Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I know there are quite a number of members online. They can see us, but we cannot see them. I am sure they are taking an interest, though. I thank the committee for the opportunity to present my Department's 2024 Revised Estimate. I have a reasonably long introduction to read, but I hope it will give members a good sense of the overall Estimate and the priorities within it. My officials have provided the committee’s secretariat with briefing on the details of our Estimate. I hope it is of assistance to members.

This is the second year I have had the pleasure of presenting the Estimate of the Department of Enterprise, Trade and Employment. Last year’s Estimate was presented in the context of the economy and society having emerged from the shadows of the pandemic. However, the challenge of Covid was almost immediately followed by the cost-of-living challenge and rising prices, driven in no small part by the impacts of war on Ukraine. The Government, through a range of budgetary measures, continued to support businesses, workers and households throughout the course of last year. These measures included discrete supports rolled out by my Department, not least the temporary business energy support scheme, which was designed to cushion the impact of high-energy costs on business. While prices and energy costs have been reducing from the 8.25% inflation rate in December 2022 to the 4.6% recorded last month, I am conscious the costs of doing business continue to be a significant challenge for some companies, particularly small businesses. As it has in the past, the Government will continue to support businesses through this challenge. Measures brought forward in budget 2024, such as the extension of the 9% VAT rate on gas and electricity to the end of October 2024 and extending the excise rate fuel reductions to the end of March, demonstrate our commitment to doing so. Other measures, such as the increased cost of business grant, in respect of which €257 million is being provided in my Department’s Estimate for this year, will also help. In addition, the debt warehousing scheme is being reviewed with a view to making it as flexible as possible in easing the debt and repayment burdens on businesses.

Notwithstanding the plethora of Government supports, I am aware of the concerns that have been expressed about the impact of recent improvements in working conditions, including the transition to a living wage, pension auto-enrolment, parental leave and benefit, statutory sick pay, an additional public holiday and remote working. It is important to point out that each of these improvements followed on from extensive public consultations involving employers, trade unions and the public, and while they may bring additional costs for some businesses, they will also bring economic and societal benefits by means of increasing disposable incomes and addressing in-work poverty. My Department is working with the Department of Social Protection on a report that examines the impact of changes to working conditions. I have no doubt the report, which I expect to receive shortly and a draft of which I have already seen, will make a valuable contribution to future policy in the areas of enterprise development and working conditions.

Notwithstanding the difficulties being experienced in this period of extended price inflation, it is worth bearing in mind that the Irish economy continues to perform robustly. Employment is at a record high, with 2.6 million people now in work, consumer prices have fallen and are likely to continue doing so, the public finances continue to be robust, and Ireland is ranked as the second most competitive economy in the globe under the IMD world competitiveness rankings.

The Estimate before the committee provides my Department with a gross allocation of €1.268 billion for use this year, broken down between €402.474 million in current funding and €866.04 million in capital funding. While this is some €353 million less than our allocation in the 2023 Revised Estimates, it should be borne in mind that the Department received additional non-core current funding of just under €650 million last year to fund the cost of payments under the temporary business energy support scheme. Excluding the non-core TBESS funding of last year and the increased cost of business funding being provided for this year, the Department’s core funding for 2024 is €979 million, which represents an increase of €35 million on our core 2023 allocation of €944 million. I can go through those details in more detail in a minute, if members wish.

This increase in core funding will ensure that we can progress a number of initiatives under my Department's enterprise, development, innovation and regulation programme. The Exchequer has provided a total of €890 million in the Revised Estimate to support this programme this year. In addition, the enterprise agencies supported under this programme, such as the IDA Ireland, Enterprise Ireland and the National Standards Authority of Ireland will, subject to sanction from the Minister for public expenditure, have the use of up to a further €100 million from income they generate from property and equity investments with clients to support their capital programmes and to fund operational activity such as recruiting additional staff this year. In other words, they are allowed to use their own resources. Each year, Enterprise Ireland, IDA and others generate up to a surplus of approximately €100 million in income from their own investments, charges and so on, and we have sanctioned that they will be able to spend a considerable amount of that money on top of the other Exchequer funding that has been allocated.

