I move: "That the Bill be now read a Second Time."
I am pleased to have the opportunity to address the House and present the National Training Fund (Amendment) Bill. This Bill, as is evident from its Title, amends the National Training Fund Act 2000. The National Training Fund, NTF, was established by the National Training Fund Act 2000 as a dedicated fund to raise the skills of those in employment and to facilitate lifelong learning, provide training to those who wish to acquire skills to take up employment and provide information in relation to skills requirements in the economy.
As Minister for further and higher education, I am responsible for the overall management, monitoring and evaluation of the fund, while the Minister for Finance manages and controls the investment account contained in the fund. The fund is financed through a levy on employers, which is collected through employers' PRSI contributions. Currently, the NTF levy is set at 1% on reckonable earnings, following annual increases of 0.1% across the budgets from 2018 to 2020. A key priority of the fund is to strengthen and shape existing skills and to develop new higher education and further education and training provision to ensure alignment with workforce reskilling, upskilling and lifelong learning requirements. This is essential to deliver on the talent needs of the economy and strengthen Ireland’s competitive position and our reputation for an agile and responsive workforce. At the end of 2024, the NTF's accumulated surplus was approximately €1.77 billion. Although that is high, it should be noted that a prudent level of reserves within the NTF, usually taken as an amount equivalent to a year's expenditure, is necessary to be maintained to guard against the uncertainties of the economic cycle and to ensure sufficient resources are available to deliver programmes when and as required. On four previous occasions where NTF expenditure has exceeded income, the accumulated surplus was then used to address the annual shortfall. The last time that happened was in 2014.
The priorities underpinning the NTF have changed and varied over time depending on economic cycles and skills demands in the economy. Between 2014 and 2025, the funding priorities of the NTF have gradually changed. Provision for upskilling of those in employment has increased from around 17.7% or €61 million of the total NTF allocation to circa 46% or €464 million of the NTF allocation in 2025. During 2024, consideration was given to how the NTF surplus could be most effectively accessed and utilised to meet the existing and future skills for employees, those seeking employment and employers, together with addressing the funding needs for further and higher education, within the spending parameters of the annual budget. The NTF surplus package announced in budget 2025 is a six-year plan to reduce this surplus through spending a total of €1.485 billion progressively over the period commencing this year. This significant NTF investment package provides for expenditure on new training and skills provision areas that were not previously funded, including enhanced funding for higher education, research expenditure, including increases in the PhD stipend, and capital expenditure.
However, it is important to note that NTF expenditure on existing services will be retained. NTF expenditure increases general Government expenditure and it can only be accommodated within the fiscal strategy agreed by the Government. The new NTF surplus funding package, therefore, is encompassed within these ceilings. It is not additional to but is contained within the Department's fiscal ceiling.
During 2024, when the progression of the fund was being explored and agreed, legal advice was sought on proposals to fund some capital expenditure from the fund. The legal advice received notes that an amendment to the NTF Act is required to facilitate capital expenditure on land and on infrastructure. Legal advice was also sought during the drafting of the Bill on whether an amendment to the NTF Act was required to facilitate core funding for higher education and research and innovation expenditure. The advice received was that an amendment was not necessary because facilitating enhanced higher education funding and research and innovation funding within the scheme met the purposes of the Act. Such expenditure is already in line with the targets and goals of the Act. The National Training Fund (Amendment) Bill, therefore, makes minimal amendments to the NTF Act and merely provides for capital expenditure from the NTF. This will ensure that the new NTF expenditure announced in budget 2025 can be provided from 2026 onwards.
Budget 2025 delivered a total NTF funding package of €1.485 billion over a six-year period from 2025 to 2030 for the tertiary sector, including €885 million in current funding, an increase in funding for higher education by a further €150 million per annum up to 2030, and one-off current funding of €235 million for the tertiary sector including skills and apprenticeships. Additionally, a €600 million capital uplift was provided to enable skills development, including facilities, in the areas of healthcare, veterinary skills and further education skills and to support universal access to skill provision. In the research and innovation sector, there was an increase to the PhD stipend among other things. This funding will provide key education and training facilities and opportunities for employees and those seeking employment. The funding will also assist in meeting the existing and future skills needs for employers. The National Training Fund is a strategic national asset for reskilling and upskilling our existing workforce and the NTF funding package of nearly €1.5 billion will deliver a substantial and impactful investment to deliver the critical skills needed for the 21st century.
