The National Training Fund is a dedicated fund established under the National Training Fund Act, 2000 resourced by the Training Levy paid by employers 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 skills requirements in the economy.
My Department allocates funding from the NTF, with the consent of the Minister for Public Expenditure, National Development Plan Delivery and Reform in accordance with the provisions of the Act. The allocation for each scheme is generally determined as part of the annual Estimates process. While the NTF does not form part of my Department’s Vote, it is included as an annex to the published Estimates. Any increase in NTF expenditure, all other things being equal and without a corresponding reduction on the Vote, requires an increase in my Department and overall Government expenditure ceilings. NTF expenditure increases general Government expenditure and can only be accommodated within the fiscal strategy agreed by Government.
At the end of 2021 the accumulated surplus in the National Training Fund was €1.1billion. While the 2002 Financial Statements for the NTF have yet to be audited, the surplus at the end of 2022 has increased to some €1.37 billion. For 2023, the income of the NTF is forecast at €1,020m with expenditure forecast at €900.8m, which is expected to result in an annual surplus of €120m, which will further increase the surplus. The NTF accumulated surplus reflects the increase in the rate of the levy to 1% and the continued growth in employment in the economy. In accordance with the terms of NTF Act, the surplus remains in the accounts of the NTF for possible investment in other eligible training activity.
While a prudent level of reserve in the NTF is imperative to guard against the uncertainties of the economic cycle ensuring that sufficient resources are available to deliver on our skills priorities, the current level of the surplus evidently exceeds what may conceivably be required for a potential “rainy day”. The NTF Advisory Group has recommended that the growing surplus be used to address the skills challenges in the labour market.
The recently published OECD Report Ireland Skills Strategy Report notes that many Irish adults are at risk of falling behind as they do not have the right skills to thrive in their current employment and are unprepared for changes in the world of work. Our participation in lifelong learning, while above the EU average, falls far behind top EU performers. The OECD recommends using the surplus NTF funds to address these risks and improve structural incentives for employers to take advantage of NTF-funded education and training. It proposes a discretionary fund as part of the NTF for the regional/local/sectoral level, and increased NTF support for upskilling and reskilling for SMEs.
My Department is working closely with other Departments and the enterprise led NTF Advisory Group to develop options for the potential use of the NTF surplus to address the skills challenges identified for the future world of work, driven by technology and the decarbonisation imperative, in the context of Estimates 2024.
