Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael) | Oireachtas source

I thank the Chairman for giving me the opportunity to say a few brief introductory words on the Department's 2017 Revised Estimate. My officials have already provided the committee with a detailed briefing document. The material tries to give committee members a deeper understanding of what the Department is delivering and what we are hoping to do in the near to medium term. I also understand the financial scrutiny team of the committee secretariat has provided members with a 15-page analysis of the Department’s Estimate for this year. Lest there be any confusion for members who have read both sets of briefing documents, it is important to set out clearly the basis on which the Department’s overview briefing material for the committee has been compiled.

Essentially, the Department’s material was compiled on the basis of comparing the 2016 Estimate as published in the 2016 Revised Estimates Volume with the Estimate for the Department as set out in the 2017 Revised Estimates Volume. This Estimate to Estimate comparison is the accepted basis for comparison. For the information of committee members, the 2017 Estimate for my Department was formulated in negotiation with the Department of Public Expenditure and Reform through a comparison with the 2016 Revised Estimates Volume allocation versus the 2017 Revised Estimates Volume. I understand the financial scrutiny team in its briefing material has chosen to base its comparisons on projected year-end 2016 expenditure figures from "a point in time" last November to be compared with the 2017 Revised Estimates Volume allocation. It is important to appreciate that the financial scrutiny team's figures are not the actual year-end 2016 figures. In essence, it has chosen to factor in Supplementary Estimates or savings that arise at year-end and then make a comparison with the follow-on Estimate for 2017.

The timing of the annual budget and the Revised Estimates Volume in October and November each year does not actually allow for this comparison to be made. For example, the net effect of including the additional Supplementary Estimate funding received by my Department in late December could lead committee members to believe funding for my Department's innovation budget was cut in 2017. The reality is that in 2016 and 2017 we have actually increased the innovation capital spend by €64 million. Last December we secured an additional €49 money in supplementary moneys; an extra €27 million for Science Foundation Ireland; an extra €20 million for the programme for research in third level institutions and an extra €2 million for the European Space Agency. In 2017 we are increasing the capital spend by a further €15 million, with increases for Science Foundation Ireland, Enterprise Ireland's research and development programmes, the programme for research in third level Institutions and the Tyndall National Institute.

The comparison methodology used by the financial scrutiny team has led to other anomalies in the comparisons made relating to other subheads in the Department's Vote. Again, by way of example, rather than the Department’s administrative non-pay budgets increasing by 20%, as alleged by the financial scrutiny team, they have been reduced by 12.5%, amounting to a reduction of €1.2 million this year. Likewise, the Office of the Director of Corporate Enforcement is not the beneficiary of a 76% increase, nor is the Competition and Consumer Protection Commission receiving a 20% increase this year. My comments on the financial details that follow are in line with the requirements of the Department of Public Expenditure and Reform and based on the 2016 Estimate to 2017 Estimate comparison.

The total gross allocation this year for the Department, its offices and agencies is up by nearly €48 million to €858.42 million, as per the published 2017 Revised Estimates Volume. This represents a 6% increase on the total 2016 Revised Estimates Volume allocation of €810.47 million which, it must be remembered, also included a capital carryover of €10 million from unspent moneys in 2015. This year the Department and its agencies have a total of €555million available in Exchequer capital funding, the largest Exchequer capital provision ever made available to the Department. The capital funding available to the Department this year represents a €52 million or a 10% increase on the 2016 capital base provision of €503 million.

We continued to make tremendous progress on the jobs front throughout 2016 and into this year. There are now over 2.04 million people working, the highest level since 2008. Unemployment continues to drop and was down to 6.6% at the end of February. There are now over 435,000 people working in the client companies being directly supported by the enterprise agencies. Such a level of employment across the enterprise agency clients is a record all-time high. Allowing for the multiplier effect, a similar number of people are being indirectly supported in services and sub-supply companies. Therefore, approximately 870,000 people, or two of every five jobs across the country, are being supported through the enterprise agencies.

Notwithstanding these impressive figures, the significant increases I secured in the Department’s capital allocations late last year and also for 2017 are recognition by the Government that we have more to do. We need to further accelerate regional development and, of course, to prime ourselves to face the challenges of Brexit and to be able adjust to the changing global foreign direct investment environment. Committee members will recall that the Department’s capital ceiling was also increased in December 2016 by an additional €45 million through a Supplementary Estimate that involved a total package of €60 million. This, combined with the increased 2017 capital provision, means that the allocations for the Department’s capital programmes have been increased by €97 million in recent months. The additional moneys I have secured will support the Government’s regional jobs plans, ensure the enterprise agencies will be sufficiently resourced to respond to Brexit and assist in competing in the changing global foreign direct investment environment.

I am pleased to be able to say that we have been able to increase virtually all of our capital programme funding lines this year. The primary changes include a €25 million, or 22%, increase in IDA Ireland's capital base from €112 million to €137 million. This additional funding will primarily be used by IDA Ireland to progress its regional property programme further. IDA Ireland is directly supporting more than 199,000 jobs across its client companies, which is the highest level ever following the creation of more than 11,000 additional net new jobs last year. Its enhanced capital resources this year will enable it to continue competing in the intensely competitive FDI arena, which is likely to change significantly as a result of Brexit and the new US Administration.

We have also increased the capital allocation in subhead A7 for Enterprise Ireland to €63 million, a €7 million - 12% - increase on the 2016 allocation. Enterprise Ireland's research and development allocation in subhead B4 is also being increased from €117.6 million last year to €122 million. Enterprise Ireland-supported companies directly employ more than 201,000 people in Ireland. This is also the highest level of jobs in the Enterprise Ireland client cohort, which collectively added in excess of 9,000 extra jobs last year. This means that Enterprise Ireland's clients are effectively adding 25 net new jobs everyday.

I will leave the points on local enterprise offices, LEOs, and innovation to my colleagues, the Ministers of State, Deputies Breen and Halligan, respectively.

Turning to our 2017 plans, as set out in the briefing material provided to committee members last week, enterprise supports are multi-annual in nature. Therefore, the primary focus and the challenge for the enterprise agencies this year is to replicate the excellent jobs results that have been delivered in recent years. In 2016, Enterprise Ireland, IDA Ireland and LEO clients collectively delivered more than 45,000 gross new jobs, or 24,600 net new jobs. The 2016 results follow on from a similar level of new jobs added by the enterprise agencies' clients in 2015, that figure being more than 25,500 net new jobs. More than 435,000 jobs in the economy are in companies directly supported by Enterprise Ireland, IDA Ireland and the LEOs. We are hopeful of breaking through the 450,000 jobs barrier by the end of this year.

Before concluding, I will briefly touch on the significant change in current expenditure, that is, the pay side of the Department's Estimate. This relates to the additional €3 million in Brexit-specific pay secured for 2017. Committee members will be aware that these additional moneys have been distributed across the pay allocations of IDA Ireland, Enterprise Ireland, Science Foundation Ireland, the Health and Safety Authority and the Department to assist in the recruitment of Brexit-specific staff. Such recruitment is ongoing, with the likely intake of 40 or 50 extra staff throughout this year.

Finally, there are two typos in the Department's briefing document to the committee that I would like to correct for the record. On page 21, in the second sentence of Part 2, the 2016 Revised Estimates Volume, REV, allocation should be €810.4 million, not €813.4 million. On page 50, table 17, the total capital spend for programme B – Innovation for the 2015–17 period should be €1.028 billion.

I will leave my comments there for the moment so that we can proceed to examine the respective programme expenditure areas.