Oireachtas Joint and Select Committees
Tuesday, 21 June 2016
Select Committee on Jobs, Enterprise and Innovation
Estimates for Public Services 2016
Vote 32 - Department of Jobs, Enterprise and Innovation (Revised)
We are in public session. I remind members, visitors and people in the Visitors Gallery to ensure their mobile telephones are switched off for the duration of the meeting as they interfere with the broadcasting equipment, even when in silent mode.
Members are reminded of the long-standing practice that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.
I welcome the Minister for Jobs, Enterprise and Innovation, Deputy Mary Mitchell O'Connor; the Minister of State with responsibility for training and skills, Deputy John Halligan, who is from my own constituency; and the Minister of State with responsibility for business and employment, Deputy Pat Breen. On behalf of the committee, I congratulate you all on your appointment and wish you well in your new posts. I also welcome the Department officials and thank them for the provision of the briefing material, which has been circulated to committee members.
Based on this information, the secretariat has prepared a briefing document which has been circulated to members and the Department. As agreed to in private session, the meeting will follow the following structure. A fixed time will be allocated to consider each programme, A to D, with the option of returning to particular programmes after each has been gone through, if issues remain outstanding. This will allow members with an interest in a particular programme to schedule their time and ensure the committee will give consideration to all programmes.
On programme A, jobs and enterprise, the Minister, Deputy Mary Mitchell O'Connor, will make a brief opening statement, to include the following points: whether there are emerging pressures likely to impact on departmental performance or expenditure in 2016; whether there are concerns about performance or service delivery in particular areas to the extent that there is a possibility that funding allocated to particular areas will not be fully spent by year-end; the areas involved and the reasons for the possible savings or underspend; and whether reallocation of funds to, from or within the programme has taken place or been completed. I will then take questions from members who will be invited to speak in the order in which they indicate on each programme.
On programme B, innovation, the Minister of State with responsibility for training and skills, Deputy John Halligan, who has specific responsibilities which span the programme will make a brief statement and the meeting will then proceed in the same way as for programme A. On programme C, regulation, the Minister of State with responsibility for business and employment, Deputy Pat Breen, who has specific responsibilities which span programmes A and C will make a brief statement on key elements with his remit in the context of regulation. The meeting will then proceed in the same way as for programmes A and B. We will then move to questions on programme D, appropriations-in-aid, if any. Individual programmes may be revisited in turn if there are issues outstanding. I ask members, when putting questions, to indicate the particular subhead or page in the departmental briefing material to which they are referring. Is that agreed? Agreed.
I congratulate Deputy Mary Butler on her appointment as Chairman and wish her the very best. I am glad to have Deputies Niall Collins, Stephen S. Donnelly, Tom Neville, Bríd Smith, Noel Rock and Maurice Quinlivan as members of the committee.
I am grateful for the opportunity to say a few introductory words on the Department's 2016 Estimate. Initially, I will refer briefly to the high-level details of the financial allocations across the Department for this year. I will then provide a brief commentary on recent progress across the jobs, innovation and regulation agendas, the three big programme expenditure programmes within the Estimate. Time permitting, I will also briefly allude to our plans to continue on the road to full employment and our target to create a further 200,000 jobs by 2020.
On the 2016 financial details, the total gross allocation for the Department is €810,000,047, as per the published 2016 Revised Estimates Volume. This includes funding for the Department, its offices and agencies. It compares to a 2015 Estimate provision of €810.1 million. Therefore, for 2016 it is essentially a no-change scenario in terms of the quantum of the Exchequer funding provision. Nonetheless, there are some modest changes between the capital and the current expenditure distributions. This year the Department and its agencies have a total of €513 million available in Exchequer capital funding.
This represents an increase of €4 million on the 2015 capital allocation of €509 million. However, it is important that committee members recognise that the Department was provided with an additional €50 million in capital moneys through a Supplementary Estimate in December 2015. The purpose of the Supplementary Estimate was to provide €21 million for IDA Ireland, mainly to commence its first and new five-year regional property programme.
The December 2015 Supplementary Estimate provided €29 million for innovation supports which helped to meet some commitments earlier than anticipated. It created additional headroom for extra activity by the agencies in 2016.
The most significant change in capital allocations this year is the increase in IDA Ireland's capital provision. IDA Ireland sees a €27 million increase on its 2015 total capital allocation of €95 million, resulting in a total of €122 million this year. Essentially, this increase will enable IDA Ireland to continue progress on its regional property programme during 2016. This is part of the €150 million five-year new IDA Ireland regional property programme announced in February 2015.
As highlighted in the material provided for committee members, the Department's capital expenditure to the end of May was €7 million, or 4% behind profile. It is a timing issue across the capital programmes and not indicative of any delayed activity or problem.
At this point of the year, we still anticipate capital expenditure in 2016 across the Department’s Vote such is the demand for enterprise and innovation supports. With regard to current pay and non-pay moneys, the allocation covering my Department, offices and agencies this year amounts to a total of €297.4 million gross. This is split across pay, at €155 million; pensions, at €49 million; and other non-pay elements, at €93 million. The figure of €155 million for pay covers the pay of approximately 850 staff in the Department and its offices. It covers approximately 1,600 staff in the enterprise agencies.
Our current expenditure is €5.7 million, which was 5% behind at the end of May. It is too early in the financial year to make definitive year-end projections of current expenditure. Committee members should be aware that any movement of moneys across subheads within the year requires the formal approval of the Minister for Public Expenditure and Reform. It is not something a Department can do unilaterally. This process is typically conducted shortly before the financial year-end, in November or December.
I will comment briefly on what we are doing with the total allocations this year, most of which are set out in specific actions articulated in the 2016 Action Plan for Jobs. As set out in the briefing material provided for committee members late last week, enterprise supports are multi-annual in nature. Therefore, the primary focus of Enterprise Ireland, IDA Ireland and local enterprise offices this year is on continuing the excellent job results they delivered in 2015. Last year Enterprise Ireland, IDA Ireland and local enterprise office clients, collectively, delivered over 44,000 gross new jobs, which resulted in 25,000 net new jobs. These results make 2015 a record year for the enterprise agencies. It means that over 410,000 jobs in the economy are now in companies directly supported by Enterprise Ireland, IDA Ireland and the local enterprise offices. This is the highest figure ever.
Allowing for the multiplier effect, a similar number of jobs, 400,000, is generated in terms of services and sub-supply to enterprise agency-supported clients. This year, through their capital programmes, Enterprise Ireland, IDA Ireland and the local enterprise offices will target a further 32,000 gross new jobs. There is good progress on the jobs front in the year to date but, as Minister of State, I want to ensure that we do even better. However, given the scale of agency operations, which span many thousands of clients, it is not possible to quantify the precise employment figures at this stage of the year. IDA Ireland will present its mid-year figures in early July. Enterprise Ireland and the local enterprise offices conduct an annual business survey of their clients at the end of the year. What we can say, however, is that good progress continues on the jobs front, as evidenced in the most recent CSO figures showing unemployment has dipped under 8% for the first time in over seven years.
Yesterday, I was delighted to announce the achievement of record export figures by Enterprise Ireland-supported clients. In 2015, exports by Enterprise Ireland companies surpassed €20 billion for the first time. This represents a 10% increase over 2014 export levels. There were increased exports in all sectors, with the biggest increases in the software, construction and manufacturing sectors. The primary policy supports underpinning these excellent results and our future targets are set out in Enterprise 2025. Enterprise 2025 is our new ten-year enterprise and jobs strategy, and it was published in late 2015. A core element of the strategy is the eight regional action plans that the Department co-ordinated and developed from early 2015 onwards. These are also complemented by Innovation 2020, our new national science strategy, on which I am sure the Minister of State, Deputy Halligan, will comment as we move into the examination of programme expenditure area B, which covers innovation. I am sure he will want to briefly outline some of the positive developments being supported through subhead B.4 of our Vote, concerning science and technology development. Under this subhead, significant capital investments are being made through Science Foundation Ireland and Enterprise Ireland. A key target of Enterprise 2025, which is also highlighted in the regional action plans, is our target of delivering a further 200,000 jobs in the period to 2020. Some 135,000 of these are targeted to be in the regions. Across the eight regional action plans, we are aiming for jobs growth of 10% to 15%. Admittedly, these are ambitious targets but I would point to the fact that since the action plan for jobs commenced in 2012, we now have over 155,000 more people working. We are approaching the point where 2 million people in the country will be at work.
While we have made excellent progress of the jobs front, bringing the unemployment rate below 8%, we recognise that there is further work to be done. A key deliverable for me this year is embedding the eight regional action plans. We recognise that there is a need to ensure more balanced regional economic growth. That is why we have developed the eight targeted regional plans, which will concentrate on specific regional strengths. We shall have the first update reports on implementation of these plans in the next couple of months.