The enterprise agencies continue to promote and develop an enterprise culture across all areas of the country. The 6,128 net jobs created by clients of the IDA, Enterprise Ireland and the LEOs in 2023 was somewhat less than the record achievements in previous years. It is the case that in a very challenging environment, over 560,000 jobs are being supported by clients of our agencies. This represents 21.5% of the total number of people currently in employment in the State, which is the highest ever.

The Revised Estimates increase the core funding of the IDA to just under €266 million. This additional funding will ensure that the agency can, through its grants, innovation, training and regional property programmes, support enterprise in making transformative investments to increase the productivity of Irish operations and their workforce through research, investment and development, digitalisation and actions on sustainability.

In the area of property, the increased funding will enable the IDA to deliver the remainder of the 19 property solutions committed to under its regional property programme. In this regard, eight dedicated property solutions have already been completed. A further five buildings are expected to be on site in 2024 and two further buildings are in the planning system. An extensive site selection process for the four remaining properties is currently under way. I know that there is a great deal of impatience to get on with many of these projects in different parts of the country.

The €213 million being allocated to Enterprise Ireland will be supplemented by approximately €85 million to €95 million in income from its equity, seed and venture investments. This will ensure that Enterprise Ireland can roll out a number of key significant strategic initiatives. Among them will be the launch of a new exporters accelerator programme to deliver 2,000 new exporters by 2030; new funding for its seed and venture programmes; the launch of an environmental aid offer targeting the largest emitters in order to intervene in time to meet the 2030 targets; aligning all its funding supports with a sustainability and climate requirement; and continuing the digital and green transformative programmes with pace and ambition through its dedicated green and digital transition funds. Its equity investment income will also allow Enterprise Ireland to recruit the additional staff required to roll out these strategic initiatives.

The budget of the LEOs is also being increased by 14% to €56.8 million this year. As the committee will be aware, we are asking more of the LEOs all of the time. They need more resources and they are certainly getting them. This increase recognises the growing demand for the services provided by the LEOs as well as enabling them to embrace their extended mandate for businesses operating in manufacturing and internationally trading sectors that have grown beyond ten employees and have the potential to export. As the committee knows, if one has the potential to export, the LEOs can now support businesses that employ up to 50 people whereas up until the end of last year that was limited to ten. The additional funding will be used to assist LEO clients to deal with the twin transitions of digitalisation and decarbonisation which are key priorities of the White Paper on Enterprise. Specifically in the area of decarbonisation, the LEO clients will continue to be able to access supports such as the green for business programme, which provides two days of intensive mentoring, including a sustainability audit and action plan, and the energy-efficiency grant which provides businesses with capital investment to reduce carbon emissions based on an energy-efficiency project. In the area of digitalisation, the LEOs will also continue to assist clients to adapt to the reality of the digital environment including through its trading online voucher and digital start programmes.

The credit guarantee scheme is one of a number of access-to-finance schemes supported by my Department. There are currently three distinct guarantee schemes: the original credit guarantee scheme, the Covid-19 credit guarantee scheme and the Ukraine credit guarantee scheme, UCGS. The Ukraine scheme, which was launched in January 2023, is the only scheme still open to lending facilities. The Revised Estimate has allocated €8 million to meet any calls against the guarantee under the UCGS as well as meeting the administration cost of the scheme.

As advised, the Estimate includes a provision of €257 million to support the increased cost of business scheme, ICOB, which was announced as part of budget 2024. The committee will remember that we discussed this briefly in this committee. The ICOB grant will provide a one-off cash injection of up to €5,000 to SMEs in recognition of the costs faced by businesses across the country. It is targeted at small and medium-sized businesses operating directly within a premises that is commercially rateable by a local authority. The grant will be paid at a rate of half the enterprise's 2023 commercial rates bill for firms paying up to €10,000 in rates. For those paying between €10,000 and €30,000 in rates, they will receive a flat grant of €5,000 each. No grant will be available for firms paying more than €30,000 in rates last year. To put that into context, about 96% of all rate-paying businesses are receiving a grant. I believe the figure is now approximately 143,000 businesses, so I am glad to say that a very significant number of businesses will be getting that grant over the next couple of months, with the support of the local authorities.