I will now outline the main provisions of the Bill. As I said, it is short, modest and minimal but it is very important legislation. The Bill provides for minimal amendments to the National Training Fund Act 2000. The Bill does not amend the purpose of the NTF Act, which is to fund schemes established to raise the skills of those in employment, provide training to those who wish to acquire skills for the purposes of taking up employment, or provide information on existing, or likely future, requirements for skills in the economy.
The Bill contains two sections. Section 1 amends section 7 of the National Training Fund Act 2000. This section provides for the insertion of a new section 7(2B) to provide that payments from the National Training Fund in respect of a scheme may include payments in respect of the acquisition of lands, premises, furniture or equipment or the upgrading, construction or reconstruction, including repair and maintenance, of premises. It is important to note that these payments must be made in accordance with a scheme to raise the skills of those in employment, to provide training to those who wish to acquire skills for the purposes of taking up employment or to provide information in relation to existing, or likely future, requirements for skills in the economy.
Section 2 contains the Short Title and commencement. This is a standard head in any legislation that sets out the Short Title by which the Bill will be known and allows for the commencement of the Bill.
Consultation has been undertaken on the proposed amendments to the NTF Act with the key stakeholders including the National Skills Council and the high-level skills implementation group. There has been a general welcome for the proposed amendments including a welcome for the NTF budget package. All stakeholders agreed that the NTF funds should be used effectively and that spending should align with the fund’s core objectives. I have listened to the stakeholders on this issue and there are no amendments in this Bill that alter the core objectives of the fund. Stakeholders also stressed the importance of tracking and reporting on the impact of the NTF funding on raising the skills of those in employment and those taking up employment, including a request for publication of a comprehensive record of spending. I am awaiting receipt of an ESRI report to develop a framework to monitor and assess the effectiveness of the various schemes funded under the NTF. The recommendations will be reviewed on its receipt and this issue will be addressed.
Some stakeholders raised some concerns in relation to ensuring that capital expenditure, including on decarbonisation projects, aligns with the purposes of the NTF. I have noted these concerns and assurance can be given that all NTF funding will be spent in accordance with the established purpose and original objectives of the fund. All infrastructure investment will be in accordance with the purposes of the Act and will add capacity in the system to deliver new skills programmes or expand existing skills programmes to benefit learners and industry, employees, employers and future employees. Decarbonisation will arise as part of refurbishment of infrastructure to enable space optimisation and adaptive re-se of existing building stock or other appropriate capital works that are necessary to provide appropriate facilities for the delivery of education, training and skills programmes. The objective of all works will be to enhance the learning environment, add capacity and aid the delivery of the skills needs of the country.
There is ongoing engagement with the National Skills Council, the high-level skills implementation group, key Departments and others on a range of skills and labour market issues. This will continue to ensure effective usage of the NTF in meeting the skills needs of the economy and in progressing the skills development agenda. Talent and human capital are the bedrock of Ireland’s economic performance. Talent is our greatest natural resource. The success at the heart of Ireland’s economic model over the last 50 years has been our commitment to education, training and innovation. That commitment has transformed our workforce, economy and society. For the last 25 years, the National Training Fund has been a strategic national asset for reskilling and upskilling our existing workforce. It is central to providing the future workforce with the skills to be successful. The NTF has also been critical to unblocking some of the barriers to engagement in workforce development, such as by providing targeted supports to key cohorts. Businesses are the backbone of our economy and the Government is committed to creating an environment where they can thrive, innovate and drive job creation. I am committed to the continued use of the National Training Fund as a strategic national asset for reskilling and upskilling our existing workforce. This Bill will ensure that the NTF can also be used to fund capital expenditure on essential projects and facilities for reskilling and upskilling our workforce, which will assist in meeting the skills needs of our economy and progress the skills development agenda.
I commend the Bill to the House and look forward to the debate.