Some important contributory aspects of our overall enterprise strategy fall within the areas of responsibility of the Minister of State, Deputy Breen.
I am sure that when we come to programme C, expenditure regulation, the Minister of State will elaborate further on some of the key factors underpinning our enterprise policy, such as a harmonious and effective industrial relations system and ensuring that work pays. I leave my comments there for the moment so that we can proceed to examine the respective programme expenditure areas.
I thank the Minister for attending. I congratulate the Chairman on her election to the post. I am delighted to be a member of the committee. Under the IDA, the Minister referred to property investment of €12 million to support new buildings and strategic sites. Does she have a list of those?
If the Deputy gives me one minute, I will be able give it to him. We are building advance factories at the moment. We have built or are in the process of building three and are planning the next three. I will call them out to the Deputy.
In year 1, we are building in Sligo, Tralee and Castlebar. In year 2, we are building in Galway, Dundalk and Limerick. In year 3, we are building in Athlone, Carlow and Waterford. I note 34 completions of advance facilities, including in Athlone and Waterford. There are nine further sites identified for advance facility construction and we have also identified 34 other sites for construction, investment, upgrade and acquisition. Those 34 sites range across 22 counties. Of those, 50% are business park portfolio, which equates to 14 sites, and these will receive significant site upgrades. Of the sites, four are to get complete advance facility construction. Of the large sites, seven are identified for strategic utility investment to make them shovel-ready. Of those, four have been identified for specific support infrastructure investment, which is water, link roads, etc. Two locations have been identified for site acquisition and related infrastructure investment. Limerick is there.
On the theme of the advance sites, will the Minister outline to the committee the criteria the Department or the agency followed in identifying the locations year on year? Were the sites identified in the existing portfolio of State-owned property or were they new greenfield sites?
The Minister referred in her opening statement to the regional property programme.
I presume the advance factory sites are part of that programme. What exactly does the programme entail in the case of the many vacant sites in State ownership around the country? They are IDA Ireland sites. How is this married with the site visits which take place nationally? The Minister said there were a number of counties in which no advance factory sites were planned. In parallel, it was indicated in a reply to a parliamentary question of mine recently that there were a number of counties which did not receive site visits. Therefore, there are gaps on the map on which we must focus our attention. Will the Minister provide us with an overview of how the regional property programme will push vacant sites and identify potential businesses for them?
Separately, am I right in saying the finances of Science Foundation Ireland, IDA Ireland, Enterprise Ireland, InterTradeIreland and the various agencies listed in programme A are all audited by the Comptroller and Auditor General? If so, they will be subject to scrutiny by the Committee of Public Accounts. Is there any issue of which this committee should be made aware arising from previous audits of any of the agencies involved? Most of us here are starting from scratch.
I tabled a parliamentary question on Brexit which, as the Minister will appreciate, is topical, given that the referendum is being held this week. The question was transferred to the Department of the Taoiseach. Will the Minister outline to the committee the level of activity of her Department and the agencies on this scenario or in contingency planning in advance of the result of the referendum? There seems to be a view that it is a little like hoping against hope it might not happen. There seems to be a drift and business is concerned. One does not need to recite the various statistics to show our reliance on our trading relationship with the United Kingdom.
If I have not taken a note of all of the Deputy's questions, he can remind me. I will start with Brexit. Obviously, we are watching very closely what is happening. The Government and most Irish people hope the United Kingdom will vote to remain in the European Union. The value of trade over and back across the Irish Sea every week is €1.2 billion. It is a massive trade and we want to protect it. We will do everything to protect it, but it must be remembered that there would be a two year lead-in period. It will not all happen on Friday morning if the people of the United Kingdom decide to exit. We have contingency plans in place and, depending on the result, will be meeting very early on Friday morning to decide what exactly we should do.
We will continue to work with our clients. I have mentioned Enterprise Ireland and that our exports are massive this year, at a figure of over €20 billion. England accounts for €7.2 billion of this figure. In fact, the trend is downwards; the figure has fallen from something like 45% ten years ago to approximately 37%.
To counteract this trend, Enterprise Ireland is making sure that we gain markets. We are diversifying and making sure that we are out there getting more markets. The agencies will continue to work really hard. We know there will be issues around currency fluctuation, regulation, tariffs and all of that. If such issues arise, our agencies will help their existing companies to work their way through any issues. It will be all hands on deck on Friday morning.
I was asked about the property background. IDA Ireland regularly assesses property requirements in the regions and it has identified locations where quality building and site solutions would enhance the property or the opportunity for winning FDI. I have a list of all the visits made by IDA Ireland to counties, but job creation is not all about IDA Ireland because Enterprise Ireland also delivers jobs. I know it is really popular to ask about visits by IDA Ireland.
In terms of clients of IDA Ireland coming to the country, if companies have decided to locate their businesses in a particular region, then it is really difficult for IDA Ireland to bully them to go somewhere else. Of course, if one has advance factories, suitable vacant factories or vacant company sites, then one can bring companies to these areas.
IDA Ireland has spoken to me about another issue. We can tell a Chinese or Singaporean company, for example, that it only takes one hour to travel from Dublin to Athlone but, in contrast, to us Athlone seems thousands of miles away. We are working our way through the matter. I am from the country. I know that I have said the following many times but I am determined that IDA Ireland and Enterprise Ireland will do their very best to bring their clients to the regions. Improvements have been made because last year, 51% of visits were made to rural and regional Ireland, but this year that figure has increased to 56%, which proves we are working away. I am sorry but Dublin and Cork are popular locations to visit, and Galway has had ten visits. I have visited Athlone, Galway, Sligo, Leitrim, Longford and Limerick. All the people in these locations, especially the teams that we have built around the regional plans, for example, the local authorities, IDA Ireland, Enterprise Ireland, local enterprise offices, LEOs, and industrial ambassadors, are doing their very best to ensure we get companies on board.
In terms of audits, I can confirm that audits are conducted by the Comptroller and Auditor General. There are no issues of concern across the agencies, in terms of the Comptroller and Auditor General's annual examination.
Yes. I start by congratulating the Minister and her Ministers of State, Deputy Breen and Deputy Halligan, on their appointments. I wish the Minister the best. I also wish the Chairman the best of luck. I am sure we will all be very well behaved most of the time.
A new Government, Minister and programme for Government have been put in place.
In terms of the spend presented to the Dáil last year, it was done with a particular political programme in mind. As there is a new Dáil, Minister, ministerial team and programme for Government, how has the spend changed? Presumably, it is now based on the new political priorities. Some of the things agreed to in January, for example, have now changed; therefore, some of the ways in which the money is being spent have also changed.
I congratulate the officials on coming in on budget. Perhaps we should send some of them to the Department of Health on secondment because they might save the country a great deal of money. It is fantastic to see expenditure coming in on budget, almost to the euro. The mix of how money is directed may have changed with the arrival of the new ministerial team and so forth. I would like to hear the Minister's views on same.
Would the Chairman prefer if I asked all of my questions together?
IDA Ireland's building programme is very good, but it needs to be more ambitious. I would like to see the Minister return to the Dáil to seek more funding. IDA Ireland has targeted third level institutions. In this regard, the Minister listed the institutes in Carlow, Athlone and Waterford. IDA Ireland is building where an institute of technology, university or college is located. That is fine, but many other places do not have such an institution. North Wicklow is an example and obviously I am lobbying on its behalf. There are plenty of areas where the lack of grade A office space means that nobody is coming to them and developers will not build the first building. It is a case of the chicken and the egg. We have lost several high-tech investment opportunities in north Wicklow because there are no suitable buildings available. I spoke to IDA Ireland about the matter and it explained that it was co-locating buildings with educational facilities. I ask the Minister to look at the matter.
I wish to ask follow-up questions to the one posed by Deputy Niall Collins. Is there a consultation programme? Could Dublin City Council, Wicklow County Council or Longford County Council approach IDA Ireland about securing an IDA Ireland building for its region?
I wish to talk about a third issue. It is one for Enterprise Ireland and that I have mentioned to the Minister in the Dáil. One of Enterprise Ireland's tasks is to link indigenous companies with the multinational supply chain. I have heard anecdotal evidence that it does not have the resources required to carry out this task properly. The issue has been paid lip service, but that is not a criticism. Linking companies is not happening on any scale, but there is a huge opportunity to create jobs. The Minister may not know the answer to my next question, but I ask her to come back to the committee with her answer. How much money has been allocated for the task of linking companies? Will such expenditure be increased?
