Monthly Archives: May 2013

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Ireland, as we know, is not a tax haven. We know this because we are told it. And, our political and economic elite wouldn’t lie would they…

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The cost of legal advice to Irish Institutes of Technology

How much do institutes of technology and universities spend on external legal advice? Thanks to the indefatigable Peter Mathews TD we now have the information for the IoT sector. See below the total external spend on legal advice per annum, broken down between HR and other issues.

Some interesting figures here.  What was going on in LIT in 2002 (400k non HR) and 2007 (116k) ;  What is the story in Cork IT spending over 100k on non HR related legal fees every year since 2006? ; What about IADT, the smallest of them all, and its non HR legal spend in the last few years? ; similarly IT Sligo has a few non HR spends over 100k in 2009 and 2012?; DIT and WIT seem to be veritable gold mines for the lawyers ;  whats going on in Athlone that it spends so much on external legal fees related to HR issues?

Im sure that there are perfectly good explanations for these spending but it might be nice to see them. At times of stringent resource constraints one has to wonder also if these spends are wholly justified. It is in my experience and opinion a relatively easy way out to throw law at a management, HR or structural problem when the best solution might be an internal resolution. Lets bear in mind that while there has been change the legal profession still charges massive fees.

Human Resources

 IITR

 ITB

 LIT

2001

 €19,066

 €5,000

 €-

2002

 €36,416

 €-

 €-

2003

 €40,270

 €22,000

 €-

2004

 €24,192

 €44,000

 €-

2005

 €17,729

 €11,239

 €-

2006

 €52,256

 €1,951

 €-

2007

 €64,111

 €16,177

 €-

2008

 €54,676

 €24,424

 €-

2009

 €9,383

 €7,828

 €-

2010

 €50,125

 €10,361

 €-

2011

 €41,570

 €3,360

 €-

2012

 €39,644

 €23,845

 €20,006

Non HR

 IITR

 ITB

 LIT

2001

 €8,171

 €-

2002

 €15,607

 €49,850

 €417,993

2003

 €16,448

 €-

 €84,662

2004

 €10,368

 €-

 €23,628

2005

 €7,598

 €-

 €64,882

2006

 €22,395

 €12,775

 €11,154

2007

 €22,586

 €780

 €116,282

2008

 €34,580

 €12,539

 €17,653

2009

 €24,761

 €3,150

 €65,696

2010

 €18,290

 €1,391

 €13,543

2011

 €16,979

 €4,355

 €90,088

2012

 €17,811

 €2,799

 €55,009

Human Resources

 LYIT

 GMIT

 CIT

2001

 €17,000

2002

 €15,000

2003

 €21,000

2004

 €4,923

 €36,169

 €35,462

2005

 €58,774

 €40,141

 €37,000

2006

 €1,062

 €65,563

 €36,000

2007

 €23,595

 €46,365

 €78,000

2008

 €28,354

 €88,013

 €34,231

2009

 €1,276

 €19,749

 €63,000

2010

 €2,390

 €45,940

 €86,000

2011

 €14,356

 €48,980

 €96,000

2012

 €4,637

 €91,802

 €85,000

Non HR

 LYIT

 GMIT

 CIT

2001

 €38,569

2002

 €34,414

2003

 €17,130

 €54,361

2004

 €6,118

 €2,463

 €98,630

2005

 €1,331

 €1,367

 €60,779

2006

 €2,093

 €3,759

 €106,557

2007

 €3,977

 €-

 €232,858

2008

 €7,547

 €4,733

 €175,027

2009

 €28,833

 €2,066

 €118,003

2010

 €17,465

 €19,228

 €229,309

2011

 €29,106

 €56,703

 €350,414

2012

 €8,307

 €1,485

 €129,687

Human Resources

 ITS

 IADT

 ITTD

2001

 €12,217

2002

 €6,679

2003

 €-

2004

 €-

2005

 €1,301

2006

 €-

2007

 €9,300

2008

 €4,150

 €-

2009

 €1,116

 €2,097

2010

 €10,206

 €1,608

2011

 €17,479

 €877

2012

 €2,517

