Reform of the National Training Fund: Budget 2017

Reform of the National Training Fund: Budget 2017

The 2017 Budget will allow a significant investment to be made in higher and further education and training. The National Training Fund levy will be raised by 0.1% in 2018 to 0.8% and by a further 0.1% in both 2019 and 2020. This measure allows for additional expenditure of €47.5 million from the NTF in 2018. The final two increases will be subject to the implementation of the necessary reforms to ensure that employers have a greater role in determining the priorities and the strategic direction of the Fund. Together with a €17 million additional investment from the Exchequer this will allow a higher and further education training package worth €64.5 million. This will build on last year’s Exchequer investment of €36.5 million.


A range of reforms will be introduced in response to issues raised by employers as part of the consultation process on the Employer-Exchequer Investment Mechanism. This includes an independent review of the National Training Fund to make it more transparent, as well as to better align the NTF with employer needs, including increasing “in employment” programmes to €154 million in 2018 (from €106 million in 2017), significant additional and refocused funding on programmes relevant to employers and a greater say for employers, more transparency and more evaluation.

 

 

A REFORMED NATIONAL TRAINING FUND

 

Four major reforms will be undertaken in response to issues raised by employers during the consultation process on employer-exchequer investment in higher and further education and training:

 

1. A Comprehensive Review of the NTF:

A comprehensive and independent review of the National Training Fund will be undertaken to guide strategic decisions on its structure and future direction in order to inform Budget 2019.

 

2. Additional and refocused expenditure on programmes relevant to employers:

Additional funding and refocused expenditure will be deployed on programmes and initiatives directly relevant to employers. €31.5 million in FET and skills funding and €15.5 million in HE funding will be used to support 6,000 new apprenticeships and 3,900 traineeships in line with the Government’s Action Plan to Expand Apprenticeship and Traineeship in Ireland 2016-2020 – including in new apprenticeships such as culinary sector, property services and retail, 1,000 new Springboard places, pilot programmes in higher education aimed at up-skilling and re-skilling, enhanced funding for Skillnets (in areas such as Life Sciences; Brexit and International Financial Services ; Data Analytics, ‘DevOps’ and Cyber Security; and Sustainability, Green Finance and Responsible Investments), implementation of the foreign languages strategy in higher education and ICT incentivised places.

 

3. An NTF more aligned with employer needs:

As an initial step, the composition of programmes in the National Training Fund has been reviewed to bring greater alignment with employer needs. The key elements of this in 2018 will be an increase in funding for “in employment” programmes to €153 million in 2018 (from €106 million in 2017), and the transfer of €37 million funding for higher education programmes which are aligned with the needs of the economy into the NTF. Certain programmes, totalling on the order of €26 million, which are more closely focused on social inclusion will no longer be supported from the Fund, and will instead be transferred to the Education and Skills Vote. Changes to the NTF in 2018 are set out in the table below.

 

 

Investing in Higher and Further Education and Training through a Reformed National Training Fund

 

Changes in National Training Fund provision

Changes in 2018

Transfer of certain Higher Education provision of relevance to employers from Exchequer funding to the NTF

€37m

Additional Expenditure on Apprenticeship and Traineeship

€38m

Transfer of Apprenticeship and skills funding from Exchequer to NTF

€19m

Additional Expenditure on Springboard

€3m

Additional Expenditure on Skillnets

€3.5m

New Expenditure on Regional Upskilling and Reskilling

€1m

Reallocation within the NTF to meet increased apprenticeship costs

-€28m

Transfer of programmes which are less relevant to employer needs to funding by the Exchequer

-€26m



Total

+€47.5m

 

 

4. A greater say for employers, more transparency and stronger evaluation:

Pending the recommendations of the comprehensive independent review, a number of interim steps will be undertaken including: the annual prioritisation of skill needs by the National Skills Council will be used to inform spending priorities on NTF programmes. An NTF expenditure report will be published before 31 January each year, informed by consultation with the National Skills Council. This will include details of planned expenditure on each NTF-supported programme, along with appropriate targets and indicators. An annual review paper will also be published

within the first quarter of each year. A formal evaluation of at least one NTFsupported

programme will be undertaken each year.

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