Oireachtas Joint and Select Committees
Tuesday, 9 July 2013
Joint Oireachtas Committee on Jobs, Enterprise and Innovation
Action Plan for Jobs 2013: Discussion with Minister for Jobs, Enterprise and Innovation
Apologies have been received from Deputy Áine Collins.
I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, and his officials to review the Action Plan for Jobs 2013. By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.
We will try to finish between 3 p.m. and 3.30 p.m., although I know we have many issues to go through. I ask the Minister to make his presentation which will be followed by a question and answer session.
I thank the Chairman. I will, however, try to keep to five minutes.
This discussion is, in a sense, very timely. I met the committee in February after we had just published the Action Plan for Jobs 2013. As we are now starting the process of engaging in consultation on the plan for 2014, it is timely to meet the committee.
I do not need to remind members of the action plan, but its concept is twofold. First, it tries to mobilise all Departments in the task of creating employment. Second, quarterly reporting means we harvest whatever is put forward. There is a strong sense of meeting these targets on time, which shows that we are delivering on the priority we have ascribed to the plan. By and large, the system has responded very well. A figure of over 90% has been delivered in all quarters in which we sought to deliver. Some things have proved more difficult, but most of them, though not all, are connected with the legislative process. It can be difficult to get the timing right for legislation; even with ambitions, one cannot have the desired timing.
Since February a number of things have happened that are worth recording. As the committee will know, the research prioritisation exercise seeks to identify key business areas and is within the remit of the Minister of State, Deputy Sean Sherlock. On the back of that scheme, we announced funding for seven Science Foundation Ireland research centres a couple of months back. They will be larger than in the past and there will be much more collaboration across the higher education institutes. Most importantly, they are characterised by industrial funding to a level of 30% which is designed to ensure their work is relevant. We will continue to build centres of excellence and full details are available. They are in areas in which Ireland has an edge and include a data analytical centre; a perinatal centre, one of our very specific centres of excellence; and one in the pharmaceutical sector in which we also have a very strong track record. The centres focus on areas where we have opportunities.
The committee will be interested to know that we launched our first local enterprise office in Fingal and that work is ongoing. As members will know, local enterprise offices will offer a first-stop-shop to enterprises. They will also develop centres of excellence, in place within Enterprise Ireland; develop policy for small and micro start-ups and tap into the local authorities, the most fundamental influence in terms of business opportunities in a local context. That is the ambition and the programme is being rolled out.
It is worth noting that the National Pensions Reserve Fund has moved very strongly to fund SMEs, with €850 million available to bring in partners. We are beginning to build a spectrum of SME funding options. The total is €2.5 billion for micro finance, loan guarantees, development capital, seed and venture capital and the new NPRF funding which includes equity and restructure finance. We are beginning to see the emergence of a stable of SME options. As the committee will know, access to finance remains challenging and needs continuing work.
We have published the manufacturing strategy and 2014 will be characterised by how we decide to take on that issue. We have introduced a number of innovations this year and I shall outline one of them. A number of industrial partners are providing assistance, particularly in the roll-out of the seven disruptive reforms. Their influence has been helpful and acted as a catalyst in bringing in partners to help the system to respond with greater ambition and a greater sense of combined purpose with industry.
Yesterday we published the JobsPlus initiative in response to complaints from businesses about the lack of cash up-front in some of the existing schemes. For example, if one recruits a person who is out of work for over 12 months from the live register, one gets cash up-front, which is paid monthly in arrears. It is €72 per week for a person who is out of work for one year which increases towards €100 per week for someone who is out of work for two years. Cash in hand helps cash flow and we hope the scheme will prove attractive.
Last week Forfás published positive employment figures for IDA Ireland and Enterprise Ireland companies. It confirmed that there were 9,600 additional people working. It also confirmed growth in a broad range of sectors and regions. On the export oriented side, there is a good spread. The CSO's quarterly national household survey of employment has confirmed these trends and that the number employed has increased by 20,000 in the last quarter, of whom around 10,000 are in export oriented sectors. That proves building export oriented sectors has a knock-on effect on the wider domestic economy.
We have tried to incorporate the committee's reports on unemployment, in particular youth unemployment, into our policy. However, many of the reports refer more to the sectors within the remit of the Minister for Social Protection and the Minister for Education and Science rather than my own. The apprenticeship review is under way and I hope it will lead to changes. We are examining the possibility of including social clauses in Government contracts to give preference giving work to unemployed persons. An interdepartmental group is examining how to assist the retail sector which I know has been a source of concern for the committee.
One of the committee's reports was on skills in the ICT sector. We have done some follow-up work on that sector in terms of rolling out additional personnel with these skills and making the permits system easier to use.
The committee has also raised the issue of mentoring. We are looking afresh at mentoring now that we have brought the local enterprise offices and Enterprise Ireland under the same umbrella. We shall try to co-ordinate mentoring activities more effectively to give a better service, provide specialists and so on. We have commenced work in that regard.
We have also appointed a group to examine the issue of entrepreneurship under the chairmanship of Mr. Sean O'Sullivan. It will examine whether we can do more. Recent numbers show there has been a decline in the number of start-ups, which clearly reflects the economic climate. However, we have seen continuing growth in some segments. We, therefore, need to take a fresh look at the issue of entrepreneurship to see if we can do more. The group will report in the short timeframe of a maximum of three or four months.
A consultative phase will commence shortly and we are keen to receive submissions from the committee or individual members.
I welcome the Minister and his officials. I apologise in advance as I will have to leave early. As this is the first time the Minister has met the committee since the conclusion of the EU Presidency, I compliment him and all of the officials on their accomplished work. His Department probably had to shoulder the greatest burden during the Presidency. We can measure the outcomes on another day. A massive personal effort was made by the Minister, his ministerial colleagues and all of the officials involved. They deserve full credit for their work.
