IITD Response to Budget 2020


Targeted investment and upskilling crucial

Budget 2020 highlights growing risks to the global economy and uncertainty relating to the timing and form of the UK’s exit from the EU. The central scenario of Budget 2020 is preparing for the risk of a No Deal Brexit. It anticipates that indigenous SME UK-facing firms and the agri-food sector are among those sectors most exposed to a fall in demand, with parts of the retail sector vulnerable to supply disruption. 

It is anticipated that economic growth to fall from 5.5% this year to 0.7% in 2020. A “two-speed” economy is expected with sectors dominated by multinational enterprises assumed to step up a gear, while activity in indigenous UK-facing sectors will “hit the brakes”. While an additional 19,000 jobs are expected in 2020 this will be less than the increase in labour supply so that the unemployment rate is forecast to rise from 5.3% to 5.7%.
Budget 2020 sees the final 0.1% increase in the National Training Fund levy raising an additional €74million. This will be an increase on the €485 million being invested by the Fund in 2019. The IITD welcomes that this additional funding will be used for reskilling and lifelong learning with a focus on responding to the sectoral and regional impact of Brexit. 

The IITD supports a shift of the National Training Fund towards support for in-company training for SME management development, the digital upskilling of workers, and upskilling needs within Border counties, Agri-food, Tourism, Traditional Manufacturing, and supply chain skills requirements. SMEs need to take advantage of market opportunities in the Single Market and global growth markets by investing in export marketing, customs clearance, supply chain management, and cultural awareness skills. While facing the immediate threat of a No Deal Brexit there is also a need for the National Training Fund to focus on addressing emerging skills shortages in several sectors of the economy.

Well-designed public employment and training supports could reskill workers for other employment opportunities where job losses occur. The IITD welcomes that Budget 2020 will allocate a further €45 million to assist people to transition to new employment opportunities. The challenge will be to identify such job opportunities and provide the appropriate education and training support provision. 

The IITD welcomes the commitment of an additional €60 million funding in 2020 to provide 3,000 places in identified priority skills. This will complement the investment in Higher Education under the €300 million Human Capital Initiative. The key to the success of these measures will be the collaboration by enterprise and education and training providers for the design and delivery of continuing professional development provision.

The planned investment in Budget 2020 in a “Low Carbon Economy” with new Climate Action measures will lead to an increasing demand for “green skills” in the economy which education and training provision will need to match. These include skills for sustainable building and energy efficiency, renewable energies, waste management, electric vehicles and biodiversity. 

The IITD supports the investment within the Budget for the expansion and development of the new apprenticeships as an alternative career pathway for young and mature persons especially for new high-technology skills. The German and Dutch dual training system provides best practice examples of this provision. 

CEO of the IITD, Sinéad Heneghan, said: “Against the increasing risk of a No Deal Brexit, a targeted investment by Government and enterprise making greater use of the expanded National Training Fund can help sustain employment and upgrade skills within SMEs at risk in Border counties, the Agri-Food, Tourism, Logistics, and Traditional Manufacturing sectors, and for the digital upskilling of low-qualified workers. We also want to draw attention to the requirement to focus on addressing emerging skill shortages in several sectors of the economy.”



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