Mr. John Callinan:

I am an assistant secretary in the Department of the Taoiseach with responsibility for economic, international and Northern Ireland affairs. I am accompanied by colleagues from a number of Departments which, in turn, reflects the variety of issues covered in respect of our targets under Europe 2020. They are Mr. John McCarthy, Department of Finance; Mr. Terry Corcoran and Mr. Jim Walsh, Department of Social Protection; Ms Pauline Mulligan, Department of Jobs, Enterprise and Innovation; Mr. Stjohn O'Connor, Department of Communications, Energy and Natural Resources; Mr. Owen Ryan, Department of the Environment, Community and Local Government, and Mr. Brian O'Meara, Department of Education and Skills.

On my own behalf and that of my colleagues, I thank the joint committee for its invitation to appear before it and welcome the opportunity to brief it on Ireland's national reform programme update for 2013 which outlines the continuing efforts to achieve our targets under the Europe 2020 strategy. The national reform programme update for 2013 covers a broad range of policy areas, which explains the size of the delegation. I wish to refer to the context in which the update has been prepared and provide an overview of the document, including Ireland's five headline targets, with examples of some of the policy initiatives the Government is following to meet the targets set in each area.
I understand members may wish to ask questions or comment on the update. We will be happy to hear the views of the committee on the draft and provide clarification or answer questions.

Under the Europe 2020 strategy, each member state is required to prepare a national reform programme and make annual reports on progress. In addition, the European Commission can make country specific recommendations arising from the process during its annual examination of the programmes and progress reports as part of the European semester process. Ireland provided a full national reform programme in 2011. As a party to an EU-IMF programme of financial support, we were not required to submit a new national reform programme or a full progress report either for 2012 or 2013, given the rigorous reporting to which we were already subject under the support programme. Furthermore, the country-specific recommendation for Ireland under the process is confined to a recommendation that it continue to implement the measures identified in the memorandum of understanding with the European Union and the IMF. Therefore, the sole requirement requested by the Commission was a letter providing an update on progress in the previous year. However, we considered it was important to demonstrate our strong engagement with the Europe 2020 process, particularly as Ireland's goal is to exit the programme at the end of this year. As a result, it was decided to go beyond providing a letter, as happened last year. The intention is to provide more detailed feedback for the Commission on progress made this year. As a result, while the document being prepared for submission is not a full national reform programme, it nonetheless provides a comprehensive update on the actions being taken.

There is close alignment between the five headline targets under the Europe 2020 strategy which are being advanced through the national reform programme process and Ireland's domestic priorities. This is reflected in our 2011 national reform programme and the subsequent updates. The introduction to the update provides an overview of policies being implemented to promote competitiveness, growth and job creation in line with the priorities set by the European Union annual growth survey such as pursuing differentiated, growth friendly fiscal consolidation and promoting growth and competitiveness.

The macroeconomic context section, as its stands, only provides the macroeconomic outlook to 2015, pending publication of general Government balance estimates by the CSO, scheduled for release next week. The national reform programme update is prepared in conjunction with Ireland's stability programme update. For the first time the stability programme update in 2013 will include economic forecasts for 2016, as well as a broad fiscal strategy for that year and its impact on the debt and deficit. This will also be reflected in the national reform programme update once the CSO figures are available.

Following on from this, the five separate sections, on employment, research and development, climate change, education and poverty, provide details of our progress and the efforts made in achieving each target are set out. The targets should not be viewed in isolation. Effective policy implementation requires a cross-departmental approach and there are key linkages between the five targets, mutually reinforced and supported by common policies. A key driver of this approach has been the Action Plan for Jobsstrategy which targets all 15 Departments and 46 State agencies. Its focus is to ensure all efforts are made to improve the overall enterprise environment, boost job creation and retention and bring about economic growth.