 €1,040

Non HR

 ITS

 IADT

 ITTD

2001

 €45,033

 €9,973

2002

 €15,486

 €40,310

2003

 €30,604

 €86,077

2004

 €22,954

 €-

2005

 €17,885

 €21,955

2006

 €27,453

 €38,687

2007

 €49,078

 €36,949

2008

 €34,584

 €52,447

 €64,877

2009

 €169,110

 €24,045

 €25,547

2010

 €72,734

 €70,583

 €51,684

2011

 €55,444

 €169,000

 €14,946

2012

 €159,630

 €229,000

 €29,863

Human Resources

 DIT

 WIT

 DKIT

2001

 €130,793

2002

 €130,793

2003

 €90,114

2004

 €112,422

 €22,770

2005

 €189,842

 €8,260

2006

 €146,072

 €42,944

 €6,329

2007

 €271,347

 €32,050

 €9,279

2008

 €38,686

 €12,677

 €9,755

2009

 €234,134

 €15,677

2010

 €88,477

 €14,974

 €1,845

2011

 €131,310

 €24,323

2012

 €133,617

 €55,730

 €123

Non HR

 DIT

 WIT

 DKIT

2001

 €173,219

2002

 €173,219

2003

 €77,185

 €230,000

2004

 €250,407

 €40,280

 €3,993

2005

 €192,066

 €24,498

2006

 €91,532

 €101,850

 €780

2007

 €174,101

 €71,422

 €5,129

2008

 €706,204

 €46,958

 €104,720

2009

 €416,241

 €67,319

 €31,714

2010

 €293,946

 €46,669

 €9,933

2011

 €208,443

 €87,201

 €9,364

2012

 €257,128

 €224,757

 €2,253

Human Resources

 ITC

 AIT

2001

2002

2003

2004

 €-

 €45,802

2005

 €-

 €28,179

2006

 €-

 €91,604

2007

 €1,876

 €88,192

2008

 €8,743

 €74,039

2009

 €957

 €132,817

2010

 €46,020

 €70,209

2011

 €65,692

 €263,027

2012

 €22,612

 €153,127

Non HR

 ITC

 AIT

2001

2002

2003

2004

 €3,146

 €12,435

2005

 €1,927

 €57,070

2006

 €1,615

 €48,996

2007

 €9,341

 €68,144

2008

 €10,560

 €207,163

2009

 €8,272

 €13,817

2010

 €30,587

 €98,695

2011

 €81,335

 €553,560

2012

 €51,851

 €1,689,024

Spending on Libraries by Irish Third Level Institutions

So how much, as a proportion of total expenditure does an Irish higher education institution spend on its library service? Thanks to Peter Mathews TD we now know. On average its about 3.6m per annum, or about 4.5% of total spend. This is very small I think. Libraries are the heart of universities, not innovation hubs, or business accellerators, or MIS projects, or new forms of administrative complexity.

Mind you some US evidence is available which might give us a small boost. This suggests that there spending has fallen to below 2% of total.

Library spend might be expected to fall with greater efficiencies and less reliance on printed books etc. They might also fall as a percentage if they lose out in the internal fight for resources. So a lot more analysis is needed as to whether this is a good or a bad thing.

The data are below ; interpretation and analysis I leave to others.

Spend by Institution on Library Services as % total institution spend

  2007 2008 2009 2010 2011
Athlone IoT  3.4  3.3  3.0  3.5  3.5
Cork IoT  1.6  1.6  1.9  1.8  2.3
DCU  3.2  3.0  3.0  3.1  2.9
Dublin IoT  5.3  5.1  5.3  4.9  5.2
Dun Laoghaire IADT  2.9  2.8  2.4  2.1  2.1
Dundalk IoT  2.4  3.0  3.0  3.0  3.7
Galway-Mayo IoT  4.4  4.0  4.2  4.1  3.7
IoT Blanchardstown  12.9  12.4  11.5  5.7  5.6
IoT Carlow  2.6  3.3  2.9  3.8  3.8
IoT Sligo  4.7  4.2  4.6  4.3  4.2
IoT Tallaght  6.5  6.4  6.5  6.3  6.6
IoT Tralee  5.6  4.9  5.0  5.3  5.5
Letterkenny IoT  2.4  2.3  2.4  2.4  2.6
Limerick IoT  4.8  4.8  5.1  5.0  5.3
NUIG  4.4  4.0  3.7  3.7  3.6
NUIM  5.3  4.5  4.3  4.1  4.1
TCD  5.5  5.2  5.1  5.2  5.0
UCC  3.6  3.4  3.2  3.3  3.5
UCD  4.0  4.1  3.5  3.8  3.2
UL  4.4  4.4  4.1  3.7  3.6
Waterford IoT  4.0  4.1  3.7  4.0  3.7

