Five-year plan to upskill thousands of workers put on hold amid spending concerns

An ambitious five-year plan to provide upskilling courses for thousands of workers and boost funding for higher education was put on hold last month amid concern over breaching Government spending rules.

Details of a “Pact for 21st Century Skills” – due to be funded by tapping into a €1.5 billion surplus in a State training fund – were the subject of detailed discussion between senior Ministers in the run-up to last month’s budget.

However, it was delayed when officials were unable to find a way to structure it without breaching spending parameters for the annual budget, records indicate.

The plans involved using a surplus in the National Training Fund (NTF) to incentivise small- and medium-sized enterprises to engage in lifelong learning opportunities and deliver a permanent increase in core funding for the further and higher education sector.

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The NTF, which is funded by a levy on employers, has been growing due to growth in employment. The funds are defined as normal expenditure and subject to the Government restrictions on spending.

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Records released to The Irish Times under the Freedom of Information Act show the plans involved a “measured reduction” of the surplus in the NTF over a five-year period, leaving a “prudent reserve” to guard against the potential impact of future economic volatility.

Records show it was the subject of discussions involving the Taoiseach, Minister for Further and Higher Education Simon Harris, Minister for Public Expenditure Paschal Donohoe and other senior officials during September and October.

Mr Donohoe said in last month’s budget that the NTF would play a vital funding role in how we future-proof the skills needs of the labour market and ensure workers could readily access lifelong learning opportunities, as well as funding the further and higher education sector. However, he said proposals were still under discussion.

“I want to re-examine this to find a way of better meeting these needs,” he said. “To that end, officials will bring forward options including legislative changes for the future operation of the fund.”

Government officials say any plans are likely to be deferred until well into the new year.

It comes as latest projections show an increasing number of skilled workers will be needed in areas such as engineering, science and healthcare over the coming years.

The 2023 National Skills Bulletin, produced by the Solas skills and labour market research unit, identified skills shortages in science and engineering, ICT, health and social care, construction, other craft, hospitality and transport and logistics.

Recruitment issues have also been highlighted in a number of occupations including, social workers, project/operations managers, production managers in manufacturing and construction occupations.

It highlighted the need to upskill and reskill existing workers across a range of occupations to meet the requirements of the changing world of work, advances in technology and the State’s commitments to tackling climate change.

Digital transformation, retrofitting and green skills are among some of the areas where upskilling or reskilling will be needed.

The scale of the surplus on the NTF – which has increased from €1.1 billion in 2021 to an estimated €1.5 billion this year – has drawn comment from members of the Government and Opposition.

Fine Gael TD David Stanton, a member of the Oireachtas committee on jobs, enterprise and innovation, described the scale of the surplus as “colossal” and “mind-blowing” earlier this year, and said there were huge opportunities to do positive things with the funds.

Mr Harris has previously said Ireland is facing acute skills needs and can do better in improving the proportion of adults involved in lifelong learning.

He said he believed employers have paid that levy into the NTF to see additionality in terms of education provision and access to skills.