Businesses struggle to spend on staff training as they prioritise high energy costs

'Our members are already experiencing this through tighter capital markets and rapidly rising costs,' said Ibec head of national policy and chief economist, Gerard Brady, pictured with Fergal O’Brien, Director of Lobbying and Influence, Ibec, and Hazel Ahern Flynn, Economist. Picture: Maxwells.

More businesses are cutting their training budgets for staff as they struggle to fight soaring costs such as energy, according to a leading business representative group.

Ibec has called on Government to introduce a payment break and a rebate for training as part of the National Training Fund, which the lobby group said consists of €1bn that has been collected by the State from employers over time.

“Our members are already experiencing this through tighter capital markets and rapidly rising costs,” said Ibec head of national policy and chief economist, Gerard Brady.

In its pre-budget submission, the lobby group urged Government to create a €2bn package to battle high costs.

This €2bn package of spending and tax measures proposed by Ibec is in line with what experts have recommended Government should do to tackle the cost of living crisis.

“Catalysed by huge cost pressures and tightening of financial markets, we are facing significant global economic headwinds, with the era of record low interest rates, low inflation, and spare capacity ending,” said Mr Brady.

Energy bills

Ibec said the main concern being expressed by its members is the high cost of energy bills. Smaller firms are seeing their bills go up tens of thousands while one larger member said its energy bill went from €20m to €100m.

“Energy costs are causing a significant threat to viability,” said Fergal O'Brien, director of lobbying and influence at Ibec.

He said that Ibec members are seeing energy costs that are four or five times higher than in 2021. 

Ibec also said in its submission that to remain attractive to mobile and skilled workers, the entry point to the top rate of income tax should be increased to €40,000 by 2024.

In its pre budget submission, Ibec told reporters that Government won’t be able to address the cost of living crisis across the board through fiscal policy, but it is expecting that it will introduce tools in the budget that will allow it to flexibly tackle current economic headwinds even months after budget day.

The group also addressed the controversial topic of wage increases by employers, which it indicated would be problematic.

“There is no way employers can compensate employees for the cost of living crisis,” said Mr O’Brien.

Earlier this year, Minister for Expenditure Michael McGrath said increases would cause a “wage spiral” and would damage competitiveness.

“The reality is we’re all going to feel a little bit poor, unfortunately,” said Mr O'Brien.