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New DCU Master’s Degree in Aviation Shortlisted for Aviation Award

DCU Business School’s Master’s in Management (Aviation Leadership) degree, launched in 2015, has been shortlisted as a finalist in the Academic Education category of the 2016 Aviation Industry Awards. The Awards will be announced on 7th December at the Hilton Hotel Dublin.

The Aviation Master’s degree, the only qualification of its kind in Ireland, is offered by DCU Business School, an AACSB-accredited business school at a top ’50 under 50’ university.

The degree aims to integrate aviation knowledge from across all the main sectors in aviation – including airlines, airports, and air traffic control – with an education in strategic management. The course is open to graduates with relevant work experience and is offered part-time over two years to accommodate the schedules of working managers. The degree is taught by the academic staff of DCU Business School along with experienced aviation managers, including from Dublin airport, Aer Lingus, Ryanair and Emirates, the Air Corps, and the Irish Aviation Authority. The Programme Director is the former Commissioner for Aviation Regulation in Ireland.

The two year part-time executive Master’s degree is offered under the auspices of the Dublin Aviation Institute (DAI), a joint venture between DCU and the daa (formerly the Dublin Airport Authority), an initiative to bring together the educational and academic resources of DCU, on the one hand, and the airport training and operational expertise of the daa, on the other.

In a related development, DCU has launched a new Aviation Guest Lecture series, in which senior aviation managers are invited to give DCU students the benefit of their senior managerial expertise.  The first speaker in this series Kevin Toland, Dublin airport CEO (pictured)spoke to DCU aviation students at both undergraduate and Master’s level, and DCU Business School academics about aviation management.

Future speakers in the DCU Aviation Guest Lecture series will include the CEOs of many international and Irish airlines, finance and leasing companies, as well as senior public servants and policy makers.

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DCU Business School Students participate in Creative Minds Hackathon

A bunch of DCU Business School students took part of the Creative Minds Hackathon in association with the US Embassy and DCU Ryan Academy over the weekend, with some securing the winning ideas.

Three MINT students, Orla Ainsworth (MINT1), Jack Brophy (MINT1) and Ellen Harkin (MINT2) and Olaide Oladimeji (INTB1) were on one of the winning teams ‘Líonra (@LionraHq), a peer-to-peer platform that facilities refugee integration through skills exchange and knowledge sharing’. The aim of project is for newly located refugees to develop a network and create friends in their area through social events during an 8-week programme. Such events would be tailored to the refugees’ interests and would always include locals in the area to ensure that a network of friends is being developed. This also ensures the refugees work on developing their English.

Daniel Kyne from the group ‘Future Roots’ and Oisin Beaudelot from ‘RefReach’ both MINT1 students also took part.

This is only the start of their projects. Congratulations to all our students and wish them luck as they progress their ideas further!

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Life after the DCU Executive MBA – A Graduate Perspective

I completed my Executive MBA in the summer of 2015  at DCU. It was a great experience and our class comprised a spectacular bunch of people. Before I start to explain what life has been like post the MBA, I would like to acknowledge what a great experience it was. It certainly tests you on all levels – it tests your time management, it tests your productivity, it tests your ability to be part of a team, it tests your leadership – but the end result is highly rewarding.

During my MBA studies I was a Director of Research in Dublin with 16 direct reports the majority of which are PhDs. A couple of months after completing the MBA I moved to New Jersey to take on new responsibilities at our research headquarters. At that time Bell Labs (and our mother company Alcatel-Lucent) was becoming part of a new parent company (Nokia) and in that time there was a lot of flux and changes in management and structure. I was promoted up one level in the organization and I am now responsible for 50 people across 3 different research departments spanning everything from audio visual research, to photonics integration & packaging, to efficient energy transfer research.

