Oireachtas Joint and Select Committees

Tuesday, 21 October 2014

Joint Oireachtas Committee on Jobs, Enterprise and Innovation

Public Procurement Contracts: Discussion

2:15 pm

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein) | Oireachtas source

Gabhaim buíochas leis na bhfinnéithe as ucht a gcuir i láthair. I was self-employed before I became a Deputy, so I know the experience of self-employment. Tomorrow's dinner is based on the fact that one actually earns a living today. It is a hand-to-mouth experience, in general. I find it really frustrating that the Government has imposed laws which are effectively anti-business and anti-jobs. There is a spend of approximately €9 billion on goods and services, 22% of which is roughly €2 billion. That is a massive potential stimulus to the economy and, according to the figures supplied by Ms Fallon, it would be equivalent to about 20,000 jobs. Given that 40,000 jobs have been added since the Government came into power, 20,000 jobs is a big number. I met the Minister in early 2012 and made the point to him that economic benefit must be found within procurement, but that economic benefit also meant that people did not lose their jobs and that companies were not pushed out of business so that taxes would not be paid, and so on. The cheapest contract is, therefore, not necessarily the most economically advantageous to the State. The response to that was a shrug.

The issue can be resolved. In the North we had a Minister for Regional Development, Conor Murphy, who was involved in the breaking up of contracts. In other words, large road contracts could be broken up into small parcels and accessed by smaller businesses without changing the cost-benefit ratio for the State. There are a number of other issues within the contracting mechanism here. If we push for the lowest cost, it often means that some contractors actually buy tenders. They then squeeze out a subcontractor down the line to cancel out any financial disadvantage for them in the contract itself. We see that right across the construction industry.

I have also seen cases in which, after the IDA has given funds to FDI firms to come to this State, these firms have oriented their business to the domestic market on tenders and then outpriced local businesses and pushed people out of jobs. That happened to a company in Meath. Sometimes, if one quantifies the experience of an industry, it is easier to communicate that message both to the general public and to the Government. Do the witnesses have any idea exactly how many companies have gone out of business in recent years, or whether any jobs have been lost in connection with this?

Comments

No comments

Log in or join to post a public comment.