Spend by Institution on Library Services €000

  2007 2008 2009 2010 2011
Athlone IoT  €1,412  €1,470  €1,398  €1,520  €1,533
Cork IoT  €1,338  €1,450  €1,784  €1,686  €2,126
DCU  €2,659  €2,821  €2,825  €2,907  €2,597
Dublin IoT  €9,982  €10,245  €10,916  €9,274  €9,429
Dun Laoghaire IADT  €538  €545  €489  €424  €430
Dundalk IoT  €1,268  €1,366  €1,446  €1,415  €1,726
Galway-Mayo IoT  €2,722  €2,594  €2,707  €2,547  €2,222
IoT Blanchardstown  €2,338  €2,552  €2,527  €1,185  €1,135
IoT Carlow  €818  €1,079  €1,022  €1,282  €1,274
IoT Sligo  €1,741  €1,699  €1,912  €1,707  €1,723
IoT Tallaght  €2,136  €2,338  €2,486  €2,231  €2,260
IoT Tralee  €1,832  €1,706  €1,838  €1,818  €1,841
Letterkenny IoT  €697  €750  €796  €758  €808
Limerick IoT  €1,921  €2,216  €2,504  €2,305  €2,383
NUIG  €6,431  €6,637  €6,656  €6,482  €6,054
NUIM  €3,374  €3,105  €3,113  €3,005  €3,075
TCD  €11,028  €10,926  €10,917  €10,216  €9,659
UCC  €6,846  €6,875  €7,339  €7,156  €7,008
UCD  €10,618  €11,147  €10,346  €10,522  €8,410
UL  €4,506  €4,774  €4,879  €4,358  €4,145
Waterford IoT  €3,194  €3,572  €3,399  €3,332  €3,197

Spending per FullTime Student per annum

2011 Spend €000 2011 FT Students Per FT Student €
Cork Institute of Technology 2,126 7,387  287.80
Dundalk Institute of Technology 1,726 4,225  408.52
Institute of Technology Sligo 1,723 3,783  455.46
Limerick Institute of Technology 2,383 4,724  504.45
Waterford Institute of Technology 3,197 6,833  467.88
Dublin Institute of Technology 9,429 12,329  764.78
Institute of Technology Carlow 1,274 3,525  361.42
Athlone Institute of Technology 1,533 3,611  424.54
Institute of Technology Tralee 1,841 2,459  748.68
Galway-Mayo Institute of Technology 2,222 5,468  406.36
Dun Laoghaire IADT 430 2,104  204.37
Institute of Technology Tallaght 2,260 2,919  774.24
Institute of Technology Blanchardstown 1,135 2,184  519.69
Letterkenny Institute of Technology 808 2,493  324.11
UL 4,145 10,267  403.72
UCD 8,410 19,536  430.49
UCC 7,008 16,006  437.84
TCD 9,659 14,482  666.97
NUIM 3,075 7,412  414.87
NUIG 6,054 13,873  436.39
DCU 2,597 8,352  310.94

Face it : we as a society just don’t like kids….

We dont like kids in Ireland. Oh, individually we do. We love a cute baby, or a wee moppet, or pictures of kids on a strand in summer. We love our own kids. But as a society we dont. All we have to do is look at the way we deal with them over decades and we cant but accept that we dont like kids.

We don’t want them in restaurants, or in the pub. We don’t want them in some hotels or in shops in their nasty buggies – what, cant they walk?

We throw up massive barriers to adoption ensuring that kids stay institutionalised rather than having a chance at a family.

We don’t want, as a society, to allow the creation of a economic structure that allows parents the choice to either stay at home full time or to entrust them to the care of a decent system of child care.

We don’t invest in schools instead allowing literal generations of children to be educated in rotting prefabs. We don’t even provide a system of national education, instead fobbing it off to religious groups over decades.

We don’t have  a decent nationwide system of sports facilities, again relying on voluntary sports organizations some of which have only recently emerged blinking from tunnels of sporting and actual sectarianism. We don’t have playgrounds, and seem incapable of planning for children going to school despite there being 5-6y warning from birth to school.

We don’t like it when unmarried mothers have more of them and have at least moved on from snatching these kids and imprisoning the mams, instead happy now in the enlightened eras to allow them to stay together in dire poverty .  We couldn’t be bothered to invest over decades in ameliorating the deepest poverty, instead happy to fling the resultant broken kids into the savage maw of lunatic religious or latterly into a creaking state system of prison. Actually, we kinda hope that they would just overdose already and save us some money.