I wish to comment briefly on each of the five headline targets. The first is employment, in respect of which the Action Plan for Jobsis a central policy response to achieving our employment target. Ireland's headline employment target for 2020 is to raise the employment rate for men and women aged 20 to 64 years to between 69% and 71%. The employment rate last year for this cohort was 64%. That was unchanged from 2011, which suggests stabilisation in the labour market after the constant annual decrease from the 74% figure recorded in 2007. In addition, the most recent QNHS figures, for the fourth quarter of 2012, which were published at the end of February, also point to stabilisation in the labour market. The Action Plan for Jobs aims to have 100,000 more people in work by 2016 and a total of at least 2 million people in work by 2020. Assuming the current 20 to 64 year old population cohort holds constant, attaining the Action Plan for Jobstarget would have a significant positive impact for Ireland's employment rate 2020 target, reaching 67.6% by 2016 and 70.1% by 2020, almost exactly the mid-point of Ireland's employment rate range of 69% to 71% for 2020.

As the national reform programme update states, the Action Plan for Jobs is a multi-annual plan and we are already into our second year of implementation. The 2013 plan builds on the momentum gained last year and will continue to support job creation. Among the 333 actions listed in the plan are measures designed to improve access to finance, to help to build competitive advantage and further improve the skills base. The plan also focuses on seven distinct areas in which we have the potential to make a significant difference to the business environment and capitalise on Ireland's strengths in traditional areas such as ICT and innovation, including the JobsPlus initiative. The first progress report, covering the first quarter of 2013, will be published shortly.

A parallel central plank in achieving the employment target is the Pathways to Workinitiative. This policy which is designed to complement the Action Plan for Jobs aims to improve labour market activation measures and supports and help to ensure that, as much as possible, new jobs go to people on the live register, particularly focusing on the long-term unemployed. The strategy includes a new integrated employment and support service involving the transformation of local social welfare offices into a modern one-stop-shop, allowing jobseekers to access their entitlements and receive help in planning their return to work. Quarterly targets in the roll-out of this strategy have been laid down under the strategy, including moving the long-term unemployed into employment and increasing the exit rate of persons on the live register for two years or more.

The employment targets section of the update also details how we are dealing with the principal labour market bottlenecks with targeted initiatives, including the new JobsPlus initiative, the ICT action plan and the Momentum scheme, which provides education and training to the long-term unemployed. It includes the JobBridge internship scheme, which has seen a significant percentage of interns secure full employment following their internships. Finally, the issue of youth employment is covered. There is no doubt the rate of youth unemployment remains unacceptably high and the increase in long-term unemployment raises serious concerns. There are signs, however, that the level is beginning to drop on foot of a number of factors which are addressed in the draft. There are also policy measures under the Pathways to Work initiative, such as Momentum and other education and training schemes which are targeting the problem and aim to increase youth employment rates.

Our headline target for research and development is to improve the conditions for such activity and to raise combined public and private investment levels to at least 2.5% of GNP, which is approximately equivalent to 2% of GDP. The latest available data shows that the research intensity rate for 2012 is now estimated at 2.17% of GNP. The update indicates that if the current trajectory is maintained, we will meet our target close to the end date in 2020. The update outlines the key developments of the last 12 months, which include the work of the research prioritisation group. The group has identified 14 areas of opportunity for Ireland which have the potential to deliver the greatest return to the economy and in terms of employment. The group is developing a framework to monitor the impact of investment in the priority areas. The update also outlines the increase in business expenditure on research and development since the introduction of the tax credit, with the business expenditure on research and development intensity ratio exceeding the EU 27 average for 2011. A review of the tax incentive has been announced and the terms of reference were published in February. The report refers also to various initiatives to encourage students to study maths and science and provides information on the national intellectual property protocol published last June, which includes the establishment of a central technology transfer office.