With respect to how the DCU MBA helped me personally and in my career progression – the MBA gave me a much better sense of my strengths and areas for growth. Because I am in research I don’t get to explicitly use many of the elements thought in the MBA (for example, marketing, finance, accounting etc) but the fact that I have the fundamental leanings from the MBA program means I now have the ability to engage those skills at any moment and in any context. More importantly, and in my particular case, going through 2 years of extracurricular activity while also holding my day job, was viewed by senior management as extremely positive. They saw that I am serious about my personal growth and career progression and that I am willing to go many extra miles to be as good as I can be and use those growth experiences to help the company. I commenced the DCU Executive MBA programme for personal growth and to try and bring in business best practice into a research environment.

Domhnaill Hernon DCU MBA

Since moving to the U.S I have been asked to lead many large projects and I have been given much broader responsibility beyond the 3 departments I am directly responsible for. I think there are a few reasons for this but for sure the things I learned during my MBA, especially in the team aspects, have stood me in good stead. I am now also responsible for driving new site initiatives at our research head quarters in New Jersey and part of this role is to help build the Bell Labs brand by collaborating with external partners. One example of this work is shown below where we engaged in activities called Experiments in Arts and Technology (E.A.T). This is a gathering where technologists interact and collaborate with artists to help develop more advanced technology by pushing the limits of how we view the world and how our technology can be used to help humanity.

This post was kindly written by Domhnaill Hernon, Director of Research & Site Lead for Research Interactions, Nokia Bell Labs, New Jersey, U.S.A. You can follow him on Linkedin and on Twitter. 

Final applications for the DCU Executive MBA are being accepted now. If you’re considering undertaking an MBA, get in touch with DCU Business School today. 

 

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The Whats and Hows of Success in Family Business

A team within the DCU Centre for Family Business was commissioned by Fingal County Council to complete this case study. The Family Business Report, Lessons in Resilience and Success: a Snapshot of Multi-generational Family Businesses in Fingal, Dublin was produced by Martina Brophy and Eric Clinton. Their study follows twelve family businesses which are all multi-generational, family-owned and head-quartered in Fingal. Through conducting interviews with these individuals they were able to distinguish needs, challenges and strengths that come with running a family business.

 

“Family businesses are a complex and highly resourceful business type. Knowledge, learnings, resources, values and traditions pass across generations of a family: often, what is found are strategic resources and capabilities that can make a family firm distinctive and competitively advantaged,” writes Dr. Eric Clinton in this study.

 

The report provides a snapshot of 12 multi-generational family businesses in Fingal with family involvement ranging from second to fourth generation. Between them they employ over 3,500 and have turnovers ranging from €1.5 million to in excess of €100m per annum.

Business & Finance, Ireland’s leading business magazine, have covered the topic in an article, Talent in Family Business. Dr. Eric Clinton, Director of the DCU Centre for Family Business, covers a variety of topics within the topic of family business from how much family should get involved to how important it is to become a cohesive team.

Families have an effect in the businesses day-to-day happenings whether it is positive or negative. Thus, through the Family Business study Clinton and Brophy come together and provide information and recommendations on how to run a successful family run business.

 

Check out what the DCU Centre for Family Business is all about:

 

 

 

 

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DCU Executive MBA Student wins Special Award

Congratulations to Doireann Sheelan, a DCU Executive MBA student, who received a Special Award for her individual contribution at the recent MBA Association of Ireland Strategy Challenge competition, held recently at Waterford Institute of Technology.

Doireann was part of team, with fellow Executive MBA Students Kalum King, Neil Curran and James Cannon, who presented on the case study “Turkish Airlines – Widen Your World”. While they did not win the competition (the prize went to WIT) they acquitted themselves admirably receiving great praise from the judges for the depth of their analysis.

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DCU Executive MBA Team (Kalum King, Neil Curran and James Cannon)

This annual competition, hosted by the MBA Association of Ireland (MBAAI), attracts entrants from all the universities and institutes of technology in Ireland that run MBA programmes. Peter McNamara, Professor of Management & Head of School at NUI Maynooth, and Chairperson of the competition, commented: “All four of the teams did a very good job of analysing the case and making recommendations, especially under considerable time pressure.”

