Education Trust Fund to Develop Sector Infrastructure

The focal point of the National Education Trust (NET) Fund, when it commences operation in the next calendar year, will be to improve and undertake infrastructural works in the education sector.
In an interview with JIS News, Minister of Education, Andrew Holness, explains that the NET Fund will be established as an agency that will work closely with corporate entities, both in Jamaica and the Diaspora, in an effort to ascertain the long-term infrastructural development of the sector.
“I have pitched the National Education Trust Fund as an agency that will work very closely with the Diaspora both in terms of the corporate entities.and individuals in the Diaspora, who would want to contribute but who would not be able to maneuver the complex landscape in Jamaica to actually make a contribution. So (the NET) would be a kind of one-stop shop where you could give your resources to the Trust and then the Trust would in turn, assist in the development of infrastructure,” he notes, adding that the Trust will also become a mechanism through which the Government could effect its long-term infrastructure development policy on education.
The main purposes of the NET Fund are: to manage a National Education Endowment Fund; direct and co-ordinate non-financial resource, such as voluntary human resources, donated equipment, material and technology; act as the agency through which the government can execute its strategic objectives in developing and maintaining the education infrastructure, without being hampered by fiscal constraints; and interface with local and international funding organisations on education infrastructure development projects.
In addition, the NET will as the focal point for interfacing with the Diaspora on issues of education and national development; provide a credible institutional framework for accountability and efficient use of donated funds; and plan and execute a programme of school facilities construction and maintenance.
Mr. Holness tells JIS News that the Trust could be used by the government as an institution to manage an education bond, adding that “we could float an education bond or it could float a Diaspora bond managed by the Trust.”
“Again, the Trust could also be the institution that owns all the education properties which would then become an asset on its books which it could leverage.so the trust will give the government and the education system a kind of fiscal space in which it can plan its infrastructural development for education,” he continues.
The Education Minister also points out that it will also form part of the transformation of education, emphasizing that presently, construction and maintenance function falls within the Ministry of Education.
“Under the modernized Ministry, that routine function would not fit within a policy Ministry and has to reside somewhere and so the function of construction, maintenance and designing school infrastructure, would then be passed on to the trust,” he explains.
Mr. Holness points out that the concept for establishing the Trust Fund came out of the need to provide financial support outside the budgetary allocation and its concomitant constraints, so that the sector can consistently pursue important initiatives. Adding that in any given year, contributions from the Consolidated Fund which the Government gives to the Ministry of Education to deal with infrastructure, might not exceed $2 billion.
Additionally, the Minister notes that the trust was conceptualized as a result of what he said was the “dis-investment” in the infrastructural works of the sector, which has been unable over the years, keep apace with the population demand of the sector.
“Over the past 30 years, there has been significant dis-investment in the physical infrastructure in education, whereas we have built some schools, we have not built enough to keep apace with the population demand,” he states, adding that there are inadequate infrastructures to meet a reasonable teacher pupil ratio.
“We still have double usage of space in terms of the shift system and we are not replacing schools that have out-lived their useful life at a fast rate, so we need to do significant work on developing education infrastructures,” he says, pointing out that infrastructural work requires a consistent flow of funds.
He notes that the Trust would seek to secure consistent funding for infrastructural works due to the fact that “Governments would prefer to spend on the recurrent items on education for example, salaries and programmes rather than to make the large infrastructural spending that is needed to build out the space requirement.”
Minister Holness posits that the NET Fund, during its formative years, would alleviate some of the cost the government sustains, for maintenance of schools.
The Education Minister adds that the agency will assist in implementing the developmental goals of the Ministry. These include reducing the pupil teacher ratio and removing the shift system at all levels of the sector.
“We have set ourselves the target of removing the shift system in the secondary school and that means we have to build 45 new schools, followed very closely by removing the primary school off shift,” he informs, noting that in total 95 schools are needed to remove all schools from the shift system. This is estimated to cost over US$300 million.
“Really what we want to do is to set up an institution that could show how effective it is at building schools, which would make a case for the channeling of the education tax into the Education Trust Fund, that is the long-term objective,” he says.
Minister Holness informs that discussions have been undertaken with the World Bank, regarding advice on how to establish a credible institution, which will foster growth and development. He notes that the credibility of the institution would be paramount, due to the nature of the NET Fund.
“We have asked the World Bank to advise us as to how to set up an institution like the NET Fund, because if we are going to be asking persons in the Diaspora and persons locally and entities in the Diaspora to contribute, then it has to be an institution of integrity, of high repute; an institution that has the highest standards of accountability and governance,” he says, informing that the meetings have being favourable and the World Bank is pleased with the idea.
The World Bank will also assist with staffing and establishing the management structure for the Fund.
Mr. Holness points out that there are other forms of education trust funds around the world, noting that Ghana for example has an education trust, which focuses on the tertiary sector of the education system and is funded by a tax on tobacco.
The Minister notes that the NET Fund will benefit all the sectors of the education system, as long as there is a need for the development of infrastructure.
He underscores, that there are no plans to impose new taxes to fund education. “We are not proposing any new taxes to fund education.already there is the education tax and what we are trying to do, is to create a receptacle that would perform in such a way as to show how efficient it could be at developing education infrastructures to make an argument for that education tax to be directed to the Trust Fund,” he informs, adding that Prime Minister, Bruce Golding has already pointed out in Parliament that the taxes from casinos would go toward supporting education, health, and national security. As such, Mr. Holness said, the Trust will be the receptacle to receive all those contributions.
He informs that the trust will be funded through various initiatives or avenues by establishing an endowment fund. These include: contributions from the consolidated funds; contributions from corporate entities in the Diaspora; contributions from individuals in the Diaspora; proceeds from casino tax; local and internationally sourced loans; grants from international partners; local and international philanthropy; and from other fund-raising type events.
“In-other-words, the endowment could be made up of persons or entities who would want to contribute by virtue of good-will for education,” he says.
The Minister notes that the Trust will be established as a statutory body similar to the National Housing Trust. This means that “eventually, we would want to change the operating structures to make it firmly placed in the law as to what the trust can do, the obligations and the responsibilities of the Directors,” he says.
The NET Fund will, apart from its financing activities, look directly at setting the infrastructure standards for schools; the process of designing schools; contracting the actual construction of schools; managing those construction projects; and delivering the schools to the administration.
It will also look at major maintenance. As a result, for schools that are at a point where their infrastructure is compromised by virtue of their age, or natural disaster, the Trust will ensure that they are repaired or replaced.
Additionally, the agency will facilitate long term planning to: note where space will be required or have been fulfilled; and manage the education infrastructure so as to achieve optimal balance, in terms of the teacher pupil ratio.
“The Trust will have the dual role one of maintaining the National Endowment for Education, which would be a sum reserved and it will also have the function of designing, contracting and the building of schools,” Mr. Holness says.