It is not intended that there be a formal application process for the scheme and in this regard, it is proposed that local authorities will contact businesses on the availability and conditions relating to the grant. In other words, hopefully by the middle of next month, businesses will receive a letter from the local authority to confirm their bank account details and that they are still a viable, operating business. They will have to be tax compliant and in a positive relationship with local authorities in being up-to-date with their rates, or at least in some form of payment plan. The idea here is that we are making this as easy as possible, particularly for small businesses. They will receive a letter and they just have to respond positively to that letter. They should then get the payment transferred to them relatively quickly. It will take a couple of months because there is a significant amount of bureaucracy required here from the local authorities but not from the businesses. That is the way we have tried to design it. Work is ongoing between officials in my Department and the local authorities on the details of the administration of the grant. It is intended that the grant will be issued directly to eligible businesses by the local authorities in the first quarter of this year.

A total of €245 million is being provided to support to support our enterprise, innovation and commercialisation programme this year. The majority of this funding is allocated to our science and technology development programme, our memberships of international research organisations and the funding of the disruptive technologies innovation fund. The Department's science and technology programme is mainly delivered by Enterprise Ireland through its suite of innovation and commercialisation measures. The €159 million being provided to the programme this year will be focused on delivering a number of discrete initiatives.

Specifically, given our commitment to promote innovation in the construction sector under the Housing for All plan, Enterprise Ireland will allocate an additional €2 million to the development of the national demonstration park for modern methods of construction, MMC, in Mount Lucas, County Offaly. The demonstration park will be a showcase for the latest construction innovations. I respectfully suggest that it would be interesting for the committee to visit Mount Lucas because what is happening there will change how construction sites operate in the future. The Department wants to make a significant contribution to accelerating the switch to MMC.

A further €1.35 million will be allocated to the recently established Construct Innovate technology centre. This funding will support the delivery of new industry-focused research to be undertaken in 2024, which is a key part of boosting construction sector productivity. Enterprise Ireland will also use the funding allocated in the Estimate for a range of other initiatives, including: supporting up to 15 innovative high-potential start-ups that originate from the publicly funded research system; 100 in-company research, development and innovation approvals for more than €100,000; delivering more than 1,500 collaborative innovations; targeting 540 companies to be involved in technology centres; supporting 35 spin-out companies from the Irish research system that has been established; rolling out the new needs-led training innovators initiative; and continuing to deliver on the European Regional Development Fund, ERDF, co-funded knowledge transfer, KT, boost and technology gateway programmes. There is a series of programmes to drive innovation in the areas of technology and research. The innovation and commercialisation programme also funds the cost of Ireland's membership of the European Space Agency, ESA, which is now delivering results. The €26.6 million allocated in the Estimate will ensure that the number of companies which benefit from ESA contracts will continue to grow, thus maintaining the high growth rate in space-related activities in Ireland. As members will be aware, Ireland has its first satellite, which is linked to a research programme in UCD. It was sent into space in recent months.

The €42.5 million being provided to support the disruptive technologies innovation fund will allow for a seventh call to be made under the fund, which is intended to be announced in the first quarter of this year. To date, six calls have been made under the fund, with 103 successful collaborative projects announced. Approximately €365 million in funding has been awarded under these calls to 389 industry and research partners involved in approved disruptive innovation projects.

The regulation programme has been allocated a total €133 million for use this year. This represents an increase of 15% in the funding provided last year. Our regulatory agencies play a critical role in upholding Ireland's reputation as a business-friendly country and a great place to do business. The additional resources allocated in the Estimate will ensure they continue to do so, not least given the significantly expanded mandates a number of them have now assumed.

