs - we are at least twice EU average).

2. Free medical card and dental care for children under 18

3. Free school books, transport, special needs classes and abolishment of "voluntary contributions"

4. Better maternity and paternity schemes in line with EU averages.

Only when these are in place and fully operational could the removal of CB be contemplated.