Ms Meadhbh Costello:

On behalf of IBEC, I thank the committee members for the opportunity to speak with them on the future of apprenticeships. I am a senior executive for education, skills and innovation policy at IBEC.

Apprenticeships are highly valued by both employers and apprentices as an opportunity to earn and learn while achieving in-demand qualifications. The introduction of industry-led consortia apprenticeships in 2016 was a game-changer as it unlocked new pathways to employment in an exciting range of industries. IBEC has strongly supported the development of the consortia model of apprenticeships by delivering programmes, including manufacturing engineering, manufacturing technician, polymer technician, laboratory, and retail, with further programmes planned. Much progress has been made to build the profile of apprenticeships under the current action plan for apprenticeships, which will come to an end this year.

During this time, the number of apprenticeship programmes has expanded from 60 to 77, with further programmes in development. The apprentice population has grown from almost 20,000 in 2021 to just under 30,000, with an increasing number of female apprentices in the community. However, there remains significant scope for improvement, which will be critical for building talent pipelines and achieving national objectives in areas such as housing and infrastructure delivery.

One of the most ambitious actions included in the action plan is the development of a single model of apprenticeship that would bring craft and consortia programmes into one system. While work is ongoing to move this project forward, there remain several unresolved issues, which must be addressed as part of any future apprenticeship system. These include the development of a new IT platform, clarifying roles and responsibilities within the apprenticeship system and improving the time it takes to develop and launch new apprenticeship programmes.

The most significant issue limiting the continued expansion of apprenticeships is the lack of adequate funding for the system. We must ensure that the necessary resources are in place to cater for the growing apprentice population and to prevent any further backlogs. This also includes establishing a funding mechanism that would recognise and support successful consortia programmes to scale nationally and cater to unmet demand.

A single model of apprenticeship also requires parity in how off-the-job training costs are treated in the system. Cost and time remain the biggest barriers to employers investing in workforce development. Increasing the incentive available to consortia employers in line with the supports available in the craft system will help to overcome these barriers and create more training places for apprentices overall. The significant surplus in the National Training Fund, NTF, is an opportunity to address these concerns and expand participation in apprenticeships. Employers contribute 1% of their payroll to the NTF to support workforce development in Ireland, amounting to more than €1 billion per year. At the end of last year there was almost €2 billion in surplus in the NTF. While IBEC warmly welcomes the commitment from the Government to draw down €1.5 billion of this surplus over the next six years, this is a temporary solution and does not prevent the further accumulation of unspent employer contributions in the fund. It is already predicted that an additional €3 billion could accumulate by 2030 if a permanent solution to unlocking the training fund is not found. This is an extremely concerning issue for industry at a time when eight in ten employers in Ireland are experiencing a skills gap, in turn undermining the competitiveness and productivity of Irish business. The proposed amendments to the National Training Fund Act will allow much-needed investment in education, training and research infrastructure, and equipment across the tertiary sector. It is also a timely opportunity to consider additional amendments that would maximise the impact of funds on lifelong learning and workforce development. That includes addressing issues that have been highlighted by both the OECD and, most recently, the National Skills Council, such as the introduction of a permanent solution to unlocking the NTF surplus, the creation of a transparent evaluation and monitoring framework for the fund and an enhanced voice for the employer in spending decisions and the strategic direction of the fund. This is an opportunity that should not be overlooked.

Once again, I thank the committee for the opportunity to present the view of the business community on the future of apprenticeships and we are happy to take any questions on the issues raised.