Chapter 1: What is the main topic discussed in this episode?
The Clare Byrne Show on Newstalk. With Aviva Insurance.
Now, though, the government's national training fund is funded by an employer's levy. The fund currently stands at around 1.7 billion euro. And employers groups say that money should be spent or it should be handed back to the businesses that paid into it. Well, I'm joined now by Cahill Crow, Fianna Fáil TD for Clare and chair of the Oireachtas Committee on Education and Youth.
And Neil Macdonald, who is chief executive of ISMI. And you're both welcome to the programme. And Neil, I might start with you.
Chapter 2: What is the National Training Fund and how is it funded?
What's your issue with the fund?
The fund was set up in 2000 with a progressively increasing levy on employers via employers PRSI. And it's currently 1%. And that's generating about 1.2 billion euros a year.
in money into the training fund, which is kept, it's separated from the national accounts and it's money that under the original legislation was meant to be spent on in-work or work-adjacent training or for people who wanted to enter the workforce.
So it would be of benefit to employers?
Of course, it would be a benefit to employers and employees. The difficulty is that the law was changed last year to extend the range of expenditures that could be applied to. And the state can now take that money out of a fund which currently is in surplus to the tune of about 1.7 billion euro. and spend it on the physical infrastructure of universities. That's not what it was intended for.
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Chapter 3: Why do employers believe the National Training Fund should be spent?
And in the meantime, our skills education for our workers is static or falling. And we're all seeing the output of it today. Even you see it in the examiner today, industry telling Minister Lawless. that we don't have the plumbers, the electricians, the carpenters to build out the housing that we so badly need.
So that's what you're saying the fund should be used to address?
That's what it was always intended to be spent on and that's where it should go.
Let's bring in Fianna Fáil TD, Cahill Crow, who's listening to that. It does seem somewhat disingenuous, Cahill, to use this fund for universities, for the upkeep, but also to subvent the fees now for families around the country.
Good morning, Clare. Look, the National Training Fund is a very positive scheme. It's around quite a number of years now. But recently, the International Monetary Fund ranked Ireland first globally in terms of skill readiness index. So we have an enviable position globally on this. The money, the spend of this has gone up hugely over the years.
So in 2026, the spend will be 94% higher than in 2021. It's treble what it was in 2016. So Minister James Lawless, my colleague, has very much opened up the purse strings. There was a need for agility in this because I'm a County Clare TD, but I remember in 2009, the Dell factory in the neighbouring county of Limerick closed with the loss of 1,900 jobs.
And it was the National Training Fund became the main vehicle to reskill workers. So you cannot just have it all spent and allocated into here and now. You do need to leave a little bit in the rainy day fund. And that was instrumental in the Midwest region. But I would say there are many benefits week in, week out where small and medium sized enterprise are directly benefiting from this.
It's not tax recoupable, but they certainly derive immense benefits from their workforce. So we are recognised globally as having a leading edge here.
Just to be clear on it, you think that it is a good idea to have 1.7 billion sitting there in case something happens like the Dell situation?
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Chapter 4: What changes were made to the National Training Fund legislation?
They're the skills that are in demand now. And we are not training young people into those available jobs now because we want to spend this money on universities. And lastly, I'll say, Clare, you know, the only direct funding that employers get from this is through Skillnet Ireland funding. That's been static at 53 million for the last three years.
It is scheduled to be static for the next three years. It was meant to be at 100 million last year. So employers are getting a 4% return on the 1.2 billion they put into the Exchequer for worker training. That's a bad return.
So what do you want to see happen?
What we want to see, I mean, the deputy mentioned, for example, the mentors training. Our mentors training budget has been reduced by 45%, reduced from 45% from last year to this. And that has been really, really valued training for those business owners who want to expand and scale.
And if we are going to have an economy where the domestic economy, the indigenous economy is ever going to compete with our foreign multinational sector, we have to have an educated business owner base. And that can only be done by this sort of in-work and work-adjacent training, not in universities. not under the type of third level training that we're trying to divert all this funding into.
OK, does that make sense to you, Cahill, that you would have a fund that is meant for very practical upskilling of workers, perhaps apprenticeships too, but the money is being diverted into third level?
Well, I would respectfully disagree to some extent anyway. I was a primary school teacher prior to my election to the Dáil. The classroom infrastructure is as intrinsically linked and critical as the teacher delivering the skill set. And the same applies at second level, third level and all forms of tertiary education. So the two are inseparable, I would feel.
And what I've seen in recent months is there's now a new emphasis by the department. Minister Lawless, to look at key skill areas, apprenticeships, absolutely. I'll deal with that in a moment, but also areas like medical training, physiotherapy, graduate medical courses, nursing.
In terms of apprenticeships, the spend on those has never been higher, but I would say there's a cultural barrier in some ways to Excuse me, in terms of attracting people into those. I remember when I was teaching, a lot of youngsters would want to go into the trades, but mom and dad would say, why don't you try the college experience first and then maybe you could look back at that.
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Chapter 5: How is the National Training Fund currently being utilized?
It's highly funded. The money's been spent. It's not been withheld. There'll be more allocations coming across this year and next year. It's a good fund and has put us top of global rankings in terms of skill readiness. Sorry about the coughing.
That's all right. happens to the best of us it's just I suppose where we're at here is that you're saying that the fund is working for employers but the employers representative group and Neil representing them is sitting here in front of me saying it's not working for us and it just feels as though the government isn't listening to that
It's worth it. Look, the gauges are that it is. I respect what he's saying. And it is at all times the doors open to the minister's office if he wants to make a submission. We are looking at pre-budget things at the moment. The budget will be announced in October, but the work in it is already underway. But key metrics will show that this is working. Not all the money has been allocated.
And that's prudent because, as I said earlier, we have had major closures of businesses. in Wofford and Limerick and parts of the country where this fund has been instrumental in terms of reskilling people and I've seen how that benefits people.
We'll leave that there for now but thank you very much Cahill Crow from Fianna Fáil who joined us on the line and Neil Macdonald, Chief Executive of ISMI who was here with me in the studio.
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