Mr. John McKeon:

I will address those two questions and then come back to Senator Higgins's question about reversibility. In terms of the company in the UK, up to 18 companies have provided services at different points in the UK. Some of them were investigated, and there are one or two notable examples of, frankly, behaviour which nobody could condone. The two companies that are involved in Ireland were not part of that. Complaints were made against them and they were investigated by the Department of Work and Pensions in the National Audit Office in the UK but they were not upheld. The amounts involved in both those cases were very low in any event, but they were not upheld. The Department of Work and Pensions in the UK has issued statements basically exonerating them. There were one or two companies - they are not involved in Ireland - where, frankly, one's eyebrows would raise and chin would drop but we have not engaged with them at all.

There are a number of controls in the contract which I have already mentioned. There are minimum performance standards and customer service guarantees that are required. The payments are subject to and contingent on satisfactory scores in customer satisfaction research, which is not a feature in the UK. The employment outcomes are 30 hours a week whereas in the UK it is 16. The employment outcomes have to be for a minimum of 13 weeks in Ireland; in the UK, it is four. The bar we set for contractors to hit is far higher in Ireland than it was in the UK and we have also provided for inspections.

The other element we have in Ireland, which they did not manage to get in the UK, is that much of our checking is automated so when a provider submits a claim for a payment to us, we can automatically check if that person has commenced employment based on Revenue Commissioners' records. We can check if that person has left the live register. In the UK, certainly for the initial period of their contracts, all of that was done manually. We have many automated checks. We are fairly confident about that aspect. We took the best international advice we could get on the design of this contract and other countries, including Australia, are now looking at the Irish model as an example of best practice. The proof will be in the pudding.

Senator Higgins raised the question of risk, and there is risk in every contact. She asked why we would contract out this service. We already contract within the Department, for example, where we contract with local employment service providers who are also private limited companies. Contracting was always part of the Department's solution in this area. We wanted to expand the contracted provision because we did not have the capacity within the Department. We looked to see if we could get the capacity, and we considered the amount of time it would take to build that capacity ourselves. We looked at the financial costs of building it ourselves against a payment by results model where we only pay if the outcomes are achieved as opposed to another model, for example, in the case of employment through the local employment services, where we pay regardless of outcome.

Best practice in this space would be to contract. When we have decided to contract, we then move into procurement, at which point any country in Europe can compete. They all have to be assessed equally. The reversibility relates to the contract duration. It also relates to the performance of the contractor. If we assess the performance is not satisfactory, we can terminate the contract. That deals with the reversibility issues. We have not reduced our own number of staff. As I mentioned earlier, we have doubled the number of staff we have on case work. It has to be seen in that context. There was an organisational challenge in doubling our number of staff on case work duties. It was not sufficient to meet the requirement. We had to contract in extra resources. I will put it in these terms. In a normal environment, where the number of people on the live register has returned back to a level of approximately 150,000, we would have enough capacity between ourselves and the local employment services. We are maintaining that capacity. When the number of people on the live register exceeds that level, we need to supplement our staffing numbers. It is then a question of whether to supplement our capacity to deal with peaks through permanent recruitment, or to do so through temporary contracting. Our decision was influenced by such factors. Purely and simply, we will not renew the contract if we do not need the resources.