The third area of targets covers climate change, renewable energy and energy efficiency. Ireland's headline targets here are to reduce greenhouse gas emissions in the non-traded sector by 20% compared to the 2005 level, to increase the share of renewable energy in the final energy consumption mix to 16% by 2020 and to move towards a 20% increase in energy efficiency. The update indicates that our climate change targets under the Kyoto protocol covering the period to 2012 are expected to have been achieved. However, reducing greenhouse gas emissions to meet our 2020 targets will prove very challenging. The text sets out details of the programme for the development of national climate change policy published last year, including a public consultation process and the heads of the recent climate change legislation, the climate action and low carbon development Bill. The progress report on the national renewable energy action plan submitted to the Commission on a biennial basis shows that Ireland is on track to meet its renewable energy target. The report highlights the increase in obligations requiring transport fuel suppliers to provide a specific proportion of sales in the form of biofuels. In addition, a new support scheme is to be designed to be operated in Ireland from 2016 onwards to represent the start of a trajectory of revising and reducing price supports for new onshore wind projects over time. We are on course to meet our energy efficiency targets, with programmes such as the better energy homes scheme consistently delivering energy savings across the economy. Given the economic challenges faced by the country, the programme is moving from a grants-based scheme to one that relies on sustainable financing. Other elements covered include the second national energy efficiency action plan, which sets out 97 measures to deliver energy savings.

On education, Ireland's headline target is to reduce the percentage of 18 to 24 year olds with, at most, lower secondary education to just 8% and to increase the share of 30 to 34 year olds who have completed tertiary or equivalent education to at least 60%. Recent figures show a decline in early school-leavers from 11.4% in 2010 to 10.6% in 2011. The percentage of students sitting the leaving certificate examination has risen by more than 60% to over 90% in the last eight years. The report shows that there is clear evidence that the national action plan, Delivering Equality of Opportunity in Schools, which targets disadvantaged students, is having a positive effect in tackling educational disadvantage. The average leaving certificate retention rate in DEIS schools increased by almost seven percentage points to just over 80% in that period. A new integrated model of service delivery, called "one child, one team, one plan", is to be implemented this year, which will standardise service delivery across the education system for children. The literacy and numeracy strategy will continue to be rolled out in 2013 at a cost of €6.5 million. The NRP update also provides information on the reform of the junior cycle, which will be rolled out over eight years, beginning with English.

Ireland has held the highest rate of tertiary attainment for the last four years across all of the 27 EU member states. In tertiary attainment for 25 to 34 year olds, the indicator used by the OECD ranks us as first in the European Union and fourth in the OECD. The update also reports that the first pilot survey of employers in December last showed that over 75% of companies were confident that graduates had the right workplace and transferable skills and relevant subject or discipline knowledge. That is a positive message on our labour force. The update refers to the Springboard programme, which offers free part-time higher education courses to unemployed people in areas where skills needs have been identified. A recent evaluation shows that 40% of participants return to work within six months of completing a course.

The final target is poverty reduction. The target was revised last year following a review after the NRP was submitted in 2011. The review involved public consultation and engagement with key stakeholders and was informed by an EU peer review on the setting of national poverty targets. Ireland's revised headline target is to reduce the number of people experiencing consistent poverty to 4% by 2016 and to 2% or less by 2020 from the 2010 baseline rate of 6.2%. There was an increase of 2.6% on the 2010 rate of 31% in the number of people who are in consistent poverty, at risk of poverty or experiencing basic deprivation, highlighting the social impact of the economic crisis. The population affected by basic deprivation has increased, although figures show the rate of increase slowed in 2011. Efforts have been made to minimise the impact of fiscal consolidation on the most vulnerable under the troika programme. The Government maintained the nominal value of minimum welfare rates and pensions under budget 2013 and has undertaken a social impact assessment of the welfare and direct tax components of the budget. The increase in the number of jobless households, the percentage of which has risen from 15% in 2005 to 25%, is a concern. Programme for Government priorities for 2013 include a specific commitment to ensure that economic recovery does not bypass jobless households. The update provides details of measures introduced to tackle this issue, including changes to welfare and employment support services under Pathways to Work and increased provision in budget 2013 for 10,000 extra places on labour market programmes. Access to high-quality services is also part of the measures in place for social inclusion, particularly for children. There is a child poverty initiative, a school food programme and provision of an extra 6,000 after-school child care places. The report also provides information on a new social inclusion monitor which was published last month to report on progress on the national social target.

There is a great deal of information captured in the update. I have tried to set out the key elements to give a flavour of the measures being implemented to reach our Europe 2020 targets. Given the breadth and diverse nature of what the report covers, I have not tried to cover every last detail. My colleagues and I are very happy to address anything in detail should committee members have any comments. We will do our best to answer questions and provide clarifications.