Oireachtas Joint and Select Committees

Thursday, 23 April 2015

Joint Oireachtas Committee on European Union Affairs

European Semester - Draft National Reform Programme 2015: Discussion

2:00 pm

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I welcome everyone to the meeting and I ask those present to check their mobile phones before we begin to ensure that they are switched off. It is not sufficient to put them on silent mode; they need to be switched off. The meeting is being televised live today and we do not want to interfere with the broadcast. We have received apologies from Deputies John Halligan, Joe O'Reilly and Seán Kyne and Senators Catherine Noone and Kathryn Reilly.

I welcome to the meeting the Minister of State with special responsibility for European Affairs, Deputy Dara Murphy. He is a former member of this committee and we are familiar with each other. He will brief the committee on the draft 2015 national reform programme. The Government is currently consulting with the Oireachtas on the draft in advance of its submission to the European Commission in Brussels.

As the committee will be aware, the preparation of the national reform programme is a key part for each member state in its annual European Semester process, which began in recent years. Today's meeting is welcome in the context of the European Semester as part of the involving engagement with the Oireachtas to ensure that the necessary democratic accountability, legitimacy and oversight all are part and parcel of the process. The Minister of State will also give us a brief update on the outcome of the General Affairs Council meeting that was held last week.

When the Minister of State concludes, we will have time for questions. Following a brief suspension, the second part of the meeting will be with members of the Committee of the Regions. I am delighted to welcome to the Gallery some of the committee's guests and contributors to the second part of the meeting but, first, we will hear from the Minister of State.

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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I thank the Chairman. It is a great pleasure to be back at my former committee. I acknowledge the presence of members of the Committee of the Regions who are here and also my colleagues from the Oireachtas. I will give a brief report on the General Affairs Council, but the rest of the presentation is not particularly brief. It is substantive and I ask for the Chairman's indulgence in that regard. I am more than happy to take questions.

I thank the committee for the opportunity to be here and to hear the members' views and questions on Ireland's draft national reform programme, NRP, which has been circulated. As the committee will be aware, the preparation and submission of an NRP is an important element in the European Semester process. Listening to the views of fellow parliamentarians is rightly acknowledged as an important part of the process, and is something that I strongly support. Before considering the contents of the NRP, I will refer briefly to the context in which it is being prepared.

Members of the committee will be familiar with the semester process and at our last engagement at the start of March I outlined some of the recent developments. It is worth noting that the March European Council concluded the first phase of European Semester 2015 by providing guidance to member states for submission in mid-April of their stability programme updates and national reform programmes. Based on preparatory work in the Council, the political emphasis now in place reinforces the economic priorities set by the new Commission in its first annual growth survey, which was produced last November. This year's process will therefore be advanced on the basis of three main pillars: a boost to investment; a renewed commitment to both national and EU-level structural reforms; and the pursuit of fiscal responsibility. The Council invited member states to reflect these priorities in their forthcoming national reform programmes and stability or convergence programmes, depending on which they are in.

At the end of February, the Commission presented a comprehensive assessment for each member state, under the 2015 cycle of the European Semester. This is a procedural improvement introduced for this year's process that is designed to support stronger national-level engagement with the Commission's assessment, including by key stakeholders and national parliaments.

Draft proposals for the next round of country specific recommendations, CSRs, are produced by the Commission in May, for adoption subject to amendment by the Council. In Ireland's case, the assessment in the new country report is a broadly positive one, reflecting the strength of the economic recovery under way and supporting, in turn, a gradual unwinding of the deep imbalances developed during the crisis period.

The semester process embraces Europe 2020, the EU's ten-year plan, adopted in 2010, based around five headline EU targets in the areas of employment, innovation, climate and energy, education and social inclusion. Under Europe 2020, each member state adopts national targets in these five areas and progress is monitored within the framework of the European Semester and reported on annually by member states in their NRPs. The Commission's consideration of the future development of the Europe 2020 strategy will be informed by the public consultation to which this committee made a contribution in November, as reviewed in the Seanad, which I attended, in March.

As the committee will be aware, last year was the first occasion on which Ireland was a full participant in the European Semester process upon exiting our programme and we received seven CSRs in 2014. Country specific recommendations are tailored, concrete recommendations for reforms that are considered in the relevant Council formations - on what is called a comply or explain basis - and finally endorsed by the European Council meeting at the end of June. Ireland's CSRs covered public finances, health care spending, active labour market policies, social inclusion, access to finance, non-performing loans in the financial sector and legal services. The draft NRP reports formally on progress in implementing them.

I am pleased to report that progress is broadly on track and consistent with policy directions already firmly established at national level.

The draft NRP also takes stock of progress towards our Europe 2020 targets in the areas of employment; research and development; climate change and energy; education; and social inclusion. While the NRP is a reasonably comprehensive text, it is expected to be concise and as such it is not possible to include every detail in any policy area or elaborate the full extent of Government action across each issue. However, it provides a good picture of the range and scale of reforms being advanced by the Government to ensure that Ireland’s economic recovery strengthens and remains fully sustainable. In this regard, there is strong synergy between the approaches being adopted in Ireland and at European level. The semester is part of the strengthened arrangements for policy co-ordination in the wake of the economic crisis. It reflects the fact that mismanagement of one economy in an economic and monetary union can have negative implications for the economies of other member states. We have, therefore, expressed strong support for the semester process and for the oversight it provides.

I will now provide Members with an overview of the draft document, following which I will be happy to take their questions. At its outset, the NRP will provide an overview of our macroeconomic position. This will be further updated and aligned with the Department of Finance’s latest macroeconomic forecasts when the stability programme update is finalised and published next week. As the committee will be aware, our economic performance over the past year has been strong and growth is expected to continue into 2015 and beyond.

The NRP will also provide an update on measures being taken by the Government in respect of each of the seven country specific recommendations. The first of these recommendations pertains to our public finances. Considerable progress has been made in recent years, and the outlook for the period ahead is positive, as will be set out in detail in our stability programme update. Key reform measures set out in the NRP include the following: placing multi-annual expenditure ceilings on a statutory basis; establishing an Irish Fiscal Advisory Council; broadening the tax base, including through introduction of annual property tax, abolition or curtailment of tax reliefs and increases in minimum tax rates for high earners; and devising a roadmap for Ireland’s tax competitiveness, which was launched in budget 2015 and sets out a medium-term strategy for Ireland’s corporation tax policy.

The second recommendation pertains to reform of the health care sector. A significant programme of reform is being advanced in this area. The Government’s future health strategy, which was published in 2012, is driving reforms across four strands, namely, health and well being, structural reform, services reform and financial reform. The introduction of generic substitution and reference pricing delivered €50 million in savings in 2014, with a further €25 million expected to be saved in 2015. By the end of 2014 the penetration of generic drugs had reached 68% by volume, compared to a target of 60%. The use of individual health identifiers is another important reform which will commence with the introduction of free GP care to children under the age of six years in June 2015. As the committee will be aware, priorities for continuing health reform were published by the Minister for Health in January of this year.

Our third recommendation pertains to labour market activation, including long-term unemployment, the youth guarantee and reform of further education and training. This has been a key focus for Government since taking up office, with the twin strategies of the Action Plan for Jobs and Pathways to Work supporting job creation and helping those on the live register to return to work. This is another area for which a detailed whole-of-government approach has delivered strong results and it is now reasonable to look forward to a return to full employment in the economy, something that would have been inconceivable a few years ago. The Action Plan for Jobs for 2015 sets a target of 2.1 million people in employment by 2018, which is two years ahead of the original schedule. There is a particular focus under the action plan on regional development and measures to support the domestic economy in sectors including construction, retail, tourism and hospitality and agriculture and food. The updated Pathways to Work programme for 2015, which was published in October 2014, contains a suite of enhanced reforms with special focus on long-term and youth unemployment. For example, this year will see the roll-out of a new employment service model called JobPath which will support the long-term unemployed in their efforts to access today’s labour market. We all know how difficult this can be, particularly for those who have spent a number of years out of work. The Government is determined to ensure that they have the supports they need to access work and to reach their full potential. Approximately 57,000 education and training places are reserved for the long-term unemployed in 2015, subject to demand. A minimum of 16,000 places for the long-term unemployed are being created in public employment programmes, including the extension of the highly successful JobsPlus initiative.

Our fourth recommendation pertains to low work intensity households and poverty. It is important to note that Pathways to Work is supporting jobless households access the labour market. This recommendation reflects an ongoing discussion between Ireland and the Commission aimed at ensuring that, in addressing this issue, we are working on the basis of sound and reliable data. There are different ways to measure low work intensity and jobless households, and if we are to be confident that our policy responses are right for Ireland, we need to ensure that the correct measures are adopted. I refer the committee to the details set out in the NRP on this subject. The Government is firmly committed to supporting people, including those with family responsibilities, into work, to ensure that work pays and to avoid creating poverty traps that hold people back. We have been introducing reforms to the one-parent family payment on an incremental basis, which aim at strengthening links between lone parents, who are a key cohort in the jobless household population, and the labour market. Some 30,000 recipients of the payment with children over the age of seven years will transition from the payment in 2015. Tailored child care schemes, including for after school care, have been introduced to support this process. More widely, some €260 million is being invested annually by the Government in child care support programmes reaching more than 100,000 children each year and an interdepartmental group has been established to explore ways of ensuring that current and future investments deliver more affordable, accessible and high quality early years and school age care and education. The group is due to present a range of options to the Government by June 2015.

