Mr. John McKeon:

I thank the Chairman and committee members for inviting us to discuss the Department's approach to activation. I am joined by my colleagues Paul Carroll, who heads up employer engagement activities in the Department, and Jim Lynch, who heads up our operations and service delivery in the Limerick region. I note that this is a new committee. We appeared before the previous committee in the previous Oireachtas on a number of occasions to speak about activation. While I do not want to appear to be teaching grandmother to suck eggs, members will forgive me if it appears that way. I thought it would be better to outline the general approach to activation. I would be happy to come back at any stage if the committee wished to discuss any particular aspect of activation.

It might be useful to briefly describe what the term "activation" actually means. In short activation refers to the process of engaging with people to encourage and support them in the pursuit of employment. In the first instance it typically comprises the provision of case-managed personal profiling, employment planning and job-search-assistance services. In addition it involves offering jobseekers opportunities to undertake employment-relevant training and education, to undertake work experience and to participate in what are generally known as State employment schemes such as community employment and Tús.

In addition to these services an activation policy can also involve the provision of employment incentives and financial supports both to jobseekers, for example in the form of the back-to-work family dividend or increased payments when participating in certain schemes, and to employers, for example in the form of the JobsPlus and wage subsidy schemes.

A comprehensive activation policy will also include a significant level of engagement with employers in order to identify job opportunities for unemployed jobseekers and to promote the recruitment of people who are on the live register or in receipt of another welfare payment. Where the jobseeker is in receipt of jobseeker payment activation also involves the principle of rights and responsibilities. In other words the jobseeker has a right to receive a jobseeker payment and the right to receive activation services from the State, but also has a responsibility to engage with those services. Where a jobseeker fails to engage with these services his or her payment may be reduced or suspended.

In terms of impact, international research indicates that early engagement with unemployed jobseekers is key to reducing transitions into long-term unemployment. It also shows that the most effective intervention is employment planning and job-search assistance, followed by work-relevant training and work placements. General education supports and State employment programmes are generally found to be ineffective and, in some cases, have been shown to have negative impacts on employment progression. The research that has been undertaken in Ireland would support these findings.

In noting these findings it is, however, important to recognise that services and supports provided as part of a labour-market-activation regime have an important social or active inclusion role. In this sense the provision of education options and employment programmes is not only designed to address labour market issues, but is equally informed by the recognition of the role which occupational activity and further education play in improving the quality of life of people with disadvantages or with a restricted ability to take up employment. The provision of occupational outlets in schemes like community employment to people facing significant barriers to gaining open labour-market employment is also an important element of the social and community fabric in many localities across the State.

The recognition of this active or social inclusion aspect to activation also points to a difference in emphasis in the approach to activation during different phases of the economic cycle. During a time of recession, given scarce Exchequer resources, the primary focus of activation policies is necessarily to help unemployed people, who are in receipt of a jobseeker payment and on the live register, to compete for such job vacancies as arise and reduce their individual duration of unemployment, although overall levels of unemployment may not fall significantly; to bias employers' recruitment activity towards people who are unemployed and on the live register; and to ensure that the labour market operates efficiently as the economy recovers so that employers are proactive in offering employment opportunities and that those people who are unemployed are ready, willing and capable of taking up employment.

During a time of economic recovery or prosperity, as the labour supply tightens the focus of activation policies typically shifts to minimising frictional unemployment and increasing active labour-market participation by all people of a working age, both to help ensure a supply of labour, which is a very narrow economic view, and to offer greater support to people from non-jobseeker cohorts to access the labour market and achieve some level of financial independence, which would typically be called an "active inclusion" view.

Ireland has been through a period when the primary and overwhelming focus of activation policy was informed by the deep recession of the period from 2008 to 2013. Ireland entered this recession with an activation infrastructure that was not operating in line with best international practice and had been the subject of some critical reports from the ESRI and the OECD among others. While this situation was not an urgent priority during a period of full employment the collapse in the labour market brought the service weaknesses into sharp relief.

Accordingly, the Pathways to Work policy was developed in 2011 and 2012 to, among other things, design and implement the institutional, service and process changes necessary to remedy the identified deficiencies in the public employment and welfare services. These changes were implemented in the first instance to help unemployed jobseekers in receipt of a jobseeker payment and on the live register to compete for and find work.

Among the changes implemented were the merger of the community welfare service, Department of Social Protection and FÁS employment services involving over 2,000 staff moving and taking up new terms and conditions of employment; the development and roll out of the Intreo model of one-stop shops involving the build or refurbishment of over 60 Intreo offices; the doubling of the number of case workers through internal redeployment within the Department; the establishment of an employer relations division; the implementation of new engagement processes, including jobseeker profiling, group information sessions, one-to-one case management and the social contract of rights and responsibilities supported by a reduced payment regime for people who do not engage with the service; the introduction of new jobseeker services including JobBridge; JobsPlus; MOMENTUM; GateWay, and the back-to-work family dividend; and the roll-out of the JobPath contracted employment service to complement and supplement Intreo in delivering intensive case-work services to long-term unemployed people.

