Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I am pleased to have the opportunity this evening, together with my colleagues, the Ministers of State, Deputies Breen and Halligan, to say a few introductory words on my Department's 2018 Revised Estimates. My officials have already provided the committee with a detailed briefing on our 2018 Estimate, which I hope is of assistance to members. I propose to make some brief comments on our achievements in 2017 and the overall financial provision secured for our programmes in 2018 but I intend to focus my comments on programme A, which deals with jobs and enterprise development. The Minister of State, Deputy Halligan, will concentrate on programme B, dealing with innovation, and the Minister of State, Deputy Breen, will in the main deal with programme C, which pertains to regulation.

The total gross allocation for my Department, its offices and agencies in 2018 is €870.96 million. This represents an increase of more than €12 million, or 1.4%, over the 2017 allocation of €858.42 million, as per the 2017 Revised Estimates Volume, REV, published in December 2016. The 2018 allocation is made up of €555 million in capital funding and €315.96 million in current moneys. In terms of capital, the funding being provided in 2018 not only maintains the record capital allocation secured by my Department in the 2017 Revised Estimates Volume but increases it, albeit modestly, by €5 million. It must be borne in mind that the budget 2018 negotiations were conducted in a very constrained fiscal environment and improving our record 2017 allocation was, in itself, a notable achievement.

In comparing the Revised Estimates Volume 2017 allocations with the 2018 allocation, it may appear to the committee that they are on a par but the 2018 allocation is an increase of €5 million. This relates to the fact that in the Revised Estimates Volume of 2018, expenditure of €5 million under IDA Ireland's Winning Abroad programme was reclassified as current expenditure, whereas previously it had been classified as capital expenditure. While it is neutral in terms of the Department's overall allocation, this had the effect of reducing the capital ceiling by €5 million and increasing our current ceiling by €5 million. It will be seen, therefore, that the 2018 capital allocation of €555 million represents an increase of €5 million. The additional money, while modest, allows the Department to provide additional funding to its innovation programmes and, in particular, it will allow Science Foundation Ireland to increase the number of world-class research centres to 17.

The additional funding will also allow Ireland to take up membership of the European Southern Observatory in the course of 2018. The Minister of State, Deputy Halligan, will provide more details on these matters when we come to discuss programme B.

As regards current expenditure, the ceiling, as published in the Revised Estimates Volume, shows an apparent increase of €12.5 million over the allocation in the original 2017 REV. The 2018 ceiling of €315.96 million, however, includes the aforementioned reclassification of the Winning Abroad programme funding and additional pay and pension moneys arising from commitments under the Lansdowne Road agreement, as well as reflecting the funding reduction arising from the transfer of certain employment rights functions, including those relating to the Low Pay Commission, to the Department of Employment Affairs and Social Protection in the course of 2017. The net effect of the foregoing was that the Department secured an effective increase of €3 million in its current expenditure allocation for use in 2018. While modest, this increase will allow for the recruitment of an additional 40 to 50 staff across the Department and its agencies to meet the Brexit challenge. This brings the number of new Brexit-related staff posts to approximately 100 in the past two years, and demonstrates the determination of the Department to ensure that it, its offices and its agencies are sufficiently resourced to meet the Brexit challenge.

As for the financial matters, the committee will be aware that the Department was provided with a Supplementary Estimates package in 2017. The package, which was approved by the Oireachtas, enabled the Department to redistribute approximately €40 million in capital and current savings to other priority demands on the Vote. Specifically, the Supplementary Estimates package allowed the Department to contribute to the funding of the new Brexit loan scheme. The Department's contribution to this was €14 million. The remaining €26 million in saving allowed for €10.6 million to be provided to Science Foundation Ireland, SFI, to fund necessary research equipment associated with SFI research professorship awards. This brought SFI's capital investment in 2017 to over €173 million. Some €2.4 million was provided to the Tyndall National Institute to fund urgent infrastructure renewal requirements needed to ensure the institute can remain at the cutting edge of ICT research. Some €12 million was spent to accelerate the repayments on the State's commitments under the programme for research in third level institutions. Finally, €1 million was provided through the Supplementary Estimate to the European Space Agency to increase Ireland's contribution to the advanced research in telecommunications systems programme.

