Ms Anne Vaughan:

I am accompanied by Mr. John McKeon, assistant secretary general with overall responsible for the Pathways to Work programme, and Mr. Paul Carroll, who is the divisional manager in Dublin north. We have the country divided into 13 operational divisions and I thought it would be helpful for members to hear what is happening on the ground. I hope that between us we will be able to deal with the questions.

I thank the Chairman and members for the opportunity to appear before the joint committee today to discuss the Pathways to Work strategy. The Department has a very broad remit to provide income supports and services to people right across the age spectrum from childhood to working age to retirement age, including jobseekers, people with disabilities, families and carers.

The Pathways to Work strategy is targeted at those people in the working age category who have a capacity to work. It sets out our approach to labour market activation - in other words, our approach to encouraging people to stay engaged with the labour market and supporting them in finding employment. In this regard it is important to note that labour market activation is one of three main functions of the Department. The second main function is payment delivery, and the third is the control of fraud and abuse of the social welfare system. While the three functions are equally important, a balance must be struck between them. Today, I will concentrate primarily on the Pathways to Work activity, and I am pleased to provide for the committee's information a presentation pack which outlines how the Pathways to Work strategy has evolved over the past few years. I do not intend to go through it but I am quite happy to discuss later any aspects of it that members wish.

By way of context, committee members will be aware that Pathways to Work was first launched in February 2012, at a point in time when the unemployment rate stood at 15%, the number of people unemployed as measured by the Central Statistics Office stood at 322,000 and the number of people on the live register claiming jobseeker's payments - which includes people in part-time employment - stood at 439,000. These unemployment figures reflected the dramatic reversal in our nation's fortunes during the period 2008 to 2012, when the level of employment fell from just under 2.2 million to just over 1.8 million.

This reversal in our nation's fortunes led to a dramatic increase in demand for the State's welfare and employment services, which up to 2012 were provided by three separate organisations: the Department of Social Protection, the primary provider of core jobseeker income support payments; the community welfare service of the HSE, the primary provider of supplementary and emergency welfare payments; and FÁS, the primary provider of employment support and training services. As an example of the demands faced by these services, the number of jobseeker claims received by the Department of Social Protection increased more than threefold during the period 2006 to 2009 and the annual increase in the number of beneficiaries across all welfare schemes - that is, the number of new beneficiaries being added to the claim load each year - grew from just under 40,000 in 2006 to more than 270,000 in 2009.

This huge increase in demand for services placed significant pressure on the three State agencies involved in service provision. Partly in response to this pressure but also in response to the recommendations contained in various reports from bodies such as the National Economic and Social Council, NESC, the Economic and Social Research Institute, ESRI, and the Organisation for Economic Co-operation and Development, OECD, it was decided to merge the three agencies in order to provide a one-stop-shop service to customers. This merger, in addition to simplifying the service proposition to customers, facilitated the redesign and reconfiguration of service so as to improve the quality of service. In particular, it enabled the Department to ensure that jobseekers registering for income supports would have earlier access to employment services, and that our scarce case-worker resources would, in line with all international research evidence, be targeted towards those newly unemployed jobseekers who were most at risk of becoming long-term unemployed. This reconfiguration and prioritisation of service capacity was at the heart of the Pathways to Work strategy for 2012 and continues to be core to the ongoing transformation of service in the Department. A key challenge in implementing this transformation is to ensure that the job of activation is aligned with and does not detract from the equally important functions of payment delivery and control.

Pathways to Work is one of the twin-pronged approaches adopted by the Government to address the employment challenge that I have just set out. The other element is the Action Plan for Jobs, which is focused on the task of creating a demand for labour by encouraging and supporting entrepreneurial activity and investment in the Irish economy, and has set a target of adding a net 100,000 jobs to the Irish economy by 2016. Pathways to Work, in contrast, addresses the supply side of the labour market, with a focus on trying to ensure that as many as possible of the new jobs and other vacancies in the economy are filled by candidates taken from the live register. There are a number of key elements to this approach, which were set out the Pathways to Work 2012 document, including the development of the one-stop-shop Intreo to integrate welfare and employment services and deliver an improved customer-focused service to jobseekers; the implementation of client profiling to inform tailored delivery of services; the roll-out of group and one-to-one engagements to inform and advise jobseekers; the affirmation of the concept of rights and responsibilities, via a statement of mutual undertakings, to establish the basis of the relationship between the State and jobseekers; the roll-out of enhanced identity management - the public services card - to help detect and minimise fraud; the introduction of penalty rates of payment for unemployed people who do not engage with the State's employment supports, to reinforce the concept of rights and responsibilities; the roll-out of new employment supports such as JobBridge; the targeting of places on employment and training schemes such as community employment, Tús and Momentum at long-term unemployed people; the development of closer links with employers as a means of securing work opportunities to which job-seekers can be referred; and full integration of the community welfare service, FÁS employment services and the Department of Social Protection to form a new Department of Social Protection organisation.