The DCU Executive MBA is now recruiting ambitious participants for September 2016.

For more information, visit postgrad.dcu.ie/mba or  email mba@dcu.ie.

 

Pictured is the DCU MBA team with the MBA Association of Ireland President Alacoque McMenamin,

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DCU Business School Insights: Euro 2016 versus Euro 2012 – Managerial lessons learnt?

Brian Harney, Senior Lecturer in DCU Business School provides insight into managerial lessons learnt as Ireland advance in The European Championships.

Successful qualification for EURO 2016, including memorable results against the world champions are a cause for optimism amongst Irish soccer fans. Martin O’Neill and Roy Keane appear to have crafted a sense of purpose and the beginning of consistency while inspiring or re-invigorating individual performances.  Elevated results have served as a catalyst for Irish fans to (re)gain recognition as, in memorable media commentary, ‘the Aviva finally became Lansdowne Road‘. Overall,  the dynamic duo of O’Neill and Keane have shown they can manage efficiently whilst leading effectively. One can only hope this carries forward so that Euro 2016 proves more memorable and successful than the dreadful disappointment of 2012. If this feat is to be realised lessons must be continuously learnt to avoid succumbing to the type of managerial faux pas characteristic of the Trapattoni reign.

Utilise the full pool of talent available to the best of its ability

There was a growing sense that Trapattoni did not fully engage the talent that was available to him (this included the likes of Wes Hoolahan, Keiran Westwood, James McCarthy, and Darren Gibson who warmed the bench for the entire Euro 2012 tournament). Even where he did pick different players he did not exploit their strengths by deploying them in their best positions. This oversight becomes all the more severe in the context of a small football country like Ireland, where the initial talent pool is already severely limited

Pay attention to detail and keep close to the action

Trapattoni was apparently fond of saying “they are little details, but the little details are very important”. Despite this rhetoric his lack of enthusiasm for attending premiership games and visiting football grounds was frequently commented upon.  Understanding the ebb and flow of a player’s performance in the full context of a game cannot be done remotely via DVDs; there is simply no substitute for being close to the action. It is useful to recollect the story of Jack Charlton visiting Oxford United to see John Aldridge play and being introduced to a player previously not on the radar called Ray Houghton.

Foster inclusiveness accompanied by a unified sense of purpose

From the early guitar incident with Andy Reid, Trapattoni’s reign was characterized by a growing tension, distance and frequent falling out with his own players. Man management was not Trapattoni’s forte. With the legacy of Saipan as the media benchmark for football bust-ups Trapattoni’s failures in player relations might at first seem trivial. However, the list known to have run-ins with Trapattoni suggests otherwise (Kevin Doyle, Stephen Ireland, Stephen Kelly, Marc Wilson, Stephen Hunt Kevin Foley, Darron Gibson, and Shane Long). Rather than constructively engage players for the Irish cause, Trapattoni frequently pursued destructive vendettas which fragmented relations. Stephen Reid was an early regular in Trapattoni’s line-ups but on-going injury problems led to his career being dismissed off hand by the Italian. There also appeared to be limited reward for loyalty or recognition of player’s allegiance and pride in playing for Ireland. Present for over 7 years in every squad when he was fit to play, Kevin Doyle received news of his omission from the squad for the double-header with Sweden and Austria via text message.

Understand the significance of the top management team

It is perhaps no coincidence that the successful years of the Trapattoni reign were those where Liam Brady held the position of Assistant Manager. With expertise on the workings of the FAI and Irish football, vast insights and experience into the English Premier league, coupled with an extensive football network Brady’s value to Trapattoni cannot be underestimated. Indeed, one wonders if in picking Roy Keane as an assistant Martin O’Neill is also attempting to leverage something similar by way of Irish expertise and public association. The  months leading up to June 2016 should offer more insight on the longevity of this fledgling partnership.

