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14 July, 2017 - Ministers Announce Comprehensive Review of the National Training Fund

The Minister for Education and Skills, Richard Bruton T.D., together with the Minister of State for Higher Education, Mary Mitchell O’Connor T.D., and the Minister of State for Training and Skills, John Halligan T.D., today (Friday 14th July 2017) announced a comprehensive review of the National Training Fund.

Minister Bruton indicated that today’s announcement is in direct response to the issues raised in the consultation process which looked at theproposal for an Exchequer-Employer investment mechanism for higher education and further education and training. This would involve an incremental annual increase of 0.1% in the National Training Fund levy to increase it from 0.7% to 1% in the three year period to 2020, delivering up to €200million in additional funding from employers. This proposal stems from a recommendation in the report of the Expert Group on Future Funding for Higher Education.

Minister Bruton said:

“Ireland must identify, prioritise and address the existing and future skills needs of our economy and society. Winning the war for talent will be crucial to achieving and sustaining full employment, against a backdrop of international challenges.

“As a community we need to invest more in higher and further education. In 2017, the state will invest €36.5m extra in this sector, with €160m committed over the next three years. It is reasonable to ask employers to contribute more as their future success depends so much on the capacity of the education sector to respond to their needs.

“In return enterprise must also have a greater role in shaping the type of education and training that is delivered.”

The Minister has committed today to:

·        Greater employer input into informing NTF priorities, including through the National Skills Council which advises on existing and future skills needs.

·        Publication of annual data on the breakdown of NTF expenditure, evidence of engagement with employers and the impact of NTF funded programmes.

·        Carrying out a comprehensive independent review of the NTF which will be overseen by a Steering Group comprised of relevant Government Departments as well as employer and other stakeholder representatives.

The Minister said that these measures will provide assurance to employers and wider stakeholders about what the Fund is delivering and how it is responding, and how it can respond better, to existing and future skills needs.

The comprehensive review will assist in informing the future strategic direction of the Fund from 2018 onwards.

The Government in its final-decision making on the introduction of an Exchequer-Employer Investment mechanism, taking into account the outcome of the consultation process, will also consider the scope for a multi-annual Exchequer investment commitment subject to overall budgetary and expenditure considerations, including compliance with EU Fiscal Rules.

A final decision on whether there will be an increase in the NTF levy will be taken by the Government in the context of the 2018 estimates process.

Minister Bruton continued:

“Minister Donohoe and I have indicated that we favour an enhanced contribution from employers as part of the overall solution to a sustainable future funding model for higher education. It is reasonable to ask employers to contribute more as their future success depends so much on the capacity of the education sector to respond to their needs.

“Today I am announcing that employers will have a greater role in informing the priorities of the NTF, including through the National Skills Council which I chair. The publication of information about how the NTF is being used will also ensure that the fund is correctly targeted towards addressing existing and future skills needs and winning the war for talent.”

Minister of State Mitchell O’Connor said:

“We are facing a serious challenges in relation to higher education funding. The Cassells report made clear that to do nothing is not an option and the Government is committed to developing a comprehensive response to the issues identified in the Cassells report. In 2017, the state will invest €36.5m extra in higher education, with €160m committed over the next three years. Today’s announcement that a breakdown of NTF expenditure, evidence of engagement with employers and the impact of NTF funded programmes, will be provided is a very positive step forward.”

Minister of State Halligan said:

“We need to expand the range of apprenticeships and traineeships. The target in the Action Plan for Education will see a total of 50,000 apprenticeship and traineeship registrations by 2020.Employer buy in is critical as the apprenticeship model is dependent on employers taking on apprentices. Today’s announcement will give employers a greater input into the priorities of the NTF. It is essential that key stakeholders continue to build on existing and foster new relationships within the enterprise community and that all sectors of the economy embrace the challenge to develop new apprenticeships.”