I wish to discuss the Action Plan for Jobs. It is a little like Santa Claus; one wants to believe, but all the evidence suggests he is not real. I will outline a few issues, one of which is a bugbear of mine. I tabled a jobs-related parliamentary question to the Minister, asking him what actions were taken at EU-wide level to assist young people in obtaining employment; the way the measures would translate here; and if he would make a statement on the matter. However, my question was transferred to the Minister for Social Protection. Perhaps the first disruptive reform should involve somebody taking charge. The Minister for Social Protection may answer the question but only on the basis of social protection measures. This is an ongoing issue. For example, a question on SME finance is automatically forwarded to the Department of Finance, which means that it is very difficult, bar at these sessions, to get direct answers on various issues.
Can we try to resolve something over the summer break in order that there will be a central way of answering jobs-related questions instead of trying to work out which Minister is in charge of job creation for those under 25 years? Presumably, if one is under 25 years, one's future is a concern of the Department of Social Protection, while for the over-25s, it is a concern of the Department of Jobs, Enterprise and Innovation.
With regard to structural reforms, the partners the Minister has involved in rolling out reforms are excellent. Will he give us an indication of where they are at, what they have achieved and the backup they receive? He mentioned funding options for SMEs, a key part of the Action Plan for Jobs. Will he outline where we are on the microfinance and credit guarantee schemes? Concerns have been expressed about the pricing of both schemes and the relatively low take-up.
On the retail side, the Minister mentioned that an interdepartmental committee had been appointed. Have terms of reference been agreed to? I hope it will be looking at the issue of multiples using their powers. Last week saw reports in the newspapers on a major multiple challenging the industry to support its marketing budgets. Legislation is due from the Department in respect of multiples and the retail sector. Where are we in that regard?
Will the Minister confirm that JobsPlus is an initiative of the Department of Jobs, Enterprise and Innovation or the Department of Social Protection? In that context, there are 2,400 places available, which makes it sounds like a great scheme. What sense is there that places will be filled by December? Has there been any interaction on a JobsPlus budget for next year? We had the big launch in Waterford yesterday. Will there be a roll-out of JobsPlus around the country? That has been the big issue in respect of the credit guarantee and microfinance schemes. They were announced and then parked as if they were the world's best kept secrets. What marketing roll-out will there be on JobsPlus? Will people with the capacity to create jobs be targeted? We need business to business marketing. Businesses need to be told about it rather than engaging in general advertising that will not reach home. Will the Minister work with the Companies Registration Office? It could mail its clients. The Revenue Commissioners could also be involved. The business community needs to know about the scheme if it is to work. As JobsPlus is not an initiative of the Department of Jobs, Enterprise and Innovation, the Minister may not be able to answer this point.
The Minister has staked much of his personal credibility on the export sector. He is redefining the economy and job creation. Figures for the last quarter show a halt in export related jobs and there are issues concerning the patent cliff. We have oral questions tomorrow, but what are we doing specifically about the patent cliff, given the impact the expiry of patents can have on our export markets? The Science Foundation Ireland initiatives are welcome. What work is the Minister doing with companies to try to address the issue as a matter of urgency?
Gabhaim buíochas leis an Aire mar gheall ar a chuid cur i láthair. We are approaching the halfway point of the Government's term. Job creation is the biggest issue and was the biggest issue in the 2011 general election and the fiscal treaty referendum. The Government promised 100,000 additional new jobs by 2016. The household survey figures for the first quarter of 2013 and the first quarter of 2011, when the Government took office, show that the labour force has shrunk by 11,000 people, that the number in employment has increased by 3,800, that the number of full-time jobs has decreased by 10,700, that the number of part-time jobs has increased by 14,400 and that the level of under-employment has increased by 30,000. There is an increase of 3,800 jobs and the vast majority, according to the household survey figures for the past two years, are part-time jobs. The budget of the Department shows that each of the 3,800 jobs cost €442,350. This can be seen as an exaggeration because the money was not spent across all of the labour market, but the level of job creation in the past two years, given the priority accorded it was meant to receive, is phenomenally poor. This has a direct effect on every household in the State. Some 150 jobs have been created on a monthly basis since the Government came to power. Therefore, the chances of obtaining the figure of 100,000 net new jobs by 2016 are very slim, if not near impossible. Does the Minister agree that it is time to redefine achievable targets and jettison the 100,000 jobs target outlined initially?
There is lovely rhetoric on procurement in the detail of the document, but the Small Firms Association was in Leinster House last week and very clear on the message that "New Government buying policies have the potential to eliminate small businesses from the tendering process, resulting in business closures, job losses, regional imbalance and ultimately less competition in the marketplace". The OPW is not within the remit of the Minister, but the Small Firms Association cited it as not having job creation on its radar and not considering it as an issue. We can see procurement contracts being continually rolled up such that it is made more difficult for small businesses to tender for them.
A considerable amount of legislation identified in the 2012 action plan has not been completed. There are delays in Bills dealing with legal services, workplace relations, the introduction of local enterprise offices, LEOs, companies, competition and consumers. These are under the control of the Department and were highlighted in the 2012 action plan. They have not been dealt with.
In the Action Plan for Jobs there is a 50% target for foreign direct investment outside Cork and Dublin. The 2013 document does not mention this target, but IDA Ireland still uses it. There is real concern in the regions that jobs are not being attracted there. There are several figures showing that Meath and other counties do not receive IDA Ireland visits, never mind having the opportunity to attract companies to local areas. I also want to deal with micro-enterprise and other issues later.
I thank Deputy Dara Calleary for his compliments to the staff of the Department. A superhuman effort was made across all areas. There was Horizon 2020, a trade deal and accountancy directives. Many people who stayed at home had to take up the slack to keep the ordinary work going. It was a major effort and I thank the Deputy for his comments.
While the Action Plan for Jobs seeks to harness the entire Government to focus on employment creation, that does not mean that I am responsible in the House for questions in areas that fall outside my remit. I can understand the Deputy's frustration, but EU youth employment measures, with funds of €6 to €8 billion, will virtually all be covered in interventions by the Department of Social Protection and the Department of Education and Skills. That is the way it is structured, with ESF money, and it is not within the arena of the Department of Jobs, Enterprise and Innovation. Therefore, I am not answerable for it. Clearly, we seek to give an enterprise view of what is relevant through the high level group on skills needs and seek, through this process, to ensure opportunities are available.
