Mr. James Clarke:

I thank the Chairman and the members for being here this morning to listen to what we have to say. We circulated a six-page document to the committee which I am sure the members have had an opportunity to read, so I will not read it all verbatim. I will pick the important points from it and elaborate on those on basis of what some of the chairperson of the CIB has said about what the difficulties are.

The MABS national management forum, which we represent, is the umbrella body that represents the 51 MABS companies throughout the country and we speak entirely on their behalf. We have the remit to speak on their behalf. We are not here as three people with our own agenda but to speak on behalf of them all. We are also here as volunteers. We work as volunteers in our local communities. I was on a project board in the CIB yesterday as a volunteer. I give my time to that for no monetary return for the benefit of MABS and the citizens we serve. It is not as if there is a major row between the CIB and the MABS national management forum on issues. We work quite well on committees. I believe the chief executive officer of CIB will fully accept that this is the way we operate.

We are seriously concerned about the issue under discussion. We have outlined the concerns in the document we submitted. MABS was not the product of a Government decision. It was an initiative developed by the late Brendan Roche in Cork in The Lough Credit Union in the late 1980s when he became aware of difficulties people had in meeting their debt, difficulties with illegal moneylenders and other related matters. He established a small group of people and decided they would do something to help those people concerned. It worked so well that the then Minister, Michael Woods, decided it was a very good idea and that the Department of Social Welfare, as it was then titled, would take it on board and set up six initial pilot projects. Those projects worked so well that the idea was rolled out throughout the country, culminating in the establishment of 51 MABS companies, all in individual locations, picked as necessary where the needs arose. Those 51 companies are still operating today.

The local voluntary community involvement was and remains, the key success to the MABS service. Regardless of what anyone else says, its key success is in the local involvement because volunteers volunteer locally. People getting involved in their local communities and democracy at all levels is what we are talking about. It is a bottom up service. There is a major difference between a bottom up service, which comes from the ground up, informing Government policy and change and something that is being developed at the top level in Dublin and decision being made that such a model will fit throughout the country and that it will work. That is the real difference between MABS and the service that the chairperson of CIB spoke about.

We are here today because we are aware that there is a plan to abolish the 51 MABS companies and replace them with eight regional companies. Those eight regional companies will be far removed from their communities. The chairperson of the CIB said it would not cost anything but it will cost a good deal of money, and I will give some of those figures later. This is the biggest decision that has ever been made about any organisation in the country. The members will know of MABS and of the work we do. They will know the organisation provides an excellent service. I am sure many members refer constituents who are in debt to MABS. That is what we want people to continue to do. The proposed decision is a major one for MABS.

The question of volunteering at local level is what matters. The Central Statistics Office produced figures recently. I might shock the members by revealing that if every volunteer in Ireland was paid the minimum wage for what they do, it would cost the Exchequer €5.5 billion a year, nearly half the HSE budget. That is the reality. The CIB is saying we are no longer necessary. There are also many volunteers working in other organisations. Why is every such organisation not being brought in, abolished and their work centralised in the way that the CIB is talking about centralising MABS?

The programme for Government for the period 2011 to 2016 refers to undertaking a range of initiatives to shift power from the State to the citizen and to engaging with "partners from outside the public sector itself - particularly on initiatives of strategic importance - to act as a catalyst for effective delivery, feedback and learning". What is being proposed is going in the opposite direction. It is removing everything from the citizen and centralising it to the State. We do not believe that is the correct approach.

We were directly under the Department of Social Protection between 1992 and 2009 and responsibility for MABS was then transferred to the CIB. The idea at the time was that the CIB had expertise in governance and in supporting the delivery of local services. We are a little disappointed with the support we got, and I am not aware of what support we actually got. The IT system in MABS, for instance, is the same as it was in 2009. We are still working off Excel sheets and such like. We have a telephone system that was introduced a few years ago at a cost of €400,000, not an inconsiderable amount of money, which does not work today. All the other telephone systems were thrown out in the bin, this system was installed, now it does not work and the CIB will have to consider how to replace it. We expected to get a different type of support from the CIB than we got.

The notice from the Department at the time states:

[this notice is to inform you that] The Minister for Social and Family Affairs has signed a Commencement Order to give effect from 13 July 2009 to Part 4 of the Social Welfare (Miscellaneous Provisions) Act 2008 which extends the functions of Citizen Information Board to include the provision of the Money Advice & Budgeting Service. ... The MABS will be a separate distinct service within the Citizens Information Board. There will be no chance in the status of independent MABS companies with voluntary boards of management nor in the employment status of their employees that provide the local services.

Is that gone out the window today? That was the basis outlined, namely, that there would be no change to the companies and that all the companies would remain as they were.

Many parliamentary questions have been tabled in the Dáil on this issue.

Deputies throughout the country have been asked by constituents to raise this issue in the Dáil. There have been several responses by the Minister. He recently spoke about the difficulty in managing 93 companies. The issue of governance came up repeatedly. Governance is a wide issue, but today was the first time I heard that the CIB board had received complaints over how any MABS was run.

