Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

I will put on record the official reply and we can then have a discussion about it. I am addressing amendments Nos. 5, 13 and 38. While there are merits in the Deputy's proposals, they are focused on issues that are really outside the scope of this legislation. This Bill is designed to address failures to pay construction sector contractors, subcontractors and sub-subcontractors who have completed work to the required standard on construction projects. The Bill will address these issues by providing statutory arrangements concerning payment under construction contracts, including providing for interim payments and, second, by introducing a new mechanism for the swift resolution of payment disputes through a process of adjudication.

The manner of social clauses in public contracts is something that I am closely examining. The inclusion of a social clause in all public procurement contracts could require, for example, that a quota of long-term unemployed be employed in the delivery of a contract. It must be said that an initiative along these lines would pose a number of risks. In the current economic climate and, in particular, bearing in mind the difficulties in the construction sector, businesses have for obvious reasons been reducing their existing workforces rather than taking on new employees. Consequently, it would be expected that where a business is awarded a public contract, the work would be carried out by the existing employees of that business. In such circumstances a social clause requiring that a number of long-term unemployed be employed in delivering a public contract, could either impose an additional cost on SMEs that they may not be able to afford, or result in an employee of the supplier being let go in favour of a long-term unemployed person.

The Government is deploying a wide range of measures to facilitate job creation and support labour activation measures, with a particular emphasis on assisting long-term unemployed people. Obviously, the main purpose of public procurement is to ensure that goods, services and works are purchased by the State in a manner that is legal, transparent and of high probity. Our key requirement is the achievement of value for money. However, I am examining the use of social clauses as an additional means of supporting activation. We are seeking to identify the scope for the use of social clauses in parts of the capital area in particular.

Taking Deputy Creed's point, we do not think it is applicable or germane to the Bill, but I do see that there is merit in the proposal. I have already said that to Deputy McDonald when we discussed this in the House some time ago. The matter was also raised in the House recently by way of a Topical Issue. The question is how we do it and doing it in the most sensible way possible. Deputy McDonald spoke about the A5, which was something that her own colleague, Minister Murphy, put into the contracts. He put it into the A5 contract, but it was not put into a specific piece of legislation and was not done as an application throughout construction. It was not done for capital construction, but for a specific project.

All that shows that social clauses are applicable, workable and effective if one specifies a project or group of projects. It will then be clear for those going into public procurement that this will be a condition of the contract because we will not get through EU procurement law unless that is clear. One cannot discriminate against long-term unemployed people in Poland, Ireland, Britain or wherever, so we must set a very clear, level playing pitch. The way to do that is to set it upfront as a clear policy of the Government that we want to see social clauses in an area of capital projects.

We are in discussions with the National Development Finance Agency concerning the next devolved schools programme whereby, as a specific aspect of that contract, a social clause would apply. We would make it a condition of awarding those contracts that somewhere in the region of 10% of the people involved would come from the long-term unemployed. We think that is a more sensible way to approach this. I am not talking about public private partnerships, but about a bundle that would be delivered through the NDFA's funding model for the purposes of schools development.

The key issue is one of monitoring and enforcement. There is no point in having a big, laudable 10% of these jobs going to people who are long-term unemployed construction workers with particular skills, unless it is monitored and enforceable. We must ensure that that can happen. We want to see progress here and I can reliably tell the committee that we are making progress in this regard.

I have informed them that we are coming to the end of a discussion with the National Development Finance Agency which I think will have a successful outcome, and in terms of that bundle of schools, we will see a social clause. We are following the model that is being done in Northern Ireland where, regarding a specific project of capital schemes, a social clause applies. That seems to work there and I am confident it will work here as well.