My next questions concern gross and net job figures. Having a 45,000 jobs figure is great. Obviously, a net jobs figure of 25,000 means that 20,000 jobs have been lost, which seems like a lot. Are there structural or strategic reasons we are losing almost half of the jobs created? It feels like a big loss. Is the Minister concerned about the matter and is she looking at it?
Infrastructure has been mentioned. The latest World Competitiveness Yearbook ranks Ireland at No. 7, which is very good, but we are ranked at No. 23 when it comes to infrastructure. I know that the matter does not come within the remit of the Minister's Department, but it does advise on transport and broadband. Does the Minister think we should accelerate our investment in infrastructure, specifically with a view to increasing the level of job creation and retention?
As Dublin is served reasonably well, I would like to ask in particular about investment in infrastructure in the regions. I refer, for example, to the development of a high-quality road between Cork, Limerick and Galway, the acceleration of the roll-out of broadband and the development of innovation centres in smaller towns around the country. Does the Minister believe sufficient capital investment is happening to facilitate job creation? Would she like to see an increase in such investment?
Of course I would like to see more. We are pushing regional development. The programme for Government commits to provide an additional €300 million to Enterprise Ireland, the local enterprise offices and Údarás na Gaeltachta over a five-year period. It also contains a commitment to provide €200 million for IDA Ireland over five years. That will help to alleviate the infrastructure deficit. Deputy Donnelly knows that we just did not have money for investment from 2011 until 2014, at least. We were putting money into hospitals, schools and social welfare schemes. Now there is money coming on stream. I assure the Deputy that I will be pushing for more. I will make sure that over the next five years, we get the allocations of €300 million and €200 million to which I have referred.
Deputy Donnelly said there was an issue in Wicklow. I am sorry to hear some investment was lost there. I remind the Deputy that there is a consultative process. Representatives of IDA Ireland meet local authority officials regularly at the regional development implementation groups. They are all there in that mix. I advise the Deputy to encourage the chief executive in Wicklow to push for that and to identify whether there are vacant places where more can be built.
I would like to get some clarification in this regard. Perhaps the Minister has answered my specific question about IDA Ireland's building programme. That programme was stopped, obviously, but IDA Ireland is now doing it again.
I think it is a valuable programme. When IDA Ireland says it has another €20 million and intends to develop another five or ten office locations around the country, is there a formal process whereby it makes an announcement to that effect and seeks-----
I mentioned the nine advance factories that are being built. As far as I am aware, that is it for the moment. That is where the budget we have been given is going. That is what we have planned. The Deputy asked me whether there has been a change in the plan or in the budget since my appointment as Minister. I remind him that I have been here a month. A change cannot be made because of the 2017 capital review. As yet, there is no change in the 2016 spend. The agreement of the Department of Public Expenditure and Reform is needed to redirect 2016 spending. We will make sure there is an emphasis on the regions. I suppose it is good to come in here and listen to the members of the Select Committee on Jobs, Enterprise and Innovation pushing for this. Deputy Donnelly and his colleagues on the committee are making my job easier by doing so.
The Deputy also asked whether Enterprise Ireland is working with IDA Ireland to develop break-out companies from the foreign direct investment companies and to get more industry through from the foreign direct investment companies. I assure him that such work is ongoing as part of the global sourcing initiative. As I have mentioned, I was on a trade mission that went to Limerick, Athlone and Sligo. Approximately 50 foreign direct investment companies and at least 50 more Enterprise Ireland client companies were brought in and matched together. This was set up in a very organised manner. It was not done willy-nilly.
Efforts were made to ensure IDA Ireland and Enterprise Ireland had interviewed their clients and, therefore, knew what kind of matches to put together. When we met a particular gentleman who had attended a similar event two years previously, he told us he set up a business subsequent to that event and now has 45 people working for him. That is an example of what is happening under the global sourcing initiative, in which both agencies are involved.
The Deputy also asked about how budgets are used. In fact, both organisations use their budgets. There is no specific budget for these purposes. Both Enterprise Ireland and IDA Ireland use part of their respective budgets.
I would like to ask the Minister a specific question. I will understand if she does not have the number to hand. Does she know how much the two agencies are currently spending on this programme or this activity at present? Perhaps her officials have a sense of the level of expenditure in this area.
I cannot give the Deputy a precise amount for this particular programme, but I will get it for him. He can rest assured that he would be very impressed by these well-organised events. The feedback we have received, especially from the foreign direct investment companies, shows that they are delighted to do business in this way. I would like to mention another thing that came through to me when I saw smaller Enterprise Ireland companies providing industry, intellectual property or data to foreign direct investment companies. It seems to me that regardless of whether those in charge of the Irish divisions of the foreign direct investment companies are Irish or from outside the country, they put on the green jersey and make sure the overseas parts of their companies hear about the good supply chain performance they are getting from indigenous Enterprise Ireland-supported companies here. As a result of that, many smaller Irish companies are getting to trade abroad. We are trying to ensure that we facilitate as much of tis activity as possible in the interests of helping our indigenous companies to develop.
Deputy Donnelly also asked about the fall-off in jobs, or the "jobs churn" as it is called. This is a normal part of every economy. There is no overarching structural issue in our economy driving job losses at this point. In the past, we had issues with the construction sector and some other sectors, but now all sectors are growing. Of course, some are growing faster than others. Last year, the two agencies actually had their lowest level of jobs churn in recent years. However, the agencies are moving away from some of the older sectors to high-tech sectors. For example, they are moving away from pharmaceuticals to biopharmaceuticals. The pharmaceutical sector is presenting a kind of problem here. They are also moving jobs from ICT. The biopharmaceutical sector is huge in this country. The data sector is also massively important.
I would like to go off track for a moment. The Deputy spoke about infrastructure shortages. There is actually a skills shortage as well. If any mothers are listening to me, can I ask them to encourage their children towards subjects such as science, technology, engineering and mathematics? There is a massive shortage in ICT and in engineering. Those who will be filling out CAO forms before the end of June might take that on board.
I am delighted to have been selected to sit on this committee. I wish the Minister, Deputy Mitchell O'Connor, and the Ministers of State, Deputies Breen and Halligan, the very best of luck in their time in office. My questions will follow on from some of the questions that were asked earlier.
I welcome the 10% increase in exports over the past 12 months. Now that exports have reached over €20 billion, it is of paramount importance that there is a growth in manufacturing.
When an economy starts producing and exporting equipment, it creates a form of solidity within the country and the economy and that is to be welcomed. The Minister referred to this in the context of construction and software, both of which, as a country, we have been noted for over the past ten to 15 years. I welcome the drop in the numbers on the live register and the continued momentum in generating employment, given the crash that we went through some years back. I am a returning emigrant who came back in 2013. I had to emigrate as a result of the crash. There are plenty of other emigrants coming back and availing of employment opportunities in the domestic economy and, beforehand, as a result of foreign direct investment.
Following on from Deputy Niall Collins’s question, there are vacant IDA Ireland properties around the country which may be 30 years old. Has an audit taken place of these properties? Has there been some analysis as to why these are vacant or how many site visits have been made to them? At what stage of the process did they drop out? Was it at the 10% stage of winning the business or at the 80% stage? Did they just drop out at the end of the pipeline? Has there been any analysis of this? If so, have any targets been set for these vacant properties?
I thank Deputy Neville for his kind words.
In 2015, exports amounted to €220 billion, of which Enterprise Ireland-backed companies accounted for €20 billion. That is welcome news. We will keep pushing to ensure we do the best for Ireland. IDA Ireland is seeking more money to develop sites. In the programme for Government, €200 million is earmarked for IDA Ireland and €300 million for Enterprise Ireland. IDA Ireland has also looked to the private sector to provide factory sites. We have had a few successes, although not many, with the private sector providing factory spaces. Last week, we had one in Galway provided by the private sector. Over the years, IDA Ireland has negotiated exits from several private finance leases, trying to get them at better prices.
Limerick was the subject of nine site visits in the first quarter of the year. We will be pushing to ensure more visits get to Limerick. As we stated in the regional plans, it is from the ground up and not all about IDA Ireland or Enterprise Ireland. It is also about the local enterprise offices, LEOs, and small businesses such as the woman who wants to start a cheese-manufacturing business in her house or the beautician who wants to employ people. It is not all about IDA Ireland coming with the Googles or the Facebooks but about developing small businesses. We need to ensure microfinance is available for these small businesses. Microfinance Ireland can provide loans from €2,000 up to €25,000, for example. When people wish to borrow money from the banks, they should also send them to the various agencies from which they can borrow money. To be fair, IDA Ireland and the Googles are not all going to land down in, say, my hometown, Milltown, County Galway. However, they may look at Tuam where there is an IDA Ireland park. The councillors, business people and others there are all pushing to ensure its IDA Ireland park is used and recognised.
