I thank the Cathaoirleach for selecting the matter and I thank the Minister of State for giving his time today. The national training levy is a crucial source of revenue in the context of the ongoing national debate on the funding of third level education. As the Minister of State will be aware, the Cassells report released last year has painted a bleak picture of the state of our higher education sector. The report has made it clear that we must act decisively to save a third level education sector which is in serious financial trouble. I firmly believe that the national training levy must play a central role in our response to this crisis.
The report correctly identified employers as major stakeholders in and major beneficiaries from higher education. Our highly educated workforce is a major structural advantage for Irish businesses and enterprise, and it is logical that they would contribute towards its funding. I welcome the public consultation process currently under way in the Department of Education and Skills on a proposal for an increase in the levy from 0.7% to 1% and strongly support such an increase.
I note that the consultation process is specifically framed with the intention of responding to the Cassells report and the challenges facing the higher education sector which include funding issues such as the poor spend compared with other OECD states and the lower spend in comparison with primary and secondary education, but also the STEM skills gap and the growing demographic of students expected to attend higher education, with a 27% increase expected by 2028.
It is welcome that the Department is aware of and preparing for these issues. However, since the Government recognises that the national training levy will be a key part of our response to the third level funding crisis, it is crucial for us to understand the administration of the revenue generated by the levy since its introduction in 2000. How much has been allocated for expenditure? Where has the money been spent? What money has not been spent and why? How are such decisions made? What does the Government plan to do with the increased revenue? It is important for us to properly examine the record of the levy and the national training fund. We need to ensure the fund is fit for purpose and is being managed well for the benefit of citizens.
I have a number of questions for the Minister of State. How will the additional income generated by an increased levy be distributed? None of us wants Irish businesses to play a direct role in higher education policy and decision making, and demanding that their skills gaps be prioritised above other important factors. Given that we need the arts and other such subjects to be supported just as much as STEM projects, how will this be managed?
Will the Minister of State consider investing the increased revenue in capital infrastructure in higher education institutions, as universities are not ready to respond to changing demographics or opportunities that may arise as a result of Brexit? Will the Minister of State give a commitment that this funding will come as an additional resource for the higher education sector and is not used as a replacement for the loss of any existing revenue streams?
I note that section 2.4 of the legislation provides that the Minister shall manage and control the investment account of the fund.
Can the Minister comment on what investment return the fund has achieved in the last five years? What is the investment strategy? Finally, can the Minister explain why there are unspent moneys in this fund, given the current condition of the education sector?
I look forward to engaging with the Minister on this issue. I have also provided a more detailed submission under the submission process.