Oireachtas Joint and Select Committees
Thursday, 20 October 2016
Joint Oireachtas Committee on Social Protection
Labour Activation Measures: Department of Social Protection
10:00 am
John Curran (Dublin Mid West, Fianna Fail)
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I welcome Mr. John McKeon, assistant secretary at the Department of Social Protection, to discuss the matter of labour activation measures. He is accompanied by Mr. Paul Carroll and Mr. Jim Lynch, principal officers. I propose to ask Mr. McKeon to make some opening remarks. Members will then be invited to address their questions to the officials.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they are to give to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable. The opening statement submitted to the committee will be published on its website after the meeting.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.
I ask all those present to either turn off their mobile phones completely or switch them to flight mode as they interfere with the recording and transmission of proceedings.
I invite Mr. McKeon to make his opening statement after which members may ask questions.
Mr. John McKeon:
I thank the Chairman and committee members for inviting us to discuss the Department's approach to activation. I am joined by my colleagues Paul Carroll, who heads up employer engagement activities in the Department, and Jim Lynch, who heads up our operations and service delivery in the Limerick region. I note that this is a new committee. We appeared before the previous committee in the previous Oireachtas on a number of occasions to speak about activation. While I do not want to appear to be teaching grandmother to suck eggs, members will forgive me if it appears that way. I thought it would be better to outline the general approach to activation. I would be happy to come back at any stage if the committee wished to discuss any particular aspect of activation.
It might be useful to briefly describe what the term "activation" actually means. In short activation refers to the process of engaging with people to encourage and support them in the pursuit of employment. In the first instance it typically comprises the provision of case-managed personal profiling, employment planning and job-search-assistance services. In addition it involves offering jobseekers opportunities to undertake employment-relevant training and education, to undertake work experience and to participate in what are generally known as State employment schemes such as community employment and Tús.
In addition to these services an activation policy can also involve the provision of employment incentives and financial supports both to jobseekers, for example in the form of the back-to-work family dividend or increased payments when participating in certain schemes, and to employers, for example in the form of the JobsPlus and wage subsidy schemes.
A comprehensive activation policy will also include a significant level of engagement with employers in order to identify job opportunities for unemployed jobseekers and to promote the recruitment of people who are on the live register or in receipt of another welfare payment. Where the jobseeker is in receipt of jobseeker payment activation also involves the principle of rights and responsibilities. In other words the jobseeker has a right to receive a jobseeker payment and the right to receive activation services from the State, but also has a responsibility to engage with those services. Where a jobseeker fails to engage with these services his or her payment may be reduced or suspended.
In terms of impact, international research indicates that early engagement with unemployed jobseekers is key to reducing transitions into long-term unemployment. It also shows that the most effective intervention is employment planning and job-search assistance, followed by work-relevant training and work placements. General education supports and State employment programmes are generally found to be ineffective and, in some cases, have been shown to have negative impacts on employment progression. The research that has been undertaken in Ireland would support these findings.
In noting these findings it is, however, important to recognise that services and supports provided as part of a labour-market-activation regime have an important social or active inclusion role. In this sense the provision of education options and employment programmes is not only designed to address labour market issues, but is equally informed by the recognition of the role which occupational activity and further education play in improving the quality of life of people with disadvantages or with a restricted ability to take up employment. The provision of occupational outlets in schemes like community employment to people facing significant barriers to gaining open labour-market employment is also an important element of the social and community fabric in many localities across the State.
The recognition of this active or social inclusion aspect to activation also points to a difference in emphasis in the approach to activation during different phases of the economic cycle. During a time of recession, given scarce Exchequer resources, the primary focus of activation policies is necessarily to help unemployed people, who are in receipt of a jobseeker payment and on the live register, to compete for such job vacancies as arise and reduce their individual duration of unemployment, although overall levels of unemployment may not fall significantly; to bias employers' recruitment activity towards people who are unemployed and on the live register; and to ensure that the labour market operates efficiently as the economy recovers so that employers are proactive in offering employment opportunities and that those people who are unemployed are ready, willing and capable of taking up employment.
During a time of economic recovery or prosperity, as the labour supply tightens the focus of activation policies typically shifts to minimising frictional unemployment and increasing active labour-market participation by all people of a working age, both to help ensure a supply of labour, which is a very narrow economic view, and to offer greater support to people from non-jobseeker cohorts to access the labour market and achieve some level of financial independence, which would typically be called an "active inclusion" view.
Ireland has been through a period when the primary and overwhelming focus of activation policy was informed by the deep recession of the period from 2008 to 2013. Ireland entered this recession with an activation infrastructure that was not operating in line with best international practice and had been the subject of some critical reports from the ESRI and the OECD among others. While this situation was not an urgent priority during a period of full employment the collapse in the labour market brought the service weaknesses into sharp relief.
Accordingly, the Pathways to Work policy was developed in 2011 and 2012 to, among other things, design and implement the institutional, service and process changes necessary to remedy the identified deficiencies in the public employment and welfare services. These changes were implemented in the first instance to help unemployed jobseekers in receipt of a jobseeker payment and on the live register to compete for and find work.
Among the changes implemented were the merger of the community welfare service, Department of Social Protection and FÁS employment services involving over 2,000 staff moving and taking up new terms and conditions of employment; the development and roll out of the Intreo model of one-stop shops involving the build or refurbishment of over 60 Intreo offices; the doubling of the number of case workers through internal redeployment within the Department; the establishment of an employer relations division; the implementation of new engagement processes, including jobseeker profiling, group information sessions, one-to-one case management and the social contract of rights and responsibilities supported by a reduced payment regime for people who do not engage with the service; the introduction of new jobseeker services including JobBridge; JobsPlus; MOMENTUM; GateWay, and the back-to-work family dividend; and the roll-out of the JobPath contracted employment service to complement and supplement Intreo in delivering intensive case-work services to long-term unemployed people.
As a result of these changes, which were arguably the largest single public sector reform initiative over the past ten years, the delivery of employment and activation services to jobseekers is now unrecognisable from that which prevailed up to 2011. For example, in terms of service standards jobseeker claims are now processed in less than a week compared with a minimum of three weeks in 2011. All jobseekers are now profiled and invited to a group information session to be briefed on the various services and supports available to them, typically within a week of registration with the service. Jobseekers, who are profiled as having a high risk of remaining unemployed for 12 months or more, and all jobseekers who are under 25 years of age are invited to a one-to-one meeting with a case officer typically within a week of the group information session and are assisted in preparing a personal progression plan. Other jobseekers are now scheduled for a one-to-one meeting typically at about three months.
The number of engagements with jobseekers has increased dramatically. For example, since 2012 we have held over 20,000 group information sessions and more than 1 million one-to-one meetings. In the same period over 48,000 people have availed of JobBridge, more than 6,000 people have benefitted from JobsPlus and 60,000 people are now receiving intensive case management support from the JobPath service providers.
Feedback from clients is also very positive. An independent customer satisfaction survey conducted last year saw customers rate the service a score of 4.38 out of 5, and more than three quarters said that the service helped them towards getting a job.
In terms of employment impact, the changes have coincided with significant improvements in labour market conditions that are not typical in a post-recession environment. Total unemployment has fallen from over 15% to just under 8%; long-term unemployment has fallen from 205,000, which was 9.5%, to 95,500, which is 4.5%; youth unemployment has fallen from around 83,000, which was 33%, at peak to 32,400, which is 15.9%, today; and the proportion of people of working age living in jobless households has fallen by nearly a quarter from 16% at peak to 12.4% now. In parallel with these overall improvements the persistence rate on the live register, which is the measure of the number of people who make the transition from being short-term unemployed to long-term unemployment, has reduced from 35% to 26% and the exit rate from the live register of those unemployed over two years increased from 25% to 42%.