The Estimate increased the funding to the workplace relations programme by 10% this year to €23.6 million. The increased funding will enable the Workplace Relations Commission, WRC, to recruit additional staff and, in particular, to increase the number of inspectors who are required to carry out its expanded suite of functions. The commission expects to have a total of 80 inspectors in place by the end of the year. This will represent an increase of ten on the current commitment.

The funding to the Health and Safety Authority, HSA, is being increased to €30.7 million. The additional funding will allow the authority to continue its programme of recruitment, especially in its inspectorate division, to meet its expanding mandate in areas such as chemicals. Through further recruitment campaigns, the authority will look to increase its current staff head count of 261 to 295 by the end of the year.

The Corporate Enforcement Authority, CEA, will receive an increased allocation of €11.1 million in 2024. This follows increases in the authority's budget both prior to and post its establishment as a statutory authority. The authority will use the increased funding to develop a new case management system which will enhance how CEA case data is structured and managed, allowing for more efficient management, oversight and reporting and providing real-time detailed analysis of core activity. The increased funding will also ensure the authority can continue to recruit additional staff, particularly staff with specialist skills. In this regard, the authority hopes to be able to increase its current staffing complement from 70 civilian and Garda staff to 83 by the end of the year.

The mandate of the Competition and Consumer Protection Commission, CCPC, has expanded significantly in recent years and in 2024 it is expected to assume further functions under the EU Digital Service Act, the Data Governance Act, the Data Act and the Digital Markets Act, in addition to the responsibilities expected under the European accessibility Act. In other words, it will have a lot of extra work. In recognition of these additional responsibilities, the funding being allocated to the commission will be increased by more than 22% in 2024 to €25.7 million. The increased funding will allow the commission to recruit the additional staff required to carry out its expanded mandate. In this regard, the commission expects, through targeted recruitment campaigns, to increase its staffing complement from its current level of 188 to 226 by the end of the year.

Funding of €6 million will be provided to support the operations of the digital services co-ordinator, DSC, in 2024. This represents an increase of €3.3 million on the DSC allocation for last year. The Digital Services Act obliges each member state to appoint one overall competent authority as a the digital services authority, known as the digital services co-ordinator. Coimisiún na Meán, as the Irish DSC, will supervise and enforce the Digital Services Act when it comes into force on 17 February. I thank colleagues opposite for their co-operation and support in trying to get this legislation through on time, particularly as it requires the co-operation of Opposition parties. I appreciate that they have been constructive and helpful in those efforts. I hope we will complete them in the next two weeks.

The DSC, Coimisiún na Meán, will assume several new functions this year, including a significant role in the overall EU enforcement network, with the European Commission and other member states. The funding being provided to the DSC in 2024 will ensure it can recruit the additional staff required to meet the full breadth of its responsibilities, including the new functions it is taking on. In this regard, the DSC intends to recruit an additional 40 staff at all levels to discharge its functions, as part of Coimisiún na Meán's overall online safety framework. As the DSC moves from the preparatory phase to full enactment of the Digital Services Act, there will be a number of key target areas. Coimisiún na Meán will have an initial supervision operating model ready to go later this month. Its contact centre will provide advice to users on their rights under the Digital Services Act and gather intelligence that will inform an coimisiún's supervisory and enforcement activities.

Aside from the specific programme activities I have already mentioned, my Department will continue to progress a number of critical policy and legislative initiatives in the course of the coming year. A particular focus will be on implementing the targets in the White Paper on enterprise to progress the transitions required for climate and digital transformation, offshore wind energy - an offshore wind energy industrial strategy will be published before the end of March - regional enterprise development, trade policy and regulation.

I hope I have given the committee a flavour of our Estimate and what we hope to deliver for the moneys being provided by the Exchequer for this year. My contribution was slightly longer than usual, but it covered a series of different areas. I am happy to go into any detail the committee wants or to provide it with more detail in writing in respect of any areas on which I do not have detail to hand today.