Our fifth recommendation pertains to SME financing and debt. The Government has taken numerous steps to ensure that SMEs, which play an important role in our economy, can access the finance that they need to grow and thrive. Among the key policy initiatives developed in 2014, which contributed to the evolution of a more robust and effective institutional architecture for the financing of SMEs, were the establishment of the Strategic Banking Corporation of Ireland, which is providing up to €800 million of funds; the development of an innovative SME State support online tool to provide an entrepreneur with a list of the possible Government business supports; amendment of the Credit Guarantee Act 2012 and introduction of a new more flexible credit guarantee scheme; the announcement by the Minister for Finance of the commencement of work on an integrated export finance strategy in 2015; a review of Microfinance Fund Ireland; participation by Permanent TSB in the credit review process; and the transition of the NPRF into the Ireland Strategic Investment Fund.

Our sixth recommendation relates to bank performance against mortgage arrears restructuring targets and SME debt. Tackling mortgage arrears is a priority for Government and, as the committee will be aware, the Government will shortly bring forward a range of further actions in this regard. The NRP sets out some of the work that has already been undertaken and the progress that has been made.

At the end of 2014, the number of private dwelling home mortgage accounts classified as restructured by the banks stood at 114,674 - an improvement of 29% over the 2013 figures. Progress has continued in 2015.

The Central Bank set further mortgage arrears resolution targets for quarter three and quarter four of 2014, and has reported that the banks have continued to meet or exceed the targets set for them. It has also confirmed that the banks have reported that they have met their required targets on SME loans arrears to date. NAMA, which addresses distressed real-estate exposures, continues to outperform targets and is well ahead of schedule, having redeemed €17.6 billion of NAMA senior bonds, which exceeds its target of 50%.

Our seventh recommendation relates to the Legal Services Regulation Bill and court data collection. As the committee will be aware, debate on the Legal Services Regulation Bill has resumed, and it remains the Government’s aim to complete its passage so as to allow the legal services regulatory authority come into operation in mid-2015. Yesterday I took the first part of Report Stage, which was later completed by the Minister for Justice and Equality, Deputy Frances Fitzgerald. The Bill is now going to the Seanad. Therefore, it is making progress. The courts caseload data committee is overseeing an extensive range of work on enhancing computerised case support systems, and this is set out in the NRP.

I turn now to the national targets under the Europe 2020 strategy. These targets are horizontal and cross-cutting - for example, across employment and poverty reduction strategies. Our target is to raise to between 69% and 71% the employment rate for women and men aged 20 to 64, including through greater participation of young people, older workers and low-skilled workers and the better integration of legal migrants, and to review the target level of ambition in 2014 in the context of a proposed mid-term review of the Europe 2020 strategy. The mid-term review is currently ongoing. For 2014, the employment rate for women and men aged 20-64 was 67%, a welcome increase of three percentage points from 2012. This increase demonstrates the continuing improvement in the labour market after a fall from a high of 74% in the employment rate in 2007 to 71% in 2008 and less than 64% in 2012, which was the worst year for unemployment in the State. For us to reach the 2020 target, the employment rate will have to increase by 0.5 percentage points each year. We see this as feasible, provided the recent recovery is maintained into the medium term. As I have already mentioned, the Government is continuing to tackle unemployment and to support employment through the twin strategies of the Action Plan for Jobs and Pathways to Work.

Our target in the area of research and development is to raise combined public and private investment levels in this sector to 2.5% of GNP. We have significantly increased our investment in research and development in the past decade and more, while also introducing a range of measures to improve commercialisation of research and build strong links between the higher education sector and enterprise. In 2013 it is estimated that research and development intensity in Ireland was at 1.94% of GNP. As a result, Ireland has built a strong science base and is in the world’s top 20 countries for scientific output. This investment in the science base has had a positive impact on our industrial development. We are now in the process of developing a new strategy for science, technology and innovation, which is due for completion this summer.

The target for climate change and energy is to reduce emissions in the non-traded sector by 20% compared to 2005 levels, to increase the share of renewables in final energy consumption to 16%, and to move towards a 20% increase in energy efficiency.On climate change, under the 2009 EU effort-sharing decision, which applies to greenhouse gas emissions, GHG, outside the scope of the EU emissions trading scheme, Ireland must limit the growth of emissions to 20% below 2005 levels over the period 2013 to 2020. This emission reduction target under EU law is ambitious and very challenging from an Irish perspective, particularly given the large size of our agriculture sector and the scale of emissions associated with it. Our target for the period to 2020 consists of a series of declining annual targets, and compliance must be demonstrated with each annual target in turn. The targets for the years 2013 to 2016 are within reach, but beyond that point deficits will arise. The Climate Action and Low Carbon Development Bill 2015 is currently before the Houses, with enactment expected during the course of 2015.

On energy, the overarching objective of the Government's policy is to ensure secure and sustainable supplies of competitively priced energy to all consumers. The 2009 EU renewable energy directive set Ireland a legally binding target of meeting 16% of our energy requirements from renewable sources by 2020. In order to meet this target, Ireland is committed to meeting 40% of electricity demand from renewable sources, with 10% for transport and 12% for heat. In 2013, 7.8% of Ireland’s overall energy requirement was met by renewable energy. As a percentage of the targets for each of the three sectors, this equates to 20.9% of electricity demand, and 4.9% and 5.7% respectively of transport and heat power needs, being met by renewable energy in 2013.

The national energy efficiency action plan, NEEAP, which is the overarching policy framework for energy efficiency in Ireland, contains Ireland’s commitment to a 20% energy savings target across the economy by 2020 in pursuit of EU obligations. Recognising that Government must lead by example, we are committed to achieving a 33% reduction in public sector energy use by 2020. Ireland has already achieved 39% of our national target, and progress is also steady with respect to the 33% reduction in public sector energy use.

Targets in the area of education aim to address early school leaving and boost the number of people with third level qualifications. Specifically, they are to reduce the percentage of 18 to 24 year olds with at most lower secondary education and not in further education and training to 8%, and to increase the share of 30 to 34 year olds who have completed tertiary or equivalent education to at least 60%. The percentage of early school leavers in Ireland fell from 11.4% in 2010 to 8.4% by the end of 2013. This represents positive progress towards achievement of our 8% target.

The latest EU data show that Ireland's tertiary attainment for 30-34 year olds was 52.6% in 2012. Since 2009, Ireland has the highest rate for this indicator of all 28 member states. In the tertiary attainment rate for 25-34 year olds indicator presented by the OECD, Ireland ranks first in the European Union and fourth in the OECD.

On poverty our interim target is the reduce the number experiencing consistent poverty to 4% by 2016 and the target is to reduce it to 2% or less by 2020 from the 2010 baseline rate of 6.3%. Ireland's contribution to the Europe 2020 poverty target is to reduced by a minimum of 200,000 people the number in the population who are either in consistent poverty, at risk-of poverty or basic deprivation.

Following a review in 2012, the Government agreed a revised and enhanced national social target for poverty reduction, which is to reduce consistent poverty to 4% by 2016 and to 2% or less by 2020. As I have said the latest measure of consistent poverty is 8.2% in 2013. In recognition of the higher risks and life-long consequences of child poverty, a new child-specific social target was set in the National Policy Framework for Children and Young People 2014-2020, which is to lift 70,000 children out of consistent poverty by 2020

The General Affairs Council, GAC, took place in Luxembourg this week. The meeting was originally to focus on inter-institutional relations, however in light of the tragic events at the weekend, the Ministers also discussed the migration crisis in the Mediterranean. As we speak the Taoiseach is attending an emergency summit of EU leaders at the European Council to deal with the migrant crisis in the Mediterranean. As a follow-up to Monday's joint meeting of Foreign and Justice Ministers, the General Affairs Council discussed what EU members states could do to alleviate the crisis in migration and the situation in the Mediterranean.

Ministers expressed their solidarity with the victims and the countries concerned and agreed that there was an urgent need to step up common EU action to respond to the situation. The discussion focused on human trafficking, smuggling, border surveillance and solidarity. The need to address the root causes of displacement and forced migration was also discussed in detail. There was broad support for the ten point action plan proposed by the Commission and which is being discussed by the European Council today.

The General Affairs Council had a discussion on the proposal to revise the 2003 Inter-Institutional Agreement on Better Law Making to take account of post-Treaty of Lisbon realities. There was consensus that in the forthcoming negotiations of the Inter-Institutional Agreement, the General Affairs Council should prioritise better regulation, programming and delegated Acts.

In my intervention I welcomed the high priority the Commission has afforded the better regulation agenda and highlighted some areas where further progress could be made. I also highlighted the role of national parliaments in contributing to the good functioning of the European Union. Over lunch there was a discussion on the issue of counter-terrorism and measures to prevent radicalisation and to safeguard values.

The General Affairs Council marked the ten year anniversary of the signing of the accession treaties with Bulgaria and Romania. Ministers also adopted Council conclusions on the former Yugoslav Republic of Macedonia, expressing grave concern about the deteriorating situation there.

As the committee will appreciate the draft national reform programmes covers considerable ground across all Departments. In my lengthy contribution I have tried to capture some of the key elements, however it has not been possible to cover every detail.

I am more than happy to take questions from members. I am now at the disposal of the Chairman.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Thank you, Minister. It was a lengthy contribution but it was necessary because I think it is important to go through the detail of what was being proposed at the General Affairs Council. I have a number of questions.

I have a question on the draft national reform programme. As the Minister of State states the recommendations are tailored specifically to each individual country. We have to comply with what is recommended or explain the reason we are not complying with the recommendations. One of the country specific recommendations CSR 1, is the recommendation on the budget, that in order to support fiscal consolidation, consideration should be given to raising revenues through broadening the tax base. This recommendation was made last year. The Minister of State outlined what Ireland has done to comply with this recommendation. We have brought in the property tax, we have abolished some tax credits and we have brought in a carbon tax. However, all of these measures were done in advance of this recommendation. Does the Minister of State think that will be sufficient to meet the requirements for an explanation, bearing in mind that the CSR recommendations would have been written post the introduction of those taxes and post the abolition of those credits?