We don’t like the idea that we might have to mind them, instead wanting to use schools as surrogate homes and wonder why the hell the teachers get all that time off when they could be minding teaching our kids. We don’t want kids to have a say in how things are run, even big kids, so we ensure that we run referenda and elections when they cant make it.

We don’t want their voices heard so we don’t bother appointing voices of kids (as opposed to some of the excellent voices for kids) to the Seanad, instead appointing people that would make Caligula’s Horse seem like Talleyrand.

We don’t want them to play, ensuring that absent playgrounds the roads and estates are determinedly child surly to put it at its best.  We didn’t plan when we had the money and we cant be bothered now to plan for integrated housing estates that have the amenities for families instead treating them as combination battery housing/investment portfolios

We dont want kids seeing their parents, instead creating and fostering economic structures and social mores that encourage ultra commuting and the necessity for both parents to work. Meanwhile a soi disant socialist minister is busy dismantling the child support networks such as they are.

We don’t want them to grow up healthy, not bothering to put in place proper nutritional programs. We are happy to have sweet and tuck shops in schools and to allow schools to be ringed by chippers and kebab joints  – sure didn’t we have no dinner just a jam sangwidge between 9 of us and we had to make the jam ourselves etc etc etc..

We don’t want them to be healthy as that would involve a decent national children’s hospital which has served as a most useful political football over decades. Anyhow we don’t want them to survive as we can’t be bothered to invest in the normal quota of high end medical staff in the hospitals we have. God, or the market (there seems to be a conflation of these in some peoples minds) will provide. We don’t want them to stay sane, as that would require investment into childhood psychiatric and psychological services (anyhow the evidence is that the fine ‘minds’ of dail eireann are not at all convinced that mental health is a real issue…).

We don’t want them to be cluttering up the streets when they cant get a job, and we sure don’t want to bother with all that expense and trouble of intervening in youth unemployment blackspots. Sure didn’t we have to emigrate and there was no Ryanair then, no we had to SWIM to holyhead…

I could go on but I need to go to work. The Primetime report last night on creche abuse was horrific. It was enough to make me as a parent cry and to feel murderous rage that someone would do these things to smallies. But then, when I woke up this AM, I realised… this is part of what we are. We dont, as a nation, like kids.

So my uncle, Odie, passed at the weekend. He was 84, a life well lived. He was a baker, a fisherman, a businessman, a publician, a hotelier.
He and his brothers and sisters, 8 others, grew up in Waterville. His father, Michael, set up an export business in 1939 (great timing!) exporting lobsters and other shellfish. Michael had trained as a cobbler, set up as a baker, became a hotelier and a business man. They exported these shellfish round europe till the 1980s, airfreighting them from Shannon from the 1950s (where another uncle Joe had been deeply involved in setting up the hotel school and claims to have been present at the birth of Irish Coffee…)
These were hardy men, the Lucey boys, who would work (hotelier, garage man, baker etc) all day then head off to places like Kilmore Quay or Blacksod bay, load up with lobsters and crayfish, drive back, unload, then go to bed. Imagine driving the length and breath of Ireland in the 1950s on dreadful roads and deathtrap lorries. At the risk of channeling monty python “we were lucky”. When we drive a few hours on a motorway and then whinge imagine 9h in a lorry without effective suspension over rutted roads, then working in hip deep water, loading a ton of shellfish and water, then do it in reverse. People worked hard for little and got arthritis and low pay for their pains.
Lucey and Sons airfreighted in the 1950s, it innovated in the 1960’s with new shellfish products and mixes of fresh/cooked shellfish, it faltered in the 70s and expired in the 80s. Such is the typical fate of family businesses – they grow, they prosper, not all pass to another generation.
Below some newspaper clippings on same.

Passing of a generation
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For what, exactly, are we borrowing billions?

This is a expanded version of my column in the Irish Examiner 18 May 2013.

Hardly a week goes by now without a minister or backbencher reminding us, usually in stern , schoolmasterly tones, that “we are borrowing a billion euro a month to pay for <insert public sector spending head> ”. So we borrow for nurses salaries, for public sector pay, for teachers, for all sorts.  Sometimes this is couched in terms of borrowing for social welfare, but usually it is attached to public sector pay. So we borrow a billion for nurses pay, for teachers pay, for all sorts of pay. We never borrow it seems for the running of the two ringed circus of kildare street.

homerbrainRegardless of where it is attached it is a useful encapsulation of bias and special interest pleading from those doing so. First, it is as clear a demonstration as can be of what is called mental accounting; second it demonstrates an unconscious or conscious demand for cuts to be made, and third there is a concomitant sotto voce element usually that suggests that the money if it has to be borrowed would be best directed elsewhere. All three are challengeable if not demonstrably fallacious.

