Friday 28 July 2017

Employers to be asked to pay extra €200m a year to fund higher and further education

Richard Bruton. Photo: Justin Farrelly
Richard Bruton. Photo: Justin Farrelly
Katherine Donnelly

Katherine Donnelly

The Government is seeking an extra €200m a year from employers to help fund higher and further educaton and training.

Employers currently pay about €390m a year through a National Training Fund Levy, but the Government wants that to increase by almost 50 per cent by 2020

The plan for the additional €200m is contained in a consultation paper for a proposed Exchequer-Employer Investment Mechanism, launched by Education Minister Richard Burton and Public Expenditure Minister Paschal Donohoe today.

The consultation on the design of the new funding mechanism is being undertaken as part of the response to meeting the skills needs in the economy over the coming years.

The current  levy is collected from employers , through the PRSI system, at a rate of 0.7pc of  employees’ reckonable earnings, and the consultation paper proposes a phased increase to 1pc in the three years to 2020.

The initiative comes in the context of the review of funding for higher education, arising from the Cassells Report, which called for a minimum extra €600m a year by 2021 to provide a quality experience for  the growing numbers of third-level students  .

Controversially, the paper also set out options for a student loan scheme  as another way of boosting funding for the sector.

Such a scheme would mean a place in college would be free at the point of entry, but would be used as a vehicle for an increase in fees, which students would repay if their income hit a certain threshold.

The Oireachtas Education Committee is currently considering the Cassells Report, which will feed into Mr Bruton’s decision on how to progress the funding issue.

According to ministers Bruton and Donohoe, the proposed extra €200m from an Exchequer-Employer mechanism would not only mean better outcomes for students, but also for wider society

They said the views of employers would be carefully listened to in context of Brexit and the need to provide more skilled workers for growing economy.

Mr Bruton said properly-funded higher education and further education sectors were crucial to delivering on major national ambitions in areas like skills, research and disadvantage.

“Ireland’s capacity to deliver sustainable full employment, promote innovation and grow productivity in our economy, in the face of Brexit and other international challenges, will depend centrally on our capacity to nurture, develop, and deploy talent in our enterprises. Government and enterprise must work together if that ambition is to be realised.

He said there was a broad consensus on the need to develop a sustainable approach to funding this system in order to meet this ambition and the Cassells Report was clear that employers were major beneficiaries.

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