The Minister of State may have been a member of the committee at the stage we did a report on Europe 2020, and how we would achieve the targets set in that strategy. We concluded that the strategy would be likely to fail in the delivery of its targets if it remained a top-down and a non-exclusive process. We thought it would be necessary to ensure there would be a partnership approach to the targets. Is the Minister of State satisfied that there is sufficient buy-in and engagement at local and regional levels with the relevant organisations to make sure we achieve the targets set out in the 2020 strategy?

At our committee meeting we had raised the question of Macedonia and the Minister of State's response to that was comprehensive. We were glad to see that he raised the issue at the General Affairs Council. I thank the Minister for doing so and we very much appreciate it.

This committee is concerned about the crisis in regard to migration and the situation in the Mediterranean. We discussed among ourselves the push-backs at the Bulgarian border. It is getting increasingly tense with potential migrants being harried and harassed at the border. This is a very important issue and we will discuss it again at our meeting next week to which we have invited the Italian and Maltese ambassadors and the UN special representative for global migration, Mr. Peter Sutherland. We hope they will give us an update on the situation in order to see what we as a national Parliament can do to add our voices to the concerns about the unfolding humanitarian crisis.

Senator Colm Burke is next.

Photo of Colm BurkeColm Burke (Fine Gael)
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I thank the Chairman. I focus on health care and my first questions relates to generic drugs substitution, which has been in place for a short time. I have seen three or four sets of figures that have been bandied around. I am not at all convinced that we have done enough. A saving of €50 million last year and €25 million this year has been made by substituting generic for branded drugs. The penetration rate of generic drugs has reached 68% by volume of drugs. A saving of €75 million over a two year period does not sound to me as if a significant amount of work has been done on this issue. I wonder if we have done enough in this respect. Some 10% of drugs used in this country are generic drugs whereas the average in the United Kingdom is 80% generic drugs. I am not saying we should reach the 80% target for use of generic drugs. Has there been real reform, and if so, why have the savings not been greater? Savings of €75 million over two years seems very low in real terms.

The question is about reform, timeframe and savings. I am not convinced. The cost of pharmaceuticals within the health care sector went from €570 million to over €2 billion in a seven-year period. With the introduction of generic drugs, we are talking about a saving of only €75 million in two years. I am worried about that.

The second issue I want to raise is the crisis in the Mediterranean. This has been very serious issue for the last two years but we had not really taken any notice of it until four to six weeks ago. I am approaching it from a totally different point of view. While we need to take emergency action to deal with the problem, to a large extent, Europe and America have been the contributors to that problem. The arms and ammunition industry across Europe and the US has contributed to creating conflicts in a lot of places. When we overthrew Gaddafi in Libya, there was a huge surplus of arms which went to all sorts of groups and we are now paying the price. When thinking about policy in the short-term, we should be looking at the long-term consequences. We are now feeling the long-term consequences of some of the decisions that were taken five, eight or ten years ago and are having to pick up the pieces. Is this issue of countries selling arms and ammunition into developing countries and the Middle East on the agenda in Europe? If so, what do we intend doing about it?

Photo of Derek KeatingDerek Keating (Dublin Mid West, Fine Gael)
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I join with the Chairman and members in welcoming the Minister of State and his officials. I have two questions. One concerns employment under Europe 2020, which the Minister of State has, however, covered particularly well. The other concerns child poverty. We had aimed to lift 70,000 children out of poverty in Ireland by 2020. There has been an increase in the number, which is over 100,000. Does the Minister of State have any specific measures that would help to solve that growing problem and succeed where we have not done so before? How confident would he be about those measures?

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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I welcome the Minister of State. That was a long and detailed speech, so I will try to keep my contribution fairly short. The Minister of State said that some 30,000 recipients of the one-parent family payment with children over the age of seven years will transition from the payment in 2015 and that tailored child care schemes, including after-school care, have been introduced to support this process. What the Minister of State was referring to was 30,000 people losing their payment. The big argument that many lone parents are making to us, as politicians, is that the promised child care schemes are not there and the ones that are there are too costly. We are forcing people into employment without putting the supports in place. I think the Tánaiste said that child care would be a key element of these changes, but the spaces are not there. How is the Minister of State going to square that circle? It sounds positive that people are moving on with their lives, and I have not met any lone parent who does not want to get into employment. However, there are difficulties and barriers there. All the groups advocating on behalf of lone parents are saying that the child care spaces are not there and that is a big problem. We need to get our act together on this.

As regards the training schemes, the Minister of State said that 57,000 education and training places are reserved for the long-term unemployed in 2015, subject to demand. What does "subject to demand" mean? Does it mean that if people do not want to go on these schemes, they do not have to? That is not what I am being told. According to the Minister of State, a minimum of 16,000 places for long-term unemployed are being created in public employment programmes, including through the highly successful JobsPlus initiative. I was recently talking to a group of workers who were notified that they had to go on one of these schemes. There was one person under the age of 40 in the room. Many of them had skills - one was a tiler while another was a carpenter - and many of them had worked in the construction industry but for whatever reasons they have not been able to get back in to employment, even part-time. I would imagine that we need to be gearing a lot of those schemes towards young people. I do not know what training value those workers are going to get on this course. Some of it will be sweeping roads, cleaning up grass verges and so on, even though the argument was that they would be increasing their skill level. They were annoyed that they were being forced down this route. They certainly all want to get back into employment and want to upskill. What was being offered was clearly not enough.

Although we are told almost on a daily basis that we have regained our economic sovereignty and so on, Ministers are replying to questions by saying that EU rules will dictate our budget for a long time to come and that this happens through the semester. Our next budget will have to be against the backdrop of the so-called expenditure benchmark. I understand the Government is seeking greater flexibility in that regard but it seems like other countries within Europe are flagrantly disregarding the rules at the moment. We are coming in on the back of that and looking for greater flexibility, saying that it is arbitrary, even though we agreed to it.

The difficulty is that we are talking about balancing books with no understanding of the socio-economic cost of that so-called balancing. The Minister of State is talking in terms of jobs and so on. Ireland is second only to the US in terms of numbers in low-paid employment in the OECD. We are the highest in Europe. We may be talking about creating full employment, but at what cost? We have had the recent experience of Dunnes Stores as regards zero-hour contracts and so on. By all means, we need full employment and we all support that but I am concerned about the quality of the jobs we are creating.

Emigration is also a key issue. Recently, just under 4,000 jobs came on offer in Canada and the visas were gone within 12 minutes. Our young people are bright and intelligent with plenty of skills. Many of them are leaving jobs and emigrating because they do not have any hope. Collectively, it is part of our job to instil hope and show that there are alternatives. The biggest thing we need to do in Europe is instil in those in power the understanding that there are alternatives to the austerity we have faced up to now. Stimulus is the way forward and that is the big debate we need to bring to the table in Europe.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I tried to practise bilocation not very successfully for the last hour or so. I apologise for my absence for the Minister's speech, but I have read it. In the country-specific areas applicable to this country, how do we compare with other European countries and how well are all other European countries complying with the objectives laid down initially, which I agree with and with which we all must comply? Are all European countries, large and small, fully complying with the general thrust of what we are doing in this country? We have had to do it because if one does not have the resources to expend, one must cut one's cloth according to one's measure.

Second, the CSRs cover public finances, health care spending, active labour market policies, social inclusion, access to finance, non-performing loans and so forth. In the area of health care, how do we compare with our colleagues across Europe in spending on health care, that is, the ratio of spending per capitain this country compared with the best in Europe, as well as the efficiency with which we and they can deliver services? I am conscious that we all have a particular role to play across Europe in addressing the issues that have beset Europe in the past number of years. In view of the sacrifices the people in this country have made and the sacrifices politicians had to make to take very unsavoury decisions, I would like to think that everybody was shouldering responsibility to the same extent.

The semester process is better than its predecessor in that it provides for regular review of the targets. Previously, there were no reviews of the targets and by the end of the ten year period we were in a situation where no target had been met and there was insufficient or partial monitoring. Breaches in economic performance were blatant everywhere but nobody knew about it until it was too late. Clearly, this country is adhering to its programme and is delivering to the best of its ability in difficult circumstances. How do we compare with all of our colleagues in the European Union, particularly in the eurozone? The danger in a situation such as this is that those countries that were seriously in error or deficient in their performance initially might get all or most of the attention, while others that could do with a little attention might not receive the same regulatory experience.

The Pathways to Work scheme has been discussed. The one-parent family payment has arisen repeatedly. Both parties in the Government have been criticised about it on the basis that it was somewhat uncaring. I do not believe it was. There is provision to ensure that no loss of income should take place for the individual families. That must apply and if it does not, somebody is not doing the job the way it was intended to be done. In my experience, there is no need to encourage lone parents to do anything. They will do it themselves. That is the nature of the individual. They want to do the best they can in their circumstances. They will go to work as a first option, as opposed to a last option. Lest some European bureaucrat gets the impression that people here are living a cosy lifestyle and that we only do things at their behest and as a last resort, that is not so. In fact, in my time in public life, and I have been in public life for a year or two at this stage, I can assure the Minister that the efforts of lone parents to seek employment are exemplary, without exception, even though they are in very difficult circumstances. What is the comparison across Europe? What is determined in one country might not apply in another.

