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A severe funding crisis is eroding the fabric of higher education in Ireland and could threaten Smurfit’s ranking among the world’s elite graduate business schools, the new dean of Smurfit has warned.

Ciarán Ó hÓgartaigh, 44, who became dean of Smurfit School of Business and its sister undergraduate school Quinn at University College Dublin in August, says students’ fees should be reintroduced in Ireland and that some graduate business schools in the country need to merge to maintain quality.

“The abolition of student fees was one of the worst decisions made in Ireland. It is threatening our worldwide competitiveness. The fabric of third level is being eroded,” he says.

Student fees were abolished in Ireland in 1997 to try to increase university participation among people from less privileged backgrounds. But the economic crisis, which has forced the country to accept a bail-out from the European Union and International Monetary Fund, is starving the sector of funds and threatening quality.

Last week the Irish government announced a 2 per cent cut in core funding for higher education in its 2012 budget. It balked at reintroducing university fees and instead increased the existing student registration charge by €250 to a maximum of €2,250.

Prof Ó hÓgartaigh says the abolition of fees has increased inequality, as it enables middle-class parents to spend money on private schooling because they do not have to pay university fees. It has also made the sector too reliant on public funding.

Ireland’s leading universities, Trinity College Dublin and University College Dublin, slipped out of the top 100 of the Times Higher Education World University Rankings for the first time this year in the wake of the economic crisis. And Smurfit’s ranking of 78 in the Financial Times full-time global MBA rankings could suffer unless action is taken to boost higher education funding or remove a cap on the amount of non-exchequer funding colleges can use to pay salaries, Prof Ó hÓgartaigh warns.

“There has been a certain amount of poaching and we have lost some senior faculty members. We need to recruit and maintain the top faculty members. Standing still isn’t enough.”

Since 2008, staff at Smurfit and Quinn have taken pay cuts of up to 20 per cent because of cuts in public funds enforced by the economic crisis. The number of academic staff has fallen by 15 per cent to 91 full-time posts, while student numbers have increased by 5 per cent.

“Productivity has increased and people are working harder. But you can only sustain that for so long. We are depending a lot on people’s good will,” says the dean, adding that the school is now recruiting 14 academic staff using non-exchequer funds.

Prof Ó hÓgartaigh believes the tough global economic climate means students are more likely to choose the best quality schools to give them an edge in the jobs market. Six graduate business schools in Ireland are unsustainable, he says, and there is a need for consolidation.

“I’m talking about mergers or joint ventures, not takeovers,” he adds. “My door is open to other graduate schools about how we can collaborate more effectively to compete internationally. As Ireland’s leading business school we have a responsibility to start that conversation.”

Smurfit was founded with the help of a donation by cardboard box tycoon Michael Smurfit. Its MBA, which the FT ranks 10th in the world for value for money, is attended by 45 students. Together, Smurfit and Quinn offer business courses to 1,250 students.

A former Fulbright scholar and professor of accounting, Prof Ó hÓgartaigh returned to Ireland to join Smurfit in 2008 after a spell at Victoria University of Wellington in New Zealand.

One of his first acts as Smurfit dean was to ask the heads of the academic departments to stand down. All seven posts were readvertised and all but two went to new appointments. “I …felt there was a lot of energy in the school. I felt the best way to tap into that was to open up all those positions,” he says.

He is confident that with hard work Smurfit can unleash fresh thinking and shrug off the Irish recession to the benefit of its students. “We want to lead and change society. And the question we must ask ourselves is how are we going to teach the next generation of business leaders? How can we make them wiser? That is the challenge for the school.”

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