We are the umbrella body that looks after it. One would imagine that if we did, the first persons to be approached would be ourselves if someone had a difficulty with a particular company. That has never happened. If we do not know there is a difficulty, if the CIB does not inform us there is a difficulty, how can one deal with it?

We have a responsibility for employing all the people. When there are IR issues, we have to appear in the Labour Court and defend the position. It is not the CIB because it is not the employer. We fully acknowledge that the CIB has these accounting responsibilities. However, let us consider the reality of the budget. I am chairman of the Longford service and have a budget of €180,000 a year. Some 84% of that is predetermined by the CIB, by way of salaries, rent and other outgoings. We have discretion over 16% of the budget. We give our time. The people who are there are not fools. They are professional people, solicitors, accountants etc. who come in and give of their time after their work to provide a service in their local community.

We ask the Minister to tell us what the difficulties are. We have consistently demonstrated that we are open to listening and effecting change for the improvement of the service. That offer remains on the table as we speak. If the CIB has a problem with governance, it should tell us what it is. If the Minister has a problem with governance, he should tell us what it is. Let us sit down and try to work it out. We do not know what it is. As I sit here, I have no idea what it is, other than general broad statements about the Comptroller and Auditor General. We all know public funds are very important and need to be looked after. We all know about the Department of Public Expenditure and Reform circular 13 of 2014 about spending public moneys. I report four times a year to the CIB as to how we spend the €180,000 of which I have discretion on 16%. I have audited accounts completed by a professional auditor and sent to the CIB. Let us put that to bed; it is a red herring. I do not believe it is reality at all.

The Minister spoke about the trouble in managing 93 companies. A good analogy is the community employment scheme operated by the Department of Social Protection. Do members know how many of those there are? There are 660 limited companies, the same as MABS. In a small county like Longford there are 16 of them. There are two people in the Department of Social Protection in Longford to look after them. They have no difficulty about the Comptroller and Auditor General and circular 13 of 2014. They provide an excellent service in local communities, cleaning up areas and doing work on a voluntary basis. Again all those directors are volunteers.

The Fine Gael and Labour Party 2011 programme for Government provided for a commitment "to convert the Money Advice and Budgeting Service into a strengthened Personal Debt Management Agency with strong legal powers". Clearly it was suggesting it did not fit in its new home in the CIB and it needed to be taken out, put back on its own and given more powers to deal with the issues that arose.

On many occasions the chair of the CIB and the Minister said that there would be no changes to front-line services. Let us put that one to bed. On what basis were these assurances given? There was no research or investigation to underpin this conclusion. We say, with respect, there is none. There will be no control over the governance and budget or over the management of front-line services if the MABS is regionalised. That is because it would establish eight independent companies that will be given budgets of more than €2 million each. The CIB will have no control over these. There will be independent directors of independent companies running the services on a regional basis. How can the CIB and the Minister claim there will be no change to front-line services? I see Deputy O'Dea is present. A regional company could decide that it will not give as much to Limerick next year and that it will reduce the staff numbers because they have too much there. That is what can happen. There is no control over it. They are talking about more control when we would end up with less control.

What will a budget for the regional companies look like? Who will control the allocations? Nobody will control the allocations. The CIB can give a particular company a sum of €2 million, but there is no control over what it might do with it. What will the management costs versus the current costs be? Starting from the top down and changing structures without detailed analysis of the impact on citizens is putting the cart before the horse. The one thing that is missing is the suggestion that there would be a better service to the citizens we serve. The service is very good as it is. There is nothing to suggest it will be better. That is our prime importance. We are there as volunteers. We work to ensure the services work and that citizens get the best service they can get, and that is it.

On the issue of attracting volunteers to be directors of these regional companies, I presume the CIB will not create eight new quangos, God forbid. However, I am not sure it will get people who have a day job to become directors and run eight regional companies with responsibility for 80 or 90 staff and a €2 million budget, and do it for nothing. Is that what is being suggested? It is not reality.

They say they will retain the present directors as members of local advisory groups. We all know what local advisory groups do. They will sit for one or two meetings, make a few suggestions and be shot down by the CIB, the Minister or whoever it might be. That will be the end of local involvement in MABS and CIS.

When the local boards are wound up, there will be no going back. There will be no more involvement in the delivery of service. The breaking of the link between local communities and MABS will decimate the entire ethos upon which its success was established, which was bottom up rather than top down.

I refer to the credit union movement, which is critical to MABS. We need to have the credit union onside to do the special accounts. It is now looking after the recently introduced micro credit scheme. Credit unions do not work on a regional basis. They are all local and run by voluntary local people. Every credit union has a member on the board of the local MABS. That is what they do. That link will be broken. Do members think we would get the same co-operation from credit unions if we tell their representatives that they are no longer fit to be a director of Longford MABS? We certainly will not.