Be open to change when required

Trapattoni remained committed to his cautious approach and tactics even when most commentators and fans called for, and ultimately the results mandated, change. He likewise remained loyal to players like Darren O’Dea, Glen Whelan and Paul McShane when their performances at international level were not always deserving of it. More often than not key tactical or player changes were the result of injury or retirements rather than a change in mindset. Notably, in those performances best remembered, including against Italy and France, it has been suggested that the players pursued their own desired approach rather than rigidly adhering to the Trapattoni prescription. Overall, Trapattoni cast a technical shadow over Ireland’s play which served to inhibit creativity and suggested a distrust of his players.

Of course there is an argument that the distance, or even arrogance, of Trapattoni may have been a reflection of a Keanite type quest for professionalism. There are cultural differences likely to be at play here also; Italian football is a patient, technical and slow burning candle, only intermittently lit with the type of gung-ho frenzied excitement or action that Irish fans might expect. Trapattoni also inherited one of the weaker teams of current times, while Thierry Henry had a huge hand in ensuring lady luck was not on his side. In years and in past success Trapattoni is clearly deserving of respect. Nonetheless his desired approach did not result in Irish glory and may have ultimately been self-defeating. Hopefully June 2016 will provide evidence of lessons learnt and progress made. COYBIG.

Posted on LinkedIn by Brian Harney, Senior Lecturer in DCU.

Original post: DCUBS Insight – Managerial Lessons from the Trapattoni Reign

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Tony Foley Delivers Keynote State of The Economy Talk

Tony Foley, senior lecturer in economics in DCUBS, delivers a keynote state of the economy talk entitled “Is Ireland out of the economic woods?” to the annual Conference of the Hardware Association of Ireland today, Thursday 7th April in the Lyrath Estate Hotel, Kilkenny.

In the talk Foley concludes…

While the economy is out of the woods in terms of the 2008 collapse, it still faces the ongoing economy management issues faced by all economies with two significant additional Irish elements; how do we have a good public services society with a tax system which which encourages enterprise and initiative and how do we cope with the pent-up demand for higher incomes and better living standards. In the context of the recent election terminology of a fairer and more economically inclusive Ireland and sharing the recovery, Foley concludes that this objective will require more resources than are likely to be available from the fiscal space over the next few years and especially in the next two years. Future economic management will be difficult because raised expectations will be difficult or impossible to be realised.

Tony Foley is Senior Lecturer in Economics in DCU Business School, and lectures on the Executive MBA Programme.

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DCU MBA Blog: How Much Are We Drinking?

This blog reports on the recently estimated 2015 average alcohol consumption in Ireland and the measurement methodology involved. The estimation was done by the author on behalf of the Drinks Industry Group of Ireland. The data used are from the CSO Population and Migration Estimates for April 2015 (published in August 2015) and the Revenue Commissioners’ alcohol clearances data (clearances are beverages released into the market) (the 2015 figures were made available on March 5th 2016). The levels and trends in average alcohol consumption are important elements in public policy evaluation and design and robust estimates of the indicator are desirable.

Estimation Methodology

The measurement approach follows standard international practice and also the practice of previous Irish estimates by Foley (2015). The aggregate alcohol content of the different alcoholic beverages is identified. Revenue publishes alcohol equivalents for beer and spirits but cider and wine are published as quantity of beverage. The estimate is based on 5% alcohol by volume for cider and 12.5% alcohol content for wine and the actual alcohol estimates provided in the clearances data by Revenue are used for spirits and beer. Some international and national estimates use lower alcohol contents for wine and cider. The international and traditional convention of defining the adult population as 15 years and over is used, although this is, of course, an inaccurate measure of the adult population. The population data refer to April of each year. Consumption is equated with clearances as is normally done, although clearances are not an exact measure of consumption due to factors such as unrecorded out of state sourcing, stock changes and the effects of outward and inward tourism. These and other limitations of the alcohol consumption measurement methodology are discussed in Foley (2015).