No doubt much of it will be used to fund Momentum, Springboard and JobBridge. They must be associated with enterprises which are capable of growing. That is where we have a common purpose.
The Deputy raised the issue of the multiples. That is part of the consumer legislation on which we are continuing to work. We hope to publish it this month, but getting through the legislative process is challenging. The Deputy is right that the test of the success of JobsPlus will be in its roll-out. As we did last year for Government schemes, we will use the CRO, our own enterprise offices and every channel at our disposal to promote not only this scheme but others which are very relevant to business, whether to access finance which the Deputy rightly recognised, seed capital, tax breaks and so on. We will produce promotional material to be used online. This year we will have the one-stop-shop process through the local enterprise offices.
The Deputy is right that the last quarter export numbers were somewhat surprising. A lot of things are happening. As the Deputy rightly said, some products are coming off patent which will impact on the value of the trade. Some of our trading partners have been in real difficulty, but the underlying employment numbers in these sectors have been pretty solid. We need to see a little-----
I was coming to that. We have definitely done a lot of work. As job numbers in the pharmaceutical sector have been stable, there has been no impact on employment. Part of that is due to the fact that IDA Ireland is looking at new opportunities in the bio-pharmaceutical and other sectors. While we are inevitably losing jobs in some sectors, we are expanding elsewhere. As the Deputy acknowledged, we have established the Synthesis and Solid State Pharmaceutical Centre in the University of Limerick as the nucleus. It is a €40 million investment, 30% of which has come from industry. All of the large pharmaceutical companies are involved. We are assisting, through IDA Ireland, normal transformation supports but also this special research centre to try to assist companies to reposition. There are opportunities in this sector, with the convergence of IT and pharmaceuticals, and the trick is to try to stay ahead of these trends. Employment levels actually grew in this sector, despite the patent cliff problems. It is encouraging that the strategy is working.
Deputy Peadar Tóibín's portrayal of what was happening was a little unfair. I know there is an element of political presentation, but if one is coming from an economy losing jobs at a rate of 90,000 per year, one is not going to suddenly see a surge into the positive zone. Seeing 20,000 net extra people at work in the past 12 months is an encouraging sign and it certainly does not dispose me to change our target of 100,000 by the end of 2016. That remains our target and we should continue to work towards it.
The Deputy is right that the national quarterly household survey figures showed that a large proportion of the new jobs created were part-time, but, interestingly, in the last two quarters alone there has been growth in the full-time dimension. The other interesting piece of evidence is that if one looks only at the October numbers for the agencies, the full-time work figures completely dominated the part-time work figures. The agencies' October numbers showed that of the new jobs created - roughly 9,600 - only 700 were part-time, which means that the vast majority of the additional jobs were full-time. We are seeing a pattern as we come out of the recession where initially there was only part-time employment available. I hope the indications are that more of the jobs will be full time. In terms of agency-supported employment which is predominantly export driven, it is encouraging to see the very high proportion of full-time jobs in its portfolio of companies. Clearly, this is an issue. There are patterns of part-time working with which one would not be happy, but there is also legitimate expansion whereby people start off in part-time jobs.
I refer to one of the exciting things about JobsPlus. A large number of sectors are moving into the plus zone where they are actually expanding employment across a range of operations. This is a good time to introduce a simplified measure to help people to take employees off the long-term unemployment lists. There are conditions in that one must be working 30 hours and at least four days a week. The Government incentives which we are putting in place are very much geared towards creating full-time employment rather than part-time employment.
I accept the point made about procurement. There is a dilemma. When one has to consolidate public spending and if one can purchase more efficiently, it saves cutting staff, front-line services or raising taxes. Naturally, a forensic look at public procurement must be part of any fiscal correction. We have been trying to ensure that while we must get value from public procurement, we do not put obstacles in the way of SMEs. The new national procurement officer has been promoted and he is seeking to ensure SME access. The Department of Finance has rules about tendering such that one does not bundle packages of work such that SMEs cannot possibly tender for them and one does not have unnecessarily high thresholds for insurance requirements. That has been included in the criteria for tendering.
We also have a number of very successful programmes whereby Enterprise Ireland is working with the procurement service and InterTradeIreland. In terms of value for money, InterTradeIreland's initiative on public procurement is showing the best performance of any of its programmes in terms of the return to business. There are opportunities for SMEs if they participate in some of these programmes to access funding. Yesterday we were in Waterford and the head of the county enterprise board, soon to be a local enterprise office, pointed out that it published in an e-zine. All of the electronic tenders are put to a rake of businesses in the area and from its monitoring, many of them are not opened. Many businesses do not think about public procurement as an opportunity. We are, therefore, trying to work with companies to open up access. Later in the week we will meet the new procurement officer to outline some of the concerns raised with the Deputy and which are continually raised with us. One of the things we are obviously keen to see is more innovative procurement - in other words, one would tender to solve a problem rather than putting out a tender involving large quantities and materials. That gives small businesses a much better chance.
I accept that the legislative programme is behind schedule. We have not been able to meet all of our deadlines. Much of this has been due to the fact that troika work had precedence. Last year we fast-tracked our competition legislation to meets its requirements on penalties and so on, of which Deputies were critical. That pushed everything out of the way. There are problems in getting things through, but we are working really well and have better arrangements in place with the Office of the Attorney General. I hope that as a result we will be able to improve the flow.
The credit guarantee scheme is showing an improved take-up. On 5 July the figure was €6.5 million; therefore, it is up considerably. There are 49 live cases. Between the two schemes, 414 jobs were created or maintained.