As a result of these changes, which were arguably the largest single public sector reform initiative over the past ten years, the delivery of employment and activation services to jobseekers is now unrecognisable from that which prevailed up to 2011. For example, in terms of service standards jobseeker claims are now processed in less than a week compared with a minimum of three weeks in 2011. All jobseekers are now profiled and invited to a group information session to be briefed on the various services and supports available to them, typically within a week of registration with the service. Jobseekers, who are profiled as having a high risk of remaining unemployed for 12 months or more, and all jobseekers who are under 25 years of age are invited to a one-to-one meeting with a case officer typically within a week of the group information session and are assisted in preparing a personal progression plan. Other jobseekers are now scheduled for a one-to-one meeting typically at about three months.

The number of engagements with jobseekers has increased dramatically. For example, since 2012 we have held over 20,000 group information sessions and more than 1 million one-to-one meetings. In the same period over 48,000 people have availed of JobBridge, more than 6,000 people have benefitted from JobsPlus and 60,000 people are now receiving intensive case management support from the JobPath service providers.

Feedback from clients is also very positive. An independent customer satisfaction survey conducted last year saw customers rate the service a score of 4.38 out of 5, and more than three quarters said that the service helped them towards getting a job.

In terms of employment impact, the changes have coincided with significant improvements in labour market conditions that are not typical in a post-recession environment. Total unemployment has fallen from over 15% to just under 8%; long-term unemployment has fallen from 205,000, which was 9.5%, to 95,500, which is 4.5%; youth unemployment has fallen from around 83,000, which was 33%, at peak to 32,400, which is 15.9%, today; and the proportion of people of working age living in jobless households has fallen by nearly a quarter from 16% at peak to 12.4% now. In parallel with these overall improvements the persistence rate on the live register, which is the measure of the number of people who make the transition from being short-term unemployed to long-term unemployment, has reduced from 35% to 26% and the exit rate from the live register of those unemployed over two years increased from 25% to 42%.

Given the progress I have outlined, the Government initiated a major review of the Pathways to Work approach during 2015 to determine an appropriate strategy for the next five-year period. This review which involved an extensive consultation process culminated in the publication earlier this year of new Pathways to Work strategy for the period up to and including 2020. Taking account of the feedback from the consultation process this strategy acknowledges the following. Although the labour market situation is improving very long-term unemployment of three years or more and youth unemployment remain significant concerns, as does the challenge of inter-generational jobless households.

Although service delivery has improved considerably, there is still a level of inconsistency in the quality of service delivery that needs to be addressed. The focus to date on process and throughput needs to be augmented by a similar focus on service quality over the next four years if the process changes implemented are to be sustained and deliver value even as the operating environment changes from recession to recovery. It also recognises there is a demand from other non-jobseeker cohorts for access to activation services and a desire for a "parity of esteem" with jobseekers in terms of the priority and effort invested into the delivery of services.

Accordingly, the new strategy sets out a two-pronged approach. The first prong is about consolidating the recent reforms to the public employment and welfare services and prioritising provision to maximise outcomes for clients. This means ensuring that the long-term and youth unemployed cohorts continue to be prioritised and adequately supported in regard to activation services and also that the implementation and delivery of activation services is of high quality, effective, efficient and sustainable. The second prong is to gradually expand access to activation services over the 2018 to 2020 period, as resources allow, to other non-employed people of working age. This will contribute to increasing employment across working age households, promote the principles of active inclusion and improve labour supply.

This approach is to be delivered through 85 actions grouped into six logical strands. I will not go through all of them but I will mention them. There is enhanced engagement with unemployed people; increasing the employment focus of programmes; making work pay or incentivising work; continuing to incentivise employers to offer opportunities to unemployed people; building organisation capacity both within the Department and other agencies; and building work force skills, which is a new strand focusing on the further education and training sector, improving the alignment and delivery of those services with labour market requirements.

Together with these strands of action the strategy sets out a number of targets to be achieved over the course of the programme period and also for 2016. These targets relate primarily to rates of employment progression, for example, to move 20,000 long-term unemployed people into employment during 2016. Updates on performance against these targets are posted on the Department's website and I can confirm that we are in line to meet or exceed most of the targets. The Labour Market Council reviewed the strategy and published its opinion. In general, it is supportive of the approach taken but has recommended that the Government set some more ambitious targets in regard to overall employment, youth unemployment and long-term unemployment rates. The Minister has accepted these revised targets, with some slight modifications, and progress against these targets will also be reported on in future updates.

Although the topic of activation is very broad, I hope that in setting out the general approach I have addressed at least some of the issues of most interest to the committee. Together with my colleagues, I will pleased to address any questions that members may have.