Average alcohol consumption per adult 2014 and 2015

The data are presented in Table 1. The aggregate alcohol clearances and the “adult” populations are presented. These two are combined to provide the average per adult consumption. 

Table 1.  Average per adult alcohol consumption 2014 and 2015

2014

2015

% change 2014/2015

Litres of pure alcohol (LPA), Total consumption39,838,51039,711,197-0.3
Population aged 15 and over, millions3.59373.6060+0.3
Litres of pure alcohol per adult (LPA)11.08611.013-0.7
Beer (LPA)18,820,08118,538,561-1.5
Cider (LPA)3,120,5392,905,029-6.9
Spirits (LPA)7,217,9977,357,644+1.9
Wine (LPA)10,679,89310,909,963+2.2

Sources.  CSO Population and Migration Estimates August 2015, Revenue Commissioners’ Clearances data March 2015.

Total alcohol consumption as measured by clearances decreased slightly by 0.3% in 2015. The number of adults increased slightly by 0.3%.  Average per adult alcohol consumption decreased in 2015. It was 11.086 litres of pure alcohol (lpa) in 2014 compared with 11.013 lpa in 2015, a decrease of 0.7%.  Average per adult consumption is now slightly above 11 lpa. By comparison, it was at around 11 lpa in 1994 and peaked at 14.44 lpa in 2001. Since 2001 the average per adult alcohol consumption has declined by 23.7%.

It is useful to translate the litres of pure alcohol into more understandable indicators.

The 2015 11.01 lpa is equivalent to 8.7 pints of beer per week at 4.3% alcohol strength or 2.26 750 ml bottles of wine per week at 12.5% alcohol strength.

These consumption figures are averages. There is a distribution around the average. Some do not drink, some drink a lot and some drink a little. There are different estimates of the rate of abstinence but about 20% of adults do not consume alcohol. The average consumption for the drinking population is therefore about 13.766 lpa and in this group some consume above and some below this average.

In the 15 annual changes between the peak average consumption year of 2001 and 2015 there were 11 decreases and four increases.

The pattern of annual average per adult consumption of alcohol over the most recent five years is shown below:

 YearLpa
201511.013
201411.086
201310.730
201211.614
201111.692

Beer and cider volumes decreased in 2015. Spirits and wine both increased. Beer accounted for 47% of alcohol in 2015, cider 7%, spirits 19% and wine 27%. In 2001 wine’s share was only 14% and beer was 55%.

International Context

It is useful to place the Irish consumption level in an international context. The latest OECD Health Statistics for 2015 reports an OECD average alcohol consumption (for 2013 or latest year available) of 8.8 lpa, Ireland in this database is measured as 10.6 lpa for 2013 ( Foley  estimates the Irish 2013 level to be 10.7 lpa) .

The OECD average has been identified as a policy target for Ireland. However, this is not necessarily appropriate as an exact target. The OECD database includes far distant and culturally specific countries such as Turkey and Israel with very low alcohol consumption of 2.6 lpa and 1.4 lpa respectively and several other countries with “lowish” consumption such as Canada, Chile, Japan, Mexico and USA. The non EU countries in the database have an average consumption of 7.1 lpa. The 21 EU members included in the OECD database have an average consumption of 9.9 lpa compared to the 10.6 recorded in the database for Ireland. Ireland is not widely out of line with this. These figures exclude unrecorded consumption which can be relatively high in some countries, such as, for example, Portugal.

Ireland is ranked ninth highest in the OECD database with all eight higher countries being from the EU. This ranking contrasts with 2001, which was Ireland’s peak consumption level, when Ireland was the highest alcohol consuming country in the OECD. If we use the 2015 estimate of 11.01 lpa instead of the estimate in the OECD database Ireland would be fifth highest.

