Publication of Review of National Training Fund

27 August 2018 

17 August, 2018 - Minister Bruton publishes independent review of the National Training Fund

The Minister for Education and Skills, Richard Bruton, T.D, has today published a comprehensive independent review of the National Training Fund.

The National Training Fund (NTF) was established by the National Training Fund Act 2000 to raise the skills of those in employment, to give relevant skills to those preparing for employment and to support lifelong learning. 

The review of the NTF was commissioned by the Department of Education and Skills as part of a package of reforms announced to accompany the decision in Budget 2018 to raise the NTF levy. This followed a consultation process with key stakeholders, during which issues were raised regarding the transparency of the use of the Fund, the alignment of expenditure for employer needs and the role of employers in informing expenditure priorities. The independent review, which was undertaken by Indecon, examines the existing operation of the NTF and provides recommendations to inform its future direction. There are 14 specific recommendations across 4 key areas:

  • Reform of the future direction of the NTF.
  • Utilising the NTF to support investment in Higher Education.
  • Enhancing enterprise engagement and input to NTF priorities.
  • Improvements in monitoring/evaluation of the NTF.

Minister for Education and Skills, Richard Bruton T.D., said, “I welcome the clear emphasis placed by the Report on making the National Training Fund more responsive to the changing world of work. It is vital that enterprise becomes more engaged in the challenge of upskilling, in shaping optimal programs and in examining their impact. It is through the way that we develop and deploy talent that we will enhance enterprise success and raise living standards. I welcome the recommendations contained in the review - the implementation of these recommendations is an important step in the ongoing reform of the Fund.

“I have asked my officials to prepare an Implementation Plan for publication to deliver these important recommendations. In particular I have asked for a specific focus on early action to meet pressing skill needs, to secure greater employer engagement and to strengthen governance and oversight of the Fund in advance of Budget 2019.”

The Minister went on to say, “the NTF is a key enabler in the development of the skills and human capital that power our economic performance in a rapidly changing world. I have set out our ambition to have the best education and training service in Europe by 2026. A key part of this is to equip our citizens and businesses with the skills they need to thrive, even in a time of uncertainty.”

The report can be accessed on the Department for Education & Skills website at the following link: https://www.education.ie/en/Press-Events/Press-Releases/2018-press-releases/indecon-review-of-national-training-fund.pdf

Notes for Editors

The National Training Fund (NTF) was established by the National Training Fund Act, 2000, as a dedicated fund to support raising the skills of those in employment, and those preparing for employment.  The Act also provides for the funding of research to provide information on existing and likely future skills requirements of the economy. The NTF funds programmes in the higher education and further education and training sectors, as well as training grants to employers and some smaller programmes.

The creation of the fund was announced in Budget 2000 by the then Minister for Finance to raise the skills of those in employment, to give relevant skills to those preparing to take up employment and to facilitate lifelong learning.  The NTF levy, which is collected through the PRSI system, replaced the Apprenticeship Levy which was set up under the Industrial Training (Apprenticeship Levy) Act 1994. In May 2010, responsibility for the NTF was transferred from the Minister for Enterprise, Trade and Innovation to the Minister for Education and Skills.

Following a consultation process, the Government, as part of Budget 2018, decided to raise the rate of the National Training Fund (NTF) levy by 0.1% in 2018 to 0.8% and, subject to progress on a range of reforms, by a further 0.1% in both 2019 and 2020. This increase in the NTF levy takes account of the benefit to employers of having access to skilled graduates across further education and training and higher education to meet their identified skills needs as well as being able to access training for their current employees.

The measure allows for additional expenditure of €47.5 million from the NTF in 2018 under the EU fiscal rules.  Total provision from the National Training Fund in 2018 is €415 million. Further detail on spending from the Fund is available at https://www.education.ie/en/Publications/Education-Reports/national-training-fund-expenditure-report-2018.pdf

Following issues raised during a consultation process prior to the budget announcement, a number of key reforms to the NTF are being introduced to make it more responsive to employer needs, to give employers a greater say in informing priorities for the Fund and to improve overall governance, evaluation, transparency and oversight.

Some of the key reforms include:

  • A comprehensive review of the NTF.
  • Additional and refocused expenditure on programmes relevant to employers. 
  • An NTF more aligned with employer needs.
  • A greater say for employers, more transparency and stronger evaluation.           
  • New funding models in higher education and further education and training, incorporating performance agreements clearly aligned with local/regional and national priorities. 

The terms of reference for the review of the NTF, finalised following input from the National Skills Council, are set out below:

  • Examine the effectiveness and efficiency of the fund to date in meeting its objectives;
  • Assess the targets and performance criteria associated with programmes supported through the Fund;
  • Examine the adequacy of the evidence base and performance criteria on which expenditure decisions are taken;
  • Assess the monitoring and evaluation arrangements in place;
  • Assess the responsiveness of the Fund to the needs of the economy and wider society in terms of the type and method of programme delivery;
  • Assess, the continued relevance of the core objectives of the fund and the future strategic direction of the fund;
  • Identify the most appropriate governance and oversight structure of the NTF in optimising employer engagement and input into priorities strategic priorities
  • Consider the role of the fund, alongside the Exchequer and student sources, in future funding arrangements of the HE and FET sectors.
  • Make recommendations on how to improve the efficiency, effectiveness, relevance and impact of expenditure from the NTF fund and responsiveness of the Fund to the needs of the economy.
  • Undertake an analysis of trends in NTF expenditure and make proposals around how expenditure can be aligned with employer needs. This will require consultation with a number of stakeholders.

The review was undertaken by Indecon International Research Economists, following a competitive tender process.