I propose to take Questions Nos. 368 to 370, inclusive, and 374 together.
As the Deputy will be aware, I announced at Budget time last October my intention, together with the Minister for Education and Skills, to carry out a consultation process on the design and operation of an Exchequer-Employment mechanism to help fund higher and further education and training into the future and to drive continued reform. The consultation process specifically aimed to:
- Fully explore with employers the balance between impacts (on competitiveness and productivity), benefits (of skilled human capital) and costs of a proposed investment mechanism;
- Contribute to the development of an equitable and sustainable long term funding model for HE and FET;
- Strengthen outcomes for the HE and FET system of benefit to employer and the wider economy;
- Convey a clear signal domestically and internationally of the value Ireland places on the education and training of our human capital in an ever more competitive and risk heavy environment; and
- Demonstrate collective leadership where Government and Employers can consult on a high level national priority and together drive enhanced outcomes in return for additional investment.
There was considerable engagement (28 submissions) with the public consultation, which was subsequently followed by an open forum event with stakeholders on May 31st hosted by the Minister for Education and Skills and I. The purpose of the forum was firstly to better understand are the proceeds from the National Training Fund (NTF) currently being put to the best use and secondly, if there was an increase in the NTF levy how should this be configured in order to meet the needs of employers and the wider economy. Both Departments are now actively considering all of the issues raised as part of the consultation process including the specific issues referred to in the Deputy's questions, for example, the sequencing of the proposed increase in the NTF and the scope and case for establishing differential rates for the NTF levy. Following this consideration, the Minister for Education and Skills and I will bring a Memorandum to Government on the outcome of the consultation process and the proposed next steps.
With respect to the use of the surplus in the NTF; as set out in the consultation document this is constrained due to the EU fiscal rules. In the absence of an increased rate of contribution, additional expenditure cannot be sourced from the NTF without a corresponding reduction in Exchequer expenditure in other areas. The rules are designed to ensure that increases in public expenditure are sustainably financed and reduce the risk that additional expenditure is funded on the basis of cyclical or windfall revenues. The fiscal rules are applicable to all government finances therefore to disestablish the fund and re-establish the proceeds as general government revenue, as the Deputy suggested, would not alter its treatment.
As set out in the legislation the intent is for the proceeds of the NTF to be used to give skills to, or raise skills amongst those in, or seeking, employment. Given how the surplus safeguarded the FET sector during the downturn, the implications and knock-on effects of using the fund for any other purpose, including capital expenditure, require careful consideration. Regarding capital expenditure more generally, the Deputy will be aware that the capital plan is currently being reviewed by my Department in order to take stock of our national infrastructure priorities now and in the future and to allocate further resources so that they best meet our social and economic needs.