They are pushing to ensure the park is on the IDA’s radar and gets site visits to highlight the available spaces to prospective companies.
One can hear all the bad news but 70 new jobs per day were created last year by Irish business people, foreign direct investment, small businesses, Enterprise Ireland and IDA Ireland. While that is the good news, I am conscious of those who have not got on to the jobs ladder. Coming from an education background, I know every mother wants the best for their children and wants them to have a good job. That is my aim too. We should not be looking down our noses at the smaller jobs. Parents need to start thinking about apprenticeships for their children, as it is not all about getting a degree. There is so much more to be done.
If a Deputy believes it would be good for me, as Minister, to accompany the IDA or Enterprise Ireland on a site visit, I would be more than happy to do so. It is my job to ensure we get the best jobs we can for our country.
My overarching question is to do with the committee having an oversight or a watchdog role as to what kinds of jobs these are. I have just come away from a large protest of young teachers who are suffering pay inequality. Due to the pay policies introduced by this Government, in their lifetime, they will earn €250,000 less than their counterparts or the teacher behind them. That is the cost of a house. This morning, I was on the picket line at Childminding Ireland in County Wicklow. This company is backed by a local enterprise office and funded by the State through Pobal. Eight of its workers are on strike because they are being forcibly made redundant.
What oversight can this committee have because these are the sort of issues we could and should look at? As well as the numbers of jobs being created, we have to start looking at the types of jobs, their standards of work, pay and contract. The Minister of State, Deputy John Halligan, is looking at me because he knows exactly what I am talking about. The statistics might look good but some of the jobs leave much to be desired. Many abuses go on with public moneys.
The joint committee will include the members of this select committee and Senators. That committee will have a role to discuss all those items. However, the meeting today is specifically for consideration of the Revised Estimate that must go back to the Dáil. I am new to the role of Chairman. We are under a time constraint in that respect.
My question relates to the capital funding for agencies, including Enterprise Ireland, IDA Ireland and the National Standards Authority of Ireland, in the context of the capital funding voted through the Department. Do these agencies have a co-funding remit under their enabling legislation? In other words, can they raise other forms of finance to advance their capital programmes? For example, do they go to the strategic investment fund, which is the successor fund to the National Pensions Reserve Fund? Do they go to the private market or do they have a public private partnership approach? Can the Minister provide an overview on that matter?
My second supplementary question is tangential to the Action Plan for Jobs and relates to the shadow labour market. Unfortunately, we all know it is out there. For example, depending on who we talk to, the groups that support migrants who come to the country maintain there are in the region of up to 30,000 undocumented people here. Many have put down roots and have families and children. These people are working in the labour market but are undocumented. They may have come to the country with a certain visa status or perhaps student status and may be described as visa over-stayers by the Department of Justice, Equality and Law Reform. In any event, a significant number of people are in the marketplace but are not showing up on the radar. They may show up on some Revenue returns but are not otherwise officially recorded. Many are being forced to work in the shadow economy by virtue of their undocumented status. That is something which we should consider as part of the Action Plan for Jobs. Potentially, they could be forcing down rates of pay by virtue of the fact that they have to remain undocumented. They might have to work for cheaper rates of pay and many of them do so. I am keen to flag this to the Minister. This is a significant issue in our community and in the marketplace for labour.
If Deputy Niall Collins does not object, I will push that question to the Minister of State, Deputy Breen, who is in charge of the area.
The Deputy also asked about income from Enterprise Ireland and income earned by Enterprise Ireland and IDA Ireland.
No, they do not borrow money. They have their own resources and income and they get some of that from property, share sales or dividend income. They do not borrow money. However, they do leverage funding from the private sector in the area of venture capital. For example, Enterprise Ireland will invest €175 million over six years from 2014 to 2019 and then the private sector will add €525 million. This means €700 million for business in Ireland.
Thank you, Chairman. I congratulate you as well. As someone from my constituency I am delighted that you are chairing this committee. I welcome everyone from the various parties.
As Minister of State with responsibility for skills and apprenticeship my remit takes in enterprise, innovation, school buses, SOLAS and anything else one can think of, including the European Space Agency. If any members of the committee want me to come to their constituencies at any time or speak to any group in a constituency on any issue, I would be pleased to do so provided I get some days notice. I would be glad to drive down from Dublin or up from Waterford.
As the Minister, Deputy Mitchell O'Connor, has said, I have responsibility for research and development and innovation issues. I am pleased to outline to members some of the activities being delivered under what is termed programme B expenditure. Programme B expenditure accounts for approximately 60% of the total Department of Jobs, Enterprise and Innovation capital budget. Capital supports made by Science Foundation Ireland, the research community and Enterprise Ireland to client companies make up the bulk of this budget. The primary rationale for Government investment in science, technology and innovation, STI, is to develop a competitive knowledge-based economy and society to drive innovation and enterprise, build human capital and maximise the return on research and development investment for economic and social progress. The evidence shows that investment in research and development increases economic productivity and competitiveness and is crucial for creating and maintaining high-value jobs.
Innovation 2020 sets out the policies for Ireland to become a global innovation leader and provides a whole-of-government roadmap for the next five years to realise this goal. During the past decade and a half Ireland has built a strong science base which has yielded results in terms of economic and social impact. Ireland has steadily improved its ranking in the innovation union scoreboard, having moved from tenth place in 2013 to eighth place in 2015 and is currently in the group of strong innovators. Since 2009 Ireland has been listed among the top 20 countries in global rankings for the quality of its science research. However, there is no doubt we need to build on this - I will return to this point.
I will briefly outline some highlights from 2015 investments as well as targets we have set for 2016. There is no doubt that 2015 was a productive year for Science Foundation Ireland. I have met representatives of the foundation in recent days. Through the Science Foundation Ireland investigative programme a total of €30 million was awarded in research funding for 23 major projects, representing an important investment in future technology and development. A €28 million investment was made in research equipment and facilities in sectors including pharmaceutical, manufacturing, Internet of things, big data and additive manufacturing. Through the SFI programme an investment of €23 million further supported SFI's 12 research centres in cutting-edge research with industrial relevance.
There are 200 industry partners working intensively with SFI research centres and over 1,200 companies in total collaborating with SFI funded researchers. In 2016 and in line with the innovation 2020 programme Science Foundation Ireland will focus on supporting individual investigators at different career stages, attracting top research talent to Ireland and launching a new research centre.
Furthermore, Science Foundation Ireland will continue to support Irish researchers to compete and win non-Exchequer funding, particularly through the European Research Council. Through our investment in Enterprise Ireland, we have supported 896 collaborative research products between industry and academia, a record number. These projects ultimately provide companies with new commercial opportunities, cost savings or increasing capability. Enterprise Ireland will support another 900 collaborative projects in 2016. Some 14 industry-led technology centres are funded. These centres are collaborative entities established and led by the industry.
A joint initiative between Enterprise Ireland and IDA Ireland allows Irish companies and multinationals, currently 400, to work together. In 2015, we had the launch of the technology centre for dairy processing, research and innovation, and 2016 will see the establishment of a similar centre of excellence for the meat sector. Some 105 new high potential start-ups, known as HPSUs, supported in 2015 will create 1,500 jobs in the next three years. In 2016, the target is to create an additional 100 high potential start-ups, with 33 already created this year to date. In 2016, Enterprise Ireland will extend its technology gateway network to provide more regional technological cover to support local industries.
Through Ireland's membership of the European Space Agency, Irish companies secured more than €13 million in contracts in 2015 to develop and deliver technologies and products. I met the director of the European Space Agency this morning. Something that may go over the heads of many is that 50 businesses in Ireland contribute to the European Space Agency, providing 2,000 jobs. Last year we exported €75 million worth of products. One of the huge successes of the European Space Agency last year was the comet landing. Some of the technology used for landing on that comet was produced and made in Ireland.
Since 2000, Ireland has been listed among the top countries in global ranking: first, in nanoscience, second, in computer science, third, in animal and dairy science and fifth in material science. That is a phenomenal record for the 50 companies in Ireland that contribute to the European space programme. It is envisaged, based on what agency representatives told us this morning, that there will be more work as the agency has great confidence in the Irish companies. I say this because the director general of the European Space Agency, Johann-Dietrich - Jan - Wörner, was here this morning. The number of companies that invest and work in the European space programme was news to me on becoming Minister of State.