The additional €26 million provided to the Department's various innovation programmes through the Supplementary Estimate brings to almost €105 million the total additional capital secured for the innovation budget since December 2015. This is in recognition of how important innovation is in underpinning our future jobs capacity. It is a cornerstone of our overall economic development policy. The Minister of State, Deputy Halligan, will be happy to provide more details on this additional innovation funding.

Before turning to 2018, it may be helpful to the committee to look at what was achieved in 2017. In terms of jobs, 2.2 million are now employed. That figure represents the highest level in almost a decade, as per the fourth quarter data from the Central Statistics Office, CSO. The unemployment rate now stands at 6%, as per the CSO report of February 2018. Again, this is the lowest level for some time. The agencies of my Department continue to play a key role in job creation. In 2017 the enterprise agencies delivered more than 46,000 new jobs in gross terms, which resulted in a net increase of more than 24,700 new jobs. This is on a par with the number of net new jobs delivered in 2016. By the end of 2017 the total number of jobs being supported by the Department's agencies, including Enterprise Ireland, IDA and local enterprise offices, exceeded 455,000. Applying the multiplier effect, a similar number of jobs are indirectly supported in services. Effectively, approximately 900,000 jobs, or 40% of all jobs in the economy, are being supported directly or indirectly by my Department and its agencies. That is a fairly remarkable figure.

Notwithstanding this progress, it is important that the improvement in employment levels is felt across all regions in the country. The committee will be aware that one of the principle objectives of the regional action plan for jobs initiative is to have a further 10% to 15% at work in each region by 2020, with the aim of having the unemployment rate of each region within 1% of the national average. The success of the regional action plan for jobs has been crucial to the Government in meeting the ambition of creating an additional 200,000 jobs, 135,000 of which will be outside the Dublin region by 2020. Progress across the eight regions has been very positive since the launch of the initiative in early 2015, with implementation rates for actions in excess of 90% for each region. The eight current plans cover the 2015 to 2017 period, and each regional implementation committee is currently preparing its final or fourth progress report, which will conclude the current process. Collaboration between the private and public sector has been a core element in the development of each plan, and will be central to delivery. Based on the current data, all regions are on target to meet or exceed the job targets to be delivered by 2020.

The Department's enterprise agencies are making a significant contribution to the implementation of each of the regional action plans. Two thirds, or 64%, of new Enterprise Ireland jobs created in 2017 were outside of Dublin, while 45% of new jobs created by IDA firms in 2017 were outside of Dublin. Unemployment is decreasing in all the regions and given the strong progress that has been made, the potential to adopt a more strategic approach exists. It is proposed that the regional action plans be refreshed and refocused in order that they remain active for a further two-year period to 2020. An impact assessment of the regional action plans will be undertaken to inform and refresh the process.

Brexit clearly continues to be a primary focus for my Department, its offices and agencies in 2018. My Department's response to the Brexit challenge is based on four specific pillars, namely, helping firms to compete, enabling firms to innovate, supporting firms to trade and negotiating for the best possible outcome. My Department has initiated a suite of initiatives to progress each of these pillars, which I am happy to outline in more detail to the committee. Some of the headline initiatives spearheaded by my Department include a new €300 million Brexit loan scheme to assist businesses to meet the Brexit challenge; a further increase of 50 specific Brexit-related staff across the Department and its agencies, thereby doubling the number of additional Brexit-related staff to approximately 100 in the last two years; the roll-out of the €60 million Enterprise Ireland regional enterprise development fund and a second call for proposals and funding of €30 million in the first quarter of 2018; a tax package to support enterprise and investment to attract jobs to the regions; investment in PhD and research masters programmes to meet enterprise skills needs; an increase in SFI research centres from 12 to 17, with new capital funding; and enhanced programmes of Minister-led trade missions and bilateral visits to deepen existing trade and investment relationships and to forge new linkages across a range of markets.