The eight EU countries, of those in the OECD database, with higher alcohol consumption than Ireland (figures relate to 2013 or latest available year) were:

  • Austria 12.2 lpa
  • Czech Republic 11.5 lpa
  • Estonia 11.8 lpa
  • France 11.1 lpa
  • Germany 10.9 lpa
  • Hungary 11.1 lpa
  • Luxembourg 11.0 lpa
  • Poland 10.8 lpa

Average per adult alcohol consumption decreased by 0.7% in 2015 compared with 2014; from 11.086 lpa to 11.013 lpa. Total consumption decreased by 0.3% in 2015 and there were was an increase in the adult population of 0.3%.  Beer volume decreased by 1.5%. Cider volume decreased by 6.9%. Spirits volume increased by 1.9%. Wine volume increased by 2.2%. Since its peak in 2001 the average per adult alcohol consumption has declined by 23.7%.

Beer accounted for 47% of alcohol consumed in 2015, cider 7%, spirits 19% and wine 27%. In 2001 wine’s share was only 14% while beer was 55%.

 The 2015 11.01 lpa is equivalent to 8.7 pints of beer per week at 4.3% alcohol strength or 2.26 750 ml bottles of wine per week at 12.5% alcohol strength.

In 2001 Ireland was the highest alcohol consuming country in the OECD. Now, using OECD database figures it is ninth highest or, based on the latest 2015 Irish figures and the “older” OECD other country database figures, Ireland is fifth highest.

Anthony Foley is Senior Lecturer in Economics in DCU Business School, and lectures on the Executive MBA Programme.

References

  • Foley Anthony. Estimates of Alcohol Consumption Per Adult 2014. Drinks Industry Group of Ireland. 2015
  • Foley Anthony. Alcohol Consumption: Measurement and Data Issues; and Performance. Economics, Finance and Entrepreneurship Research Seminar Series. DCU Business School. November 2015
  • Population and Migration Estimates April 2015. Central Statistics Office. August 2015
  • Revenue Commissioners. Alcohol Clearances (available from Revenue Commissioners)

 

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DCU MBA Blog: Fiscal Space Odyssey – Facts and Myths

As we all know, Ireland’s public finances must meet specific EU and domestic fiscal rules on annual deficits, expenditure growth and debt reduction. Fiscal space refers to the projected or forecast amount of money available to the Government over a period of time for extra spending and/or tax reductions while ensuring that the overall fiscal rules are met. In the bad old days of cutbacks the relevant and opposite phrase was fiscal consolidation which meant the amount of expenditure reduction and/or tax increases needed to reduce borrowing over a particular period. The amount, probability and use of the available fiscal space were major issues in the recent general election.

In the election discussion the fiscal space refers to the five years from 2017 to 2021. Most of the projected fiscal space money occurs later in the period. Of the much quoted total figure of €8.6 billion, €5.7 billion or 66% arises in 2020 and 2021. Only €0.6 billion is in 2017 and €1.1b is in 2018. The 2019 level is €1.3 billion. We will have to wait a while for most of the fiscal space goodies. If the EU changes, as expected, our annual borrowing or deficit rule we will have another €1.5 billion which will arise in 2019.

The fiscal space money is not certain. It is not sitting in a bank waiting to be withdrawn. It depends on the achievement of solid economic and employment growth over the next five years. If the economy performs weaker than forecast there will be less fiscal space money available. The fiscal space calculation is based on an assumption of GDP growth of 3.5% in 2017 and around 3% for each of 2018 to 2021.

So, the fiscal space is a forecast amount of money and therefore uncertain; it depends on reasonable economic growth and other economic performance up to 2021. Even if the forecast turns out to be correct, the bulk of the fiscal space will arrive in 2020 and 2021 with much less in 2017 and 2018.

