The fund will be depleted by a sector that has shown very poor financial discipline
As we approach Budget 2026, set for Tuesday 7th October, ISME is concerned that the Government is considering diverting some of the National Training Fund (NTF) surplus into spending on third-level institutions. In our view, and that of the majority of SME employers throughout Ireland, any such development would be regarded as a serious misjudgement.
The NTF was established in 2000 as a dedicated fund to support the training of those seeking to take up employment, those in employment seeking to upskill, and to facilitate lifelong learning. Employers pay 1% of payroll spend into the NTF via their PRSI deduction, which is called the training levy.
“The National Training Fund was never intended to be subsumed into general Government spending on the university sector and it would be a serious miscalculation to use the fund for that purpose. SMEs are not paying a levy to provide funding support for universities,” said Neil McDonnell, Chief Executive of ISME.
“Employers will lose faith in a levy imposed on them being channelled to a purpose other than intended by law. Amending the Act to allow such diversion will not change this,” he said.
Employers provide approximately one billion euro per annum to the NTF via the training levy. In return, the employers can avail of co-funded training opportunities from Skillnet Ireland, which in the current year will disperse about €60m in co-funding, a mere 6% of the total training levy. Because it is co-funded by employers, Skillnet training is efficient, effective, and targeted where there is most need.
If NTF monies are diverted into capital spending in the tertiary education sector in Budget 2026, the fund will be depleted very quickly in a sector that has traditionally shown very poor financial discipline.
“ISME is not saying we shouldn’t spend more on third-level education. What we are saying is that any increase in university education should not be drawn from a fund dedicated by law to adult and life-long learning,” said Neil McDonnell.
Irish school leavers and college graduates already score well in international rankings against peer countries. However, the educational performance of Irish adults against those in peer countries is below OECD averages. This is not consistent with a country determined to increase its productivity and export potential.
Findings from the OECD Survey of Adults Skills 2023 showed that Ireland lagged behind international standards in some basic areas:
- Level 4 literacy – 9% of Irish adults against an OECD average of 12%
- Level 4 numeracy – 10% of Irish adults against to 14% OCED average
- Level 4 Adaptive Problem Solving – 3% of Irish adults against an OECD average of 5%
ISME is calling for a doubling (at a minimum) of the Skillnet funding in budget 2026. It is farcical that the NTF is allowed run a €1.5bn surplus while employers are restricted in co-funded training. We urgently need to implement the Action Plan for Apprenticeships, and improve innovation, entrepreneurial, financial, digital and export skills in our indigenous enterprise base.
“SME employers have a right to be consulted on the use of NTF funds. The training levy is their money. Such consultation has yet to take place,” said Neil McDonnell
(Ends)
Issued on behalf of ISME by Heneghan