These developments, when taken as a whole, represent a significant programme of transformation requiring substantial IT, process, staff, organisation and physical infrastructure changes. Notwithstanding that some commentators have questioned the pace at which the Department is implementing this programme, experience in other countries where similar change initiatives have been implemented, such as the UK, France and Norway, indicates a timeline for delivery of five years or more. Given the urgency of the unemployment situation in Ireland we have set ourselves a deadline of the end of next year for completion. So far we have made good progress. FÁS employment services and the community welfare service - some 2,000 staff - were transferred to the Department of Social Protection on time and within budget. New organisation and management reporting structures were implemented during 2012 and the services are now integrated within the Department. Thenew Intreo model of operation - integrating the relevant employment and payment services - was developed and roll-out commenced in October 2012. Fifteen Intreooffices, serving some 25% of our client base, have been completed to date and our target is to have more than 40 offices fully operational by the end of this year. Group engagement and individual profiling is now fully operational in all Department local offices in advance of the roll-out of the full Intreoservice. Also in advance of the roll-out of the full Intreoservice, the integrated welfare decisions process is operational in 37 offices and has been instrumental in reducing decision times on welfare claims from around three weeks to around three days in most of the offices concerned. The statement of mutual undertakingsis now in force, with penalty rates of payment introduced for jobseekers who do not engage with the State's employment or training services. The national internship scheme, JobBridge, has been rolled out and is delivering a clear pathway to employment for many people. More than 20,000 people have benefited from this scheme, with a rate of progression to employment of more than 60%. The Momentumprogramme to provide work-focused training to long-term unemployed people was developed, tendered and rolled out - more than 4,000 people are now benefiting from this programme. The number of places available on activation schemes such as CE, Tús and JobBridge was increased by 10,000, an increase of 30%, as part of budget 2013. The Springboardprogramme has supported more than 10,000 unemployed people in improving their skills for emerging employment opportunities.

Turning now to Pathways to Work 2013, this is a 50-point action plan published in July 2013 which seeks to augment the focus on newly unemployed jobseekers by increasing and intensifying our level of engagement with people who are already long-term unemployed. Among the planned actions that reflect this focus on long-term unemployment are: profiling all clients on the live register, not just new entrants, with a total of 420,000 profiles; developing an Intreo programme for engaging with clients who are long-term unemployed; increasing the number of new clients engaged in group interviews from 30,000 to 85,000 and in one-to-one interviews from 130,000 to 185,000; doubling, through internal redeployment, the number of case workers employed within the Department on activation duties to increase the capacity to engage long-term unemployed people; finalising and implementing proposals for contracting additional capacity from third-party service providers for employment services; implementing reforms to housing support under the new housing assistance payment; eliminating backlogs in the family income supplement, FIS, scheme; implementing the JobsPlusincentive for employers to recruit people who are long-term unemployed; monitoring and encouraging recruitment from the live register by client firms of the Enterprise Development agencies; establishing a labour market council of external policy experts, senior industry figures and representatives of client groups to advise on the implementation and further development of the Pathways to Work approach; and developing and implementing a plan to give effect to the EU youth guarantee in Ireland. Detailed targets have been set to measure the impact of the 50 actions under Pathways to Work 2013, and these are published at quarterly intervals on the Department's website. The report for the end of quarter 2 is included in the presentation pack and, as can be seen, we are on track to deliver most of the targets set out.

Following years of job losses, there are now tentative, though welcome, signs of progress in the labour market. There was an annual increase in employment of 33,800 in the year to the second quarter of 2013. Unemployment fell by 22,200 in the same period, to 300,700, continuing a downward trend that began at the start of 2012. By the end of September, the number of people on the live register had fallen to 408,000 from a peak of 466,000 in 2010. The unemployment rate, at 13.3%, is down from a peak of 15.1% in early 2012. Despite this progress, however, the jobs and unemployment challenge continues to loom large and remains the primary focus of the Department's transformation agenda.

I trust my comments and the presentation are of benefit to the committee in its consideration of the challenge we all face. I hope I have adequately set out, and given a sense of, the determination and commitment of the Department and its staff to respond to this challenge. I also hope the presentation gives all members an understanding of the scale and complexity of the transformation programme in the Department and, above all, reassures them that we are implementing the programme with energy and at pace.

My colleagues, Mr. McKeon and Mr. Carroll, and I will be pleased to answer questions.