Teaching Matters: It's good that the Government is at last moving to take decisions on the OECD report.

Minister for Education Mary Hanafin outlined her thoughts on April 25th in a wide-ranging speech - the most comprehensive statement on higher education from a minister for many years.

Perhaps most welcome is her apparent acceptance of the OECD's basic premise: that Ireland's ambitious national goals cannot be realised without fundamental reform of our third-level education.

Her promise of new legislation to strengthen the role of the institutes of technology is also welcome. Broadly positive, too, is the decision to create a Strategic Innovation Fund, in that its objectives seem to be to drive innovation in higher education.

There are worries about this fund. One is that it will focus on individual institutional reform and miss the big picture at national strategic level. Perhaps there is a need to split the fund into two with, say, 30 per cent going to individual institutions and the remainder applied system-wide.

There are also worries about how a competition-driven fund will work in practice. How, for instance, will it rank an access initiative in one university against an organisational restructuring in another? Rather than trying to compare apples and oranges, it might be better to allocate funds to each institution not on competition but based on size or budget. Each institution could draw down amounts, subject to meeting established criteria and having a proposal agreed with the HEA.

Overall, however, the creation of the fund is potentially a step forward. It may provoke reform and provide much-needed funding for a cash-strapped higher education sector.

Yet for all the positive signs, my judgment on the Minister's strategy is that she has painted herself into a corner, from which it will demand a great deal of political courage to emerge.

As so often when government and education intersect, money is the issue. However, while people might disagree on the details of how to make the Irish university sector world class, noone is in any doubt that it must cost a lot of money. This is especially so because of where we are coming from - 14th out of 26 in the OECD spending table. Hence the need for, in the famous phrase, a "quantum leap in funding". Let us be fully aware of what that means: to do the job, the system needs an injection of about €200 million a year - the same order of money that is involved in transforming the research scene.

What are the possible sources of this funding? There are only five:

­• Savings brought about by reforming the universities

­• Private philanthropy

­• Fees from non-EU students

­• Fees from domestic students

­• More Government support

Let us look at these possibilities. Reforming how the universities spend their resources is desirable, but the scope for savings is infinitesimal compared with the overall need. Private philanthropy in all countries, including Ireland, has concentrated on capital funding - not everyday running costs, which are at issue here. Over the past 20 years, the lion's share of Irish education's philanthropic receipts have come from one source - Chuck Feeney's Atlantic Philanthropies - which has now ended its involvement.

Expanding income from non-EU students is certainly on the cards, but the idea that this could meet our needs is fanciful. Even countries that are most successful in attracting foreign students - Australia and the UK, for instance - do not rely on them for more than a fraction of their spending.

Then there is the great unmentionable: fees from students who come from Ireland or within the EU. Since Niamh Bhreathnach abolished undergraduate fees a decade ago, it has become an unquestionable piece of political wisdom that it would be electoral suicide for any government to reinstate them.

Hanafin's much-maligned predecessor, Noel Dempsey, tried to reopen the question and was immediately savaged by his colleagues. Indeed, anyone who does the sums knows that bringing back fees is the only rational answer. Certainly the OECD is in no doubt: pointing to worldwide experience, it reckoned a continued refusal to embrace fees was simply unsustainable.

But in her latest statement, the Minister has once again confirmed that this solution is off the table for the foreseeable future. So if the decision on fees is truly irrevocable, there is no other option than that of the Government providing the quantum leap. No other possible source of funding can make the reform a reality. And without greatly increased funding, there can be no meeting our education goals. It is as simple as that.

In the face of this stark choice, what is needed is political courage of the first order: the courage to stand up to your ministerial colleagues and convince them that the country's destiny is at stake here. We have been down this road before: what we need to see is the same kind of courage and vision that Bertie Ahern, Mary Harney and Micheál Martin found a few years ago to transform virtually overnight the research environment in Irish universities.

Is that courage there now? Only the coming months will tell. But unless the money is available, the Minister's fine language about reform will prove to be nothing more than that.

Dr Danny O'Hare is a former president of DCU