National Training Fund

Dáil Éireann Debate, Tuesday - 20 June 2017

Tuesday, 20 June 2017

Ceisteanna (493, 494, 528, 529)

Thomas Byrne

Ceist:

493. Deputy Thomas Byrne asked the Minister for Education and Skills the reason the surplus of the national training fund cannot be used for capital expenditure at higher education institutions. [27230/17]

Thomas Byrne

Ceist:

494. Deputy Thomas Byrne asked the Minister for Education and Skills the way in which the expenditure allocation for the national training fund is determined; and if its expenditure envelope can increase with growing revenues. [27231/17]

Thomas Byrne

Ceist:

528. Deputy Thomas Byrne asked the Minister for Education and Skills if the proposed employer-employee contribution mechanism was established within the NTF; and if some of the surplus in the investment account can be utilised for funding higher education institutions. [27749/17]

Thomas Byrne

Ceist:

529. Deputy Thomas Byrne asked the Minister for Education and Skills the surplus or deficit for the year, the surplus brought forward by 1 January and the surplus carried forward at 31 December in relation to the income and expenditure account of the national training fund in each of the years 2000 to 2016, in tabular form. [27750/17]

Freagraí scríofa

Minister of State at the Department of Education and Skills

I propose to take Questions Nos. 493, 494, 528 and 529 together.

The National Training Fund Act, 2000 provides for a levy on employers to be used to give skills or to raise skills amongst those in, or seeking, employment.

The levy is 0.7% of reckonable earnings in respect of employees in Class A and Class H employments, which represents approximately 75% of all insured employees. The levy is collected through the PAYE/PRSI system and funds are transferred monthly to my Department by the Department of Social Protection.

Funding from the NTF is allocated by my Department with the consent of the Minister for Public Expenditure and Reform, in accordance with the provisions of the National Training Fund Act, 2000.

Section 7 of the National Training Fund Act, 2000 provides that payments may be made from the Fund in respect of schemes, which are established to:

(a)  raise the skills of those in employment;

(b) provide training to those who wish to acquire skills to take up employment; or

(c)  provide information in relation to existing, or likely future, requirements for skills in the economy.

While the NTF does not form part of the Vote of my Department, the allocation for each scheme is determined as part of the annual Estimates process. The NTF is included as an annex to the published Estimates and such funding is included in the overall expenditure ceiling for my Department since 2011. 

The operation of the EU Fiscal Rules and the inclusion of the NTF in my Department's overall annual expenditure ceiling mean that, in the absence of an increased rate of contribution, additional expenditure cannot be sourced from the NTF without a corresponding drop in Exchequer expenditure.

Income from the NTF levy had fallen from a high of €413 million in 2008 to €299 million in 2012. The accumulated surplus in the fund has been critical in maintaining expenditure levels, particularly in the provision of training for the unemployed, in a period when receipts were falling.

It is considered prudent to continue to maintain an adequate surplus in the Fund to meet demand in future years and while the surplus represents a very significant sum, it would only cover 7 months NTF expenditure at current levels. The attached table sets out the surplus in the fund during the years 2000 to 2016. The surplus remains available for investment in education and training programmes to meet skills needs.

I am reviewing the allocation of funding to programmes in the Further Education and Training and Higher Education sectors as between NTF and Exchequer sources in terms both of the emphasis required on training for employment and training persons in employment and of satisfying the needs of enterprise to meet strategic skills requirements. One objective of this review is to direct NTF allocations in a manner that best reflects enterprise priorities as identified through the revised national skills architecture. 

My Department, and the Department of Public Expenditure and Reform, have been undertaking a public consultation process on a proposed Exchequer-Employer investment mechanism for the higher and further education sectors.  The mechanism, which estimates an increase in the National Training Fund levy from 0.7% to 1% between 2018 and 2020, could yield an additional €200m revenue in 2020. As this would be an increase in discretionary revenue, the additional funds could be spent for the purposes outlined in the NTF Act.

National Training Fund Surplus 2000 – 2016

National Training Fund	Balance brought forward on 1 January €000	Surplus/(Deficit) for the Year €000	Surplus Carried forward 31 December €000
2001	0	31,279	31,279
2002	31,279	36,239	67,518
2003	67,518	18,061	85,579
2004	85,579	(1,484)	84,095
2005	84,095	16,861	100,956
2006	100,956	21,184	122,140
2007	122,140	38,710	160,850
2008	160,850	20,313	181,163
2009	181,163	8,061	189,224
2010	189,224	(85,034)	104,190
2011	104,190	73,833	178,023
2012	178,023	(23,019)	155,004
2013	155,004	742	155,746
2014	155,746	(7,921)	147,825
2015	147,825	35,937	183,762
2016	183,762	54,433	238,195

  Please note that the NTF was established in 2000.

The 2001 accounts cover the period 21st December 2000 to 31st December 2001 inclusive.