Given the progress I have outlined, the Government initiated a major review of the Pathways to Work approach during 2015 to determine an appropriate strategy for the next five-year period. This review which involved an extensive consultation process culminated in the publication earlier this year of new Pathways to Work strategy for the period up to and including 2020. Taking account of the feedback from the consultation process this strategy acknowledges the following. Although the labour market situation is improving very long-term unemployment of three years or more and youth unemployment remain significant concerns, as does the challenge of inter-generational jobless households.
Although service delivery has improved considerably, there is still a level of inconsistency in the quality of service delivery that needs to be addressed. The focus to date on process and throughput needs to be augmented by a similar focus on service quality over the next four years if the process changes implemented are to be sustained and deliver value even as the operating environment changes from recession to recovery. It also recognises there is a demand from other non-jobseeker cohorts for access to activation services and a desire for a "parity of esteem" with jobseekers in terms of the priority and effort invested into the delivery of services.
Accordingly, the new strategy sets out a two-pronged approach. The first prong is about consolidating the recent reforms to the public employment and welfare services and prioritising provision to maximise outcomes for clients. This means ensuring that the long-term and youth unemployed cohorts continue to be prioritised and adequately supported in regard to activation services and also that the implementation and delivery of activation services is of high quality, effective, efficient and sustainable. The second prong is to gradually expand access to activation services over the 2018 to 2020 period, as resources allow, to other non-employed people of working age. This will contribute to increasing employment across working age households, promote the principles of active inclusion and improve labour supply.
This approach is to be delivered through 85 actions grouped into six logical strands. I will not go through all of them but I will mention them. There is enhanced engagement with unemployed people; increasing the employment focus of programmes; making work pay or incentivising work; continuing to incentivise employers to offer opportunities to unemployed people; building organisation capacity both within the Department and other agencies; and building work force skills, which is a new strand focusing on the further education and training sector, improving the alignment and delivery of those services with labour market requirements.
Together with these strands of action the strategy sets out a number of targets to be achieved over the course of the programme period and also for 2016. These targets relate primarily to rates of employment progression, for example, to move 20,000 long-term unemployed people into employment during 2016. Updates on performance against these targets are posted on the Department's website and I can confirm that we are in line to meet or exceed most of the targets. The Labour Market Council reviewed the strategy and published its opinion. In general, it is supportive of the approach taken but has recommended that the Government set some more ambitious targets in regard to overall employment, youth unemployment and long-term unemployment rates. The Minister has accepted these revised targets, with some slight modifications, and progress against these targets will also be reported on in future updates.
Although the topic of activation is very broad, I hope that in setting out the general approach I have addressed at least some of the issues of most interest to the committee. Together with my colleagues, I will pleased to address any questions that members may have.
John Curran (Dublin Mid West, Fianna Fail)
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I thank Mr. McKeon.
Gino Kenny (Dublin Mid West, People Before Profit Alliance)
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I thank Mr. McKeon. I have a few questions for him and I will probably set out my stall relatively quickly. I have a problem with the idea that people have to work for social welfare and from an ideological perspective, that is wrong. With JobBridge and labour activation measures, there has been job displacement and exploitation from the start. JobBridge has been controversial from the start, as has the idea that one should work for a certain amount of extra money on social welfare. It has not worked in general. Will the witness comment on that and specifically job displacement? I and other members have seen what were supposed to be full-time jobs replaced by JobBridge and job activation measures, which is completely wrong. What is the future for community employment schemes? Community employment is quite good but it appears to be on the decline.
Mr. John McKeon:
The first issue was displacement and exploitation. The Deputy mentioned both JobBridge and community employment, and, of course, the issue of displacement could be made in the context of community employment as well. The argument is that if community employment was not providing some services, would other service providers give those services? It is important to understand the role of most activation schemes is to try to help people who might not otherwise get a job get a foot in the door. It is about trying to encourage employers to give people a chance. Measured against those terms, JobBridge has been successful. We have just published an independent report by Indecon, which was separately independently reviewed by the Labour Market Council, that showed very strong employment progression from JobBridge into paid employment. It indicated 79% of people ended up in employment and 64% are still in employment. That uplift was 32% against a matched control group. For example, that would have compared John McKeon against somebody who was unemployed with the same background, qualifications and experiences, meaning that person had a 32% better chance of getting employment and sustaining it having gone on JobBridge. There are independent experts on the Labour Market Council, including some eminent international economists, and they see that as the best performance they have seen anywhere in Europe. Measured on that metric, it has been successful.
I accept the issue of payment and I know the concern raised by the Deputy that people must work for their welfare. The condition in the social welfare regulations is that people must be available for and genuinely seeking work. Nobody is required to work for their welfare. For example, the JobBridge scheme is entirely voluntary, as is the community employment scheme. People do not have to participate and there is no penalty if they do not participate. People do not have to work for their welfare but they are presented with opportunities to work if they wish to do so, with a top-up payment, and then to use that experience, in effect, as a testimony for other employers. It tells them what the person can do. I do not know if that has addressed the question.
Gino Kenny (Dublin Mid West, People Before Profit Alliance)
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Some of it has done so. Is the Gateway scheme compulsory?
Gino Kenny (Dublin Mid West, People Before Profit Alliance)
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The participant gets an extra €20. That is very controversial.
Mr. John McKeon:
I can see the point, I suppose. With schemes like Gateway, the issue is about encouraging people to engage in the labour market and gain experience which, as I stated, they can use to demonstrate and prove their worth to other employers. The Deputy's question is whether it should be compulsory. There is another way of looking at it, and this is a Government decision. The alternative is that if people are available for work having been unemployed for a long time, it is better to have them occupied than not.
Gino Kenny (Dublin Mid West, People Before Profit Alliance)
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Yes.
Joe Carey (Clare, Fine Gael)
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I thank Mr. McKeon for his presentation. I must concur as much of the feedback I receive is very positive on the question of building activation infrastructure, Intreo offices, engagement with case managers and trying to match people who find themselves unemployed with an opportunity to get back into the work force, training and education. I compliment the Department and I have had dealings with Mr. Lynch which have been helpful and useful.
There is an area that comes to my attention every now and then. This is where people might be illiterate and cannot read or write. They might suddenly become unemployed.
They could be asked to partake in a particular course or do whatever and it is not suitable. The person is embarrassed that he or she cannot read or write, and it is not something that he or she would be public about. Has the Department any policy to deal with such cases? It is prevalent, certainly in my clinics. I would have cases where the spouse of an individual will come and tell me that this is a real issue. I would also have cases where engagement in formal education for particular cohorts is not an option. They would be better placed if they were working manually. The formal educational setting may not suit them. The witnesses might share their views on that.
Mr. John McKeon:
I might ask Mr. Lynch to come in on that. As a general point, I would say we try to ensure if clients are being referred to training or education courses that those courses are suitable for them, both in terms of their competence to undertake them and in terms of the employment prospects, and where we find mismatches we try to resolve them. Often clients do not disclose such difficulties, particularly around literacy, and it is only when they are faced with the difficulty that the issue arises.