As regards the enterprise agencies themselves, their 2017 record capital allocations have been maintained in 2018 and will be key in continuing the progress in achieving balanced regional development and responding to the challenges of Brexit. Specifically, the funding provided to the IDA will enable the authority to continue the roll-out of its regional property programme, to complete advanced buildings in Galway, Athlone, Dundalk and Limerick and to progress the design of similar buildings in Waterford and Carlow with a view to completion in 2019. The IDA will also continue to progress the delivery of its investment in job creation targets as it sets out its five-year strategy, "Winning: Foreign Direct Investment 2015-2019". The strategy targets the creation of 80,000 new jobs and a 30% to 40% increase in investment in each region by 2019. By the end of 2018 the level of employment in IDA-supported clients should grow well beyond 210,000 jobs. In 2018, the IDA will specifically target the creation of 7,000 new net jobs and the delivery of 185 new foreign direct investment, FDI, projects.

The focus of Enterprise Ireland in 2018 will be to continue to grow and maintain jobs in the face of Brexit. Specifically, it will extend its competitive start fund, CSF, programme, and intends to run a further nine CSF calls in 2018. Enterprise Ireland has targeted the creation of 15,000 gross new jobs in 2018. It intends to support 180 new and early stage companies and will support clients in concluding up to 1,400 new contracts overseas in 2018. In addition to its existing Brexit responses, such as the Brexit scorecard and the be prepared grant, Enterprise Ireland will roll out its Act On programme to assist companies to decide on specific actions over a short period to address some of the risks and opportunities from Brexit. Enterprise Ireland will also work with companies to support their export reach and deepen their presence in eurozone markets.

It has set ambitious targets to increase exports to the eurozone by €2 billion - 50% per annum - by 2020. This will involve Enterprise Ireland partnering with eurozone start and eurozone scale clients and working with them on the export journey, market opportunity awareness, research and capability assessment, product localisation, market entry and market growth.

The Minister of State, Deputy Breen, will provide more detailed information to the committee on local enterprise offices, LEOs, and their performance and plans for 2018. The LEOs are fully committed to continuing their remarkable progress of job creation right across the country. In 2017, they delivered an average of ten net new jobs each day. They will continue to be a key resource for regional job creation in 2018.

I will say a few words about the national development plan and my Department's responsibility in implementing the employment and innovation objectives relating to it. Project Ireland 2040 is the overarching policy and planning framework for the social, economic and cultural development of the country. Its foundation is the national planning framework and it includes a detailed investment plan for the period 2018 to 2027. Project Ireland 2040, in highlighting the employment challenge, has identified the likely need to create in excess of 660,000 additional jobs in the period up to 2040. One of the specific strategic outcomes identified in Project Ireland 2040 is a strong economy supported by enterprise, innovation and skills. My Department, together with its enterprise agencies, has a key role in delivering this strategic outcome. The national development plan, which sets out the configuration for public capital investment over the period 2018 to 2027, is the key vehicle for driving the implementation of Project Ireland 2040. The national development plan details the various investment priority projects and programmes which will be delivered or commenced by 2021 as well as those that will be prioritised between now and 2027. The national development plan has identified over 16 specific priority investments, the delivery of which will be the prime responsibility of my Department. These cover a variety of areas including regional investment initiatives, innovation initiatives, property investment initiatives, entrepreneur promotion initiatives and regional collaboration initiatives. The national development plan commits a total of almost €116 billion of capital funding over the lifetime of the plan to underpin the implementation of the strategic national objectives of the national planning framework. In so far as the capital funding for my Department is concerned, the plan commits a total of €3.16 billion for capital priority projects over the first five years of the plan out to 2022. Under the plan, our capital ceiling will increase from €555 million in 2018 to €715 million in 2022. That is an increase of over 28%. My firm focus is to ensure that we utilise this additional funding to deliver the aforementioned priority investment projects within the timescale envisaged in the plan. In this regard, progress has already commenced on a number of the projects or will be commenced shortly.

I will leave my comments there for the moment. I am happy to take any questions on programme A before we proceed to the other expenditure programmes under the Vote.