 

Notes to Editor

Review of the Consultation Process on a proposed Employer-Exchequer Investment Mechanism for Higher Education and Further Education and Skills

 

The Review of the NTF:

The review of the NTF will:

·        Examine the effectiveness and efficiency of the Fund

·        Assess the targets and performance criteria associated with programmes supported through the Fund

·        Examine the adequacy of the evidence base and performance criteria on which expenditure decisions are taken;

·        Assess the monitoring and evaluation arrangements in place

·        Assess the responsiveness of the Fund to the needs of the economy and wider society in terms of the type and method of programme delivery;

·        Assess the continued relevance of the core objectives of the Fund and the future strategic direction of the Fund

·        Identify the most appropriate governance and oversight structure of the Fund in optimising employer engagement and input into strategic priorities

·        Consider the role of the Fund, alongside the Exchequer and existing student sources, in future funding arrangements of the HE and FET sectors

·        Make recommendations on how to improve the efficiency, effectiveness, relevance and impact of expenditure from the Fund and responsiveness of the Fund to the needs, inter alia, of the economy

The Terms of Reference will be finalised in consultation with the National Skills Council.

Expert Group on Future Funding for Higher Education (Cassells Report)

A key recommendation contained in the 2016 report of the Expert Group on Future Funding for Higher Education (Cassells Report) was that employers, as major beneficiaries of the outcomes of higher education, should contribute more to the funding of higher education and that this could be achieved by an increase in the National Training Fund levy.

Ministers Bruton and Donohoe launched a public consultation in March 2017, and met directly with employers and other stakeholders in May, to hear their views on the design and operation of a proposed Exchequer-employer investment mechanism for higher education and further education and training, which would contribute to a more sustainable funding model across HE and FET and would help to drive continued reform, quality and performance improvement. 

The Report of the Expert Group on Future Funding for Higher Education concluded that current funding arrangements were not sufficient and it called for the implementation of a clear funding strategy for the sector that will deliver a robust and steady base of funding to sustain the system into the future. The report included a number of recommendations in relation to options to fund higher education in the period to 2030. The Group estimated that an additional €600m funding per annum would be required for higher education by 2021 and €1 billion by 2030. 

Link to report:

http://www.education.ie/en/Publications/Policy-Reports/Investing-in-National-Ambition-A-Strategy-for-Funding-Higher-Education.pdf

The National Training Fund Act 2000 requires employers to contribute to training initiatives through a levy of 0.7% of reckonable earnings in respect of the majority of employees. The levy is collected through the PRSI system by the Revenue Commissioners. The levy is used:

(a) to raise the skills of those in employment,

(b) to provide training to those who wish to acquire skills for the purposes of taking up employment, and

(c) to provide information in relation to existing, or likely future, requirements for skills in the economy.

The public consultation paper proposes an incremental annual increase of 0.1% in the National Training Fund levy to increase it from 0.7% to 1% in the three year period to 2020. The paper is available on the website of the Department of Education and Skills at www.education.ieand the Department of Public Expenditure and Reform atwww.per.gov.ie.

The 28 submissions made on the consultation paper are currently available on the DES website

http://www.education.ie/en/The-Education-System/Higher-Education/Public-Consultation-on-Exchequer-Employer-Investment.html

Outcomes to be delivered

The initiative forms part of a broader plan for the higher and further education sector, as part of the Action Plan for Education, aimed at dealing with the three key issues of skills, research and disadvantage. The outcomes to be delivered include:

-      Increase the number of people doing traineeships and apprenticeships from 5,500 to 14,000; in total provide 50,000 apprenticeship and traineeship registrations by 2020

-      Provide 50,000 upskilling and reskilling places in HE by 2021 to meet identified skills gaps in the economy and to support an increase in Lifelong Learning. Of these places, 6,000 are annual upskilling and reskilling courses, currently under Springboard+, focused on key strategic skills.

-      Increase the number of HE students undertaking a work placement or work based project as part of their course by 25% by 2021

-      Increase by 30% in the number of students from disadvantaged areas attending higher level

-      Increase annual research masters and postgraduate students by 500 to 2,250 as set out in Innovation 2020. Of these places, the Action Plan for Education 2017 aims for 200 postgraduate research enrolments and 20 funded postdoctoral places.

-      Complete the delivery of a 10% increase in the number of employees reached by Skillnets between 2016 and 2017