Mr. Jim Lynch:
Generally speaking, that would be our approach. Sometimes it manifests itself in obvious ways when someone comes to us to fill a form, we ask him or her for some subsequent information and our staff member who is dealing with the person at the window can see the difficulty. Our front-line staff who deal with such applicants would generally be sensitive to such matters and part of the awareness training we will have done with them is to be conscious and sensitive of those matters. They would be conscious of that.
When it comes to such persons' interaction with a case officer from the point of view of activation subsequently, one of our referral mechanisms in trying to enhance their skills would be a referral to the education and training board, ETB, for adult learning or the National Adult Literacy Agency, NALA. We are conscious of the referral afterwards that we cannot refer those clients to somewhere where reading and writing might be necessary. We are conscious that we need to bring their skill level up to the stage where they can take advantage of that.
I would be the first to admit it can be difficult. There is embarrassment on the client's side and on the side of our case officer to find a suitable intervention for the person. We try to work with clients and bring them along where we can. We know the way the employment environment has gone. If a person is not literate, his or her chances are minimal.
We build up good relations. I would like especially to compliment some of the community employment supervisors who operate in this area. Some community employment supervisors and sponsors can be very conscious of this, and if we have such one-to-one contact, we can ask them to take a person on board or to consider him or her whereby literacy can be addressed as part of the community employment training. We find that works well. In the example Deputy Carey used in connection with somebody who has manual skills and many not be good at numeracy, we would see a community employment intervention as an ideal intervention to bring that person to the level where he or she could participate or achieve something out of it, and he or she will be doing something as well at the same time. I hope that answers the Deputy's question.
Joe Carey (Clare, Fine Gael)
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It was good, yes. I thank Mr. Lynch.
Denise Mitchell (Dublin Bay North, Sinn Fein)
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I thank the officials for the presentation. If possible, I will group together a few questions regarding JobPath. In Dublin, there are more than 5,000 participants and it will be rolled out to 60,000 nationally. Will JobPath be seen eventually to replace all the other schemes?
I want to touch on sanctions and travel. Who determines what is a reasonable distance and what sanctions will be taken? Is it indirectly a private company that decides ultimately whether the sanctions apply?
I want to touch on the rules of governance on JobPath as well. What conditions govern the procedures of the programme? Is there any code of practice, for instance, within the private companies relating to vulnerable persons? What auditing process takes place?
I have a few concerns about the private companies operating the programme. In a case I have seen, for instance, I had a 62 year old lady come to see me who is on the programme. She found herself very distressed. She went to see her adviser and she was given a sheet with 15 vacant slots on it to which she had to go and present. She then had to bring that sheet back so that it could be said she had looked for employment. It had to be stamped by employers. This was her second occasion to do this. At that age, she felt it was a little degrading to be knocking at the door of places. I took the day to go with her. We got only two signatures and two stamps because companies now do not have management available.
Is there another way of looking at this? Can persons present forwarded e-mails to show that they have been contacting companies? As the officials will be aware, when a person presents at the local supermarket, he or she is always told to send a CV to head office. I am wondering about such issues because it is not nice to be going around knocking on doors and asking for an employer to stamp the form. In this woman's case, many of those she met were a lot younger than she was and she did not find it good.
Will the officials also explain the complaints procedures if somebody has an issue? Have there been many complaints regarding the programme?
The officials mentioned the report that was to be published. We all expected a report in the second quarter of 2016 regarding the impact of cuts to those under 26. At what stage is the report and when will we be looking at it?
Mr. John McKeon:
Maybe I will describe JobPath. It is not to replace any other programme. JobPath is a service where we contracted in additional casework support. JobPath is a casework or case management service. Although the live register is falling, we still have many clients who are long-term unemployed. I mentioned in my opening statement that international evidence and our own research indicates the most effective support in helping clients get back to work is the job search assistance, the counselling and the personal progression planning. That is hugely resource intensive, when one has a large live register and a large number of clients who are long-term unemployed. JobPath is simply a way of contracting in an additional resource to provide that service, the same way our own case managers in Intreo provide a service and the same way local employment service staff provide a service to complement and supplement that capacity.
JobPath is not a programme. It is a service to jobseekers where we have people who will meet them, help them identify their own strengths and weaknesses, identify what jobs in the market are suitable for them, and help them with getting access to training and delivering some training, particularly around softer skills, such as writing a CV, doing interviews, etc. That is the service. It is no more or less than that.
In terms of the contract itself, it is what we call a payment by results contract. We only pay the contractors if they get clients into work and that work is sustained. The payments are made for every 13 weeks that a person is in employment of more than 30 hours per week. The person has to get into work, that job must be a 30 hours per week job and it has to last at least 13 weeks. Then they get a payment, and there are potentially four payments over 12 months, one payment per quarter. The job has to be sustained. It is not merely a matter of putting somebody into a job, ticking the box and then six weeks later the person leaves the job because it did not suit him or her. There is no point in trying to force somebody into a job he or she will not stick at. That is one of the controls.
We have other controls. For example, there is a code of practice, what we call a customer commitment or customer service charter, that every JobPath company has to abide by. They have to publish it. They are meant to hand it to the clients. We have an independent customer satisfaction survey and the first one of those is in the field at present asking those who have been referred to JobPath their opinion of the service. If they do not meet a minimum level on that survey, their payments to JobPath contractors are reduced. Therefore, there is a penalty payment regime. We have inspectors who inspect the services to ensure they are being delivered in the way that they are meant to be delivered. If the inspectors find that the schemes are not working, we can impose payment penalties on the JobPath providers.
Deputy Mitchell raised a question about sanctions. The JobPath providers cannot impose sanctions.
Where a person is not engaging, it is referred back to our deciding officers who will look at it afresh. The process we take in the Department on sanctions is a two strikes and you are out approach. I hate to use this language but it is just to explain. A person comes in and is told that the evidence indicates he or she has not been looking for work or that he or she has not been turning up for meetings with his or her case officer and that if this keeps up, a penalty will have to be imposed. We ask that the person engage with his or her case officer and explain that if he or she comes back a second time, a penalty will be imposed. It is a two strikes and you are out approach. It is only the Department that can do that.
The example was given of a 62 year old. I will follow that one up. Everybody who is on the live register regardless of age is supposed to be looking for work. That is the condition of the payment. Given that we are increasing the pension age, 62 now is not the same as it was 15 or 20 years ago. There are many people in the Houses of the Oireachtas and in government who are a good bit older than 62, for example. Everybody has the potential to work. We expect them to take, as we do, a pragmatic approach. There is a general process which is applied but there will always be people at the edges and about whom one must be a bit more sensitive and deal with differently. As such, I will take that up.
I have met the JobPath providers frequently and I have been genuinely impressed by them. I am not saying that just because I am within the Department. The feedback we get is very positive in general. I was asked about the number of complaints. At this point in time, 60,000 people have been referred to JobPath and we have received 117 complaints, which is less than 0.2%. There is a complaints process which is published and the offices I have visited have had it on display. If one has a complaint, it sets out the route to take. In our own service and in local employment and community employment services, we refer complaints received within the Department back to the front line in the first instance because that is the best space to resolve complaints. We then get a report on whether the complaint has been resolved. To date, approximately 70 of the 117 complaints have been resolved and the balance are outstanding. The biggest complaint is, "I do not want to do this. I have been unemployed for 12 or 15 years." Many people are in that category and they would ask whether we would not be better off trying to activate a younger person rather than them. That is not necessarily from 62 year olds. It is from people in their 50s as well. People might initially be a little fearful of this but once they get over that, our experience is positive on the whole. I emphasise that it is just about case work. It is not a programme.