I wish to refer to two further points. The first is climate change, the extent to which we must comply with less dependency on fossil fuels, the degree to which we can achieve our targets and the extent to which all other countries throughout Europe are achieving targets as well and making the same sacrifices that we will have to make. We must ensure somebody does not take advantage of the situation in the European Union and say, for example, that the food sector in Ireland is a carbon rich area that puts a high level of responsibility on the economy here to produce alternatives. It is correct that it does. However, it should be possible to achieve the standards required across Europe without doing damage to our economy or to the other economies in Europe.

The last issue is bank performance in respect of mortgage arrears, restructuring targets and SME debt. Every Member of the House, including the Minister, has struggled with this problem for the past six or seven years. In general, the people have shouldered their responsibilities admirably. There will always be a minority of people who will see an opportunity to make a quick buck and who will suggest that if enough people opt out they will not have to pay at all. I hold no brief for those people. However, there is a body of people who have been very responsible. They found themselves in difficult circumstances six to eight years ago, which they had great difficulty working out. Some of it was due to the collapse in the housing market, some was due to the collapse of business, some was the result of the collapse of their health and some was the result of unemployment. However, they have faithfully managed to make a payment throughout the entire period, be it from their social welfare or whatever. They continue to pay to this day.

It is very difficult to accept the attitude of some financial institutions. They say the scene has changed, they are now over the difficulties and it is time to go back to traditional systems and methods. My response is, "not so fast". The lending institutions also had a role in, and responsibility for, what happened to this country. It was not a small role or responsibility. It is fine for people to say we must return to the way we were, clean up our act and get everything in order, but we are already doing that. It is happening. However, there must be a graduated system whereby those people who made the effort are recognised for making that effort. That must happen in this country and throughout Europe. Our European colleagues must recognise the sacrifices that many people, families and businesses in this country have made over the past number of years. Doing so would be significantly to the advantage of the European project, and obviously to us as members of the European Union.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Recognised in what way?

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Not to be so explicit in the determination of the targets that they want to be met within the timescale. For example, there are countless situations where a person who has a 25 year loan might find themselves reaching 70 years of age before the end of the 25 years. The lending institutions saw fit to lend to that extent at the time of the institution of the mortgage, but they now see things in a different light. They say, "By the way, you will be 72 or 73 before this is repaid". "So what?", is the correct reply to that. If it was possible to lend the money in the first place, regardless of the criteria by which it was loaned, equally it should be possible to restructure, without interest, in such a way as to accommodate the unfortunate person who is burdened with the responsibility of that loan.

I apologise for taking so much time, but I will not intervene again.

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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There was a broad range of questions. To start with the question on broadening the tax base, we welcome the fact that the Commission and the Council have acknowledged that Ireland has made significant progress in this regard. I will not go through the property tax and the other ways in which we have broadened it to date. Development in the future will be in the space of getting more people back to work and increasing income tax revenues in that way and increasing spending tax revenue through VAT as we see domestic demand and activity growing in the economy. That is the next phase on which we will focus.

The Europe 2020 strategies are being reviewed at present. With the exception of the education sector, many of the targets were not achieved, so it remains to be seen what the next set of proposals will be, but the Deputy is spot on: there will have to be a broad engagement across all sectors of Irish life. This cuts across many of the questions. Whether it is in Europe 2020 or the country-specific targets, the people who benefit most from achieving the targets in both areas are the Irish people themselves. That is why we will be looking to get strong engagement with respect to all of them.

I was very glad to bring to the General Affairs Council the issue of - it was not referred to as the Former Yugoslav Republic of Macedonia, as it must be referred to in the European Council-----

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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We are among friends.

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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Yes. It is a very important part of my job to bring to the General Affairs Council the observations and deliberations of this committee, so I will continue to ensure that process works. There was a strong intervention on Monday evening from Bulgaria. Many countries from the southern Mediterranean are deeply affected and concerned for the poor individuals involved, who continue to be trafficked. There was broad consensus on the initial deliberations of the Commission, but that is being discussed as we speak by the Prime Ministers.

There has been reform with respect to pharmaceutical spending. Nobody is suggesting that reform has been completed. That is the nature of reform. The State continues to seek further savings from the Irish Pharmaceutical Healthcare Association and we must also acknowledge that the process has resulted in the lowering of prices for branded drugs and will have to deliver further savings.

In response to Deputy Keating, it is vital to support people getting back into work and child care is key to this. Some 100,000 children are supported in the State each year. There is the community child care subvention and the early childhood care and education scheme. In budget 2015, the Government increased expenditure on children by €96 million, including increased child benefit payment and a new payment of €30 per child per week for people returning to work. We are fully aware that we are coming from a very difficult few years and work must continue in that respect.

To some extent, Deputy Durkan gave my answer to Deputy Crowe's questions about the objective that people would not be out of pocket by virtue of the changes. Deputy Crowe also asked about the demand level. Subject to demand, as I referenced in my note, the places are reserved in the first instance for the long-term unemployed. Fortunately, as is the case with all categories of the unemployed, the number of long-term unemployed is decreasing and there are also other options available. Places available on the courses may not be taken up, so it is possible that places available may exceed demand. We would have to see how that evolves.

In respect of the country-specific recommendations and how we compare, about which Deputy Durkan asked, on the country-specific report on budget 2015, Ireland was one of only five countries that were fully compliant with the Stability and Growth Pact. The compliance of other countries is very mixed, but we strongly support the process. When there are discussions about rules and how compliant we are, it is important to stress that it is for the Irish people that we are complying with these measures, which are delivering strong job creation. The Deputy asked how we compare generally. After some very difficult years, we have the fastest growing economy in the European Union for this year, with falling unemployment projected for next year and perhaps even for the year after. This compliance with these recommendations for countries is in the best interests of the Irish people. That includes the climate change targets, which the Deputy also mentioned. Just two or three months ago the European targets for the deliberations, which will take place in Paris, were decided by the European Council. The specific national elements of that have not been agreed, but they are under active discussion as we speak.

I strongly support the Deputy's comments about the continued role the banks will have to play in ensuring that solutions are found for people. The other committee of which I was a member before becoming a Minister of State was the Committee on Finance, Public Expenditure and Reform. The engagement of that committee with the banks has been productive in the past and was very productive yesterday. I congratulate the Chairman, Deputy Liam Twomey, and his committee on that engagement. All of us who are involved as politicians are aware that, notwithstanding the very positive figures and targets that have been met for some people in banking distress, there are still many people experiencing great difficulty. We must all must raise at any opportunity the important point that it is never too late for people who are in difficulty with lending institutions to engage, to talk to their lenders and to engage with some of the supports we have. A significant number of repossessions that take place by court order are a consequence of people not engaging.

The Chairman's questions were very detailed and I am sure that my answers to some of them were a bit brief, but I am aware of the time. I thank the committee for inviting me to this meeting.

Photo of Colm BurkeColm Burke (Fine Gael)
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I raised the arms trade issue. It is a fundamental issue in the whole conflict. Is it on the agenda?

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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It is very much on the agenda. As the Deputy will know, the broader issue underlying the migration we are now seeing is the significant state failings in countries like Syria and Libya. They are the consequence of many factors, over many years, which have now reached the point of significant conflict. I am not going to comment on the broader foreign policy actions taken by other countries, which is a subjective perspective that people would have. At my level, as Minister of State with special responsibility for European affairs and through attending the Foreign Affairs Council, we are aware there is a human crisis unfolding in the Mediterranean. We must support and show solidarity with the countries of the southern Mediterranean, in particular, which are trying to help and support people who are being trafficked, and also look at measures to deal in a robust fashion with the traffickers. The Senator spoke about the need for a long-term strategy of having in place states that can actively deal with their own populations and that do not arrive at a point where people are so fearful for their lives and their safety that they are willing to engage with traffickers to get themselves out of terrible conditions.

We will have to continue to work with the countries known as transit countries, and their neighbours. Many of the latter are themselves in dire economic situations and need support if they are to help in this regard.

I was asked a specific question about weapons and how conflicts commenced. We could talk about it in the context of the African continent and the Middle East but, with respect, it is a broad topic of deliberation that I do not propose to get into today.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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On behalf of the committee, I thank the Minister of State and his officials for attending the committee and giving us such a comprehensive briefing.

Photo of Dara MurphyDara Murphy (Cork North Central, Fine Gael)
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I thank the Chairman.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I propose that we suspend briefly to allow the next witnesses to come in.

Sitting suspended at 3.21 p.m. and resumed at 3.24 p.m.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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In our earlier discussion, we talked about how important the national reform programme is to the European Semester process. Last year we reviewed this matter. It was the first time we had a delegation from the Committee of the Regions in attendance. This year we again have a delegation in attendance. We are joined today by Councillor Mary Freehill, Councillor Neale Richmond, Councillor Maria Byrne, and Councillor Enda Stenson. We have also been joined by two officials from the committee.

For people who do not know, the Committee of the Regions is composed of 344 local and regional representatives from across the European Union. Therefore, it is an important institution which ensures that the views and experiences of local people are fed into EU policy. We saw the committee during our review of the Europe 2020 strategy. It raised many issues that ended up in our report, which we published and sent to the Commission. The issues included making sure that we address regional disparities, and the requirement for strategies, not just from the top down, but involving local and regional organisations in a partnership-based approach, which is a point I made earlier to the Minister of State. All of those things fed into our review of 2020. We are delighted to have the opportunity to discuss the national reform programme with representatives of the Committee of the Regions.

Before we begin, I remind members 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 either by name or in such a way as to make him or her identifiable. 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 do so, 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 a person or an entity by name or in such a way as to make him, her or it identifiable.

We have spoken beforehand about the order for today's contributions. I will call people from left to right, so I will start with Councillor Mary Freehill.

Ms Mary Freehill:

I thank the Chairman. I suffer from hearing loss, so I will need people to speak up.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Am I speaking loudly enough? Is my microphone loud enough for the councillor?