In the case of microfinance, the loan value is €1.3 million, which figure relates to 79 microenterprises and the approval rate is 45%. They are beginning to gain traction and we are continuing to promote them. We recently had meetings with one of the banks. We will meet all of them to make sure those who are refused loans are alerted to this programme at the point of refusal, which is the critical point. Approximately 24,000 small businesses have been refused loans. If we can get one quarter of these to apply for microfinance, we will believe we are accessing our target group. We are trying to secure better arrangements with the banks in order that people will be alerted.
The final issue raised by the Deputy was the question of regional spread. To be fair, the regional spread in the Enterprise Ireland and Forfás figures is not bad, even if it is not ideal. Just one region did not see an expansion in employment. Most of the regions outside Dublin saw increases of 5,600, 5,800 and 1,200. If I had my calculator, I could give the Deputy all of the figures which are in the public domain. We are seeing a spread. The Deputy will be aware that the foreign direct investment projects we are winning are increasingly focused on the deep labour and skills pools found in the cities. That is a feature of the profile of the projects we are winning. We are trying to expand this, for example, by placing an emphasis on emerging companies and developing the Connect Ireland programme. We are trying to put new tools in the field to attract foreign direct investment that is less likely to need to be based in large urban centres. That work is ongoing.
The reforms are proceeding. On data reform, we have established the new Insight Centre which involves 250 researchers across four colleges and 45 companies and is now operational. The Health Innovation Hub is progressing well. Six companies are already involved in a pilot project. We are evaluating how we can extend this initiative across the country. Obviously, the JobsPlus scheme was launched yesterday. We have done some pilot scheme work on how we can get more people to trade online. Two pilot schemes have examined on how best to do this. Facebook, PayPal and Google, representing the social media, payment and advertising sectors, were involved in a scheme conducted under the auspices of the Dublin Chamber of Commerce and another model is being developed by the software society. There is a couple of models. We are now looking at how best we can shape an innovation voucher that will support best practice in this field. Good progress is being made in that regard.
The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, recently established a €70 million energy fund, with €35 million coming from the Government's funds and matching funds coming from the private sector. That fund is now up and running and those involved are identifying pilot projects in the public and private sectors that can be funded. A fresh crop of skills initiatives is being advanced under Springboard. We will meet officials in the Department of Education and Skills next week to examine how further initiatives in this area can be pursued. SOLAS which will have a new mandate is being established. It represents a great opportunity to develop ICT and wider skills. An apprenticeship review is also being carried out and we intend to bring new legislation on work permits to the House. In line with the report put together by Senator Deirdre Clune, the legislation is designed to make it easier for people who are legitimate to access those needed to meet skills shortages when such workers cannot be sourced in Ireland. We are moving in all of these areas and I think we can report progress. As I have said, the addition of a private sector partner has caused us to think outside the box in each of these areas.
If Deputy Anthony Lawlor and Senator Feargal Quinn do not mind, I propose to allow Senator Mary M. White to ask a quick question at this point because she needs to head off. She has agreed to ask just one question.
Go raibh míle maith agat. The Minister is doing his very best and giving this 100%. I congratulate him on his personal efforts. I would like to ask about the legislation on local enterprise offices. Are we still going ahead with the proposal regarding such offices?
It will be before the Dáil in the autumn and we are working to try to complete it. I think we are getting towards the stamped copy. We are close to the end.
I thank the Minister for coming to the meeting. He is always welcome here. I congratulate him on the success of the EU Presidency.
The Minister has mentioned that the Action Plan for Jobs relates to a number of Departments. Which of them is the lead Department in this regard?
The Leader programme, a significant source of funding for start-up companies and businesses in rural areas, is run by the Department of the Environment, Community and Local Government and the Department of Agriculture, Food and the Marine comes into it also.
The aim of the JobsPlus scheme which was launched yesterday and the Pathways to Work scheme is to get young people back to work. As Deputy Dara Calleary said, the Department of Social Protection is responsible for these schemes. I want to find out what is the lead authority. What Department looks after the questions asked about this matter?
I appreciate that the Minister is not directly responsible for the JobsPlus scheme. As it focuses on people who have been unemployed for longer periods of time, it could be said to discriminate against people who receive short-term contracts of two or three months before going back to square one and trying to find employment once more. When one examines the figures, one finds that even when there was full employment, almost 60,000 people were deemed to be long-term unemployed. Such persons are being given more opportunities than those who take up short-term work and then have to go to the back of the queue. It seems unfair that employers who are trying to maximise the amount of money they receive from the Department are being asked to take on those who have been out of the workforce for a longer period of time, rather than those who have managed to find some short-term work. Perhaps something might be done in that regard.
As I mentioned to the Minister previously, many small and medium-sized enterprises are caught in a gap - they are too big to receive microfinance and too small to avail of some of the larger financial packages available. Most of them encounter short-term cash flow problems that last a couple of months. I ask that something be done to assist them.
I welcome today's announcement that the growth figure for the UK economy, one of our biggest trading partners, has been revised upwards to 0.9%. I have also noticed figures which suggest the level of unemployment among women has remained fairly static in the past year, whereas the level among men has dropped. Some will say they are all leaving the country, but that is not true. There has been a dramatic drop in the level of male unemployment, but the level of female unemployment seems to be remaining static. Can we do something to encourage more females who are unemployed back into the workforce? Perhaps we might take the same approach to the entrepreneurial fund that we took in the case of youth employment when we provided for a young person's bonus. We might look at what we can do to support females who want to come forward.
I welcome the Minister. It is interesting to hear about the range of targets he is setting for himself. I am concerned that in recent years we seem to have lost the belief people should create their own jobs. Perhaps we never had it. People seem to wonder about what the Government or somebody else will do to create jobs for them.
