Chapter 2 — Finance

Increases in the amount paid

There was no increase in the capitation grant between April 1939 and July 1944. The rate was increased at two and three year intervals for the rest of the 1940s. It will be noted that there were significant increases in the (state and local authority) capitation grant from 19/- in 1946 to 27/- in 1951 in respect of Reformatory Schools and from 16/- to 24/- in respect of Industrial Schools. (The figures used here combine both the central and local government contributions.)

A substantial increase was also provided in the period 1951 and 1968, when the combined rate for Reformatory Schools increased from 27/- to 85/- and from 24/- to 82/- in respect of Industrial Schools. Strikingly, the capitation grant was then doubled in the following year to reach approx 171/- for Reformatory Schools and 165/- for Industrial Schools.

In the 1950s, there was a six-year gap between 1952 and 1958 when no increases were made and a further five-year interval between then and 1963. For the rest of that decade, increases occurred every one or two years. There was a three-year gap between 1969, when the grant was doubled, to 1972 when the grant was increased by a further £10.30 (roughly 200/-) in respect of Reformatory Schools and £9.90 (roughly 180/-) in respect of Industrial Schools. The figures in 1972 represent the changeover in currency. Thereafter in the 70s and 80s there were annual increases to meet cost of living increases and wage increases.

When increases were granted, the Department generally sent a circular to say that it was the Minister’s expectation that improvements in the care, diet and maintenance would be made, so there was no suggestion that increases were just to maintain the status quo.

Total expenditure out of public funds was:

Negotiations on capitation payments 1957 and 1969

Two case studies outline the very different circumstances leading to the 1957 and 1969 increases. The earlier, 1957, negotiations were typical whereas the later increase was exceptional. The Minister for Education and some of his officials met with a deputation representing the Resident Managers’ Association. The deputation sought an increase of 40/- in the grant to a combined rate of £3.10 per head per week. They argued that, owing to cost of living increases, the standard of diet and clothing for the children entrusted to their care had fallen much below what was required and that the buildings and accommodation facilities were in need of renovation.

The Department then wrote to the Department of Finance supporting the claim and requesting a minimum increase of £1 in the weekly capitation grant by the Department and in that of local authorities. This was estimated to involve extra State expenditure of £121,000 (on top of the existing figure of about £400,000) in a full year. Education admitted that there had been an approximate increase of only 1/6th in the cost of living during the period since the previous increase. However, the size of the suggested increase was supported by: the steady decline in the number of committals to the schools with no corresponding fall in overhead expenses; the increases in wages of employees in the preceding four years; the need for greater effort to brighten the lives of children; and the modernising of certain facilities in the schools. In January 1958, the Department of Finance sanctioned an increase of 15/- in the State capitation rate for Industrial and Reformatory Schools with a corresponding increase in the local authority contribution.

By 1967, when another increase was sought, circumstances had changed. The religious Orders were described as ‘gravely dissatisfied’ with the last increase and it appears that threats had been made about closing all the schools. The Department believed that this was not such a remote possibility as might be thought and that it would, if it happened, constitute a ‘national disaster’ because the cost of maintaining children would at least be doubled; for in Great Britain and Northern Ireland, the cost was some three or four times the cost in Ireland. In those circumstances, the Department recommended that a substantial interim increase was warranted, even pending the outcome of the Kennedy Report, of 21/- per week. The Department of Finance’s response, in February 1968, was that the proposed increase was disproportionate and also untimely, while the system was being examined by Kennedy. Nevertheless, as an exceptional measure, Finance was agreeable to a 15/- increase.

The Department of Education submitted: Records of the Department of Finance which were discovered to the Commission indicate that in June 1969, the then Minister for Finance, Mr Charles Haughey, had met with a group known as the Friends of Industrial Schools and indicated that he would authorise a doubling of the capitation grant in respect of children in industrial schools. The Department of Finance subsequently notified the Department of Education of the Minister’s decision.. The Department of Education records also indicate that the then Taoiseach, Jack Lynch, inquired from the Department about the capitation grant prior to its doubling and was informed of its increase in letters from the Department respectively dated 19 September 1969 and 24 October 1969.

Themes in the negotiations

Many of the same themes recurred in each of the negotiations between the 1940s and the 1970s. The Resident Managers emphasised the increasing cost of living and made comparisons with British and Northern Irish fees, and with prisons or private schools. As discussed above, the Department responded by asking for detailed accounts from the schools, justifying the request by the need to persuade the Department of Finance of the case for the increase.

Through the 1950s further causes of strain on the schools’ finances were drawn to the Department’s attention. The major factors were the decline in the number of children, increases in wages of lay staff and the need for repair of premises that were often nearly a century old. The figures for all the schools were as follows. Total capacity: 7,484 Residents: 5,227 Committed: 4,662 Others: 565 Percentage occupancy: 70%

At least as early as September 1955, the Department of Finance raised the reasonable suggestion of closing one-third of the schools in order to allow the remaining schools to operate at full capacity and become financially viable.

The minutes of a meeting on 20th November 1955 between the Minister for Education with his officials and five representatives of the schools stated: The Secretary said ‘that Ireland was very fortunate to have religious communities in charge of these schools’. He wondered whether a partial solution would be for some of the schools to be closed. From a social point of view, he said, the falling number was a very good thing....

Two years later, however, in a letter to the Department dated 18th June 1957, the Managers’ Association wrote: The Managers have had a desperate struggle to keep the Schools open but they cannot be expected to accept children unless sufficient funds are made available.

It is against this historical background that the question of the adequacy of the State funding of the institutions has to be approached.