There are several different concepts, definitions and estimates of the fiscal space ranging from €14.2 billion to €3.2 billion which cause problems for a wide understanding of the issue.. This range gives space for much argument as was seen in the election campaign. All of the estimates are valid methodologically but are based on different interpretations, inclusions/exclusions and assumptions.

The €8.6 billion estimate is based on achieving a deficit of 0% but, as mentioned, there is a strong likelihood that we will be allowed a deficit of 0.5% by the EU, instead of 0%. This would give us another €1.5 billion of fiscal space and would arise in 2019. Therefore the fiscal space could be €8.6 billion plus €1.5 billion, or the €10.1 billion which appears, for example, in the FG election economic plan.

The original €8.6 billion was estimated by the department of finance and details are in tables A.8 and A.9 of the 2016 Economic and Fiscal Outlook. To arrive at the figure the department estimated the requirements to meet the fiscal rules between 2017 and 2021 based on our projected economic performance. It then calculated the projected actual public financial situation based on the current level of public services, salaries, social welfare payments and other expenditures and tax revenues. The difference between the two is the fiscal space or the amount of money available to use in expenditure (above the current level) and tax reductions and still be compliant with the fiscal rules.

This exercise resulted in what is called the gross fiscal space of €10.9 billion but this figure assumed that income tax bands would be adjusted in line with inflation. As such an adjustment is unlikely, there would be additional tax revenues flowing to the exchequer of €1.8 billion. Adding this to the €10.9 billion we get €12.7 billion of adjusted gross fiscal space. If we add on the €1.5 billion from the possible change in the level of the deficit the total is €14.2 billion. Excluding this reduced deficit impact we are at €12.7 billion.

But, the government could not spend all of this €12.7 (or €14.2 billion) billion on, for example, new teachers, doctors, nurses, social workers and guards or reduce taxation by €12.7 (or €14.2) billion because there are some definite or committed other expenditures over the 2017 to 2021 period. These include capital investment projects, the Lansdowne Rd pay deal and the demographic effect of more users of service through population growth and aging. There is also a plus side in that the number claiming unemployment payments will decrease. The department of finance estimates that €4.3 billion should be taken from the gross space of €12.7 billion, to cover the capital item, Lansdowne Rd and demographic influences to give the net fiscal space of €8.6 billion. You will note that the actual figure is €8.4 billion but this  deifference is due to rounding the totals.

Hence, we have our famous €8.6 billion. It includes an estimate for future demographic pressures and other known expenditure commitments. However, the Irish Fiscal Advisory Council thinks that the €4.3 billion adjustment to the gross fiscal space is too low and that the €8.6 billion (or €10.1 billion if the deficit is changed to 0.5%) gives a wrong and exaggerated picture of the additional money the government will have to allocate over the next five years. The IFAC agrees with the figures up to this point and with the estimate of gross and net fiscal space (actually the IFAC estimates it to be €8.9 billion versus the €8.6 billion) but not with the implication that the money is available for new measures. The IFAC wants to identify the cost of providing the current level of services over the five year period including higher cost from inflation, likely increased salaries after Lansdowne Rd for 2019 to 2021 and increased social welfare payments. In addition, the IFAC believes the demographic adjustment done by the Department of Finance is too low.

Starting from the department of finance’s €8.6 billion net fiscal space which already incorporates a demographic adjustment, the IFAC suggests that another €1.5 billion should be allocated to cope with demographic pressure. The IFAC estimates that the cost of providing the present level of services and expenditure will increase by €4.2 billion between 2017 and 2021 through pay and social welfare increases and price inflation. Consequently, the IFAC estimates that the €8.6 billion (or €8.9 billion as IFAC estimates) should be further reduced by €1.5 billion and €4.2 billion to give an available level of resources of €3.2 billion. When the likely future cost of current services, salaries and social welfare payments are taken into account, the IFAC says there is €3.2 billion instead of €8.6 billion (or €4.7 billion instead of €10.1 billion) net fiscal space remaining for new measures.