The task of the Government is to encourage entrepreneurship. I was delighted to hear Mr. Sean O'Sullivan had been chosen as chairman of the forum on start-ups for entrepreneurs. If we are to succeed in this area, we must ensure it is made more attractive to start, set up, develop, make profitable and expand businesses. We are not doing nearly enough in that regard, although we are doing a lot to create jobs. I continually hear people ask what the Government or somebody else is going to do, rather than thinking about what they can do themselves. The two sectors I consider targets for a fast response in this regard are retail and tourism, on both of which the Minister touched. I see huge opportunities for the use of the Internet in the retail sector. Young people seem to be able to grasp this early. I would love to see an attitude change and for people to realise that not all jobs will be created by somebody else, that sometimes we must create them ourselves. I am sure that with Mr. O'Sullivan as chairman of the forum on start-ups for entrepreneurs we will not lose sight of this. Too many people sit back and ask what more they can do to find work once they have written an application. However, large numbers around the country are setting up small enterprises that they are growing and developing. They may only employ one or two people now, but that is how every big business started.
Deputy Anthony Lawlor raised the same issue as Deputy Dara Calleary. What we are trying to do with the Action Plan for Jobs is to work across the silos, but the fact that we are engaging in co-ordination across them does not mean that we are in charge of the respective programmes. What we are trying to do is something a little different. Therefore, if members want to raise questions about Leader or social protection schemes, it is not my Department that is answerable. What we do is try to ensure we work in a collaborative way. This is particularly true in areas such as the disruptive reforms, where there must be cross-government participation in order to deliver them successfully. I understand people would like to be able to direct their questions relating to various Departments to one Minister, but that is not what we are trying to do. We are trying to promote collaboration and are having some success in that regard.
The only type of work excluded by JobsPlus is seasonal work such as when an employer takes on a person to do a job that is not intended to be long term. The intention must be that the job offered is one in which the person can remain. However, employers will not be penalised if the job only lasts three months.
JobsPlus will not allow an employer to rotate through a number of people. If an employer creates a job and finds an employee through the scheme, he or she will not then be able to let that person go and replace him or her with somebody else through the scheme. There will be no incentive to do this. The issue of who the employer selects-----
Yes, but it comes down to the probability of a person leaving the live register. Last year some 140,000 left the live register. Of these, 120,000 were unemployed for less than 12 months and only 20,000 for over 12 months. Looking at the percentages, the chance of finding a job if one is long-term unemployed is only one in nine, but if one is unemployed for only a short time, it is quite high, at 66%.
What we are saying through the scheme is that we need to give people a chance who otherwise could drift into being long-term unemployed and become detached from the workplace. What we need to do is bring them back into the workforce. Whether they have spent the past 12 months on FÁS courses or participating in JobBridge or community employment schemes, we want to use this programme to get as many of them as possible who are now 12 months or more out of work back into the jobs market. The scheme has been deliberately targeted at them. It is not just a subsidy for an employer to recruit an employee, it also seeks to help a disadvantaged group. Many of the programmes involve people who are coming off JobBridge, community employment or FÁS courses; therefore, significant preparatory work has been done in preparing them for the jobs market. With good matching between the new Intreo offices and employers, we can deliver on this commitment.
The Deputy correctly identified a problem in the SME sector, namely, the difficulty in accessing funding for cash flow for larger companies. We are undertaking a review of the loan guarantee scheme to examine whether some of the conditions are too restrictive. This seems to be an area in which there is a gap in funding, at which we will look as part of the review. If the Deputy has experience with regard to specific companies, we would like to work on it. He has already referred one company to me.
On the trend in unemployment as regards women versus men, in the early part of the recession the level of male employment was hugely higher. The rate for men is still much higher than for women. The first dislocation of people from the construction sector had a massive impact. Many of the long-term unemployed are male. Therefore, it is encouraging to see an improvement. I agree that there are probably new areas with untapped opportunities to promote entrepreneurship among women. Last year we allocated €750,000, in two tranches, for competitive start-ups by women. This was massively over-subscribed and a very successful programme. It is encouraging in the number of people starting up businesses this year that the number involving women has risen. The signs are that women are beginning to become more actively involved in entrepreneurship. We are also looking at the suggestion of dedicating part of the initiative headed by Mr. Sean O'Sullivan for young entrepreneurs.
On the point made by Senator Feargal Quinn, the decline in entrepreneurship in Ireland can be traced to the economic circumstances. Retail and consumer-led sectors were certainly hit by the recession, while export-targeted sectors held up better. High-potential start-ups are doing well, as is the competitive sector, such as companies starting up in applications. When I meet European colleagues, I understand we have a better environment to develop these areas. We have tax relief which allows a person to put six years of PAYE tax payments into his or her company. This concession is not generally available in other countries. Enterprise Ireland's seed and venture funding scheme is far more developed than that in any comparative agency in the rest of Europe. We now also have microfinance. However, I agree that we are still not tapping this space enough and that is the reason we are looking for new ideas. Perhaps we might promote these opportunities better in order that people will be more aware of them and look out for specific groups on which we have missed out.
One enterprise on which we are working is the high-skill start-up. Some of our research and innovation budget is going to centres that promote spin-out.
We have about ten spin-out companies per year from SFI type work, at the high end of technology, as opposed to the retail end of tourism. These companies also spin out licensed technologies.
As the seed capital schemes apply to all sectors since November 2012, the retail and tourism sectors are no longer excluded. As they used only to apply to manufacturing and internationally traded services, it is a boost for people involved in these sectors.
I thought two committee members, in their remarks at the beginning of the meeting, were overly critical of the Government's performance in the past couple of years, as if we had inherited a normal economy in normal times. It is important to remember the context. This country had lost its credibility on the international stage and it has been an extraordinary task to reinstate and win it back. We have to keep that context in mind.
What I identify with the Minister are his energy, commitment and dedication to the high end of the economy. The ideas, techniques, technology and vision are almost iconoclastic. I do not understand it all, but I find it very exciting and that it has a lot of credibility because we realise people in the Department know what they are on about. This is showing results on the ground and part of the narrative of restoration of reputation that Ireland is pulling from the sinking ship era of a couple of years ago. However, this is only half the picture. I am very concerned about the lack of focus and investment in areas in which there is huge clustering of unemployed persons in urban communities, where personal, community and family instability is being engendered by people not working, losing the dignity of work and the income related with work, particularly for former construction workers. The trickle down effect of the Minister's endeavours will not extend far enough, quickly enough or deeply enough to raise the hopes and aspirations of the families of the people concerned. We must look at that issue. We must bring forward practical ideas to restore hope and restore belief in communities that something positive can be done. This malaise must be recognised and tackled. I cannot see why big labour intensive projects such as the DART and St. James's Hospital extensions are not being prioritised. There are hundreds of construction jobs tied into these projects.
