Ibec, the group that represents Irish business, has welcomed the Government’s decision to review the effectiveness of National Training Fund (NTF) expenditure, and to involve employers in identifying spending priorities. The NTF, funded by a 0.7% levy on payroll, is expected to generate over €400m this year.
Ibec Head of Education and Social Policy Tony Donohoe stated, "Ibec has raised serious concerns for many years over how NTF funding is used. Some NTF supported programmes, such as apprenticeships and Skillnets training programmes, respond to specific skills needs effectively. However, we estimate that least 70% of the Fund is allocated to programmes which have not been properly evaluated in terms of meeting skill demands and have no employer input. The Fund also carries significant surpluses which could be more purposefully used for upskilling.
"The review has been announced against the backdrop of a proposed 40% increase in the NTF levy. ‘Given the Government’s acknowledgement of the shortcomings in the Fund’s governance and allocation, a decision on the levy increase should be postponed. The proposed increase in what is effectively an employment tax will have an adverse impact on Ireland’s competitiveness at a time of economic uncertainty. While the Government’s commitment to reform is welcome, we need the NTF evaluation to be completed and new funding mechanisms in place before employers will be reassured that this money is being used for the purposes for which it is collected."