Take mental accounting. This has nothing to do with how Bertie dealt with shopping bags of money, but instead is a well-known psychological bias. Its about compartmentalizing monies that are in reality all the same. This bias leads people to have money on deposit earning small amounts of interest while simultaneously having large debts costing a lot. The most sensible thing would be to use the deposit to pay off the debt. At present we have over 30b in cash balances earning 1% or less while also having 190b plus in debt costing nearly 5% per annum.  Government money is fungible. There is no special bond issued or troika drawdown for paying nurses alone, or for the dole. Its all in one pot. In this regard we might treat with some considerable scepticisim the notion that in the long term the monies from the local property tax will be devoted to things local. No more than the road tax is devoted to traffic and road expenditure will this hold, in the long term.

Treating public sector pay or welfare as separate elements and attributing to them the excess of spending over income is a  further classic case of mental accounting.  It may also demonstrate a blindness, willful or otherwise, on the part of the speaker about what exactly constitutes the structure of government spending and revenue. If we examine (data taken from eurostat)  the government expenditure and revenue over the last 18 years we find that by far the typical pattern is for the sum of public sector wages and pensions plus social welfare to be be vastly exceeded by the total tax plus social insurance take. Only in 2009 and 2010 was this not the case. Now, one might well argue that we do not want to spend money on these issues but that is  a separate issue. Below is a summary (go to http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=gov_a_main&lang=en and play around yourself…) income and expenditure account for the General Government sector in Ireland

Screen shot 2013-05-18 at 07.25.56

What is clear is that if we want to play the mental accounting game we need to accept that depending on the categories we use the result will differ. This is of course another psychological bias, that of framing..But from a purely cash basis we raise enough to pay our teachers and doctors and to pay the welfare. We might not want to pay these sums, and thats a separate argument, but to state that we do not as a state raise enough money for them is fallacious.

Where then does the money go? See below…The large blip in the “other” category represents our cash bailout..

wheredoesitgo

We as a state incur other costs ; capital goods and equipment depreciates and that accounts for a couple of billion per annum. Even factoring in this we still about break even. We have to pay for goods and services, we subsidize private enterprise and these plus the interest on the national debt are for what, at least as arguably as the wages of nurses or the dole,  we borrow a billion a month. In fact this year the total deficit is pretty much the sum of what we spend on private sector provided goods and services plus interest.  Anyone who has any experience of public sector procurement knows that there is vast waste. Private sector companies have done as least as well out of the public purse as have the public sector workers over the years.  There was in relation to private sector professional services a Golconda of expenditure that  rained forth. No public sector manager will yet get fired for seeking additional vastly expensive legal advice from large law firms or seeking accounting or consulting advice. They might for hiring  a new staffer…. The interest bill also requires some thought. That which has tipped us over the edge is the cost of the bank bailout. And we bailed out non Irish bondholders and Irish based depositors.  The ongoing cost of this  are part of the borrowing also.

Hidden here is the assumption, or sometimes as recently by IBEC the overt suggestion that we should further cut expenditure on current government spending and divert it to capital. Apart from this being a naked play for resources, it also is questionable in the circumstances in which we find ourselves.  It assumes three things – that capital spending is more beneficial than current, that there is no economic gain from current spending and that the economy would be better off if this rebalancing took place. Lets leave aside the remarkable argument that there is no economic benefit from public services. People who think this assume that the public sector consumes alone and is never investment. They then however will demand more public money be devoted to investment, as somehow spending on a bridge or road will magically create as least as much social and economic wealth as spending the same equivalent on health or education.

The ESRI benchmarking analysis in 2010 suggests that there are remarkably similar dynamics in terms of their effect on the economy of cutting public sector wages and cutting capital expenditure. There is no guarantee whatsoever that increased capital expenditure will offset the falls in employment and consumption from cutting current expenditure.  In any case, it is not clear what capital spending is needed – hospitals and schools may be built but are useless without staff.

We borrow to spend on all government expenditure. Some of this benefits the private sector, some the public sector.  Some arises as a result of bailouts, some from the unbalanced tax base we created. All is part of the overall economy. To finger point and attribute this borrowing as being uniquely directed at one sector or another is neither economically sensible nor coherent, no matter how politically pleasing it may sound.