Ms Mary Freehill:

Not quite.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I am sure we can turn up the volume.

Ms Mary Freehill:

I suggest that the volume be increased a little.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I shall speak more loudly.

Ms Mary Freehill:

We will see how we go. On behalf of the Irish delegation of the European Committee of the Regions, I thank the Chairman for inviting us to make a presentation which follows up on submissions made by our members last year on the national reform programme and the mid-term review of the Europe 2020 strategy. We wish to record our appreciation for the interest that the Chairman and his committee have taken in our activities.

I shall update the committee on some developments at regional level. The new terms for the Committee of the Regions came into effect in January last and our mandate continues for five years. The nine full members and nine alternate members, nominated by the Government, reflect the wide spectrum of councillors elected across the country last May.

Last January, the three new regional assemblies came into being. The assemblies are based in the following areas: Ballymun for the eastern and midlands region; Ballaghaderreen for the northern and western region; and Waterford for the southern region. Three regional assemblies replaced the eight regional authorities and the two regional assemblies. However, somewhat confusingly for cohesion policy purposes, the old NUTS II and NUTS III classifications remain in place until at least 2016, with the country remaining divided in two for European Regional Development Fund, ERDF, operational programmes in the Border, midlands and west region and the south and east region, as was the case in the past. This will run until 2020.

My three colleagues have already been introduced.

Our presentation will touch on the Committee of the Regions, COR,European perspective, differing challenges faced by our regions across Ireland and the newer roles and structures of local and regional government relevant to achieving the European 2020 targets. The COR has long prioritised implementation of the European 2020 strategy, with particular focus on emphasising the need to recognise and address issues at sub-national level and underlining the importance of partnership and multilevel governance.

Since 2011, the COR has been monitoring the involvement of local and regional authorities and their representative bodies in the preparation and implementation of the national reform plans across Europe. Generally, it has been found that multilevel governance arrangements are being increasingly adopted in many EU countries to implement Europe 2020. Naturally, these arrangements differ according to how powers are allocated in each country according to the various policy fields. Over the years, across the EU, there is an increasing trend towards regionally differentiated approaches, along with a greater role for local and regional authorities in implementing the Europe 2020 strategy through the national reform programmes. Last year, for example, the national reform programme in 24 states mentioned the active role of local and regional authorities in implementation, with use of Structural Funds in particular being key to achieving the Europe 2020 targets.

The COR has also found that the disparities between and within countries as measured by gross domestic product and levels of employment are increasingly due to the impact of the economic crisis and pre-existing gaps. Whereas neither 2014 country-specific recommendations nor the countries report of 2015 make specific reference to regional disparities in the Irish context, there is a need to take account of the varying challenges facing regions.

I will briefly touch on the potential of the European Fund for Strategic Investment, also known as the Juncker plan, which has ambitions to invest €315 billion in productive infrastructure based on seed capital of €21 billion in EU money. When the Minister was here, the Chairman asked if there is buy-in from the regions and that query was not answered. I emphasise that it is important that all stakeholders in Ireland, including the local government sector, are fully informed of the fund details once they are finalised and that our authorities have an opportunity to benefit from participation.

Following lengthy planning in February, the two regional operational programmes to implement the European Regional Development Fund element of the European structural and investment funds were formally signed. These will see investment of approximately €820 million in Ireland up to 2020, with 50% provided by Brussels. This underlines the continuing importance of EU regional policy to Irish regions. These regional operational programmes, ROPs, are the EU's principal investment tool for delivering Europe 2020 goals and a focus on investment, research and development, information and communications technology, competitiveness of small and medium enterprises and a shift to a low carbon economy. There will also be significant sustainable urban investment in designated gateway towns. Given these investment priorities and their scale, we would like to see consistency and co-ordination between these Structural Funds and any investments to be developed in Ireland under the Juncker plan. It is crucial that the new fund be used to address regional disparities and facilitate synergies for further investment across the regions.

I thank the Chairman. Mr. Richmond will now highlight regional imbalances and challenges.

Mr. Neale Richmond:

I thank the committee for having us back. In Ireland, although there has been a very welcome and robust reduction in unemployment, there are marked differences in regional performance, with recovery unevenly spread across the regions. Using the Nomenclature of Territorial Units for Statistics, NUTS, III classification, since 2012, employment has fallen in the west and south west, while unemployment rates are highest in the midlands and south east. Labour force participation rates are lowest in the Border and mid-west regions. As far as income is concerned, Central Statistics Office figures indicate Dublin as the only region with higher per capitadisposable income than the State average during the entire 2003 to 2012 period. The midland, Border and west regions have continuously earned less than the State average. For example, in 2012, the disposable income in the midlands was less than 80% of the Dublin figure.

The focus of the economic recovery has been on the greater Dublin area and although there is potential for the recovery in greater Dublin to spill over into neighbouring counties, there needs to be concerted action to prevent structural shifts that could further weaken outlying counties and regions. Statistics can be presented in such a way as to back up differing arguments but it is undeniable that there are regional and local disparities that are best addressed with targeted actions. For example, it is recognised that city regions are the drivers for economic investment and growth. Dublin, therefore, is competing globally with the likes of San Diego and Shanghai, rather than locally with Sligo. Greater Dublin and the "Silicon Docks" area in particular, is a global hub for ICT investment and Dublin is recognised as one of the best places in the world for technology start-ups. However, a relative decline in Dublin's status as a financial services centre demonstrates that the city and the region must strive to improve its competitiveness and attractiveness to ensure continuing foreign as well as domestic investment.

There are major challenges facing the metropolitan area that could put future investment in jeopardy, such as the availability of reasonably priced housing, increasing congestion and the very small degree of wiggle-room with water resources now available. Equally, the relative decline of our universities in global rankings needs to be reversed. Whatever about average GDP rates, there are pockets of deprivation that need targeted interventions. More broadly, these differing regional strengths and weaknesses indicate that more nuanced regional targets, taking heed of regional strengths and weaknesses, may be more appropriate than one size fits all national targets. A particular challenge for the eastern and midland regional assembly established in January in addition to its statutory responsibilities will be to forge its identity with the wider public service sector over the coming years and develop its own operational programme for Structural Funds. This process would start with the realignment of the NUTS regions next year.

We also very much appreciate the strong regional element of the Minister for Jobs, Enterprise and Innovation's 2015 Action Plan for Jobs, based on the NUTS III regions. We strongly welcome this process to support job creation across the country by supporting agencies and organisations within each region to build on their particular strengths and assets and drive new job creation projects and strategies. The eastern and midland regional assembly area naturally includes the midlands, with its own set of priorities and challenges, and I congratulate Longford County Council and Coillte on the recent Center Parcs announcement, which is a great example of ensuring that every region has the opportunity to make the best of its own resources.

I will hand over to my colleague, Ms Maria Byrne from Limerick City and County Council, who will highlight elements of recent local government reform relevant to the national reform programmes.

Ms Maria Byrne:

I thank the committee for inviting us here today. As the committee appreciates, the Local Government Reform Act 2014 gave legislative effect to commitments to reform local government and provide it with a more central role in local economic, social and community development. The Act requires that each local authority establish a dedicated strategic policy committee for economic development, which is required to guide and support economic and enterprise development at county level. The Act also includes the establishment of local community development committees and local enterprise offices. The statutory function of the local community development committees includes the preparation and implementation of the community elements and the review of the economic elements of the local economic and community plans, the economic element being prepared by the local enterprise office.

The management and oversight of local development companies brings responsibility for national funding programmes to a local level, with the implementation of the social inclusion community and activation programme to support local strategies for social inclusion issues promoting access to life-long learning, employment and social enterprise.

The LCDCs will also facilitate the Leader element of the rural development programme by taking a management as well as an applicant role to support economic development projects for rural communities. Under Leader, €250 million will be available in the period to 2020 and the selection process for local action groups has commenced.

These more recent developments, in addition to the wider responsibilities of local authorities, indicate that we will have a direct impact on the achievement of elements of the national European 2020 targets, and in addressing several of the CSRs on labour market and SME policies. This should be reflected in the national reform plan. Unfortunately, however, there was no mention of these local authority roles in the NRP.

The establishment of three new regional assemblies in January was described by the Minister of State, Deputy Paudie Coffey, as an opportunity to frame new governance institutions, to counteract unbalanced development and promote regional recovery. The key function of the new regional assemblies will be to develop new regional, spatial and economic strategies to come on stream from 2016 onwards. These strategies will be underpinned to ensure that all relevant public sector bodies with responsibility for economic development and enterprise promotion follow through on implementation.

The Minister of State, Deputy Coffey, has indicated that all relevant agencies will be accountable to the regional assemblies as regards progress being made towards achieving the objectives of the new regional strategies.

In the Irish context, with increasing congestion in and around the capital, strategies to increase investment throughout the so-called two-tier cities, such as Limerick, would be more environmentally sustainable. Moreover, academic studies have demonstrated that because cities like Limerick have greater potential for growth, investments in these cities will very likely show a greater return.

I will give a small example of something we have done in Limerick. We have established another company under the auspices of the local authority called Innovate Limerick. It is made up of local authority representatives and council management, as well as public and private sector businesses and representatives from education. The key aims of Innovate Limerick are: to establish Limerick's innovation hub as Ireland's first growth accelerator; grow dynamic industry and sector partnerships; double the number of innovation partnerships and SME-FTI linkages; double the number of incubating and accelerating firms; also double the number of HPSUs; and deliver the national centre for social innovation. I thank the Chairman and will now hand over to my colleague, Councillor Enda Stenson.