I am also happy to report on good progress on Horizon 2020, the EU framework programme for research and innovation. This is an important source of funding for research and innovation in Ireland. We have set an ambitious target to win €1.25 billion in competitive funding from Horizon 2020 between 2014 and 2020. Between 2014 and November 2015, Ireland won €251 million in competitive funding from Horizon 2020, €52 million of which went to SMEs. This performance has us on track to achieve the 2020 target. All this investment is helping to deliver impact. In 2015, we saw a record number of licences and commercially valuable technologies being transferred from higher education research to industry. We also saw the creation of 31 new spin-off companies from their roots in higher education research. In 2016, we will continue to drive the commercialisation of Irish research and will deliver more than 30 new spin-out companies as well as approximately 200 new commercial technologies.
As Minister of State with responsibility for skills and training, I fully understand the need for proper investment in the country's talent. Last year the secretary general of the OECD said that skills have become a global currency in the 21st century.
I welcome the ambitious targets set out in Innovation 2020, particularly around human capital aimed at ensuring a pipeline of talent. Our success will always depend on our people. The Government has protected investment in science technology and innovation because it understands the contribution it makes to economic productivity and competitiveness. We are in a strong position to build on previous investment and secure even greater impact from it. Innovation 2020 sets out the roadmap to deliver this with its focus on excellent talent and improving research and development.
I wish to pose a few questions and make a few observations. I am not sure how much basic scientific research comes into the Minister of State's brief and my figures may be out of date but I think it has been cut by about 60%. Scientists who were engaged in basic scientific research have essentially been outsourced to the pharmaceutical companies. Rather than developing new molecules, they are testing drugs for the pharmaceutical companies based in Ireland. I have met some of our leading scientists in the past two or three years. What they say is that this move away from basic scientific research and innovation towards a much more commercial role is essentially killing the innovation pipeline, the really high-tech stuff. Maybe not now, but in two, three or four years' time, our labs will dry up with our own research. Those scientists have met me privately. Several of them are worried about speaking out publicly, which is something to be aware of, but they are very concerned about that. I do not know if this falls within the Minister of State's remit and it may be for the Department of Education and Skills, but certainly anybody who is looking at innovation would want to know that. I want the Minister of State to know that and perhaps he would come back to the committee on it. He may already have a view on it.
The Vote before the committee is significant, comprising several hundred million euro. Does the Minister of State foresee any changes to it? In December, the Minister of State and I and all Members of the Dáil looked at the Supplementary Estimate for the Department of €50 million, which revised the original Estimate. I accept that the Minister and Minister of State are new to the role but does the Minister of State foresee making any changes during the rest of the year to the €333 million being brought forward? Is there anything within that spend that is not providing value for money that the committee and, therefore, the Dáil should know about? Is there anything that the group of Ministers, whatever way they work, might start doing that had not been envisaged and that might cost some extra money?
One of the subheads included in the Vote is our membership of international organisations. I would be keen for Ireland to join CERN in Switzerland, which is part of the physics group. This is something we have not done before. Does the Minister of State know how much it would cost? There are two types of membership - full membership and associate membership. Currently, three countries are associate members. Are there any plans for Ireland to join CERN and, if so, how much would it cost?
There is another issue on which I would like to know if any money is allocated. The Minister, quite rightly, encouraged everyone to start looking at science, technology, engineering and mathematics, STEM, subjects. However, there is a development gap between our scientists and our engineers. Scientists say that they are very good at creating very impressive science but they are not trained and usually not very interested in its commercialisation. Engineers are very good at product development but engineering professors say there is an ongoing lack of State investment in the linkages between the science and the engineers and specifically in terms of product development. It is something Ireland has never done well. The heads of schools say it is an area that needs investment.
It may come through the education Vote but it is certainly relevant to the Minister's Department.
I wish to pick up on a comment made by the Minister or Minister of State on the need to attract in the best academics - I could not agree more - and people from the private sector into academia. One of the biggest impediments to Ireland attracting really high calibre foreign academics and high calibre private sector people to go into academia is the academic hiring framework, which does not allow consideration of either private sector experience or foreign academic experience. Let me give an example of how this is hurting Ireland right now. I spoke with a professor recently who secured a lot of European money on Big Data and he needs to hire a group of people. He needs to hire two types of people - people from the private sector who are Big Data analysts from Twitter, Google and Facebook, etc., some of whom work in Ireland. He also needs to hire some world class academics - Cambridge is one of the leading areas, MIT, Caltech etc. He explained that he can employ them on €32,000 which is the starting salary for a junior academic. However, he is not allowed to take into account any of their academic work. He can turn to an MIT professor and say he is not allowed to pay that individual according to his 20 years' academic work in MIT because he did not do it in Ireland. Obviously, no leading academic will come to Ireland for that amount. Similarly, if he approaches people in Facebook, Google, Twitter and so on he is not allowed take into account, in the increment calculation, any of their work. He said he can hire somebody who has been working in the Department of Agriculture, Food and the Marine on bovine inoculation for a decade and pay that person because he or she is a public sector worker and that counts but he cannot take into account any private sector experience or any foreign academic experience. I was told this about six months ago. Perhaps the position has changed but I do not think it has. I raise this issue as I fully agree that we need to bring in the best people from abroad and from the private sector into academia but we are stopping ourselves doing that at the moment.
I will take as many questions as I can. I ask the Deputy to come back to me if I miss any questions. On the issue of funding for basic scientific research, statistical evidence for the academic year 2012-13 shows that 50.9% of the total higher education research and development budget was on basic research, which has shown very little change. My Department provides Science Foundation Ireland with its annual budget and in turn it invests in the academic research that is most likely to generate new knowledge. The evidence shows that a sizeable amount of that budget goes into basic research and Science Foundation Ireland appears to be okay with that.
The scientists say that what is happening is being hidden by that data. They say that the total amount of money being spent is not falling but that the work they have to do has changed. They have raised this issue before and the data the Minister of State has just given is exactly the data they have repeated back to them year after year. They are saying that the money for the labs has not decreased but what they are being asked to do for that money has fundamentally changed.
The Deputy may be correct. It is clear from Innovation 2000 that there is a commitment to establish a competitive fund across all the disciplines and sites to support research that is being done that might be under funded and new research that is coming on board, so the commitment is there. This fund will be established and administered by the research council. There is a commitment to at least keep the funding on a par for new projects. This fund will be established and farmed out.
The Deputy raised the issue of Ireland joining CERN. Ireland is exploring the possibility of membership of CERN which, at present day costs, will cost about €1 million per year. We are looking at possibly observer status for this year and, perhaps, 2017. If anything changes in the area I will come back to the Deputy.
The Deputy asked abut attracting new scientists and so on into Ireland. Again, Innovation 2000 and Science Foundation Ireland are keen that funding is made available to attract people into the sciences. Speaking to Science Foundation Ireland this morning, I am informed it has a couple of projects coming on board in the next couple of months, about which I will inform everybody, as to how it hopes to attract third level applicants and those from the sciences - biology, chemistry and so on - to high tech science. In the next couple of months Science Foundation Ireland and I will announce a project to include new technologies and new innovations from people who want to become involved in science. Across Europe, it is accepted that we are probably below par in terms of those who are coming into the sciences in Ireland.
Did the Deputy ask something about innovation?
It was more an observation. I was picking up on what the Minister of State had said about people doing STEM subjects. There is a gap between our scientists and our product development people. There has been insufficient investment in commercialisation and in the skillset and in creating the linkages and encouraging the IP out of the labs but there is also a gap in basic product development, training and application, which is something that should be considered.
Knowledge Transfer Ireland, KTI, has been tasked with helping companies to innovate and bridge the gap. Already I have met a number of businesses associated with the sciences and they do have some reservations. Overall, as I said earlier, there are 50 business companies dealing exclusively in science and science technology on a level with Europe which would not have been the case ten or 12 years ago. Science Foundation Ireland is coming here in a couple of weeks' time and anybody who wishes to meet it with me is welcome to do so. I was asked a question in the House last week on that issue by a Fianna Fáil Deputy. He has arranged to meet SFI with me. I will arrange for anybody who is interested to meet it. Its jobs is to make it easier to commercialise and ultimately create viable business and jobs from State-funded research from all third level institutes across the country. Knowledge Transfer Ireland plays a key role in commercialisation of the research and development fund. Again we hope to meet KTI in the next couple of weeks.
Did the Deputy ask about clinical trials?
That was the basic scientific research part. I made an observation on our academic hiring framework. Basically, we stopped ourselves being able to hire from the private sector and foreigners into academia. The other question relevant to the Vote was whether the Minister of State would recommend any changes to it based on what the Dáil saw in the supplementary Estimate for the Department for his Vote block of €333 million in December-January.
Conscious of Innovation 2020, most of the funding goes to SFI.
