Mr. John King:

Deputy Carey asked why some of the existing providers did not tender, what were the restrictive pieces around that and why we think that will play out even more significantly in tender two. We have told the Department that we believe, on the basis of current trajectory, that we are heading for a crash here. The result of that crash will not deliver for the service users or the staff and will result in significant job losses and redundancies.

I know, following extensive engagement with workers and individuals at chief executive level in some of these companies, that they do not have confidence that the proposed tendering process is going to work. The Department will say that they can all tender.

That is true, but the difficulty is they cannot tender because of the restrictive pieces around the tender, particularly financial. If you imagine somebody who has just recently been made unemployed and who goes into an Intreo office, if that person is highly skilled he or she is likely to be employed pretty quickly because they have got the skill set. A payment model based on getting that person a job might deliver finance. Following being in Intreo for a while, that person will then go to a private provider who will get a second opportunity. If that provider finds a job for the person, it will get a financial capacity. The LES and jobs clubs providers will get, for want of a better word, a third layer and they are the people most distanced from the market. They will be the clients and service users most in need of support to become employable. A financial model only based on giving State support when a person gets a job will not deliver the finances to make those companies sustainable. That is why they will not tender. We will have many areas that will not tender. We may have some areas that will tender but they will have to cut their cloth so significantly that the effect of the tendering will mean they will have to shed many jobs in many areas. Those are the significant pieces around why there are concerns about it.

Mr. Kane mentioned this situation will lead to a transfer of risk from a net cost basis to a payment model. What do we think will happen? Mr. Kane mentioned we are very close to the end of the year. The new model is supposed to be in place on 1 January next year. We think the Department should pause this process to allow significant time for the stakeholder engagement piece we mentioned so we can try to build confidence within the existing providers to be able to make sustainable tenders. It would be an absolute nightmare scenario if companies tendered, realised five or six months later that they were no longer sustainable and are forced to wind up. Apart from the fact people would be made redundant at that stage, large parts of the country would be abandoned and would have no employment services at all. We would like to use the time within a pausing of the process to design a system that works for the service user and the State, and allows for elements of private sector involvement, but protects that piece, which is an essential base for the community providervis-à-vis the local employment service and the jobs clubs.