Denise Mitchell (Dublin Bay North, Sinn Fein)
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I asked about the report.
Mr. John McKeon:
On the report on under-26s, we provided the National University of Ireland, Maynooth with access to our full jobseekers longitudinal database which records all the activity we have with jobseekers of various ages and whether they go back to work. The university is analysing those data and we expect to have the results by the end of the year. It is probably a bigger job than people anticipated it would be because there are millions of records in the database. It takes a long time. NUI Maynooth is doing it on a pro bonobasis for which we are very grateful. It is doing it from a research interest point of view which should be good from the point of view of its independence. It is professional researchers doing it primarily as a research project for their own purposes but it also something that will meet our requirements.
Gino Kenny (Dublin Mid West, People Before Profit Alliance)
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In reference to JobPath providers, is Mr. McKeon talking about a private company?
Mr. John McKeon:
There are two businesses. We went to tender and had a public procurement competition. There are two companies which won the contract. One operates at all points north of the line one might draw between Dublin and Galway and the other operates at all points south. The company that operates in the south is called Turas Nua Limited and is a joint venture between Farm Relief Services, FRS, a co-operative company based in Roscrea, and Working Links, a not-for-profit company in the UK.
Gino Kenny (Dublin Mid West, People Before Profit Alliance)
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It is hard to believe.
Gino Kenny (Dublin Mid West, People Before Profit Alliance)
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I find that astonishing. It has been privatised to a company to get people to work. I find that extraordinary.
Mr. John McKeon:
The issue is not who does the work. The issue is whether the work is being done. If I am a jobseeker, the issue is whether I have someone I can meet who will give me advice and support in job searching. Whether that person is employed by the State directly or indirectly through local employment services, which are also private companies, or by a commercial private company is, to a certain extent, less important than whether the person is qualified, knows what they are doing and can help me get a job. We are within the European Union and there are public procurement rules. We have to go to tender for this type of work and it is a very rigorous procurement process. There were independent members on the assessment panel for tenders. That is the process we had to go through. We work with whoever comes through that process.
Alice-Mary Higgins (Independent)
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I will bracket for a moment my own questions because I need to come in on this. I might then come back to my original questions. It is very important that we are clear on that question. Mr. McKeon cites European public procurement rules. While I recognise that there have been some ameliorating attempts in the way the contracts have been designed, there are a couple of fundamental issues. Leaving aside some of the bigger questions on the role of private companies in JobPath and how the targets work, I am concerned about the question of education outcomes. What potential is there through the JobPath system for an education outcome for an individual? Is it the case that after a certain period, say two years, the only outcome is to be processed to a job? There is a concern about that model.
We have to be very clear that we are not obliged under EU public procurement directives to contract out for this. It was very regrettable that the Department put this on the agenda in advance of the transposition of new European directives in March this year which make explicit provision that member states have the right to exclude areas of social protection. These are clear areas which governments are not required to put to contract or tender. There is a very serious concern about this. I would like to know if the Department has carried out an impact or risk assessment as to what this means for the Department and this area of social protection. It is a new step to introduce private contractors. How does that affect the public policy options that will be open to Government in future? If we go ahead with the trade agreements we are negotiating, there will be a ratchet clause which will make it very difficult for any area that has been into private contract to be restored to public contract. Without going back to subjects like water and whether we opted for the derogation, there are clear and explicit options for social protection as one of the areas which can be reserved for public delivery. I would love to know if the Department has looked, is looking or will look at a risk assessment in terms of not just delivery right now but what it means for our public policy options in future.
I cite the Oireachtas's own research as to why this is important. The research of the Library and Research Service in the Oireachtas shows that European services which have done this have found mixed outcomes. While I appreciate that an experiment is being tried, it is also about the attached risk. A large-scale French experimental study found that public employment services had a positive impact on employment rates which was twice that of a private provider. In Sweden, increased interaction with private providers did not improve overall chances of finding a job. Recent research in Germany has found that public provision provided better outcomes than contracting out employment services. I appreciate that the Department was trying to respond to demand at a time of huge unemployment and during a public service freeze when the necessary staffing was not available. I recognise that there has been a very genuine desire to ensure and improve times and engagement. This decision was made in that context. However, I am cautious. What is the exit strategy?
If this private contracting does not work out and the Department wants to hire case workers and retake that area of work into its direct delivery, what is the route? I will come back to my overall questions later.
John Curran (Dublin Mid West, Fianna Fail)
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It is a specific issue so we might allow Mr. McKeon to reply.
Mr. John McKeon:
First, we conducted a lot of research and many assessments on the JobPath model before we went down the route. We engaged expert consultants called the Centre of Economic and Social Inclusion from the UK, which is a not-for-profit organisation and a recognised, for want of a better term, left leaning consultancy group in the UK. We engaged Professor Dan Finn from the University of Southampton, who would be from that kind of background, to advise us on the design of it. We held a number of open consultative forums where trade unions, local employment service and community employment service providers contributed to the design. We involved the National Economic and Social Council, NESC. Again, people from NUI Maynooth attended meetings with us. The best report written on activation, probably in many countries, is the report by NESC in 2011, which was called Activation, Supports and Services for Unemployed Jobseekers. It suggested that we need to contract out and that we should examine other contract models. We did a good deal of research. We are aware of the research findings, which are mixed. The Senator quoted research where it is stated that these models do not work, but there are other research findings which state that they do work. Therefore, the findings are mixed.
We tried to design the contract on the basis of what the evidence showed worked best. We tried to design it on the basis of how will we get the best outcomes for people. For example, in the contract there are specified minimum levels of employment outcomes that contractors are expected to provide. If they do not reach those levels of employment outcomes, we reduce their payments - there are penalty payments - and they are 60% in excess of the counterfactuals at the time the contract was signed. They have very high performance targets to hit. If they do not hit them in terms of getting people into sustained jobs - 12 months in employment as a minimum - there are payment penalties. We will see whether that comes to pass.
It is a four-year contract. There is no obligation on the Department to extend or renew it. There is a two-year work-out from it because the last referral is at the end of the fourth year. A person is with the provider for 12 months and if he or she gets a job on the last day of that 12-month period, he or she is down their payments for the subsequent 12 months. It is a four-year contract with a two-year work-out provision.
The Deputy raised a question about education. Probably uniquely among these contracts around Europe, this contract provides for the providers to send people on into training and education and we have what is called a stop the clock mechanism. There is an incentive to providers and they are facilitated in sending people on to training and education.
Alice-Mary Higgins (Independent)
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In terms of long-term education, for example, college education, do they get referred back into the system?
Alice-Mary Higgins (Independent)
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I know there is a time limit of a month on the-----
Mr. John McKeon:
The referral period for any client is 12 months, so they work with the provider for 12 months. The model provides that if a person becomes unemployed and works with our Intreo service for 12 months, potentially they would then work with a JobPath provider for 12 months. That is the model. During that period, the provider can send somebody to an education programme of up to six months duration and apply the stop the clock mechanism. That is deliberately done because if we allowed it to be a longer period, the contract could ultimately end up , being four years plus five or six years instead of being four years plus two years at the end because someone went into long-term education.
Alice-Mary Higgins (Independent)
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In terms of choice-----
Mr. John McKeon:
I will finish on this point. It is also because all the research evidence bar none shows that the training that works best in terms of getting people into employment is short, specific skills-based training. The Economic and Social Research Institute did a study last year on the back to education allowance scheme and it found that the employment prospects of people who went onto the back to education allowance and undertook long-term training courses in second and third level were significantly reduced even four or five years after completing the programmes. That same outcome is to be found all over the world, not only in Ireland. In terms of focusing on employment outcomes, having a six month, specific short skills training course is a much better investment than a long-term general education course.
