10 March, 2017 - Minister Bruton and Minister Donohoe launch consultation on proposed Exchequer-Employer Investment Mechanism aimed at providing €200million in extra funding and better outcomes for students and wider society

Skills, research and disadvantage at the heart of Government plans to provide better funding for higher and further education

Views of employers will be carefully listened to in context of Brexit and the need to provide more skilled workers for growing economy

The Minister for Education and Skills, Mr. Richard Bruton, T.D., and the Minister for Public Expenditure and Reform, Mr. Paschal Donohoe, T.D., today [10 March 2017] launched a public consultation process on a proposed Exchequer-Employer investment mechanism for higher education and further education and training, following a commitment in Budget 2017.

Both Ministers have agreed that a proposed increase in the National Training Fund should be considered in relation to the funding needs of both the higher education and further education and training sectors.

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

We must invest more and we must ensure that we get maximum impact by investing in innovative ways. That is why:

  • In Budget 2017 Minister Bruton secured €36.5million in additional funding for 2017, and at least €160million in additional funding over a 3-year period, from the Exchequer, the first significant increase for the sector in 9 years
  • A series of reviews are being carried out including: a review of the funding model in higher education, to ensure that funding mechanisms are aligned at delivery of key goals-including in areas of skills, research and disadvantage; a review of Further Education and Training programmes funded by the National Training Fund to ensure that spending is optimally targeted at enterprise objectives-including the balance between “for employment” and “in employment” at a time of 6.6% unemployment and falling; and the Oireachtas Committee is considering the Cassells report, including the issue of possible additional funding from students.

The consultation on the design of an Employer-Exchequer Investment mechanism is beingundertaken as part of the overall response to meeting the anticipated skills needs in the economy over the coming years.  The consultation paper being announced today 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, delivering up to €200million in additional funding from employers.

 

Minister Bruton said:

“Higher and further education and training is a central part of our plan as a Government to support a strong economy and a fair society. A properly-funded HE and FET sector is crucial to delivering on major national ambitions in areas like skills, research and disadvantage.

“Ireland’s capacity to deliver sustainable full employment, promote innovation and grow productivity in our economy, in the face of Brexit and other international challenges, will depend centrally on our capacity to nurture, develop, and deploy talent in our enterprises. Government and enterprise must work together if that ambition is to be realised.

“There is a broad consensus on the need to develop a sustainable approach to funding this system in order to meet this ambition. The Cassells report was clear that employers are major beneficiaries of the high quality graduates being produced through our internationally competitive higher education system.   Employers at all levels and in all areas from tourism to ICT and from pharma to accounting to retail, depend on a sustainable supply of skilled workers.  This need is even more acute in the context of Brexit

“Our objective is to build a stronger further and higher education system that serves the needs of all students, enterprise and society more generally through high-quality teaching and learning, upskilling and reskilling, research and innovation, as well as supporting the most disadvantaged to participate in higher education as part of the overall goal of delivering the best education and training system in Europe by 2026.

“The purpose of this consultation is to obtain the views of employers on a proposed funding approach which will contribute to the sustainable funding of the higher and further education system, alongside Exchequer investment and student contributions.

“We look forward to receiving responses to the consultation paper from industry and employer stakeholders and from any other interested parties.”

Minister Donohoe said:

 “In order to continue to reap the rewards as a society and as an economy from the advancement of our key asset, our human capital, we need to put in place a sustainable, equitable and predictable long-term funding model for the higher and further education and training sectors. The Exchequer has allocated increased expenditure on higher education in the Estimates for 2017 with further provision for demographic increases in the sector in 2018 and 2019.

“The Government is working on a number of elements of which the proposal relating to an Exchequer-Employer investment mechanism is an important part. We must work together to ensure that an equitable and practical funding model is designed and implemented which will maintain and strengthen the dynamic education sectors required in an increasingly globalised and competitive environment”.

 

ENDS

Note for Editors

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.

 

Details of the Consultation Process:

The consultation paper is available on the website of the Department of Education and Skills at Public Consultation on Exchequer-Employer Investment and the Department of Public Expenditure and Reform at www.per.gov.ie

While the consultation process is targeted in the first instance at key industry and employer stakeholders, comments are also invited from individual members of the public, groups or organisations.  Comments may be submitted to the Departments of Education and Skills and Public Expenditure and Reform to the email address: ConsultationNTF@education.gov.ie

or, by post to John McDermott, Higher Education Funding and Governance Section, Department of Education and Skills, Marlborough Street, Dublin 1, D01 RC96. The deadline for receipt of comments is 5 p.m. on Thursday 13th April 2017.

Link to report:

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 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.