I have asked Science Foundation Ireland to recommend how science, technology and innovation could best serve the Irish economy in employment, development, reconfiguration of the sciences itself and in dealing with Europe and worldwide issues. They will revert to me in the next couple of weeks. Let me repeat that members of the committee are welcome to meet the witnesses from Science Foundation Ireland and put the relevant questions to them.
Let me emphasise that most of the funding goes to Science Foundation Ireland, which then allocates the funding. If members feel that the funding should be distributed in different ways, they should raise it with them.
I thank the Minister and Minister of State for their presentations. I thank both the Minister, Deputy Mitchell O'Connor and the Minister of State, Deputy Halligan for acceding to our request to meet us, be it in Limerick or elsewhere.
Will the Minister of State explain the 11% reduction in total expenditure for innovation in the Estimates? It is section B on page 80 of the Revised Estimates.
Deputy Quinlivan and I will work together on that.
My point is more of an observation on the Minister's comment that "skills are a global currency". I think we have to remember the Irish diaspora and the skills set of the modern Irish emigrant who had to leave in 2008 and 2009, when we had moved from a service to a knowledge-based economy in 2005 onwards. Those who left - be it the graduates or those with three or four years experience would now have a wealth of experience and if they did not chose to return home, they would have a network of colleagues which we could search for the skilled personnel we need, particularly in innovation. I know that those who work for large organisations have a knowledge that they will bring back to the country. I think we should prioritise the diaspora when we consider recruitment. We want to look after those living here but if there is a skills shortage, we should look at the networks of the Irish diaspora for those skilled in innovation, who can generate more growth when they return.
I will take up some of the points made by Deputy Neville. There is no question that we lost many skilled people during the recession. At one stage in 2007, there were 50,000 people serving their apprenticeship, and that number reduced to approximately 5,000.
Let us look at the apprenticeships that were on offer during the boom, such as electrics, carpentry, brickwork, plastering and so on, but following the downturn many builders decided not to take on apprentices and employ others, some from outside Ireland who were not qualified. I have no problem with people from outside of Ireland working here.
We lost the capacity to offer apprenticeships as the numbers offered dribbled out in some fundamental areas. It is my objective to try to entice companies to take on more people to serve an apprenticeship. It may require an added incentive for employers to do that. One of the suggestions that I had been making is that since JobBridge was being axed, paying a company to take on the apprentice for a period of time would work. The problem apprentices found, once they went through their three or four years training, was there was no job so they left.
Innovation 2020 is a programme where Enterprise Ireland, IDA, Science Foundation Ireland try to attract people with high quality jobs. Last week in University College Dublin I addressed the issue of job creation from high-tech jobs in the science area. It was agreed that in order to attract those who were highly skilled and qualified to return to this country, we would as Deputy Neville said not get them back unless we have the jobs. Under the Innovation 2020 programme, there is the human capital and creativity fund that would attempt to bring people back. I was in London last week to speak on Brexit, but I met many young people who had left and were working in high-tech industry in London and other parts of England, who would value an opportunity of good jobs to which to return. That is an issue this Government will address through the 2020 Horizon project.
I agree with the Minister of State that we need the jobs to bring back many who have gone, but we do not need jobs that are 100% of what they are doing, many will return for 70% of the job and because they are in technical innovation, they will grow that role into a different area of research and development. We have to be mindful that it takes less effort to get somebody back than to attract somebody new to the country. That is psychology.
My comments are to try to aid or help us see a way forward. That follows from what Deputy Donnelly said about the recruitment process so that if there are bottlenecks in the recruitment process they should be freed up and the avenue should be explored in order to attract them.
One of the difficulties in research and development as the Deputy will probably know is that some of the major multinational companies do their own research and development and do much of it outside of Ireland. That is a well known factor. The objective of the Innovation 2020 is to try to persuade those countries that Ireland has quality people to do research and development competitively. It can be done at a competitive price compared to having it done outside the country. This is applicable to industries that have been here a long time but still decide to conduct their research and development outside the country. I am not saying that is unacceptable, they may not accept me saying that but I think we need to persuade some of the major industries that the people are here and that the Innovation 2020 strategy will ensure there are graduates. We are endeavouring to try to retain our graduates and that is the reason we have allocated a great deal of money to the research and development fund. The bulk of the money goes into research and development.
I thank the Chair and wish her well in her role. I spent five years in a similar position on a different committee. It is a great honour to be a chairperson of an Oireachtas committee. I am sure that her five year tenure will be very fruitful. I want to wish all the other members of the committee well. This is a very powerful committee and it is very important to be a member of this committee in the present economic climate. I wish to let members know that I intend to work closely with all of them in carrying out my remit as Minister of State.
I am a bit nervous, looking across at three Limerick members, when considering all the jobs visits and field visits that were promised by the Minister and the visits in respect of Science Foundation Ireland. I hope there is something in it for us in County Clare as well. I wish the committee well.
Chairperson, I will deal specifically with my remit and will make some brief introductory comments on my role.
Subhead 3, C3 provided just over €19 million for the workplace relations programme. With the commencement of the Workplace Relations Act 2015 on 1 October 2015 two statutory independent bodies replaced the five previously in existence. From that date there is now a single body called the Workplace Relations Commission and an expanded Labour Court. This was the most radical reform of the State's workplace relations in more than 70 years. I think this is a very important development, particularly for future industrial relations. These new structures aim to deliver an independent, world class workplace relations service, which is easy to use, effective, provides for workable means of redress and enforcement within a reasonable period. It reduces the cost to business, which I think is important as well.
The allocation to the Workplace Relations Commission provides for extensive information services to workers and employers, for industrial relations advisory support as well as for conciliation and mediation of disputes. In addition it provides for inspection and enforcement of employment rights through the labour inspection services, formerly NERA. So far more than 5,000 inspections were carried out and 13,000 complaints were addressed in 2015.
Subhead C5 provides €17.5 million for expenditure on the Health and Safety Authority. That is a very important part of my remit that we should examine. We are now experiencing very strong economic growth, businesses are rapidly expanding and new jobs are being created on a daily basis, as outlined by the Minister and Minister of State. It is vital that we continue to prioritise the safety and health of all workers in a way that promotes business growth, aids competitiveness and protects workers. A particular focus remains on high risk areas such as agriculture and construction.
More than 10,800 inspections and investigations were carried out in 2015 and new ways of engaging such as using knowledge sharing groups of farmers and farm walks have been developed. Small and medium-sized businesses are the backbone of our economy and need simple tools and guidance to help them to manage workplace safety and health. The authority has been to the forefront in meeting this challenge with the continuing roll out of the BeSMART online risk assessment tool, reaching more than 30,000 businesses.
Subhead C13 provides close to €500,000 for the Low Pay Commission. Last year the newly established Low Pay Commission recommended an increase in the national minimum wage of 50 cent per hour. A rise of 5.8% to €9.15 cent per hour, which was accepted by the Government and took effect from 1 January this year. As Minister of State, I look forward to receiving the report of the Low Pay Commission with its recommendations on the rate for the national minimum wage for 2017 on 19 July next.
Subhead C15 provides for Ireland's annual subscription to the International Labour Organisation, ILO, of €1.5 million. The Department is currently deepening its engagement with the tripartite UN agency responsible for international labour standards, the International Labour Organisation and next year - I was at a meeting in Geneva about this last week - for the first time ever, Ireland will assume the titular seat on the ILO executive body of the governing body.
The Department of Jobs, Enterprise and Innovation deals with job permits only. It is the remit of the Department of Justice and Equality to deal with regulation of non-nationals, visas, citizenships and residency and this is a matter for the Minister, Deputy Fitzgerald or the Minister of State, Deputy Stanton to address. As Deputy Collins knows, we only issue permits where there is a skills shortage and that is currently being done in some areas.
I can deal with issues on the Workplace Relations Commission, inspections and so on.
Deputy Collins spoke about emigrants and migrants.
I thank the Minister of State, Deputy Breen, and wish him the best of luck.
My question refers to subhead C7, the Office of the Director of Corporate of Enforcement, ODCE. I am still reading into the brief in respect of this committee, but my understanding anecdotally is that in the past few years the office has not had the kind of-----
My understanding is that the office has been significantly under resourced, so for example, it did not have any forensic accountants.
It plays a critical role and I have always been very impressed by the professionalism of the office whenever I have dealt with it. We have a culture whereby white collar crime tends to go unnoticed and undetected. The ODCE is a critical part of the State infrastructure, yet funding for it is actually falling, albeit by a small amount. However, it must be asked if the amount of funding that is provided for under the subhead is sufficient for the ODCE to scale up to meet the funding requirements of the forensic accountants and all the other technical skill sets that I am told that it did not have two years ago. Perhaps it has them now. It must also be asked if the ODCE has sufficient funding to fully resource the office to do the job that needs to be done in the coming years.