The magnitude of dealing with likely increases in wages and social payments is substantial. Keeping pace with the GDP deflator measure of inflation of 1.2% per year would add about €1.7 billion to the social payments total between 2017 and 2021.  The same increase for wages and salaries in 2019 to 2021 would add about €800 million. Indexing the cost of government purchases would add about €600 million in the 2017 to 2021 period. These three alone on the above estimates would add €3.1 billion to the future cost of the current level of services and reduce the amount of fiscal space available for new services and tax reductions, except, of course, that higher social welfare payments, which could also be defined as a new measure, are accounted for. Higher interest payments and higher capital costs would further add to the cost of the present level of expenditure and services.

Some politicians in the election campaign have pointed out that the €8.6 billion (or €10.1 billion) figure includes an allowance for demographic effects. However, as noted, the IFAC believes that the department of finance demographic adjustment is insufficient and should be increased.

The point was also made by various politicians that the IFAC approach prejudges government decisions on wage deals and social payment increases and that these should be part of how the bigger estimate of fiscal space should be used and not excluded from the fiscal space total which is available for decision-making. This is a reasonable position. The IFAC concern is that a failure to make these costs explicit gives an exaggerated impression of the available new financial resources for tax reductions and new spending measures. For example, the FF economic plan allocated €4.76 billion of the available fiscal space for current services but this includes a sum for higher social welfare payments.

The FG economic plan allocated €4.2 billion of fiscal space for current services and notes (page 9) that this allocation includes…”provisions for sensible pay increases,….targeted welfare improvements and for other pressures (over and above a provision for addressing demographic costs)” (presumably the department of finance demographic provision). It was also argued that indexing the cost of goods and services to inflation is not appropriate because more effective procurement would reduce costs.

The IFAC figure of €3.2 billion is not directly comparable to the FG and FF figures of €8.6 billion because the FG and FF figures expect the social welfare increases to come from their €8.6 billion figures  while the IFAC has already excluded this from the fiscal space. However, neither FF nor FG included a provision for additional demographic costs compared to the department of finance’s estimate.

However, it must be remembered that there are no fiscal space monies available now. It depends on future economic growth and will be quite limited in the early years of the new government. In addition, the large amounts which are being mentioned relate to a five year period.

Anthony Foley is Senior Lecturer in Economics in DCU Business School, and lectures on the Executive MBA Programme.

If you’re interested in undertaking a part-time Executive MBA, we’re holding an open evening on March 31st 2016. Details here.

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4 DCU Business School Master’s Degrees ranked in the top 30 globally in their field

DCU Business School, home of the Irish Centre for Cloud Computing and the Leadership & Talent Institute, has further strengthened its position in the latest Eduniversal Best Masters rankings, with 4 specialist Master’s degrees ranked within the top 30 in the world.

The Eduniversal Best Masters rankings, which rates Master’s degrees on reputation, student satisfaction, and employment prospects, placed theMSc in E-Commerce in 18th position, the MSc in Emergency Management in 24th position, the MSc in Human Resource Management in 26th position, and the MSc in Accounting in 28th position, in their respective subject categories.

Dr Anne Sinnott, Executive Dean of DCU Business School puts the success down to DCU Business School’s research informed teaching and extensive industry links. “The latest rankings show that we are not only ranked among the top global universities but leaders in specialist areas like E-Commerce and Emergency Management. This ensures DCU Business School students are graduating with the most up-to-date knowledge and skills ready for the global marketplace”.

The DCU Executive MBA and MSc in Finance were also ranked within the top 100 in their categories. Eduniversal rates the academic excellence and quality of 4,000 programmes in 30 fields of study across 1,000 academic institutions in 154 countries, with final rankings determined through a survey of 5,000 international recruiters and 800,000 students.

To find out more and apply for our next intake in September visit our postgraduate listing

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