Surplus in State training fund set to climb to €1bn in 2020

Scale of skills underspend emerges as third-level sectors facing investment ‘crisis’

 Fianna Fáil’s education spokesperson Thomas Byrne: “I fully accept that a surplus is required to be maintained for lean years. However, a surplus amounting to one year’s levy should be sufficient.” Photograph: Alan Betson

Fianna Fáil’s education spokesperson Thomas Byrne: “I fully accept that a surplus is required to be maintained for lean years. However, a surplus amounting to one year’s levy should be sufficient.” Photograph: Alan Betson

 

The Government is facing calls for an “urgent review” of a State training fund after it emerged that the surplus is set to climb to almost €1 billion this year.

The scale of the surplus has emerged at a time when the higher education sector claims it is facing a financial “crisis” linked to reduced State investment.

Latest figures show the National Training Fund – an employers’ levy aimed at supporting the training of those in employment – has in recent years been running large surpluses of between €200 and €300 million annually .

Official projections for 2020 indicate there will be a further underspend of more than €230 million in 2020, bringing the total surplus in the fund to €915 million.

The Government is due to increase the rate of the National Training Fund levy by a further 0.1 per cent this year .

The Irish University Association says it is time for additional funds to be injected into the sector.

It says core State funding per student has dropped by about 40 per cent over the past decade and the impact has been seen in Irish universities sliding down world rankings.

A spokesman for the Department of Education said State funding for the sector has risen significantly.

EU rules

He said EU spending rules meant that additional expenditure could not be sourced from the fund without a corresponding drop in exchequer spending.

“The EU rules are designed to ensure that growth in public expenditure is sustainable and supports the achievement of key fiscal targets,” the spokesman said.

“The accumulated surplus in the NTF has previously been important in maintaining expenditure levels, particularly in the provision of training for unemployed people, when NTF income declined.”

However, Fianna Fáil’s education spokesman Thomas Byrne TD said a full review of the operation of the training fund needed to happen “ urgently”.

“The fact that the annual unspent surplus is now exceeding the increase in the levy means that a net benefit to the higher and further education sector is not being felt,” he said.

“I fully accept that a surplus is required to be maintained for lean years. However, a surplus amounting to one year’s levy should be sufficient. We are now exceeding that.”

Value for money

Mr Byrne said that at a time when the surplus is increasing, the Government had “put a halt” to capital projects in the further education sector.

“This does not add up. Employers who pay the levy along with workers and students who benefit are not getting value for money,” he said.

“Notwithstanding EU rules, I favour an urgent examination to see if the surplus above one year’s income can be used for badly needed building projects for further education colleges.”

A Department of Education spokesman pointed out there had been “significant” increases in investment on education and training from the fund over recent years.

A further increase in National Training Fund spending of €70 million is planned for 2020.

This has funded a significant expansion in apprenticeships, training for people in employment and in the Springboard+ programme.

It has also enabled the establishment of the “human capital initiative”, a five-year programme of increased investment in “priority skills” in higher education. This amounts to €300 million over the period 2020-2024.