Alice-Mary Higgins (Independent)
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Should we suggest that to our 18 year old graduates coming out of secondary school then in that context?
Mr. John McKeon:
No. There is a difference. It is important to state that there is a difference between further education and higher education for somebody coming straight out of college. The research evidence shows that for somebody who was working but who becomes unemployed. The Senator should think of it in these terms. Generally speaking, when people go on a long-term education course, they cease job search during that period. If someone has been unemployed, say, for two years and he or she then does a four or five-year course, when he or she goes back to employment, he or she has been out of the labour market for six years. It is what is called the lock-out effect. Unfortunately, I am not making this up. The evidence shows that the progression from that is lower than the lock-out effect. There are many research papers that show that.
John Curran (Dublin Mid West, Fianna Fail)
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I will come back to the Senator because she has-----
Alice-Mary Higgins (Independent)
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It is the fundamental question of reversibility. That is all.
John Curran (Dublin Mid West, Fianna Fail)
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I will allow Deputy Mitchell to come in because it is on the same point.
Denise Mitchell (Dublin Bay North, Sinn Fein)
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On the question of the company, we know one of the parent companies has been investigated in the UK for suspected fraud. In yesterday's presentation, a Department official acknowledged that mistakes had been made in the UK, so we need reassurance about what the Department is doing to ensure that those mistakes are not happening.
Denise Mitchell (Dublin Bay North, Sinn Fein)
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Mr. McKeon said this company was given a four-year contract. What is the actual cost to the State of this company?
Mr. John McKeon:
I will address those two questions and then come back to Senator Higgins's question about reversibility. In terms of the company in the UK, up to 18 companies have provided services at different points in the UK. Some of them were investigated, and there are one or two notable examples of, frankly, behaviour which nobody could condone. The two companies that are involved in Ireland were not part of that. Complaints were made against them and they were investigated by the Department of Work and Pensions in the National Audit Office in the UK but they were not upheld. The amounts involved in both those cases were very low in any event, but they were not upheld. The Department of Work and Pensions in the UK has issued statements basically exonerating them. There were one or two companies - they are not involved in Ireland - where, frankly, one's eyebrows would raise and chin would drop but we have not engaged with them at all.
There are a number of controls in the contract which I have already mentioned. There are minimum performance standards and customer service guarantees that are required. The payments are subject to and contingent on satisfactory scores in customer satisfaction research, which is not a feature in the UK. The employment outcomes are 30 hours a week whereas in the UK it is 16. The employment outcomes have to be for a minimum of 13 weeks in Ireland; in the UK, it is four. The bar we set for contractors to hit is far higher in Ireland than it was in the UK and we have also provided for inspections.
The other element we have in Ireland, which they did not manage to get in the UK, is that much of our checking is automated so when a provider submits a claim for a payment to us, we can automatically check if that person has commenced employment based on Revenue Commissioners' records. We can check if that person has left the live register. In the UK, certainly for the initial period of their contracts, all of that was done manually. We have many automated checks. We are fairly confident about that aspect. We took the best international advice we could get on the design of this contract and other countries, including Australia, are now looking at the Irish model as an example of best practice. The proof will be in the pudding.
Senator Higgins raised the question of risk, and there is risk in every contact. She asked why we would contract out this service. We already contract within the Department, for example, where we contract with local employment service providers who are also private limited companies. Contracting was always part of the Department's solution in this area. We wanted to expand the contracted provision because we did not have the capacity within the Department. We looked to see if we could get the capacity, and we considered the amount of time it would take to build that capacity ourselves. We looked at the financial costs of building it ourselves against a payment by results model where we only pay if the outcomes are achieved as opposed to another model, for example, in the case of employment through the local employment services, where we pay regardless of outcome.
Best practice in this space would be to contract. When we have decided to contract, we then move into procurement, at which point any country in Europe can compete. They all have to be assessed equally. The reversibility relates to the contract duration. It also relates to the performance of the contractor. If we assess the performance is not satisfactory, we can terminate the contract. That deals with the reversibility issues. We have not reduced our own number of staff. As I mentioned earlier, we have doubled the number of staff we have on case work. It has to be seen in that context. There was an organisational challenge in doubling our number of staff on case work duties. It was not sufficient to meet the requirement. We had to contract in extra resources. I will put it in these terms. In a normal environment, where the number of people on the live register has returned back to a level of approximately 150,000, we would have enough capacity between ourselves and the local employment services. We are maintaining that capacity. When the number of people on the live register exceeds that level, we need to supplement our staffing numbers. It is then a question of whether to supplement our capacity to deal with peaks through permanent recruitment, or to do so through temporary contracting. Our decision was influenced by such factors. Purely and simply, we will not renew the contract if we do not need the resources.
Alice-Mary Higgins (Independent)
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Will the Department have the option of returning to public delivery fully? I am interested in this from a legal and commercial perspective. Mr. McKeon has spoken about the Department's obligations under procurement directives. I am now speaking in terms of investment directives because there is an area of future projected profits.
Mr. John McKeon:
These contracts were agreed to supplement and augment our own capacity, rather than to replace it. To the best of my knowledge - I will look into this - I do not think there is any European regulation that compels us to have contracting if we do not need it. I think the regulation relates to what one must do if one needs contracting. If we return to the-----
Alice-Mary Higgins (Independent)
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I was asking about the setting of a precedent. We can come back to it another time.
Mr. John McKeon:
I honestly do not think there are any constraints on the Department in this regard. That is my understanding, but I will check the detail of it. What would the alternative be? Would the European Commission really suggest we keep the contract going, even if we do not need it, when unemployment returns to the levels we all hope it will return to?
Alice-Mary Higgins (Independent)
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We can come back to this in detail because I think it is somewhat technical.
John Curran (Dublin Mid West, Fianna Fail)
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Does Senator Higgins want to address some additional areas?
Alice-Mary Higgins (Independent)
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Yes. I apologise for spending so much time on that question, in particular. I welcome Mr. McKeon's statement that he may come back in on more specific detailed questions, so I am not going to ask many of them.
I would like to reflect on the crucial and fundamental principles and assumptions that are at work here. I am noting a fundamental issue and question that arises here. There is a role for employment activation and support and there is a role for social protection. I believe there would be a benefit from bringing those two roles closer together. That is very different from making one conditional on the other. The leap that has been made in this regard is different. It is a very different question when the idea of sanction comes in. The social protection payments we have, including jobseeker's allowance, are not designed simply as a reward for jobseeking. They are designed to ensure every citizen has a basic and appropriate level of income which protects them. It is important that we embed this conditional question. There is talk here of rights and responsibilities. Fundamentally, if we go back to the 1800s, we will find the laissez-fairemodel, which had problems, and we will find models that involved compulsory or targeted work. None of us is looking for any of these models to be adopted. We need to be saying that in a modern designed system, we must ensure the social protection component is never jeopardised. When we look at payment reduction, we are looking at compromising the well-being of the poorest people in the State.
