Mr. Mark Fielding:

Thank you, Chairman, and I thank the committee for the invitation to address this meeting. I represent the Irish Small and Medium Enterprises Association, ISME, which represents small and medium businesses throughout the country. We have 8,700 members. I do not need to tell members of the committee about the global and national crisis we are in and I will not talk about the need to restore stability and reignite short-term economic activity. We are here today to discuss micro-enterprise, the small business unit and its liaison with local authorities.

We are talking about changing a structure but we still do not have a national policy on entrepreneurship. That is a massive indictment of the current and previous Governments. We must develop and adopt a national policy for entrepreneurship and small business development. I am asking the committee to put such a proposal at the top of its agenda, and in doing so to think small first.

Supports for entrepreneurs are of the utmost importance in encouraging new business start-ups, growing businesses to a sustainable level and making the transition to a global scale. We talk in terms of three tiers: at the top level are the multinationals, foreign direct investment companies that have the backing of IDA Ireland, report to the Department of Jobs, Enterprise and Innovation and are doing an excellent job. At the next level down are the medium and small businesses. Again, they are within the remit of Enterprise Ireland and can avail of the support provided by its high potential start-up, HPSU, policy and export units which report to the Department of Jobs, Enterprise and Innovation. At the lowest level, the micro-business level, the real seedbed, is where all businesses start and obviously they need support. They represent about 85% of all business entities in the country. These businesses need advice and encouragement which they will get from local authorities under the Department of the Environment, Community and Local Government. Is that thinking small first?

The county enterprise boards and the Irish Small and Medium Enterprises Association, ISME, share a birthday. We left IBEC in 1993, the year the county enterprise boards were established. They have played a significant role with very limited resources in the past 19 years. They have promoted small and medium business development at local level throughout all parts of the country. I will not say they have done an excellent job, but they have done a good job. ISME was a critic of them in the early part of this century. In the first press release I issued in August 2001, I was having a go at them for being a little bit distant from their clients. In recent years they have improved and remain the main contact point for support for so many micro-businesses. The locally based county and city enterprise boards have assisted entrepreneurs with start-up capital and financial support in the form of loans which are almost unobtainable from our busted but bailed out banks. They supply training support, as well as engendering a positive attitude to entrepreneurship in local communities. We have seen attitudes to entrepreneurship improving greatly in the past ten years, but there are still significant gaps in the provision of start-up capital, market knowledge and ensuring the development of the appropriate entrepreneurial mindsets and business skills. It is imperative that the level and quality of the service provided are maintained and improved. The best model is the continuance of the county enterprise board ethos under the control and guidance of the Department of Jobs, Enterprise and Innovation, with a greater focus, better direction and greater cost control.
Let me comment on the issue of public expenditure. One of the promises of the Government after the McCarthy report was issued was to get rid of quangos as part of the strategy to curtail public expenditure. Obviously, ISME would agree with this. There is no need to have 35 sets of overheads, CEOs, finance officers and different offices, as the money spent could be used much more beneficially in assisting micro-enterprise businesses. This is a perfect opportunity to put in place shared services. Killing off 35 quangos might make a great soundbite, but it is not sound judgment if it is done without thinking through the consequences of a proper solution. It is dangerous. The way it is being portrayed and pushed could put the provision of entrepreneurship support back ten years.
In the place of the dissolved county enterprise boards we will have a micro-enterprise service within local authorities that will work to establish a new network of local enterprise offices in each local authority. The intention is that the county enterprise boards will migrate to this new structure. That announcement has sparked concern and confusion among many micro-businesses that we support and represent. There has been no mention of changes to the range of services county and city enterprise boards provide by way of business supports and the budget available to them. There is very little detail on matters such as reporting responsibilities, levels of autonomy, advisory structure and staff levels. We have not seen a cost benefit analysis or a savings breakdown. The real challenge will be to avoid the county enterprise boards getting lost in the labyrinthine structures which will not be able to deliver quality services to clients and which will not be an efficient use of limited resources. Is that thinking small first? Most county enterprise boards are seen as doing a good job and the fear is that by making them part of a bigger entity, the intimacy of the local services they provide may be lost and decision-making will be slowed down. Whatever happens, we will still need local assessment boards. There is creeping inertia in the boards because this has been ongoing for a number of years. Fears have also been expressed about undue administrative influence if the link between the new entities and the local authorities is too close and it will be close. The new entities will be part of the local authorities, which is a danger.
From the point of view of responsibilities and ethos, in one fell swoop the Government is interfering with the organisations that are actually making a difference to micro-businesses. The county enterprise boards were always the first port of call for new entrants, where they received initial encouragement and support. I would be very fearful about the boards operating under the wing of local authorities because local authorities have a job to do; they do not have the same ethos or experience of dealing with small business. As I said, the move has the potential to set Irish entrepreneurship back and should be resisted. We recognise that some unpalatable decisions will be made and that current structures cannot be immune from the requirement to achieve savings and the need for more innovative responses. However, shoe horning the county enterprise boards in under the Department of the Environment, Community and Local Government is wrong. The Department of the Environment, Community and Local Government looks after the environment and has responsibility for matters such as water charges, septic tanks and bogs. It should stick to its knitting and look after the taps, toilets and turf. The remit of the local authorities is to look after a long list of items; I will not bore members with the 26 listed in my presentation, but they include housing, estate management, roads, plant and machinery, water services, drainage, leaks, metering, planning, parks, museums, the heritage, libraries, rates assessment, rates collection and enforcement, just to name a few. Now we will add business support and the encouragement of entrepreneurship to their remit. We have a seedbed for small business in which these businesses are being nurtured by the county enterprise boards, yet we are going to take that structure and migrate it to an underground carpark in the local authorities. We have plenty of big buildings around the country, the Taj Mahals being built by them, which is wrong. The Department of Jobs, Enterprise and Innovation should look after and have responsibility for job creation, enterprise and innovation. It seem ludicrous to strip away the seedbed for businesses from the relevant Department.

