Mr. Niall Egan:

I agree with Deputy Ó Cuív that we need to reach out in a comprehensive way to those who are very long-term unemployed and very distant from the labour market. The employment service we are building, particularly the regional employment services, will have that mechanism and feature. That model will be the best placed and have the highest skills set to help those individuals on their journey. As I said, that journey does and will involve progression into employment, education or employment support programmes, not only employment. That has been reflected in the regional employment service RFT.

Regarding the JobPath focus on those who are most likely to be placed, I accept the temptation is to see it that way but the contract we have with both JobPath providers, Turas Nua, which is a farm co-operative, and Seetec, which is an employee trust ownership structure, is very much that they must engage with every individual once every 20 days. We inspect that very carefully. One of the fears in contracting for public employment services is that people would cream and park, cream being to focus on those closest to the labour market in terms of getting them a job, and park being not engaging with those who are furthest from labour market. The providers are required to engage with all individuals once every 20 days. We carefully examine that as part of the management of the contracts.

It is not the case that the JobPath model,per se, has been dictated by an EU obligation. When the Department issued the tender for JobPath in 2014, we created an increase of burst capacity to deal with an extraordinary level of unemployment in the Irish labour market at the time. We were then able to focus and redistribute short-term unemployed individuals who were being dealt with by the Intreo service and that continues to be the case. Any individual who is long-term unemployed is sent to either JobPath, having been chosen randomly, or he or she can be referred to the local employment service or jobs clubs service. We are sending long-term unemployed people to those three separate providers which are contracted to provide an employment service. JobPath and the local employment service are essentially contracted to provide the same service, namely, 12 months of intensive employment service, support and advice.

When it comes to an EU obligation, from a legal perspective it is EU Directive 2014/14, which we will forward to the clerk to the committee, for the members' information. Essentially, it relates to the provision of that employment service. On the basis that we tendered for that in 2014, we are required to retender for all employment services on foot of the legal advice we have received to date.

Deputy Donnelly asked about the way we have listened to those involved and the way that can be manifested in the design of the RFT, which we published at the end of May. There are a few features in that contract. One of the key lessons we learned from our engagement with the sector was that when we went to market with JobPath we required successful tenders to have significant upfront capital. There is no such requirement in the phase 1 tender. The issue of cash flow was also raised as a major concern. We acknowledge the providers operate on a cost-met structure. They have a two-month float from the Department and operate on that basis. We gave a commitment in that respect to all representatives prior to publication. That is included in the RFT, but I acknowledge it has been overlooked and we need to strengthen it. We operate all our contracts on a reasonable basis. We are aware cash flow will be an issue for the new service provision. We are committed to providing upfront cash flow prior to referral starting for the new services.

We also considered the issue of lot sizes. If we were to adopt a cold and calculated approach at a remove from the service, we would have lot sizes that are on a national structure, more akin to the JobPath model of four to five lots. We are now considering lot sizes realistically nationwide for the regional employment service of around 20. We have taken that issue on board.

We also considered the issue of multi-annual contracts in the context of the existing model of annual contracts that did not offer certainty and flexibility from year to year. The multi-annual dimension has been included on foot of what we heard. The 23% of marks awarded for social value is also important.

In terms of costs, normally, from the Department’s perspective, when we procure, our procurement requirements are typically 40% or 45% of costs. In this procurement, our requirements were 25% of costs. That is exceptionally low by the Department's standards. In addition, because we want a high-quality employment service that we know will involve a significant cost, we introduced a minimum cost requirement based on the cost of the delivery of service. It narrows the cost implications very substantially between a minimum and a maximum. It reduces the cost requirement. That is to ensure we protect against low-cost bids and that the cost structure we receive from tenderers reflects the cost of the delivery. We are confident it does that based on the information we have.