Chairman, should I ask questions singly or a number of them together?
My next question is on subhead C8, the Competition and Consumer Protection Commission. I understand from the Department's briefing note that the commission was established in autumn 2015, a few months ago. Most of us would agree that the two bodies that came together never had the resources they needed so there has been an allegation of cartel behaviour, including monopolistic, duopolistic and oligopolistic behaviour in a few different industries. The two groups that have come together stated they never had the resources to do the job, that perhaps they could do one or two investigations at the same time but they could never really address serious allegations of what is essentially white collar crime. The funding to the new organisation has fallen for the year 2015-16, again by a small amount. Is the 2015 figure basically the combined budget for the two organisations that have come together? The line item in respect of 2016 refers to the new commission. Has additional funding been provided to increase the capacity of the commission because the two organisations that it brings together did not have that capacity?
With regard to regulation, there are key performance indicators, KPIs, for companies using the web portal of the Company Registration Office, CRO. Is there any money in the subhead for developing and building out a web portal to allow companies, the self-employed to do more of their compliance work online? I think I mentioned to both Ministers in the Chamber last week there is a system used in Norway called Altinn, which was implemented in 2001 and which has been hugely successful. Is there any money for building out that platform to allow more and more of the compliance to happen online? Is there funding for creating a one-stop shop for SMEs and the self-employed. The LEOs are there. There has been a discussion about a much more advanced service for the self-employed and the SMEs around the county. Has progress been made and has money been allocated in the Estimates regulatory subhead for a one-stop shop capacity?
The allocation for the regulatory area is about €83 million. We are now half way through the year. Is there anything that is not working within this group? The previous Minister brought a figure of €83 million before the Dáil at the end of last year. We are now half way through the year and I hope as much as possible of it is working, but what is not working, now that we are six months in to the year?
Deputy Stephen S. Donnelly asked if anything was not working. The answer is no.
I was asked about the funding for the Office of the Director of Corporate Enforcement, ODCE. Its funding has not seen a reduction. There was a return to 26 fortnightly pay periods in 2016, compared to 27 in 2015. Therefore, there was no cut. There was a small reduction in the level of unused ODCE legal costs, which shows up in the figure mentioned by the Deputy. Therefore, the office is sufficiently funded.
The ODCE employs 38.5 staff who include a number of legal and accounting professionals. Three of the five new accounting posts had been filled at the end of May and, in addition, six members of An Garda Síochána have been seconded to the office. The costs associated with the members of An Garda Síochána are met from Vote 20, the Vote for An Garda Síochána. All other staffing, legal administration and information technology support services are funded from Vote 32, subhead C7.
We have sanctioned a major recruitment campaign for the IASSA and the ODCE. We are looking for forensic accountants, but the difficulty is that the pay they receive in the public service is much lower than what they would earn in the private sector. We have a difficulty in that regard.
The Deputy asked me about CCPC funding. It shows sufficiency, but it also allows for the recruitment of more staff. There is significant investment in ICT to allow online transactions for company registrations and work permits to be processed.
The Deputy also asked about the one stop shop and LEOs
I am sorry to cut across the Minister, but she stated she was satisfied with the staffing proposals of the ODCE. Obviously, it takes time to hire staff, but when they have been hired, is the Minister satisfied that the staff complement will be enough to do the job? I ask the same question about the CCPC.
Yes, we are, but, as I said, we are looking to employ more staff. However, we have the difficulty I have outlined.
On the one stop shop and LEOs, we are pretty happy. Of course, there are issues in some of the LEOs. For example, some staff had retired and there was an embargo on recruitment to replace them. Therefore, when the LEOs were taken over by the local authorities, there was a shortage of staff. We are going to ensure they will have the staff complement that they need.
If the Deputy wants to ask me about the direction I am taking in my role as Minister, small businesses are really important and I will be pushing for us to look at them. I made a major statement on the importance of IDA Ireland and Enterprise Ireland, but getting businesses up and running and helping start-ups and entrepreneurs is hugely important. That is what I will be doing.
On the one stop shop, I am quite happy, but, of course, I always want more money for the Department. However, we have to work within the 2016 allocation. We will be looking at the position to ensure we will be well financed for next year.
In one way, the transformed LEOs are one stop shops. They are totally different from the local enterprise boards of the past. They give advice and signpost financial assistance, a matter about which we spoke, and other supports for those who wish to start their own business. It is important to note that there are 31 LEOs located around the country and that they work closely with Enterprise Ireland.
Working with microbusinesses is important for LEOs. They created 3,500 jobs last year. They were put in place in 2014. The LEOs are good value for money. There is access to a LEO in every county, and there are two in the larger counties. They are a one-stop-shop and they have a very important role to play for start-ups, particularly in access to finance. One of the problems many start-up companies have is not being able to access finance. The Minister said that microfinance is in place, and while grants range from €2,000 to €25,000, the average loan is about €15,000. There is a major take-up of these loans in every constituency. The efforts of the local enterprise office in County Wicklow, Deputy Donnelly's county, for example, resulted in some 74 jobs being created. The credit guarantee scheme approved more than €54 million and supported 4,400 jobs last year. A great deal of financial help is available for start-up companies. That is very important as we move forward.
As the Minister rightly said, small business is the way forward. We will not get foreign direct investment into every part of Ireland. It will probably be focused on the hubs. Careful consideration has to be given to the LEOs, and as Minister of State with responsibility for small business, I intend to visit as many LEOs as possible to ensure they are working. That is very important as taxpayer's money is involved. We must ensure they are delivering to the counties and that there is transparency.
Chairman, may I respond to the Minister of State? I agree. The opportunity and the challenge is the word "start-up". The LEOs are ramping up and are learning what they are doing. Some of them are good and some of them are not so good, but their focus is start-ups. We have the IDA bringing in business. Enterprise Ireland is working with a certain number of businesses, for example, through the high potential start-up programme. What I do not see in the Vote is funding allocated to companies that are steady state.
For example, there is an internationally traded services firm in Newtownmountkennedy, County Wicklow, which is working with a furniture manufacturer in another part of the county and exporting furniture. That firm has a turnover of several million, is in rapid ramp-up mode and is a major success story. The people there have nowhere to go to ask someone what is available. The Minister of State listed a number of schemes such as the credit guarantee scheme. Enterprise Ireland can do certain things and there may be more, but what seems to be missing from the Vote is funding to help existing companies. We are helping major foreign companies, EI is helping a relatively small number of Irish companies and the LEOs are helping the start-ups, but there is no one for the tradesperson to go to, for example, a plumber who wants to know what he or she can do to grow the business and hire two more people. That plumber may want to know if there are internship or training programmes, if there is a tax rebate for hiring two new people, or what is the gamut of State aid and support available. The company representatives I spoke to yesterday have approached EI and they have been waiting a while, but they are hoping to get an answer from EI. While the one-stop-shop is for the rest of the companies that are not high potential start-ups, companies such as the one I am referring to are not start-ups or Google-type companies.
The LEOs work. They are a resource where people want to start a business, but there is progression in the way a company moves on. The LEOs work with all start-up companies. They also work with sole traders. If one compares the numbers of jobs created by LEOs last year with the results for the year before, there is a probably a reduction in some areas because some of those businesses progressed to being Enterprise Ireland clients. LEOs give advice on progress from the starting point. That is the way the LEOs are set up, so that business can move on to the next stage, which is Enterprise Ireland.
Enterprise Ireland has the resources to deal with companies with more than 15 employees.
If the Deputy is aware of a company that wants to progress further and that is of the view that it is done with the LEOs - in other words, it feels further progress cannot be made - then I believe its role is to go further with Enterprise Ireland. If the company has any problems with doing so, the Deputy can contact us with the details. I admire companies that grow all of the time and that is the whole reason for progression. That is why LEOs like to see companies move out of its remit and on to Enterprise Ireland, which will give advice about skills and anything else in order that companies might progress.
I thank the Minister of State for his presentation. I have a query but perhaps I misheard a detail. Did he say that the Low Pay Commission, covered under subhead C13, will publish its report on 19 July?
I was disappointed by the Minister's maiden speech in the Dáil because she made no reference to low pay, workers' rights or industrial relations. I know we will discuss those matters later. In response to Deputy Bríd Smith's query, the Minister said she would respond in respect of them.
I wish to refer to page 83 of the Revised Estimates where it is stated that in 2013-----
It is hard to read the documentation. One heading is "Context and Impact indicators" but I shall continue with my question. In 2013, a total of 14,965 days were lost due to industrial action but by December 2015 the figure had jumped to the very high figure of 32,848. Obviously, a significant part of the latter figure included the teachers' strike about the reform of the junior certificate. Can we look at the findings of the Low Pay Commission's publication?
