Rose Conway-Walsh (Mayo, Sinn Fein)
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82. To ask the Minister for Education and Skills the estimated total expenditure from the National Training Fund in 2022; the allocated expenditure for this coming year as part of budget 2023; the estimated reserve in the National Training Fund by the end of 2023; and if he will make a statement on the matter. [51724/22]

Rose Conway-Walsh (Mayo, Sinn Fein)
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Will the Minister explain the reduction in expenditure on the National Training Fund from €752 million in 2022 to €682 million in 2023? Will he outline the estimated reserve by the end of 2023? Why are we reducing our expenditure when the reserve continues to grow so rapidly?

Simon Harris (Wicklow, Fine Gael)
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I thank Deputy Conway-Walsh for this question. The 2022 Revised Estimates provided for expenditure, as the Deputy said, of €765 million from the National Training Fund. While these amounts have been allocated to the various beneficiaries, the final actual expenditure for 2022 is not known as yet because we have not reached year end. The final allocation for the NTF in 2023 will be set out in the Revised Estimates. Any increase in NTF expenditure, all other things being equal and without a corresponding reduction on the Vote, requires an increase in my Department and overall Government expenditure ceilings. NTF expenditure increases general Government expenditure and can only be accommodated within the fiscal strategy agreed by Government.

Budget 2023 has allocated €682.5 million for the NTF, as the Deputy correctly said. The net difference between the 2022 and 2023 allocations is €82.5 million. This is due to the removal of the temporary funding provided in 2022 for Covid, the Brexit adjustment reserve and the national recovery and resilience plan, which amounted to €131.4 million in 2021, with the provision of €48.5 million in the 2023 allocation for Covid and Brexit measures, as well as an increase of €400,000 in the NTF baseline for access to apprenticeship initiatives. I know I have presented many figures, but it is important to put them on the record.

When finalising the Revised Estimates for 2023, further expenditure may be identified and categorised under the NTF. The final amount is a matter for Revenue in the coming weeks. The cumulative surplus for the NTF at end 2021 was €1.102 billion. The projected annual surplus for 2022 as set out in the Revised Estimates for 2022 was €88.7 million but it is likely to be higher when all receipts and expenditure fall due.

The forecast for the annual surplus in 2023 will be reviewed in finalising the Revised Estimates taking account of all allocated expenditure and income projections. The forecast annual surplus for 2023 was calculated on a preliminary basis as part of budget 2023 as €338.4 million. While a prudent level of reserve is imperative to guard against uncertainties the current level of the surplus evidently exceeds what may conceivably be required for any potential rainy day.

Rose Conway-Walsh (Mayo, Sinn Fein)
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This year the money collected from the National Training Fund, NTF, is estimated, as the Minister said, to pass €1 billion for the first time. However, he is only proposing to spend about two thirds of that. Some €340 million will go unspent. On top of that, the Minister said there is more than €1 billion sitting in reserve from unspent funds from the past few years. That means that by the end of 2023 there will be €1.5 billion sitting in this reserve, accumulating no interest. This money was collected through the levy with the commitment that it would be invested in education and training and at the same time the Minister has failed to deliver any meaningful progress on addressing the funding gap in the third level education budget. Will the Minister commit to mobilising the NTF reserve to address the funding needs of further and higher education? We have a situation where third level education is crying out for greater levels of funding. At the same time, we have an ever-increasing reserve of money in the NTF. I request that the Minister work with the Minister for Public Expenditure and Reform to invest this money to address the very severe workforce planning challenges that we have.

Simon Harris (Wicklow, Fine Gael)
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I fundamentally agree with Deputy Conway-Walsh. I ran out of time on my last answer but I fundamentally agree with the Deputy in regard to the size of the surplus. It is prudent to have a level of surplus. We would agree on that. It is imprudent to have such a large surplus. I agree on that too. The challenge for the Government, and I respectfully suggest it is also a challenge for the Opposition to show how it is done, is that any expenditure from the NTF is categorised as the equivalent of general Government expenditure. We have signed up to, and I believe the Opposition supports, operating within the general fiscal rules, the European framework and the likes. Having said that, I am doing exactly as the Deputy suggests, which is engaging with other Departments, including the Department of Enterprise, Trade and Employment, to see how we can better leverage this. I would like to see a particular application of the NTF to support skills priorities and to develop the quality of our workforce. In regard to the latter issue I envisage an expanded mandate for Skillnet Ireland, which is the way to proceed, in leading workforce development as the Government agency with extensive partnerships with industry and employees. In addition the Deputy will be aware that the OECD is conducting a full review of Ireland’s skills planning and development and it can be considered in that context.

Rose Conway-Walsh (Mayo, Sinn Fein)
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I was cut off there when I wanted to talk about the severe problems we have in workforce planning. Today at the Joint Oireachtas Committee on Education, Further and Higher Education, Research, Innovation and Science when we were talking about mental health and the need for resources on mental health within schools, the point was made around the point of advertising vacancies when there are so many vacant places. We do not have the workers coming through in the high-demand courses that we need in regard to health. We are not only threatening our economic stability but we causing a deep inequality in access to health and other essential services. There is a real knock-on effect. It is not good enough just to list the technical issues around the Vote and the expenditure ceilings. We need to lift the bonnet on this to get that money and to get it in a way that it can be spent. I have looked at the legislation around it in regard to the flexibility that it will allow us. I believe there is greater flexibility there than we are using at the moment to get that money invested so that we have the multiplier effect and the benefits of it.

Simon Harris (Wicklow, Fine Gael)
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We have to get this right. My colleague, the Tánaiste, indicated most recently in his speech at the IBEC annual dinner his wish, my wish and the Government’s wish to be able to use this fund, an element of the surplus of this fund, to provide an additionality when it comes to skills provision in Ireland. As I have said, on my invitation the OECD is currently conducting a review of Ireland’s approach to skills planning and development. These and other developments will support further consideration of this issue, including skills priority or investment strategy and the role of the NTF. I intend that the Government would develop proposals within the year 2023 as to how we can better harness this within the context of the rules, the law and all the very careful considerations that need to be given.

In regard to training, training places and workforce planning, which are important points about which I feel strongly, we must do much better as a State in regard to workforce planning. At the same time, we cannot just reduce it to an issue of training because there are obviously issues in regard to recruitment and retention of individuals. In some areas we train many more than the European average. Training is absolutely an important element but not the only part.