I thank the Minister for agreeing to come to Ballyfermot College which has shown in the past 30 years how the creative industry can create jobs in unexplored areas such as animation, film making, the music industry and so on. The creative sector received no investment, other than teachers' salaries. This is extraordinary. An entire genre of film making has been reinvented at Ballyfermot College without investment, except in teachers' salaries. I know that the Minister has come to look at it, but it is an inspirational story in the past 25 years. We must focus on these areas of high unemployment, where even community employment schemes are barely financed enough. We must realise how important such schemes are to keep people's dignity afloat. We must examine the pittance people receive when they go back onto a community employment scheme. We must make the scheme a base for the social economy. We need to build a social economy which encompasses the human values associated with the social economy across Europe. Ours is the most fragile in Europe; it is non-existent and the community employment scheme could be its bedrock.
We need to look at these areas in which there are thousands of people without work. If we leave them without work, hope will evaporate and we will have serious community issues that will be impossible to tackle if they move beyond a certain point. We need to start focusing on them. If some other Minister can do what this Minister has done at the high end in some of the areas I am highlighting, we certainly will be addressing the full picture, rather than half of it.
I welcome the Minister and hope he enjoyed his visit to Waterford and the very sunny south east yesterday. The previous speaker said some of the contributions had a political context to them. I do not think we should apologise for this because we have to be honest about where we are. The jobs crisis is still the single biggest issue facing the people. We still have far too many out of work and far too many young people who are emigrating. While the Minister is very busy, the benchmark on which I will judge him and the Government is not the high standard that I set for myself. My standards would be higher than those of the Minister, as is my ambition of where we need to be, but we are benchmarking the Government's performance on the targets the Minister set such as creating 100,000 net jobs and others that simply have not been met. That is a fair assessment of where we are. We have a job to do to represent the people we represent at meetings such as this. If people think that is political, fair enough, but that is our job. One of the Minister's targets was to attract 50% of foreign direct investment to locations outside Cork and Dublin. Unfortunately, that has not happened and is one of the targets that has not been reached.
One of the issues that comes up in some regions - the south east has the highest unemployment rate - is the grant aid available to companies. The BMW region has a more favourable grant aid figure than the south east, in spite of its higher unemployment rate. Can this issue be examined? We need to look at regional disparities in foreign direct investment. One of the previous speakers spoke about site visits and how some regions and counties simply had not received the level of support they needed from IDA Ireland. When IDA Ireland has tried to attract foreign direct investment to some regions and counties, there has often been a lack of property solutions. Again, that is where the Minister needs to have a joined-up approach. He spoke about collaboration between Departments. We need collaboration between local authorities to make sure we can make these property solutions available. We need to attract foreign direct investment across the State to ensure balanced regional development and to ensure this we need property solutions. We could then develop clusters in some sectors.
I recognise that the Government is doing a lot of good work, but there are opportunities in three sectors, the first of which is agriculture. It is important that there be a joined-up approach and that we do not have a silo mentality or approach as we adopted in the past with previous Governments. Agriculture provides great job opportunities. We have the abolition of the milk quotas and the Harvest 2020 targets to achieve. If we want jobs to be created in the sector, we will have to look at providing employment supports, as well as banking support, for farmers if they want to increase production. If this is a key growth sector, what measures is the Department putting in place to ensure we achieve these targets to create the necessary jobs?
The life sciences and medical devices sector was mentioned. The expiry of patents is one problem the sector faces, but there are also challenges in terms of the cost of research and development. Global over-capacity is also a problem, as well as competition from Asia.
As the life sciences and medical device sectors continues to offer significant opportunities, what holistic strategy is in place to combat and deal with these challenges? We need to recognise and overcome these challenges and then make sure we exploit the available opportunities. Aside from the expiry of patents, there is the issue of research and development. In this regard, we need to co-ordinate the work of the institutes of technology and the universities.
I refer to the tourism sector. The Gathering is an important event which is good and great for the country. It has obviously boosted tourist numbers. Many regions of the country regard tourism as a key driver of job creation and the local economy. What initiatives are being considered by the Minister and his Department? This might be regarded as the responsibility of the Ministers with responsibility for tourism and agriculture, but I am looking at it from a job creation perspective, which is the responsibility of the Minister's Department.
We need to support SMEs. Commercial rates are an issue in my own county of Waterford. The Government is looking to move towards self-assessment, but many small and medium-sized businesses have been hit with a doubling and a trebling of their rates because of the rates revaluation. This has caused significant problems. It is an antiquated system of calculating rates which needs to be modernised. The burden must be shifted from small to medium-sized businesses onto larger companies in order to give them a break. I ask for the Minister's views on this issue.
I welcome the Minister and his officials. I appreciate that this is a review of the Action Plan for Jobs, for which I commend the Minister and the Department because it sets out clearly the actions needed and, most importantly, identifies responsibilities. I commend the Minister's engagement with SMEs and stakeholders. I attended one of his meetings in Galway city which was very well attended by senior people from multinational companies and SMEs. We need more communication on the very many support programmes and initiatives taken by the Department and the Government. It is hoped the establishment of the LEOs will help solve that problem in that they will be a one-stop shop for everyone looking to create jobs. I welcome the JobsPlus initiative because it is better to be working part-time than not working at all.