The issue of timing was mentioned. The timing is all wrong because entrepreneurs, whether they be survivalists, nascent or budding entrepreneurs, need all the help they can get. What we are doing is upsetting the infrastructure, the people, advisers and, or, management and starting mini turf wars where there is uncertainty. There is always the danger of inertia happening. We talk about the clients or customers of the county enterprise boards. Changes to the county enterprise board network structure must keep the needs of clients at the core of deliberations. In that context, a locally based flexible, client-focused system under the control of an enterprise service will undoubtedly have most merit. Have the customers or clients being asked for their opinion? The answer is "No." Even the customers' representative bodies have all voiced their opposition at the small business advisory group but we have been almost ignored. The question was raised of how many small businesses were represented on the implementation body. The answer is none. Mr. Hayes states the plans are in place and that ISME will be consulted. The customers of the county enterprise boards, which are about to be changed, have not been consulted. In fact, our displeasure has been ignored.
There is also a difficulty with the bridge when a business customer of a county enterprise board, somebody with fewer than ten employees, grows to become a customer of Enterprise Ireland when he or she has more than ten employees.

There is a difficulty in the transfer of the functions of CEBs to Enterprise Ireland, and while efforts are being made all the time to overcome that difficulty, imagine what will happen when not alone is there to be a transfer from the local enterprise office CEB to Enterprise Ireland, but responsibility for this is to transfer from the Department of the Environment, Community and Local Government to the Department Jobs, Enterprise and Innovation. All along, entrepreneurs are working in same businesses in the same sector and are confused because of the potential that this will happen. That is not thinking small first.

All Departments need to be in unison in how they co-ordinate the delivery of sustainable growth and meaningful, long-lasting jobs. A fragmented approach will not be conducive to long-term growth and job creation. What the Government needs to consider is the creation of a clear, effective and holistic approach to sustainable job creation and growth. We need to stop the turf wars, the in-fighting and the manoeuvrings between the Department of the Environment, Community and Local Government and the Department of Jobs, Enterprise and Innovation.

In a nutshell, to encourage entrepreneurship and job creation in all Government and public sector initiatives, we must protect, defend and nurture micro-businesses from their set-up through to their growth and we have to streamline those services, not create obstacles, as is proposed in this move under local authorities and the Department of the Environment, Community and Local Government. We need to have a national policy of entrepreneurship and we need to think small first. Putting the support services for micro-businesses under the Department of the Environment, Community and Local Government and local authorities is a wrong move. It will stunt and delay growth and will set back entrepreneurship by decades. I predict that if and when this happens, we will back here in a number of years to rectify this bad decision. I thank the members for their time.