From Department of Public Expenditure, NDP Delivery and Reform
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The Minister for Public Expenditure and Reform, Paschal Donohoe TD and the Minister for Education and Skills, Richard Bruton TD, today (31 May 2017) held a half-day forum in Dublin’s Iveagh House on the proposed exchequer-employer investment mechanism for Higher Education and Further Education and Training.
Both ministers have agreed that a proposed increase in the National Training Fund should be considered in relation to meeting the funding needs of both the higher and further education and training sectors.
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 large multinational companies, to Irish export companies, and to domestic trading companies, in order to drive economic growth, and achieve and sustain full employment.
That is why government and enterprise have a shared interest in Ireland becoming the best in Europe in responding to existing and future skills needs. In order to respond effectively we need to put in place a sustainable funding model for the higher and further education and training sectors.
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. However, in return enterprise must also have a greater role in shaping the type of education and training that is delivered.
The initiative forms part of a broader plan for the higher and further education sector, as part of the Action Plan for Education. The outcomes to be delivered include:
In the consultation paper published last March it was proposed to introduce an incremental annual increase of 0.1% in the National Training Fund levy to increase it from 0.7% to 1% in the 3-year period to 2020, delivering up to €200 million (over 2015 levels) in additional funding from employers.
As part of the consultation period, there was a call for written submissions from stakeholders. Today’s forum is the second part of the consultation, where we will explore the key issues arising from the consultation process. Invitations were sent to all 28 individuals and organisations that made submissions as part of the consultation.
Mr Cassells provided an opening address contextualising the expert group report’s recommendations on increased employer funding of higher education. The expert report also included recommendations on strengthening employer engagement and the balancing and prioritisation of core funding and additional skills provision within the sector.
Minister Donohoe said:
“The level of engagement with the consultation process is extremely encouraging with a lot of very well thought out submissions.
“The purpose of today is to tease out firstly are the proceeds from the National Training Fund (NTF) currently being put to the best use and secondly, if there was an increase in the NTF levy how should this be configured in order to meet the needs of employers and the wider economy.
“I firmly believe the NTF has a role to play as part of a sustainable and predictable long-term funding model for the higher and further education and training sectors, alongside exchequer investment and student contributions.
“Today provides us with an opportunity to identify solutions to the issues highlighted in the consultation process and ensure we get the greatest return for our investment.”
Minister Bruton said:
“We are facing the possibility of major changes in the relationships we have with our key trading partners, including the UK and the USA. We have to adopt the best policies to fortify us for the challenges which lie ahead, and ensure that we can nurture, develop and retain talent.
"Today’s consultation is part of our plan to make Ireland a leader in anticipating and responding to the rapidly changing need for talent and skills across all sectors.
“Everyone agrees that we have to increase funding of the higher education and further education and training sector, as identified in Peter Cassells’ report last year. However, there is less consensus on where that funding should come from.
“Doing nothing is not an option. I have already moved swiftly to secure increased funding of €36.5 million for higher education in Budget 2017, the first such increase since the crisis hit.
“To date, the department has cumulatively secured an additional €160 million investment provision in higher education over the period 2017-2019 but much more is required.
“It is in this context that we are seeking to achieve consensus on a future funding model for the higher education and further education and training sector going forward where all benefactors, including the state, employers and students, can play their role.
“This is a part of a suite of measures we are introducing to make Ireland the best in Europe in responding to emerging skills needs, including the establishment of the National Skills Council and nine regional skills fora.”
ENDS
We must invest more and we must ensure that we get maximum impact by investing in innovative ways. That is why:
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:
The report of the Expert Group on the Future Funding for Higher Education sets out a number of future funding options for the sector including a predominantly state-funded system, a state-funded system supplemented with continuing student fees and increased state funding with deferred payment of fees through an income contingent student loans scheme.
The report is currently with the Joint Oireachtas Committee for consideration where each of the funding models will be examined including hearing input from key stakeholders.
The current public consultation process on a proposed exchequer-employer investment mechanism for higher education and further education and training is seeking to deliver up to an additional €200 million per annum by 2020 through an increase in the National Training Fund levy of 0.1% in each of the years 2018, 2019 and 2020.
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:
Technical work is also being undertaken in relation to the option set out in the expert group report on deferred payment of student fees through income contingent student loan schemes. The aim of such technical work is to inform future policy options including in the light of recommendations from the Oireachtas Committee on Education and Skills.
Invitations were sent to all 28 individuals and organisations that made submissions as part of the consultation. This includes members of key groups such as IBEC, ICTU, ISME, SFA, Chambers Ireland, American Chamber of Commerce Ireland, and the Irish Exporters Association. Representatives from the education sector include the Technical Higher Education Association, Trinity College Dublin and TCD Students' Union, Griffith College, IT Sligo, NALA, AONTAS, as well as a number of members of the Oireachtas.