It is important to reflect on the assumptions behind the current approach. There seems to be a core assumption that we need to emphasise the push factor among a certain cohort. The research we have seen, including the ESRI research from a couple of years ago, found that the vast majority of people want to work and are better off working. Even if they are not better off working, most unemployed people would choose work. This is the research. We are always told about disincentives to work, etc. The fundamental fact is that there is a large cohort of people who really want to work. There is a focus on the push dynamic, rather than the pull dynamic of supports and engagement. I realise that work has been done on pull factors as well. I recognise that there have been absolute improvements in Intreo offices, in experiences and in times. I believe those pull factors are being undermined by a strong perception that supports cannot be accessed without sanction. I am just saying that this is a very strong perception. There are some people who do not engage with the jobseeker system because they are afraid of some of the conditions.
The question of availability has been mentioned. Full-time availability is still a core component even though we know that people in a huge cohort of society have part-time availability. That does not necessarily mean availability at a casual or low-skilled level. Some people have high-quality part-time availability. The system takes an "all of nothing" approach at the moment. It considers that people are either available full-time or they are not available at all. There has been some waiving of this requirement, for example involving people on the jobseeker's transitional payment. There has not been a recognition of the value of building labour market attachment. For example, people may move in and out of the labour market at various stages of their lives. Somebody who is available on a part-time basis now might become available on a full-time basis at a later stage. I think some of the outcomes we have seen from the education and community employment schemes that have been mentioned are linked to that too. Sometimes, people are sent on courses that are not suitable or they go on courses that are not suitable because they can manage the hours of those courses with their other responsibilities.
I am very concerned about the scepticism with regard to educational outcomes. I do not believe we can give up on the potential of citizens to achieve. It is not just a question of the numbers who end up in employment; it is also a question of the quality of the employment they end up in. There is a fundamental principle of choice here. Engagement might be required. In some of the better systems, where sanction is used it is used only in the context of ensuring people are engaging. It is getting narrower here. It is not just a question of whether people are engaging; it is also a question of whether they are engaging with the list of options under Gateway, or with a specific list of courses. People are asked whether they have been engaging with something that fits the model of a certain company, having been referred by JobPath. One does not choose to refer to JobPath; one is referred to JobPath. What is the route back for somebody who says "I am sorry, I know you think I am going to end up in employment quicker if I take a six-month training course in assembly with a view to working in a factory, but I genuinely want to go back to do a college course and have a different outcome for my life"? That is fundamental. The choice issue is crucial.
The question of negative assumptions versus positive assumptions arises in this context. I think there is a huge issue associated with this assumption. We are losing out on a vast number of people who want to seek voluntary activation. I was concerned by the presentation in this respect. It is one thing to say what was done in the recession, and I appreciate that some good things and some bad things were done, but it is another thing to say that only at non-austerity or non-recession points in the cycle - in times of surplus - will we see whether we might provide activation supports. This assumption exists right across Europe, where the question of qualified adults is being considered. Thousands of qualified adults, who are predominantly women, might be interested in accessing voluntary supports and activation measures. Many groups, including people with disabilities, have been asking and begging in many cases for education and training opportunities and activation measures to enable them to return to the workforce. Are they are a backup force or reserve? Are they meant to sit aside for five or six years because the authorities are only prepared to work with people on the live register during recessionary periods? Every citizen should have the same supports. We need to keep it in focus that every time somebody enters a job, that is a positive outcome. I would be very concerned about anything that would suggest this as a pattern.
I am also concerned that it is not planned to start giving access to activation measures to these groups until 2018. I know the departmental officials will say there is always access. I had this discussion with them a few years ago. I would like this form of access to be prioritised and put in place.
It is set out from 2018 to 2020 but needs to be brought forward because people have been waiting for four or five years. Every person's life is precious and every person wants to live a full life. I am sorry if it sounds very philosophical, but we will come back with detailed questions and the specifics of courses.
It is welcome that the new Indecon research on JobBridge is better than the previous research because of the control groups. It is, therefore, more valuable. Some of the proposals put forward by the Minister, as reported in the newspapers yesterday, are constructive. They are a start. We need to see more, but they are constructive. It is appropriate that there be an employer contribution, that it be time limited and that it be 30 hours rather than 40, giving people a period of time in which to seek other employment. These are positive steps and I am sure we will get a chance to look at the details of the scheme. I apologise for my lengthy intervention.
Mr. John McKeon:
On the issue of conditionality and compulsion, the social protection system is wider than jobseeker's payments. The purpose of the social protection system is to provide people with an income when they have a contingency, in other words, when they cannot generate an income. Fundamentally, defining it in its narrowest and most basic sense, that is what the social protection system is for. The conditionality is that someone who cannot find work - this has always been the case - must be looking for it.
Alice-Mary Higgins (Independent)
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The sanction is new.
Mr. John McKeon:
No, it is not, as I will explain. There is a new sanction which is in addition to the previous one - the stopping of a payment. Every year the payments of thousands of people were stopped. This sanction was always available and it still is. What has been introduced is an intermediate sanction. As of today, out of the approximately 300,000 people who could potentially be subject to sanction because they are in receipt of a jobseeker related payment, 1,100 or approximately 0.3% are on a penalty rate or a reduced payment.
The Senator mentioned the perception.
Mr. John McKeon:
There is a perception that the Department has taken a very hard-nosed or aggressive attitude, but the facts do not bear this out. Mr. Lynch can speak about his experience, but the staff in offices do not behave in this way. It ill behoves anyone to take small examples and characterise them as being the generality because it is not. I believe very strongly that this is fear-mongering. We need to be temperate in the language we use.
Alice-Mary Higgins (Independent)
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I am certainly not suggesting it is the general practice among staff and I certainly do not want to engage in fear-mongering, but when we give information that there is a perception, it is important because people are very vulnerable in these situations. Perhaps there might be a need for a stronger information programme in which we can look to clarify the position. I would happily be able to support it if we were able to have such a programme.
Mr. Jim Lynch:
It is important to state the penalty rate is appealable. There is a process whereby it can be appealed. With this in mind, deciding officers and those who speak to people on a daily basis do not easily arrive at the decision to stop or reduce a payment. As Mr. McKeon explained, we first have a chat and explain to those involved what they said they would do. It is very important to remember that in the activation measures the first part of the process is attending a group information session and that the second is a one to one meeting at which a personal progression plan is agreed to. We can only apply a sanction where someone is in breach of his or her agreement with us. He or she agrees that this might be a proper course of action to pursue, but it could mean waiting for three months for an education and training board course to become available and until the person concerned does not show up on the first day of the course. We are then back to having a conversation and asking why he or she did not start the course. We also explain the implications. On a practical level, we give a person every opportunity to comply and the application of a penalty rate is a last case scenario because on a human level deciding officers are very aware of the impact and implications of reducing somebody's money by €40. It is, therefore, very much the last option for us.
Mr. John McKeon:
It is important to recognise that the Department has two schemes in place which facilitate those who are working part time. There are the casual jobseeker's allowance and the part-time job incentive, both of which are available to persons who are working part-time. We very much see working part time as a step towards working full time.
On extension to other cohorts, if I gave the impression in the way I represented the approach during a recession as opposed to that in a recovery, that somehow we ignored people with disabilities or other cohorts, we do not. In fact, people with disabilities have access to a very wide range of employment supports and services which are more generous than jobseeker's payments.
Alice-Mary Higgins (Independent)
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The particular cohort is qualified adults.
