Time to refocus the National Training Fund – Education & Skills asks Budget 2018
Aug 14, 2017
by Elisha Collier O’Brien, Policy and Research Executive, Chambers Ireland
Irish businesses benefit greatly from opportunities to access training and skills for employees to build capacity and enhance productivity.
The National Training Fund is an important component in Ireland’s further education and training landscape. Currently, employer’s PRSI contribution includes a 0.7% National Training Fund Levy and in 2016 the value of the NTF was roughly €383 million.
The purpose of the National Training Fund is to raise the skills of those in employment, provide training to those who wish to acquire skills to take up employment and provide information in relation to existing or likely future requirements for skills in the economy. It is a vital part of Ireland’s education and training system, with particular importance for employees and small businesses.
As it currently stands, the NTF is weighted significantly towards “For Employment” training. This is despite the fact that unemployment levels have reduced dramatically in the last few years. A recent report by Goodbody Stockbrokers forecasts that Ireland will likely reach full employment in 2018 and unemployment levels as low as 5%.
At the same time, the NTF is weighted 77% ‘For Employment’ and 23% ‘In Employment’, meaning that the overwhelming majority of funds are being targeted at an ever decreasing number people. More is going towards the increasingly fewer number of people seeking employment, while a smaller amount is spread across the thankfully continuously increasing number of people in employment.
Chambers Ireland highlighted this discord between the employment figures and the weighting of the NTF in a submission earlier this year to the Department of Education and Skills and in our recent Pre Budget 2018 Submission to the Department of Finance. In these submissions we outlined that the NTF must reflect the current employment levels and that there should be no increase to the employer’s PRSI levy while the NTF is not properly aligned with the needs of the businesses paying into it.
The skills requirements of businesses are subject to rapid change stemming from global and domestic policies and challenges, as well as technological developments which can impact upon sectoral demands. In addition to this, we are currently in a position where the productivity and capacity of SMEs to deal with change and challenging issues is increasingly important in the face of Brexit and the uncertainty surrounding the outcomes of current negotiations.
The NTF can be utilised as an important tool in preparing Irish businesses, in particular our SMEs, for Brexit. Through increased provision of training on customs issues, supply change management and many more areas of concern to SMEs, we can bolster the capabilities of business to withstand the challenges that lie ahead in trading and doing business in a post-Brexit world.
Our education and training system has seen many positive changes over recent years, but challenges remain to ensure it is capable of meeting the current and future skills needs of the economy.
Chambers Ireland Pre-Budget Submission is available to read here