Mr. Enda Stenson:

I thank the Chairman and members of committee for inviting us. As a member of the Committee of the Regions and an independent member of Leitrim County Council, it is a great honour for me to be here and I am grateful for the invitation.

I would like to summarise our position and underline what we would like to see in the NRP. In the Irish context, the approach to Europe 2020 and the national reform programme process have plenty of room for improvement. As we see it, discussion on national targets is essentially confined within a number of Government Departments, with measures selected largely from existing national policy documents to achieve them. Ireland is not alone in this regard, but the centralised and closed nature of the process here is particularly acute.

Later this year, the mid–term review of the Europe 2020 strategy is due to be presented. It is likely that attention will be drawn to the need for greater partnership in the development, ownership and implementation of national reform plans. We would also expect to see expression of the need for more regionally differentiated targets.

This year in the Irish NRP we hope to see, as a general approach, at least a recognition of regional disparities and the need for specific policy actions at regional level. Unfortunately, this was not visible in the draft programme circulated to stakeholders.

In relation to the future Irish NRPs, we would welcome increased consultation with stakeholders at local and regional levels. We would advocate giving a clear territorial dimension by setting regionally differentiated targets, with regional indicators to assess progress in a process that would include all relevant tiers of governance.

This is what we are proposing when it comes to the Europe 2020 strategy and how its targets can be achieved effectively – a whole-of-Government approach. This includes national, regional and local government as well as other agencies and key stakeholders.

With a new national planning framework to succeed the national spatial strategy expected in 2016, we would expect to see more coherence and consistency with regard to economic, social and territorial planning. Development of the NRPs must be part of, and contribute to, this coherence.

Future national reform programmes should be compatible with, and must inform, the priorities of the regional spatial and economic strategies, which in turn provide a framework for local economic and community plans.

In this context, we would therefore like to see the Department of the Taoiseach provide a roadmap for a more structured, continuous and constructive engagement with NRP stakeholders after the mid-term review.

I would briefly like to mention one other relevant issue concerning climate change targets. On 1 April, milk quotas were finally abolished and this has liberated Irish milk farmers and processors to do more of what we are among the best in the world at doing.

Last week, I was pleased that the Committee of the Regions formally adopted my recommendation that EU climate change and food security policies need to be reconciled so that the most carbon-efficient and environmentally-sustainable agricultural production systems are supported. Irish food production has an extremely low carbon footprint, but we cannot take things for granted. Our farmers - I am a farmer myself - and scientists must continue to improve our adaptation and mitigation measures so that our potential to sustainably produce food is not threatened. I will leave it at that Chairman but we would be happy to respond to any questions and comments members may have.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I have a couple of questions for Councillor Stenson, the first of which is on regional disparities in economic growth. The Government's Action Plan for Jobs, published earlier this year, focused on how we can ensure that the economic recovery can be experienced by people across the country. Does Councillor Stenson have any thoughts on the approach being adopted by the Action Plan for Jobs? Does it go far enough? Could more be done and, if so, in what areas?

My second question concerns the involvement of stakeholders in the national reform programme. Councillor Stenson said he would welcome increased consultation. He is calling on the Department of the Taoiseach to provide a structured roadmap. It would be useful for this joint committee if the Committee of the Regions could make some concrete proposals on how it could become engaged with the process. We could then take it forward on its behalf and feed it in to the Minister.

Representatives of the ESRI will attend this committee next week to talk about the national reform programme. After that, we will be writing to the Minister with our views, including the discussions we are having today. Therefore, if the Committee of the Regions could put some concrete proposals to us, we can ensure that they will form part of the submission this committee will make to the Minister.

I am making that suggestion because we do not have control over the Department of the Taoiseach producing a structured roadmap, which may take time. It might be best, therefore, if we moved things along from our end.

Ms Mary Freehill:

Does the Chairman want us to respond as he asks the questions or does he want to hear everybody and then we will come back?

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I will take a few other questioners and then it will be back to the witnesses who can decide which questions to deal with.

Ms Mary Freehill:

We will respond then.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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The first questioner will be Senator Colm Burke.

Photo of Colm BurkeColm Burke (Fine Gael)
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I thank the councillors for their contributions as well as for their work at local and European level, which is much appreciated. My question, specifically to Councillor Maria Byrne, is about the whole structure of Limerick City Council.

Limerick city and county are now under one council. People might not be aware that there is greater industrial output in the Cork-Kerry region than in Dublin and the greater Dublin region. We are doing well, particularly in the Cork region. A report will be produced at the end of October or beginning of November about whether Cork county and city councils should amalgamate. The population is 526,000 in County Cork and in the Cork-Kerry region it is over 650,000. From their own experience do the witnesses think there is an advantage in the reforms that have occurred or is it too early to judge? For example, does Limerick have a stronger pitch for getting its share of the national cake because there is now a coordinated approach, instead of many local authorities competing with one another? Would there be a better distribution of jobs and other infrastructural development if Cork city and county councils amalgamate? I am not talking about competing with Limerick or Waterford for jobs but about moving outside Dublin and the greater Dublin region, and the allocation of jobs to Limerick.

Photo of Aideen HaydenAideen Hayden (Labour)
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I thank the witnesses for their presentations. I have comments and observations on all of them, maybe not in logical order but in the order of the presentations. The witnesses spoke about the whole-of-government approach including national, regional and local government as well as agencies and key stakeholders. Have we ever really achieved regional government? It has been on the cards on numerous occasions. We have had numerous reports about how to develop an Ireland of the regions, and we can talk about the Cork region, as Senator Burke did. This point is close to my heart. People talk, for example, about the Dublin region but there are regions within regions, in other words, there are regions within Dublin. Quite often people dismiss Dublin or the Dublin region as if it were a single entity rather than several regions with separate issues and complications. We have a great deal more work to do in developing a regional approach. Do the witnesses, especially Councillor Stenson, have any comments on that?

Councillor Byrne mentioned the social inclusion and community activation programme, SICAP, tender process. It was incredibly badly handled. Much of what happened was illogical, with partnerships bidding against each other, although they were dealing with completely different regions, for example, Ballymun and Blanchardstown, which are not interchangeable. Senator Burke mentioned the population of 500,000 in Cork city and county but in the Dublin region the population is over 1 million. The process undermined the valuable work partnerships had done. Does Councillor Byrne have any comments on that?

Councillor Richmond mentioned housing. It is important, when talking about income and disposable income, to take on board the fact that there are greater costs imposed on people living in urban areas such as Cork, Dublin, Galway, and to a lesser extent Limerick, in order to provide housing. There are significant pressures on people to provide housing. There is a big wash-out in mortgage arrears, which in terms of the country specific recommendations is a major issue that will hit urban Ireland in particular. Would Councillor Richmond like to say something about the regional disparities that put pressure on people’s disposable incomes, such as the cost of housing?

The Government has set up the Office for Government Procurement, OGP, which has centralised the tendering and procurement process for State agencies. This creates a problem because trying to achieve best value for the taxpayer at the same time as centralising the tendering process may rule out regional competitors, for example, as happened with certain procurement for hospitals, or the leaving certificate examination papers when a Spanish company got the job. Do the witnesses have a view or position on what we should do to ensure that local small and medium sized enterprises, SMEs, get access to tendering for State contracts, particularly in view of EU tendering rules and social contract clauses?

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I welcome our guests and thank them for their submissions which have been most interesting. I agree with Senator Hayden about identifying specific deficiencies in the regions, whether urban or rural. It is a work in progress and we must concentrate on it to ensure we have a balanced economic spread of development across the country. Some may be isolated and an anchor investor is required in those regions. I recall going to Germany a few years ago but I will not say how many.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Was it pre- or post-War?

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Many people were not born at the time. I was on one of those much-criticised junkets. It was a learning experience and one of the first things we learnt was in Stuttgart, headquarters of Mercedes manufacturing, where 20,000 people worked. The benefit was visible as one approached the city, one knew there was a big player in the area because so many ancillary industries had piggybacked on to it to make it much bigger.

We have to do that in this country. I use the example of the Shannon development zone which was very effective in years gone by. It was a co-ordinated plan and those of us who were not from that area travelled there to see what was available. The nearby airport was used very effectively at that time, although circumstances have changed since. It had a co-ordinated plan which affected the whole region. Immediately one drove into the area one could sense that there was something afoot.

We have to replicate that performance in particular throughout the midlands, the mid-west, the south and in the north west. I agree with the references to the development in Longford which is a worthwhile experience, a great development and a great proposal and we hope that it goes well. It is up to the local people there to drive it on from there. There was an equally welcome investment in the Waterford-Kilkenny area in recent times and also in Tipperary and various other regions. It is the beginning but there is a long way to go. The geographic isolation needs to be addressed. The social and economic deprivation to which my colleague referred has to be addressed in cities and towns, in both urban and rural areas.

When one is in the trenches for a while - as we all try to be - one notices things in a way that the people living there all the time do not necessarily notice. For example, I remember canvassing in a by-election - I will not say where - in an urban area and seeing the children coming home from school and studying in stairwells that were littered with disused needles and various other items and castoffs - not the proper environment nor the kind of environment in which we would expect our children to excel. It is not fair to them and there is no necessity for it. We need to spend much more time addressing those social issues, including that kind of deprivation that forces children at first or second level of schooling to study in an environment that is anything but conducive to study. Those coming from that bacground will be at a disadvantage when they go into the workplace in order to compete with others. I support the remarks made by my colleague, Senator Aideen Hayden. There is a great deal of scope for improvement that we have not tapped into. It applies to all our cities and to some rural areas.

