National Training Fund

Wednesday, 30 June 2021

Ceisteanna (170)

Rose Conway-Walsh

Ceist:

170. Deputy Rose Conway-Walsh asked the Minister for Further and Higher Education, Research, Innovation and Science the estimated projected annual income to the National Training Fund and the reserve surplus of the Fund up until 2025 if expenditure remained stable both including and excluding Covid-19 emergency expenditure; and if he will make a statement on the matter. [35013/21]

Amharc ar fhreagra

Freagraí scríofa

Minister for Further and Higher Education, Research, Innovation and Science

The National Training Fund (NTF) Act, 2000 provides for a levy on employers to be used to fund the development of and raising of skills amongst those in, or seeking, employment.

The projected reserve surplus of the NTF by 2025 if expenditure remained stable is €1.4 billion, and €1.9 billion excluding Covid emergency spending. See tables below for further detail.

Table 1 – NTF projected surplus including Covid emergency spending (€’000)

	2021	2022	2023	2024	2025
NTF Levy A	774,300	783,500	826,300	870,900	918,400
European Social Fund B	27,750	27,750	27,750	27,750	27,750
Total Projected Income	802,050	811,250	854,050	898,650	946,150

Expenditure held flat from 2021	741,273	741,273	741,273	741,273	741,273

Projected Surplus/(Deficit) for the year	60,777	69,977	112,777	157,377	204,877
Balance brought forward at 1 January 2021 C	817,464
Surplus carried forward as at 31 December 2025 (projected)					1,423,249

Table 2 - NTF projected surplus excluding Covid emergency spending (€’000)

	2021	2022	2023	2024	2025
NTF Levy A	774,300	783,500	826,300	870,900	918,400
European Social Fund B	27,750	27,750	27,750	27,750	27,750
Total Projected Income	802,050	811,250	854,050	898,650	946,150

Expenditure held flat (excluding Covid from 2022 onwards)	741,273	623,273	623,273	623,273	623,273

Projected Surplus/(Deficit) for the year	60,777	187,977	230,777	275,377	322,877
Balance brought forward at 1 January 2021 C	817,464
Surplus carried forward as at 31 December 2025 (projected)					1,895,249

A 2021 Levy is as per 2021 published Revised Estimates. Levy for 2022 onwards is as forecasted by the Department of Social Protection in April 2021.

B The level of ESF receipts to the NTF in any year depends on the amounts certified to and reimbursed by the Commission in that year in respect of NTF funded activities. For the purpose of this request ESF income continues to be shown at the 2021 published figure in the Revised Estimates.

C As per draft NTF 2020 Accounts.

The operation of the EU Fiscal Rules, prior to Covid-19, and the inclusion of the NTF in the Department's overall annual expenditure ceiling has meant that, in the absence of an increased rate of contribution or the availability of additional fiscal space, additional expenditure could not be sourced from the NTF without a corresponding drop in Exchequer expenditure. So while the surplus has built up over previous years due to improvements seen in the economic and labour market situation before Covid-19 started to impact in 2020, it was not possible to increase expenditure beyond that generated by the increase in the levy.

There has been very substantial growth in NTF spending in recent years on the basis of the +0.1% increase in the Training Levy in both 2018 and 2019 with expenditure increasing by €58m (16%) and €69m (17%) respectively. This has supported a very significant expansion in NTF priorities. The Training Levy increased in Budget 2020 to 1% allowing a further increase in NTF spending of €77m.

The NTF Advisory Group continues to be the mechanism to inform and guide on investment from the Fund and the use of the surplus. The Group has set out a detailed work plan over the next two years to examine a range of themes that will ultimately guide upskilling and reskilling priorities for the NTF into the future.