Mr. John McKeon:
Qualified adults are a group at which we will look in the coming year or two. What I have always said - this is something that is not well known, for which the Department might perhaps be criticised - is that it is always an option for qualified adults to split their claim with their partners and become a claimant in their own right, in which case they would have full access to all services. It is an option for any jobseeker, regardless of his or her status, to walk into an Intreo centre where he or she will be met by a case officer who will work with him or her. A good number of the available supports and services are available to everybody, regardless of status, including access to training courses. Our approach has always been that those who engage on a voluntary basis are not denied a service. We are speaking about trying to be more proactive in the next two years, as opposed to being reactive in services being available when sought. We have been proactive with people with disabilities. I do not have the figures with me, but a good number of people receive a wage subsidy, which is more than €10,000 year. A good number of people also receive workplace adaptation grants, which are significant. We fund an employability service with specialist providers. Our colleagues in the further education sector provide an entire suite of specialist training courses. The feedback we received during the consultation process was that all of these services were available, but all people here want us to speak about are jobseekers. In terms of being proactive, it is a parity of esteem rather than a service issue.
John Curran (Dublin Mid West, Fianna Fail)
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I want to raise one or two specific issues. There is reference in the opening statement to the Pathways to Work scheme in the period from 2016 to 2020. The targets relate primarily to rates of employment progression. There is a specific reference to moving 20,000 long-term unemployed persons to employment during 2016. The target of 20,000 was set prior to 2015 during development of the programme. Is that correct?
John Curran (Dublin Mid West, Fianna Fail)
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Is that the original or revised target based on the review carried out by the Labour Market Council which stated the targets needed to be more ambitious?
John Curran (Dublin Mid West, Fianna Fail)
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It is the original target.
Mr. John McKeon:
Yes; the Labour Market Council did not suggest changing it. The target is to move 50,000 people who were long-term unemployed on 1 January 2016 into employment by the end of the programme. It is considered to be an ambitious target because as the number diminishes it will get harder and harder for people who were unemployed on 1 January this year to get into employment next year.
John Curran (Dublin Mid West, Fianna Fail)
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To clarify, the original target was 20,000 in 2016 and 50,000 during the period.
John Curran (Dublin Mid West, Fianna Fail)
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The Labour Market Council reviewed the plan and stated it was not ambitious enough.
John Curran (Dublin Mid West, Fianna Fail)
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It made no reference to that target.
John Curran (Dublin Mid West, Fianna Fail)
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To what specific targets did it refer which it stated needed to be more ambitious?
Mr. John McKeon:
It wanted us to include specific targets which had not been included because they were whole-of-government figures for employment and unemployment generally. We have agreed to include them.
One of the targets related to the overall employment rate among adults of working age in this State, which is approximately 65% at present. I suggested that we should set a target of between 71% and 73% by the end of the relevant period and that has been agreed. The Labour Market Council suggested that we should set a target of between 5% and 6% for the overall unemployment rate and we have agreed to incorporate that. The council also suggested that we should set a target of reducing the long-term unemployment rate to 2.2%. This is the only one we modified a bit. I think it can be inferred from current Government documents that there is a target of just over 3% at present. We have agreed to reduce that to 2.5%, rather than 2.2%. A target of 2.2% would be a very significant stretch. We have agreed to 2.5%. If my memory serves me right - I ask the Chair not to quote me on this - the council suggested that we should set an overall target of 12% for the youth unemployment rate and we have accepted that.
John Curran (Dublin Mid West, Fianna Fail)
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It might be helpful if Mr. McKeon were to circulate the revised targets based on the Labour Market Council's review.
John Curran (Dublin Mid West, Fianna Fail)
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That would enable us to monitor the outcomes as we go forward in the context of the Department's aims, rather than the original-----
John Curran (Dublin Mid West, Fianna Fail)
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I take that point. The Minister announced this week that the JobBridge internship programme is to be brought to a conclusion after running for approximately five years. From the Department's point of view, what was the level and nature of the complaints, if any, that were received about the scheme? I would be particularly interested to hear about complaints regarding exploitation.
Mr. Paul Carroll:
Approximately 48,000 people and 19,000 host organisations participated in JobBridge over the period in question. Seventy-nine organisations were suspended from participation in the scheme over the entire period. Obviously, they represent a small fraction of the total number of host organisations that participated in JobBridge. We conducted approximately 13,500 monitoring visits over the five-year period. We found there was a compliance rate of approximately 98%. This indicates that there was a high level of compliance and a low level of non-compliance on the part of the organisations concerned.
John Curran (Dublin Mid West, Fianna Fail)
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Mr. Carroll has told us how many companies or organisations were taken out of the scheme. Can he tell us whether the level of complaints made was significant? Obviously, those investigations occurred because somebody made a complaint.
John Curran (Dublin Mid West, Fianna Fail)
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Some complaints were found to be upheld and others were not.
John Curran (Dublin Mid West, Fianna Fail)
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If there were 200 complaints from the 48,000 participants, that sounds like a very low figure.
John Curran (Dublin Mid West, Fianna Fail)
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Would Mr. Carroll say the most recent Indecon report underpinned or was largely supportive of the outcomes of JobBridge?
John Curran (Dublin Mid West, Fianna Fail)
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I am asking about JobBridge because I was somewhat taken aback in one respect. The Minister said "the Department will now hold a consultation process on the principles proposed by the Labour Market Council, that a new programme should" be developed. I was surprised that one programme was stopped before the next programme was developed. This seemed to happen very suddenly. I am not saying there should not be a new programme. There is a suggestion that it will be some time before the new programme comes into play. What is the reasoning behind this approach? When is the new programme likely to start?
Mr. Paul Carroll:
The reason for closing JobBridge was that despite its success, there was a need to change the programme in light of the changed economic circumstances and in response to some of the more legitimate complaints and issues that have been raised by participants. Even though JobBridge scored well in 18 of the 20 aspects that were measured, there were significant levels of dissatisfaction among participants with regard to certain aspects of the scheme. It is important for any new scheme to reflect that. The gap between the end of JobBridge and the start of the new scheme will allow for the orderly wind-down of the JobBridge scheme and facilitate a period of consultation with people before the new scheme is finalised. I think it is quite reasonable for there to be a gap between the two schemes.
John Curran (Dublin Mid West, Fianna Fail)
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I do not. I suggest an unemployed person who believes an internship would benefit him or her in finding a job, regardless of whether this would be under the old scheme or a new scheme, would find it peculiar to be asked to wait for six months or 12 months because one scheme has been brought to an end and the new scheme has not yet been put in place. If the JobBridge model is seen to have been successful - according to Mr. Carroll, it has been underpinned by Indecon - I cannot understand from a practical point of view why the new scheme was not designed to be up and running before the closure of the old scheme. If JobBridge has been successful, why are we taking a timeout? If it has been unsuccessful, we should get rid of it. If the Department wants to modify elements of it as part of a new scheme, should that not be designed with an orderly transition rather than a timeout period before the original scheme is finished? I understand Deputy Carey wants to come in on the same issue.
Joe Carey (Clare, Fine Gael)
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Yesterday, the Minister gave a broad outline of the new scheme that has been recommended by Indecon. How long will the period of consultation with the various stakeholders take? When does Mr. Carroll envisage that the new scheme will be in place? What is the thinking in that regard?
John Curran (Dublin Mid West, Fianna Fail)
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Will the new scheme be operational at that point?
Joe Carey (Clare, Fine Gael)
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Will a person who is currently in JobBridge be allowed to continue?
John Curran (Dublin Mid West, Fianna Fail)
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The point I am making is that after this week, there will be nowhere for a new entrant who is interested in an internship to go until the new scheme is implemented sometime next year.