I referred to the question of anchor investors. We need them, we need to look after them, we need to ensure they stay here and we need to ensure they continue to come. No industry lasts forever in that times change and we have to be prepared. In the context of planning we need to encourage our local authorities to try to ensure that they plan sensitively in order to give the best possible opportunity to those providing jobs in order for them to do so in the respective regions. The local authorities should not impose restrictions to the extent that people will decide it is not worth the risk and they will go elsewhere.

We need to prioritise the issues that impact most on us. For instance, in the urban areas, access to proper areas of recreation is an issue that must be dealt with to a far greater extent than has been the case. The Government is doing this but we must improve on it. Access to sport is a means of deflecting attention from other activities that are not so constructive and certainly not so useful in the workplace. I refer to basic requirements such as access to water. Water services will become a huge issue in the future, much more than we have ever experienced. Major industries coming to this country and existing indigenous industries will rely heavily on high quality water supply and instant availability. They do not want to wait for two, three or ten years before they get it. We need to have the best of modern telecommunications such as broadband available throughout all the regions. In the area of transport there has been reference to congestion and rightly so. In particular this is the case in the eastern region all the time. We need to implement counter-measures. For instance, the M50 any morning at rush hour is jammed with traffic. It reached over-capacity a long time ago. We need to plan for the future, not just for the moment. The Naas dual carriageway stood the test of time for far longer than some of the more recent introductions to that area.

Climate change is an important issue which has the potential to impact positively or negatively on our most important industry, in particular, in the context of economic recovery. In the recent past, during the boom, for instance, little regard was had for the agricultural sector and nobody wanted to know about it. Sons and daughters from the agricultural community wanted to get into development or go anywhere else other than agriculture. When the crunch came, it showed that our basic industries were the ones that carried the responsibility and had the ability to recover much more quickly than any other sector. I agree entirely with and I strongly support every effort that can be made to ensure that we comply with the requirements and that we do not incur carbon penalties to the extent that this might happen, resulting in the obvious negative impact on the whole industry and associated industries. We must maximise the availability of realisable alternative energy because it is on that basis that we will be able to compete with all others.

Photo of Seán CroweSeán Crowe (Dublin South West, Sinn Fein)
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I welcome the delegates to the meeting.

I will be brief in my contribution. I refer to references in the presentation to regional disparities. I agree with my colleagues that parts of Dublin have not seen the so-called growth and development in the region. Many of those areas were left behind during the boom times. They are still being left behind and another cycle begins.

The delegates are meeting their European counterparts in committees. Is there any sense that they understand the sacrifices and the difficulties that people have endured in Ireland and in countries like Ireland? There does not seem to be this understanding at other levels. People think that we have done well, that we are now in recovery mode and the country is back on track. There is no sense of the sacrifices that have been made and the sacrifices that are still being made. Do the delegates regard their role as complementing the Minister or do they regard their role as being separate with a separate voice and pair of eyes at local and regional level? I am trying to tease that out for people who are listening at home. The jargon we use in this meeting is NUTS III classification but people are scratching their heads wondering what is NUTS III. The language we use, such as reference to LEOs, is completely different from the language used by ordinary people.

I mentioned two-tier development or recovery when speaking to the Minister. I spoke about job creation. Do people in Europe understand that many of the new jobs created are low-income jobs? Is there any sense or understanding that Ireland has proportionately the highest number of people in low-income jobs in Europe?

We had a spatial strategy during the boom times. What happened to it? That development did not happen. The Minister is now talking about developing a new spatial strategy. That is certainly the way to go. The local authorities are going to oversee it. This problem developed when all sorts of structures were in place. The previous spatial strategy was led by the Government, but it did not happen in many regions. I could refer to many of the places where the councillors are from, including counties Leitrim and Limerick. There were weaknesses within the strategy. Are the councillors confident that this will work at local level? In my experience, the Government does not really listen to local authority members. I am worried that if this is the driver for change, if this is how the spatial strategy is going to be rolled out, at some stage the Minister will say he does not necessarily agree with it and it will be pushed to one side.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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A number of questions have been asked.

Ms Mary Freehill:

Will I start as the lead speaker?

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Perhaps Ms Freehill can start. I suggest the witnesses can answer the questions they think are relevant to them.

Ms Mary Freehill:

I suppose the first thing to say is that this meeting and the previous meeting represent the first formal contact, involving a group of people outside central government, where business has been done. We thank the Chairman for facilitating that. It is the first time such an initiative has been taken. It is very important to recognise that we need much more interaction. The committee can talk to us, but we cannot talk to the committee. Perhaps we can see how that might be changed.

It was music to my ears to hear the Minister for the Environment, Community and Local Government say last week that it is time for the regions to play to their strengths. I think there has been a very welcome change in attitude. Historically, Ireland has been way behind many other countries in terms of the level of centrality of the system of governance. Maybe this is one of the good things that might come out of the process of local government reform. It is up to all of us to start working on this.

I would like to speak about economic growth. There is no doubt that IDA Ireland is very regionalised. It is working very well at that level. There is a need to connect that into the regional assemblies. We used to have two regional assemblies but we now have three. All of that has to bed down. More clarity is needed from the Department of the Environment, Community and Local Government in terms of how we will work on that.

Deputy Crowe mentioned the use of nomenclature like NUTS II and NUTS III. I suggest there is very real meaning in that in so far as it presents us with the figures and what we have to deal with. A great deal of clarity is needed in that regard.

The regional assemblies are certainly up for it. We want to work. Although we are here from the European Committee of the Regions, we are also members of regional assemblies. If we are to work, the regional assemblies have to work. It is about everyone working together.

Senator Hayden asked whether this has really started. I am saying that we need a team approach. We had a meeting with Declan Kelleher, who is Ireland's ambassador at the permanent representation in Brussels, when we were in that city last week. It was a welcome first step because it allows us to start moving on this and to operate in a much more coherent way.

Senator Hayden asked about the centralisation of procurement and about the Social Inclusion and Community Activation Programme, SICAP. Both of those questions can be answered in the same way. A very centralised approach to all of this was probably taken. I wonder whether a sufficient percentage of value was assigned to track records, to local knowledge and to what had been done in the past when projects were being weighed and evaluated under SICAP. I have questions about the way that was done. Perhaps the same thing applies to procurement, although that is saving money and probably creates much more transparency than we might otherwise have had. I think these things always have to be looked at again.

I would like to respond to Deputy Durkan, who was a councillor at one stage.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Once upon a time.

Ms Mary Freehill:

We worked together. The Deputy spoke about Germany, etc. I come back to the point that a co-ordinated plan is needed for the regions. One of our big difficulties is that national statistics and indicators keep being used. We need to make much more use of our regional indicators. I took that up at a recent meeting of the European Committee of the Regions when reference was made to 80% broadband coverage. That was probably the national figure. As we know, the provision of broadband in Ireland was left to the market and we saw what happened. The Minister, Deputy White, is doing a very good job in rectifying all of that at the moment.

Deputy Crowe referred to regional disparities. The European Committee of the Regions is extremely concerned about the urban indicators because the presence of the wealthiest people within a city means the existence of the highest level of poverty in the same city does not show up.

The Deputy also referred to those who are low paid. When we were waiting for the airplane with our Northern Ireland colleagues on our way back from Brussels the other day, they pointed out that salaries in the South are 15% higher, even among low-paid workers, than they are in the North. I suppose we are doing something right. That does not mean we do not have a very big challenge in that area.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Is that a reflection of the change in sterling?

Ms Mary Freehill:

No, it was the case even before that change. Those involved in business will say there is quite a difference.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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There is a disparity.

Ms Mary Freehill:

Yes. Perhaps my colleagues would like to come in at this point.

Mr. Enda Stenson:

I thank my colleagues for allowing me to say my cúpla focal now even though I was due to be the fourth speaker. I probably have the longest journey home and transport to Leitrim is not always the easiest. I know my colleagues will cover everything that needs to be said. I believe there should be better consultation with local authorities. There is a lack of consultation in this country from top to bottom. We can be working away, but I am not sure at times. I do not know whether the funding is coming through to help the wonderful regional assemblies and their wonderful staff. The western and Border regions probably suffered more over the years of the Troubles and all of that than any other region of this country. I think we deserve better help at times. Our transport system and everything else is not at the same level.

We have three regions in this country - the Dublin region, the southern region and the western region. The western region might be the poorest of the three. I believe something has to be done for our rural towns, particularly in the western region. The centres of many rural towns are dying. We need to get help from somewhere. I appeal to the relevant authorities to help us through this. I know there was a programme on RTE lately about rural degeneration. There is no place like the west and rural Ireland. People might be surprised to hear I would never for the life of me leave somewhere like Leitrim. We love that part of the country. I think there should be greater co-operation with places like our region. I appeal to people in higher levels of authority to facilitate that.

We used to have a huge industry in our county. Deputy Durkan mentioned that up to 20,000 people are employed in large places in Germany. That is comparable in relative terms to what we had in Carrick-on-Shannon when MBNA employed 1,200 people there. When people came into the town, they immediately knew something was happening. Sadly, MBNA is gone. The regions should be supported in things like that. Employment should be given back to the regions. That is what will keep the regions alive. We never want to let the regions die.

I will hand over to my colleagues. I thank the committee very much and am sorry that I have to leave.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I am sorry Councillor Stenson has to leave early. We thank him for attending today and wish him the best.

Mr. Enda Stenson:

The committee is very welcome.