My main concern is the construction sector, which suffered a large number of job losses after the collapse. Various groups have attended this committee and proposed initiatives relating to grants or VAT rates which they claim would be cost-neutral in some cases. Many former workers in the construction industry are at an age where they are reliant on future job opportunities within that industry such as those involving retrofitting schemes and building small extensions. A few weeks ago at this committee Chambers Ireland proposed a VAT initiative which could be considered in discussions with the Minister for Finance when the budget is being prepared.
I welcome the Minister. I also welcome the JobsPlus initiative. The Minister may recall that I suggested this initiative to him eight or nine months ago at this committee. I said it was pointless paying someone the full rate of social welfare to stay at home and do nothing when half of the payment could be given to an employer to take a person off the live register. The Minister did not warm to my proposal at the time-----
-----but I have always argued this point and perhaps the Minister has warmed to it as a result of the good weather. I also raised it on numerous occasions with the Minister for Social Protection, Deputy Joan Burton, and I am glad to see that common sense has prevailed on this one. I am confident the initiative will work. I agree with Deputy Dara Calleary that we should be informing all of the chambers of commerce, county enterprise boards, county development boards and Enterprise Ireland to let employers know that this facility is available.
Employers can avail of tax incentives, while employment grants are provided through the county enterprise boards. I hope and assume the JobsPlus initiative will not replace any of these incentives and that they will remain in place alongside the JobsPlus scheme. Employers need all the supports possible at this time, particularly those in rural Ireland. As elected representatives, we are in Dublin three or four days a week and see the level of economic activity in the city, but then we travel to rural Ireland and it is all doom and gloom. Many people in my part of rural Roscommon are lucky to be in work because they have migrated to the larger centres such as Dublin, Cork and Galway or else they have been forced to emigrate. Therefore, more needs to be done for employers in rural Ireland. The JobsPlus initiative will work, but I ask the Minister to reassure me that it will not replace any existing incentive aimed at job creation.
I agree with Deputy Michael Conaghan on community employment schemes. There is merit in rolling out more places on community employment schemes across the country. In the past week Castlecoote, County Roscommon won an important Tidy Towns award. It is just a small village, but thanks to all of the community employment scheme participants, it won that award. It is now possible to market a county such as Roscommon that was left on the hind teat, for want of a better phrase, for so many years. Communities working together, with the help of community employment scheme participants, are able to market and sell the county as a tourism destination. I would welcome the Minister's response on these matters.
I thank Deputy Michael Conaghan for his kind comments. I agree with him that there are two dimensions to this challenge. It has been crucial to rebuild the export, enterprise, innovation-oriented economy. As the Deputy rightly observed, the domestic economy has more clusters of unemployment as a result of the collapse of the construction industry which had been at the core of much of the prosperity experienced by some of these areas. I take his point that the benefits are slow in trickling down. However, approximately 5,000 people are working on IDA Ireland-sponsored construction sites. IDA Ireland has had a very good year, with an extra 6,500 people at work. The expansion in construction has had a real knock-on impact on job creation in communities.
We want to see new capital expenditure projects. The Minister for Public Expenditure and Reform, Deputy Brendan Howlin, is trying to find new ways of funding such projects. A fortnight ago €150 million of additional spending was approved for road, school and energy projects. I acknowledge that people like to hear about big engineering projects, but the funding for retrofitting projects to save energy provided a return of approximately 30 jobs per €1 million expended, while the return on the big capital projects is fewer than ten jobs. In employment terms, there is more bang for our buck in some of the smaller scale projects.
I agree that digital gaming and the work of Ballyfermot College in that area present a real opportunity for us in this rapidly changing environment.
We have set up a group to examine how we can position ourselves in that regard.
There is a great deal happening in the social enterprise area. As we move towards a more broadly based recovery, we will begin to see the returns from the work being done by the Department of Social Protection in turning the welfare system from one which supported people who were idle - indeed, required them to be idle to qualify for benefits - to one which places a greater emphasis on activation. There are 90,000 opportunities between the various programmes, including JobBridge, Momentum, Springboard, community employment schemes, JobsPlus and so on. We are developing a suite of interventions which will prove their worth as the broader economy lifts. We are beginning to see that lift already. Last year, 10,000 people secured employment in export-orientated companies, and 10,000 in the broader economy.
As I said, that wider lift is beginning to emerge, and we have to build on the momentum. I have no objection to being held to account for our targets, but it should be noted that the overall target relates to 2016. I never said we would have an even, straight-line graph, with 20,000 jobs created in year one, 20,000 in year two and so on. That was always going to be totally unrealistic coming off a situation where the economy was shedding 90,000 jobs per year. It is not possible overnight to turn around a graph that is falling on such a sharp trajectory. I see the progress we have been making as a steady turnaround. I am not looking for plaudits for it, but the path we are on is clear and, very importantly, it is sustainable. Clearly, there is more to do and our efforts are focused on it every day.
Senator David Cullinane is right to point out some of the areas of opportunity, the agriculture sector certainly being one of them. Glanbia, for example, has nailed its colours to the mast in the Senator's region with its large investment, which will, between direct employment and gains for suppliers, support 1,600 additional jobs. The Kerry Group has committed to a major project which will provide 900 additional jobs in the high-technology end of food production. Those projects are all backed by my Department as part of our efforts to develop the sector. Also in the Senator's area, Dr. Willie Donnelly is doing interesting work at Waterford Institute of Technology on smart agriculture and how it can be rolled out. There is a real opportunity there, particularly in the south-eastern area. There is a fight-back occurring in the region and we support that ambition.
The Senator also referred to property issues. IDA Ireland has applied for planning permission in Waterford in order to position itself to provide the types of property solutions that are needed. The grant rates are set by the European Union, but the new regional aid guidelines offer some scope for adjustment in the regional aid map. There is work ongoing in this regard. We have moved from the initial position where there would have been real threats to C regions which would undermine their capacity to support large companies. We managed, by and large, to fight off that deterioration in the regional aid guidelines and are now in a position to maintain support levels. There is, for instance, a great deal happening in the whole life sciences area, as I outlined earlier.