The industrial relations machinery to resolve disputes has been set up in the past 12 months . We have seen the workings of the Workplace Relations Commission and the Labour Court. One can see the difference they have made by comparing the number of days lost through industrial disputes in 2015 with the number of days lost in the first quarter of 2016. One can see that a total 5,115 days were lost due to industrial disputes in the first quarter of 2016, which involved a total of 4,828 workers and four firms. A total of 32,964 days were lost due to industrial disputes in 2015, which involved nine firms and 37,760 workers. Comparing those figures and looking at what has happened this year, it is obvious that the industrial relations machinery works, which is extremely important to note.
The statistics the Deputy mentioned refer to one-day strikes by teachers that involved 27,000 workers and that account for 23,500 of the days lost in 2014.
The second teachers' strike accounts for 98% of the 24,056 days lost. A total of 27,588 workers went on strike between January and March of this year. As many as 27,500 of these were second level teachers striking over the junior cycle reform dispute.
The industrial relations machinery is independent and is part of the success of the Workplace Relations Commission's programme and that of the Labour Court. They have done well to ensure that strikes do not occur. In terms of inspection enforcement, as many as 5,185 inspections were carried out in 2015.
The WRC aims to conduct hearings within three months. It also has an adviser on corporate services, which is important when it comes to ensuring that strikes do not take place. The WRC's advisory service provides advice and assistance to employees, employers and trade unions in situations where there is no trade dispute, which is extremely important.
The WRC also has a conciliation service and a mediation service. The conciliation service helps employers and their employees to resolve disputes when they have failed to reach agreement during their own previous negotiations. The majority of the cases referred to conciliation are settled. If no agreement is reached then the dispute may be referred to the Labour Court. That is the whole idea of the Industrial Relations Act. Machinery has been set in place to ensure we have industrial peace and that impending disputes are settled by the WRC and the Labour Court.
I wish to discuss LEOs. I understand the one-stop-shop approach. I have had a lot of interaction with my local LEO and found the service provided to be excellent, given what we were looking for at the time. The biggest problem a small business or sole trader, be it a cabinet maker or plumber, encounters when he or she tries to move from trading into the business world is generating sales. Time and again many small business owners have told me that sales is their biggest challenge. They feel they are good at what they do but are less confident when it comes to sales. They often find the office business side easier but sales prove troublesome. The LEOs run courses and provide mentoring. As the economy evolves I would like the LEOs to evolve and thus there should be a greater focus on sales training for owners of small businesses to help them grow. I am referring to what I have learned from working with small businesses.
I seek an update on the process of filling the high profile retirements from the Workplace Relations Commission and the Labour Court. Have the interviews been concluded? When can we expect an announcement? Where is the process? I refer to two very key positions on the industrial relations landscape.
I take this opportunity to pay tribute to the two outgoing people who have served in the Labour Court and the Workplace Relations Commission. Both of the individuals were very experienced operators. I understand that interviews will be completed by the end of the month and that a decision will be made soon afterwards in terms of the appointment of two new people to two very important positions.
I wish to respond to queries by Deputies Neville and Donnelly. Earlier Deputy Donnelly spoke about his friend who sought help.
The LEOs are not one-stop shops, rather they provide signposting to tell people where to go. I heard what Deputy Neville said. It is very important for businesses out there. We have a very good portal on our website, www.djei.ie, especially for people seeking grants. I have met many businesses which do not know what is available. I would direct them towards the portal. Someone in the food business could type the word "food" into his or her computer and the website will display information about where the person can go to seek grants. It is a very useful portal for those in business. We ran a very good campaign telling people about the different enterprise supports and trying to drive take-up. We probably need to do more. I ask Deputies who meet individuals from high-potential start-ups, to for God's sake tell them about these good supports.
Deputy Neville asked about training courses. LEOs provide sales courses to companies on an ongoing basis. It is a very important part of their work. For any company to have a plan in place, it needs to be able to market what it is producing. If a company has to access finance, ensuring it has a proper sales programme will be very much part of its plan. Our trading online vouchers encourage many small companies to trade online, which is important.
In addition to microfinance, people must also consider the commercial banks as a means of accessing finance. Ulster Bank is doing a promotion to support women with ideas. The Minister, Deputy Mitchell O'Connor, would support this. AIB has its "We're Backing Brave" campaign for entrepreneurs with ideas. Bank of Ireland is running enterprise weekends all over the country and these have proved very successful. I attended two of them in County Clare. All the local businesses come together for a family weekend and they invite many sports personalities to attend and showcase many small industries. I am sure they will take place in all constituencies. Much is being done. Our goal is to ensure we tell people what is available for start-up companies.
Deputy Donnelly indicated that he had come across some scientists or business people who were afraid to speak their minds. If, at any stage, any of those people would like to meet me, in the strictest confidence, with the Deputy, that will be no problem. If the Deputy wants to meet me afterwards, it would be between ourselves.
I thank the Minister of State. We left questions on the overall budget until now. The document from the Department is excellent and very useful. I have not said that in five years about the Departments of Public Expenditure and Reform or Finance. It is not random praise. While the document is good at referring to what is happening, the targets and activities, it does not detail what is not working. Such information this tends to be missing from Government reports. Inevitably, with an €810 million spend, while much will go according to plan and some things will be better than expected, some things will not be working. Are there specific line items or spends contained in what the Department is asking the Dáil to vote through that are working ahead of expectation and are there important areas that are not? Given that we are six months into the year, it is inevitable that some things will not be working as planned.
I thank the Deputy for his praise of the Department. We evaluate our programmes and we are pretty happy. We would like more money for research and innovation and we would like to do more there. We will be pushing towards that. I am telling all my ministerial friends at the Cabinet table that we will be seeking more money in the 2017 budget to ensure we can further reduce the 7.8% unemployment rate.
The Deputy praised the Department. We never hear anybody praise the Department. During the worst recession, the Department staff put their shoulders to the wheel and delivered. In 2011, the Government said it would help to create an environment for 100,000 jobs, and it over-delivered. I remember thinking it would never happen. I thank the Department. Enterprise Ireland, the IDA and all the people I have met from the LEOs are very professional and one would be so proud of them. I was in Carlow recently at one of the LEO exhibitions where we saw some of the work they are doing. They are so focused on getting the job done, which is to get people back to work. I thank the Ministers of State with whom I am working. We will ensure it happens. I also thank the Department for the good job it has done. It is not perfect and we have much more to do, of which I am very conscious. My focus is on the regions and rural Ireland and ensuring we deliver.
Deputy Stephen Donnelly referred to finance for research and development. There is an ambitious target to get €1.25 billion in competitive funding from Horizon 2020. In 2015, Ireland won €251 million in competitive funding from Horizon 2020, including €52 million for SMEs. This performance was on track to achieve the Horizon 2020 target. It looks pretty good. Although I cannot commit to it, I think we will get close to achieving €1.25 billion, which would be an extraordinary achievement.
Yesterday's figures from Enterprise Ireland speak volumes about the work that has been done for SMEs and the work on exports. In my area, the changes and reforms to the industrial relations machinery are very important and we should be very proud of them. It was done under the previous Government. My former colleague, the then Minister, Gerald Nash and the Minister, Deputy Richard Bruton, were involved. Much good work was done to put very successful workplace machinery in place.
As Deputy Maurice Quinlivan said, areas that will feature in the near future will be the findings of the Low Pay Commission regarding the minimum wage. The Department is dealing with two areas in my remit, namely the fall-out from the Clerys workers and what we can do to prevent such situations, and the issue of zero hours contracts. We must give careful and considered thought to these two areas and ensure whatever legislation we put in place is copperfastened and strong.
I thank the Chairman, wish her well and look forward to working with her in the time ahead.
I thank the Minister of State. As there are no further questions we will conclude our consideration of the Revised Estimate, Vote 32 - Jobs, Enterprise and Innovation. I thank the Minister, Ministers of State and departmental officials for attending today's meeting. I also thank the clerk to the committee and the secretariat who have been very good to me in recent days in briefing me and helping me to prepare for today's meeting.
The committee agreed earlier to invite the Minister to a meeting of the Joint Committee on Jobs, Enterprise and Innovation in the autumn to have an exchange of views on the emerging position for 2017. The Minister has agreed to the appear before the committee, as have both Ministers of State at her Department. The clerk to the committee has corresponded with departmental officials with a view to having documentation provided to the joint committee in the format requested by 31 July. I hope that is acceptable to the Minister.