Mr. Neale Richmond:

Unlike Councillor Stenson, I only have to get the Luas home so the committee is stuck with me for as long as it will put up with me. There are a couple of points I will address in as chronological an order as I can. The regional spread and aspect of the Action Plan for Jobs was raised. It is something we have seen quite a bit in the three years since the Action Plan for Jobs was launched. It was initially focused on the larger urban areas, and definitely Dublin, which was probably necessary to restore the holes and go not for the quick fixes but for areas where it was easier to attract jobs straight after the crash. However, we are starting to see that improve with, for example, Centre Parcs in Longford, which sounds brilliant to me. There is an entire strategy for the midlands which is due to come on stream, we are told by the Government, in the coming months. That could add a great deal to the regional aspect of the Action Plan for Jobs. It is something that is greatly needed. As my colleagues have mentioned, the co-operation between Enterprise Ireland and the IDA has been top class in terms of bringing in jobs. We see the people going across to foreign countries and operating within the internal market to attract investment. They are going out flying the flag and wearing the jersey. It is something of which we should be very proud and to see a regional dimension come into it is definitely welcome. It will allow for longer-term sustainable growth.

Deputy Durkan mentioned an anchor investor but as Councillor Stenson mentioned in the cases of MBNA and, Councillor Maria Byrne will probably not thank me for saying it, Dell, we saw the risks that come with putting all our apples with one big anchor investor. We feel a cluster of investors is required. It is about having an area for the region where a number of companies come in, not just a large one-stop shop on which a whole town or city relies. It is about a couple of companies starting from SMEs, which are the backbone of the European economy, building up to the larger ones. They all feed in, tying into third level institutions and also second level with whatever training programmes are there. That is where the local authorities come in.

The issue about disposable income after taxation, which Senator Hayden raised, is extremely apparent in Dublin, especially when it comes to the housing crisis. The housing crisis is at all levels. It is an affordable housing crisis as much as a social housing crisis. It is the generation to which I belong which is looking to get a foot on the property ladder. Let us face the fact that Irish people are addicted to owning property. We must face that as an aspect of our culture. When one is going out looking at mortgage compared to rental options in Dublin, it is simply cheaper to get a mortgage per month than to pay out rent, especially for a three-bedroom semi-detached house or two-bedroom apartment.

I do not know how popular I will be with Councillor Maria Byrne for saying that what we would like to see is local authorities and the Government playing a balancing act on the local property tax. It is something that is coming up repeatedly. On my authority of Dún Laoghaire-Rathdown, which Senator Hayden will know, we reduced the property tax by 15%, as did Dublin City Council, in our first year since the local elections. We were able to do it - the funds were in place - even though we only got to hold on to 80% of our property tax. We cannot do that again for four years. That is done. We do not know what the property market will do and what sort of measures the Government will introduce on the revaluation of properties, especially in Dublin. We have reduced the property tax by 15%, but in many places in Dublin property values have gone up 30% since the original revaluation. Is the solution from central government and the Minister for Finance simply to freeze the valuation of properties as is at the rate, or is it to give local authorities in Dublin the opportunity to reduce it or increase it as much as they see fit in order to produce the services they need? That is something that could address Dublin-specific concerns around disposable income. I know a great many people who noticed that 15% coming off their bills this year.

Deputy Crowe made some comments and suggestions. When we go over to Brussels, we go as a delegation of nine Irish people having met beforehand. Therefore, when Councillor Stenson and Councillor McCarthy from Cork were tabling amendments last week, we were able to back them.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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Is that Councillor Catherine McCarthy?

Mr. Neale Richmond:

Councillor Ciaran McCarthy is an independent councillor from Cork. Within our group, we sit in larger political groups, as Senator Burke will remember. Councillor Maria Byrne and I are members of the EPP, while Councillor Freehill is a member of the socialist grouping. We mirror the European Parliament. Councillors McCarthy, Stenson and McGrath, who are all independents, sit in the European Free Alliance which used to involve Fianna Fáil and the Europe of the Nations group once upon a time. As a Sinn Féin councillor, Rose Conway Walsh from Mayo sits as an independent. Our two Fianna Fáil colleagues sit in the liberal ALDE group. As such, we have a responsibility to our groups as well. We do not go over there and completely abandon what we feel is important, but we have differing opinions. Maria Byrne and I are proud members of Fine Gael and the EPP, as are all the members of their respective affiliations, and we must do what we believe accords with our political persuasions. We are talking about certain different things. We will have different opinions on everything political, but that is the way it goes.

There is definitely an appreciation at a European level of the sacrifices Ireland has made. Maria Byrne and I had a meeting with a number of leading EPP MEPs and members of the European Council, Heads of State and Ministers when we were over for plenary last week. All of them speaking to our entire group of representatives from 28 member states cited the examples of both Ireland and Portugal as countries which have made deep and meaningful sacrifices, albeit sacrifices with a direction. They were made for a reason, which was to get back on an even keel. We will probably disagree politically on whether it was the right thing to do, but there is a recognition that something was done and things definitely have changed at an Irish level. We are seeing that with the type of jobs that are coming on stream. They are not all low-paid jobs. We are seeing some really high-paying high-tech jobs. Within the fin-tech sector, there is a potential in the next 20 years for 5,000 jobs with an average wage of €80,000 per annum. That is a high-quality sustainable job of the type we need to attract to Ireland and not just for Dublin, Cork or the Kerry region. We need such jobs throughout the entire country because that is where we compete against the other European regions such as Poland and the UK, especially Scotland. I will hand over to Councillor Byrne to wrap up.

Ms Maria Byrne:

The Chairman asked a question on the Action Plan for Jobs. In Limerick, people welcomed the fact that the Minister came down and spoke directly. There were people there to give advice and there was interaction. People felt their voices were being heard, which was very important. It was not seen that everything was happening above in Dublin but that things were spread throughout the country. That is just a comment I heard back.

Senator Burke asked a question about Limerick and the amalgamation of the local authorities. We have had the amalgamation of Limerick city and county councils since last year, but we sat as two separate councils leading up to the local elections, since which all 40 councillors have sat around the same table. It has certainly involved a learning curve for everyone. Of the old city council, only six councillors were returned whereas a significant number of county councillors from the former county council were returned. The rest is made up of newly elected members. Some of my colleagues come from the really urban areas while my own area goes from urban to extremely urban and rural to extremely rural and is very diverse compared with when I was on the city council. I am covering everything from one-off housing applications to investment in the city centre. It is very different.

Certainly there has been a great deal of emphasis on the redevelopment of the city centre. Limerick city was governed by three local authorities previously. One had Limerick City Council, Limerick County Council and Clare County Council on the outskirts. A number of out-of-town shopping centres were granted permission with a detrimental effect on the city centre. We are now operating as a unit. Deputy Durkan referred to the Shannon Development lands and it is interesting that there is now a partnership approach between the educational institutions and Shannon Airport, which is in Clare. There is a joined-up thinking approach that was never there before. When I was first elected in 1999, the city operated as the city and everybody else operated separately. The joined-up approach has certainly helped. A number of my colleagues in the really rural areas see the city and investment in the city centre as a threat, however. This goes back to my reference earlier to Innovate Limerick, which we set up under the LEOs and the economic development unit.

They have purchased six incubation units, which are located not only in the city but the county, including the Andersen plant in Rathkeale which is an extremely rural area. Occupancy at this plant is currently 80%, with some companies having purchased part of the plant and the remainder paying rent. A further 20% remains unoccupied.

We have also purchased other key infrastructure. It is all about providing space, the returns from which will be invested in our economic development plan. There is more joined-up thinking now than in the past. We are on a learning curve. It will take up to two election terms before everybody is satisfied that we are all operating on a level playing field. However, this is the most positive thing that has happened and in the long-term it will benefit not only Limerick but the region in that we will into the future be working together rather than competing with one another.

In terms of the housing crisis, there are more than 5,000 people on our housing waiting list. Councillor Richmond mentioned that people in Ireland like to own their home while across Europe people predominantly like to rent. I spoke only yesterday to a person who has been renting a house in an urban area, in respect of which the rent up to now was €500 per month but has since been increased to €800 per month. It is an issue that needs to be addressed.

The Social Inclusion Community and Activation Programme, SICAP, was mentioned. The fact that funding for urban and rural development is to be administered locally is very positive. In Limerick, PAUL Partnership and the rural development companies now operate under one umbrella. This means there will be equal distribution in terms of funding provision for relevant projects. As regards the one-size fits all for the different regions, I do not think that will be the case. Each region is different and has their own difficulties and crises which need to be addressed. While the regions need to work together, the same issues do not arise across the board.

Local SMEs are covered by our economic development unit. Councillor Richmond referred to Dell. I was delighted to hear the 100 job announcements by the company today. While previously there were 3,500 people working at that plant the current workforce is only approximately 1,000, but it appears it is set to increase. While that is very positive it is important we do not put all of our eggs in the one basket. Job losses at that plant had a huge socioeconomic effect not only on Limerick but on the region because there were people working there from counties Tipperary, Clare and Kerry as well. It is good see a company increasing its workforce.

Recreation and sport was mentioned. All across the country we have fine facilities in this regard. The linkage between sport and business is to be commended.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I thank all of our witnesses for attending today's meeting and for their useful contributions. As I said, our final engagement on this issue will take place next week with delegates from the Economic and Social Research Institute, ESRI.

Ms Maria Byrne:

In regard to the committee's request that we obtain a recommendation from some of the stakeholders, we will work on that.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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We would need it, at the latest, two weeks from today.

Ms Maria Byrne:

That is fine.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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We will then incorporate it into our submission.

Ms Mary Freehill:

As a group, we welcome the opportunity to work with the committee. Given that we now also represent the regional assemblies, it is important we find a way of working closer together. It is in our collective interests to do so.

Photo of Dominic HanniganDominic Hannigan (Meath East, Labour)
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I agree.

The joint committee went into private session at 4.35 p.m. and adjourned at 4.45 p.m. until 12.15 p.m. on Wednesday, 29 April 2015.