Mr. Paul Carroll:
There will be a range of other interventions. Nevertheless, the Chairman is quite right. The internship scheme will close to new entrants tomorrow. We decided not to allow that scheme to continue, despite its success and bearing in mind that issues were raised, because the new scheme will be fundamentally different. It will last for a shorter period. Participants will work for 30 hours, which is a shorter period of time. The most significant difference is that employers will be required to make a contribution. Difficulties could arise if the new scheme was to start on 1 June 2017, for example, and the other scheme were to be allowed to run up to that date. For example, a host organisation that signed up on the basis of one scheme might have to participate in a fundamentally changed scheme the following week. At present, employers do not make contributions, interns are required to work up to 40 hours a week and schemes last nine months. If the new scheme were to be initiated as soon as the old scheme concludes, people starting a week apart would operate under completely different terms. I accept the Chairman's point about the short window during which we will finalise the scheme. Although an internship scheme will not be open to people, a range of other opportunities will be available.
John Curran (Dublin Mid West, Fianna Fail)
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I take that point. I was asking why, given that internships have proven to be successful, there will be a timeout period when nobody can get an internship while the scheme is being modified and changed.
John Curran (Dublin Mid West, Fianna Fail)
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I will take a couple of final questions from Deputy Mitchell and Senator Higgins.
Denise Mitchell (Dublin Bay North, Sinn Fein)
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I did not get an answer to my question about the cost of the contract.
Alice-Mary Higgins (Independent)
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I thank the officials again. I am not trying to start a philosophical debate to doubt what they are saying. It is important that we look at these assumptions. I have a question about equality monitoring. At the moment, we have a public duty when it comes to equality and human rights. What mechanisms are being put in place across the Department to look at the equality of outcomes for different cohorts? I refer, for example, to equality of employment outcomes for women compared to men, or to equality for Travellers, etc. I understand there are some mechanisms in place. I would like to get a sense of how they are being monitored. There should be a focus not just on the numbers entering employment but also on the quality of outcome that is there. I should also say while I am commenting on the question of quality of outcome that I welcome strand 3, which deals with the question of making work pay and incentivising work within the plan as it goes forward. I wonder whether an additional ambition is needed with regard to in-work poverty. Maybe it is under way.
We are talking about measures designed to alleviate in-work poverty and a number of in-work supports have been developed. I refer to the Department's leverage in pressing for decent pay for decent work, as it has significant leverage and is engaging heavily with employers. It is offering a number of employment and employer incentive schemes, for example, through JobsPlus. What leverage might it be able to use in that regard? I note the programme for Government commits the Government to address, through the Low Pay Commission, the issue of in-work poverty. How is the Department actively engaging with the other half of that equation?
There is the question of choice. We did not get an answer in terms of those schemes where there is constrained choice, such as Gateway and JobPath. What is the route for an individual who is given a limited set of options to get engaged again with the system to look at a wider range of options? Is the Department considering a waiver of the full-time availability or strengthening voluntary engagement with respect to qualified adults rather than moving them towards the live register model? How can we engage with that?
Mr. John McKeon:
With regard to Deputy Mitchell's first question, we have not published the value of the contract. It was a competitive tender process and we have two providers with two different sets of prices. We want to try to keep it that way as we believe there is leverage, to the Department and the State's benefit, in not letting one provider know what the other provider bid to win the contract. It is a payment by results contract so we will not really know the full picture until we see the results. The value of the contract is entirely dependent on how well they do, so the only element we could publish is what prices they gave us. From a procurement perspective, we would prefer not to publish the prices because it is possible it would distort the market if and when we ever went again. The Department's Revised Estimates will have what we estimate as the total cost next year. We would prefer not to publish the prices. In the Revised Estimates we have multiplied the prices by what we think they are likely to do.
I will go through Senator Higgins's questions in reverse order. She asked about in-work poverty and decent pay for decent work. There are two aspects to the Department dealing with that. The main Department leading this is the Department of Jobs, Enterprise and Innovation and it is responsible for the Workplace Relations Commission, the Low Pay Commission, national employment rights and so on. It is an issue that we raise with that Department. We are members of the senior officials group on economy, trade and jobs and our Minister attends the Cabinet committee. We certainly make our views known quite forcibly. Most of the time, they are taken on board, to be fair.
The Labour Market Council intends in the next year to consider this issue; that is sponsored by our Department and we provide the secretariat, so there will certainly be an outcome on that. There are two aspects to incentivising work, as we have always argued, and one tends to get much press attention, particularly from the tabloids. This relates to welfare rates, spongers and all of that. Our view is to ask what work will pay, meaning there is a second part to the equation. As the Senator stated, all our evidence is that the welfare rate is not an impediment to anybody going back to work. We certainly approach it from that angle.
The equality of outcomes is something we monitor and the Central Statistics Office does a good job of it as well. All the data are broken down by age and gender. Generally, the issue of concern from a gender perspective might be the level of female participation in the work force. The outcomes in terms of people we engage with are relatively gender-neutral. There is no evidence in the data of bias. It is really a wider labour market issue about female participation. That is tied into the issue of child care, the lone-parent family payment and arrangements around that. Sometimes it is difficult to say it but I will say it anyway, as when we examine micro-data in the quarterly national household survey, QNHS, to which our statisticians have access, we see that quite a few women who do not participate in the labour market answer "No" when asked the follow-up question as to whether they want to participate. I absolutely acknowledge child care issues and the way in which society is framed that makes it more difficult for women. I would never deny that. There is another issue about choices, and perhaps that is a cultural element. I do not know and I cannot explain it. Perhaps it takes generations for that to work its way out.
There was a question about constrained choice and I will deal with JobPath first. I emphasise that JobPath is simply meeting a case officer; it is just they happen to work for another company rather than directly for the Department. People do not have a choice in meeting a case officer. Mr. Lynch explained that if a person is asked to a meeting, he or she should go and engage with the process. If the person does not engage, warnings and so all will follow. I emphasise again that the level of penalties is tiny. We find that people engage and in general feedback, they are very positive about the engagement.
Where people have a particular issue, we will always look at it. For example, 200 people referred to JobPath have been taken back. It is done on a case-by-case basis of whether it makes sense for the individual and if a particular circumstance applies. The same is true with our own case officers or anything else. The same applies for Gateway, community employment and all of those as well. We look at them on a case-by-case basis. We have the general rule, which is to participate, but if there is a very good reason not to, we do not impose the rule in an unthinking or unfeeling manner.
Alice-Mary Higgins (Independent)
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If people know the route back, it would be practical information. Perhaps it could come further down the line, as the witness mentioned, in addressing perceptions. If people knew it was not the right scheme for them, they might want to know how to get back.
Mr. John McKeon:
Okay, and to be fair, we will generally take a fairly firm line. For example, some people have said they do not want to go to community employment, JobPath or a one-to-one meeting with a case officer. We have told them they have to go. If there is a good reason - and it must be a very good reason - that may not happen. Some people have said they are uncomfortable, afraid, do not know about it or do not understand but that is not a good enough reason to be left alone.
Mr. Jim Lynch:
Sometimes the reason indicates something else that the case officer might need to take on board. It may be an issue of having to care for somebody else. The referral in that case might be to carer's allowance and we would suspend intervention until such stage as the person transfers on to the other payment. We need to know the reason. I always suggest that people be open and give us honest reasons.
John Curran (Dublin Mid West, Fianna Fail)
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I thank the delegation for their attendance, the presentation and, most important, the information supplied in the answers to the questions. I would appreciate it if the witnesses would forward the replies they indicated during the session.