In regard to tourism, I had a chance to taste some of the tourism products on offer in the Senator's area before I left yesterday evening. We are engaged in a range of initiatives in this area. Microfinance is entirely new for the tourism sector, for example, as is the extension of the seed capital scheme. There are significant supports available for tourism start-ups which were not in place 18 months ago. It is a message we are eager to get out.
I have met many people who expressed concerns regarding the revaluation process that is ongoing in the Waterford area. It comes at the same time as the amalgamation whereby new rating poundages are being set in the three local authorities. I am acutely aware of the concerns in this regard. The basis of any valuation, as I understand it, is always the same, namely, that it derives from an estimation of the rental value which a property would secure on an appointed day. I understand a date in October 2011 was the day appointed in the case of Waterford. Values have not been set there since 1988 and are clearly way out of kilter, which has resulted in both winners and losers under the revaluation scheme. I understand the point the Senator is making.
Deputy Seán Kyne referred to the future of the construction industry. As we have learned to our cost, a great deal of the success or otherwise of that sector depends on the underlying demand. We cannot simply pump it up to a level which outstretches that underlying demand. We are hopeful that there is some recovery of demand in certain parts of the country. We are also building the underlying demand via new ways of funding public capital projects, as I mentioned. In addition, some of the investment in export-oriented companies will have a construction employment return, an aspect highlighted in the recent report by Forfás on the construction sector. There are areas where we can continue to build. The exporting of construction services is running to something like €500 million, which is quite significant in itself. In the case of some of the services we have developed, we are able to keep people at work through the marketing of those services overseas. It is a difficult time for the construction sector and we must do as much as we can while ensuring projects are sustainable. That is the message from our recent experience.
I am happy to accept any claim of having originated a good idea that works. We do not show any greed over here as to the source of these ideas. If a proposal works, we are happy to take it on board. There are no employment grants in county enterprise boards, but there are grants for the development of a business which are totally unrelated to the grants available for start-ups. The purpose of the develop grants is essentially to encourage people who are recruiting to take on people from the live register who are long-term unemployed. This initiative does not conflict with the other supports to which a new start-up is entitled through the tax code or otherwise.
I strongly endorse the point about communities working together. All the evidence regarding successful regional strategies suggests that they come down to the ambition of individuals who get together and seek to drive progress. All the successful clusters begin with people who put themselves out to make things happen. It is very important as we build our local enterprise office structures that we work with people who are willing to be leaders in their own community and build a competitive edge for their region. All of the literature suggests that the special ingredient or secret of regional success is individuals stepping up and trying to make something work. It is our job to support them.
Part of that endeavour should include a debate on what is involved in a successful regional strategy. It is not about saying that IDA Ireland should move thousands of jobs into X or Y region; that is not how successful regions work. Rather, it is about building off one's strengths and developing strengths where they are lacking. We need an honest debate on what we can do to encourage a stronger regional strategy. For the Department, it is a question of considering how our services - which are enterprise-facing services - can participate in a broader regional growth strategy which plays to our competitive strengths. The action plan for the south east has already seen leaders emerge. Eishtec is an extraordinary example, with three individuals working to create 550 jobs out of the ashes of something else. They have the ambition to continue to grow that enterprise. We need an open debate on how we can help to support those types of enterprises.
This probably goes back to what Senator Feargal Quinn, who is a wily old critter at this stage, said about entrepreneurship and encouraging people to develop enterprises in their regions. Perhaps on another occasion we might discuss how we can best position ourselves to drive successful regional growth.
I thank the Minister for answering the various questions put to him. Deputy Dara Calleary referred to the promotion of these schemes. In fairness, the committee has teased out various ideas which did not come from the manifestos of members' individual parties. Many have been put forward and we try to feed them into the reports we produce. I am glad that the Minister made reference to our reports during his various contributions. A common theme during the committee's discussions is that a common-sense approach should apply in some of the schemes. I am not necessarily referring to the Minister's Department in that regard, but certain Departments should definitely apply a little more common sense in the qualifying criteria for schemes. There should be a way, for example, to resolve difficulties relating to someone being obliged to wait a couple of days or even a couple of months to get on a scheme. People generally want to return to work and sometimes the State - in the guise of Departments - can get in the way with particular rules it imposes. I understand rules must be built into schemes when they are designed. However, applying a little common sense when they are in operation can make all the difference.
Deputy Dara Calleary also referred to the way in which schemes are advertised. Many business groups, etc., come before the committee and it is obvious that many of the individuals to whom we speak are not aware of the existence of some schemes. There is a need for a cross-departmental advertising campaign to get the message across to businesses on what schemes are available. Schemes such as that which relates to family income supplement do not often seem to availed of by many businesses - either by employers or employees - because it can be difficult to access them. However, chasing them up can be a worthwhile exercise. There is a need to advertise these worthy schemes because the level of take-up could be better. There is definitely a need to sell them. This is not just a job for Departments; the various State agencies involved, the chambers of commerce, etc., must also be involved. As the Minister knows, it is not enough just to have these schemes in place, efforts must be made to promote them. This is an issue which is not often stressed outside this room but on which emphasis is placed at almost every meeting we hold.
The fact that we have been able to discuss the Action Plan for Jobs at this meeting will be of assistance in flagging some of the initiatives relating to it. The plan is extremely good and involves getting back to basics, laying down a roadmap for where we want to go, identifying everything that needs to be done and ticking all of the boxes. This plan is the most important which has been produced, particularly because of the initiatives it contains. The basics are often missed and as the Minister has often pointed out, we did not do the basics during the boom years. That is why we are in the position in which we find ourselves. The action plan will correct the position in that regard. Some of the initiatives within it may seem small in nature, but they are essential and must not be forgotten over time. I compliment the Minister on the plan.
If it is acceptable to the Minister, the committee would be interested in meeting him on a regular basis in order that we might scrutinise the level of progress on the Action Plan for Jobs. I accept that he might be put on the spot to some degree at such meetings, but that is good for everyone involved because we would all have a chance to tease out matters. I thank the Minister and his officials for attending.