Employers may contribute €200m extra to training fund

Employers could see the amount they contribute to a national training fund almost double by 2020 in a Government plan to raise an extra €200m a year for third-level education.

Employers may contribute €200m extra to training fund

The National Training Fund (NTF) is raised through a levy on employers, which is paid as part of employers’ PRSI. While they currently pay the equivalent of 0.7% of most employee’s earnings into the fund, proposals launched today by two government ministers would see that rise by 0.1% a year between 2018 and 2020.

The NTF levy increase was flagged in Budget 2017 last October but the details of a proposed increase to 1% and the timeframe are only being announced by Education Minister Richard Bruton and Public Expenditure Minister Paschal Donohoe this morning, as they invite responses from industry and the public.

The increase received a guarded acceptance from employer groups in October, but they indicated that any additional funding raised from businesses would have to be seen to be put to effective use.

An increased employer contribution towards higher education was a key proposal in last summer’s report by Peter Cassells, setting out future costs and potential sources of funding for higher education. The Government announced an extra €160m in public funding over three years in Budget 2017, and a combination of improved taxpayer and employer input are likely to be used as political impetus to get support for increased student fees.

An income-contingent loan option included in the Cassells report is currently being considered by the Oireachtas Education Committee.

The NTF levy raised around €380m last year and the fund supports training schemes for people in employment or seeking work. It is also being used to help roll out new apprenticeship schemes, but the two ministers have agreed an increased fund could be used to help fund higher education, as well as the further education and training sector.

Mr Bruton said that the Cassells report is clear that employers are major beneficiaries of the system’s high-quality graduates.

“Employers at all levels and in all areas, from tourism to ICT and from pharma to accounting to retail, depend on a sustainable supply of skilled workers. This need is even more acute in the context of Brexit,” he said.

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