Near-€1.4bn surplus in State training fund is ‘ridiculous’ and ‘outrageous’

Accumulated surplus in National Training Fund now stands at €1.37bn, Public Accounts Committee is told

A near-€1.4 billion surplus in a key State training fund has been criticised as “ridiculous” and “outrageous” at the Public Accounts Committee (PAC).

The high-powered Dáil committee is hearing from officials at the Department of Further and Higher Education, who outlined the accumulated surplus in the National Training Fund (NTF) now stands at €1.37 billion.

Colm O’Reardon, the new secretary general for the department, said the underspend was a “very important issue for us” with the surplus building for several years.

Imelda Munster, the Sinn Féin TD for Louth, described the figure as “ridiculous”, claiming it was an “outrageous amount of money to be sitting there in a surplus not used”.


James O’Connor, the Fianna Fáil TD for Cork East, said the income of the fund was €951 million last year and payments amounted to €681 million, with a €269 million surplus now bringing the accumulated surplus to €1.37 billion.

“All we seem to be doing here is accumulating money,” he said.

Mr O’Reardon said policy options had been developed for the fund, which is fed by employer PRSI contributions, but that it could only be spent if there was approval from the Minister for Public Expenditure at budget time.

“Essentially, it’s a matter for Government to decide how it spends its money,” he said, adding the State operates under an expenditure rule which limited spending – but that there were a “range of areas where this money could be invested” and that there was “no shortage of ambition”.

Ms Munster said that John McCarthy, the chief economist of the Department of Finance, had told the PAC there were no fiscal rules in relation to the spending of the fund’s surplus – something Mr O’Reardon said did not chime with the advice he had received from the same department.

“That’s not what it says in the note I got from the Department of Finance before I came in here,” Mr O’Reardon – who was until recently a senior official in Finance – told TDs. He said the “kernel” of the issue was to create more fiscal space for the funding to be used.

Green Party TD for Waterford Marc Ó Cathasaigh told the committee there was “massive frustration” among employers who were paying to fund the NTF but were unable to get access to the surplus to pay for schemes for their workers.

“Employee retention is a real challenge and employers want to get their hands on this money,” he said. “They are dying to upskill their employees while in work and people can’t get access to it.”

Mr Ó Cathasaigh asked whether it was a case that the Department of Further Education had gone to the Department of Public Expenditure with ideas for how to spend the money “and computer said no?”.

Mr O’Reardon responded there had been proposals developed but they acknowledged that Government had to keep in line with its own internal rules.

The committee also heard criticism of an underspend of €105 million in student supports last year, with Mr O’Connor saying this was “astronomical” against the backdrop of a cost-of-living crisis.

The officials told the committee that the estimates for the Susi grants were drawn up with a significant degree of uncertainty overhanging 2022, and that the underspend reflected allocations Government had made in its cost-of-living package, which reduced payouts, as well as lower levels of applications and the non-use of some Covid funds.

The committee also heard there was a difficulty in estimating the anticipated level of need, which had to be done with information only emerging late in the day relative to the budgetary process.

The issue of student accommodation was also discussed, with department official Paul Lemass saying funding was being made available but that third-level institutes were being “plagued” with cost increases.

He said the cost of building a student bed was around €100,000 in 2015 but that some quotations universities were getting suggested it had risen to €200,000 per student bed.

There was, he said, “a horrendous inflationary environment”.

Colm Burke, the Fine Gael TD for Cork North Central, said ownership and control of student accommodation in Cork was concentrated in a number of companies and that the cost to students is “extremely high”, coming in at around €250 per week, per bed.

Jack Horgan-Jones

Jack Horgan-Jones

Jack Horgan-Jones is a Political Correspondent with The Irish Times