The Minister was speaking at our conference in November. He spoke about using the savings, as did the chair of CIB, that were going to be achieved to enhance the service. Let me tell the committee, the figures that are in there are not actually correct because we have done a few sums on it since. Very conservative estimates of the cost of winding up the existing services and setting up the new companies are €1.2 million. The annual running costs thereafter will be €2.3 million per annum. That is the actual figure. I have papers here, if CIB wishes to look at and examine them. I have erred on the side of caution. I have not been exaggerating. I expect it will probably be approximately €3 million a year. Is that €3 million going to be provided from more State borrowing or will it be taken from the CIB budget? I am not sure the Minister, Deputy Paschal Donohoe would like to give us another €3 million for that. If CIB take it out of its own budget there will be a reduction in services.

MABS was recently designated as the Government’s gateway to debt advice and cannot be diverted from the mission. No consideration has been given to the disruptive aspect of this proposed restructuring at this time - HR issues, negotiations with unions, new lease agreements, legal issues in winding up companies and all the rest.

Next week the Tánaiste and the Minister will launch a big communications plan. They will roll out MABS as the front line for the new Abhaile service. At the same time they are abolishing MABS, because you can take it for granted that if the 51 companies are abolished, MABS will be gone.

MABS boards locally have always been highly responsive and adaptable. New Government initiatives have recently been professionally embraced and implemented with minimum fuss. We took on the debt relief notices under the new legislation, the dedicated mortgage arrears advisers and the court mentoring service. Let me tell the committee about the court mentoring service and the importance of local involvement in that. That court mentoring service is run in tandem with the courts. I was able, as chairman of Longford MABS, to go in to the county registrar. I was able to sit down with her, say that we would try out this court mentoring service and ask for accommodation in the courtroom. She was supportive and asked what we wanted. I asked for a room and she said that she would certainly arrange that; she would dedicate a room for us, allow us to put our signage outside and she would inform every person in there that MABS was outside if they wished to see us. Would that happen on a regional basis? No. It is all on a personal basis, it is all local, it is all in the community. That is the way it works.

The chair of CIB has spoken about all these recommendations that came from consultants. I am not going to go into the cost of consultants because I would scare the Chairman. The Pathfinder consultants, commissioned in 2014, identified that the two services, MABS and CIS, could not be integrated. We suggest that regionalisation may not have the same effect on CIS as it may have on MABS. If there is a desire to go regional there is a possibility if the appetite is there. I am not saying it is there, and CIS is not here today, but it I am hearing on the ground from CIS people that they would not mind regionalisation. However, they are two totally distinct and separate services so it would not make any difference. I would suggest to my colleagues from CIB to have a look, and possible regionalise the CIS services as a pilot.

To regionalise eight MABS services without any pilot is to move ahead on a wing and a prayer. Nobody has any idea what will come out at the end. We know what we have today but we do not know what will come out the end of this. Nobody knows. They do not know and we do not know, but we do know that the people who are involved locally are not going to be involved. The chair of CIB spoke about all these great sub-groups that were involved; design groups, steering groups, Pathfinder reports and all the rest. Each of those groups had a majority from CIB.

Pathfinder was quoted as stating: “The Government through the Department of Public Expenditure and Reform (DPER) has been driving significant change programmes through the public service.” MABS employees are not public servants. They are employed by independent limited companies and they do not enjoy the public sector perks of public servants. Common sense would dictate that it was DPER’s concern to achieve savings, not to increase costs. I have shown the committee, and will demonstrate to it and challenge anyone to question it, that it will cost money. It is all very fine to talk about these things but in reality implementing them and making them work is a totally different story.

In summary therefore, we suggest that the Minister and CIB have both failed to evidentially demonstrate the existence of a problem, the solution to which they consider to be regionalisation. They have failed to deliver a cost benefit analysis. We have never seen it and they have never prepared any figures. They have failed to quantify the real monetary cost of the endeavour. They have failed to cost the loss of the input of voluntary local boards of management. They have failed to be explicit on what the value of this costly exercise will be to the vulnerable clients served by MABS. They have failed to address the status of the national representative groups in MABS, that is the national management forum and the national executive committee, who represent staff, in any new structure with their existence likely to be dispensed with. That is most likely what will happen because they will not be there any more. They are doing all of this at a time when MABS is dealing with the greatest personal debt crisis and can ill afford such disruption, distraction and destabilisation. Contrast this with what is happening in the UK at the moment, where this week they are introducing legislation to look specifically at debt issues facing families with young children.

So, finally, what can the Minister do? The committee, I am sure, can report back to the Minister and can tell him what it heard today. The members can make up their own minds. They do not have to believe everything I have told them, but I think that I have set it out fairly clearly. The Minister has the power under the 2007 Act to issue a directive to the board. We are suggesting that the Oireachtas might suggest to the Minister that he abandon this whole idea of regionalisation and examine all the reasonable issues that have been raised and provide space for all parties to discuss and agree a workable alternative. His late predecessor, Deputy Seamus Brennan, whom I met, was faced with a similar dilemma. When the facts were put before him he put his foot down and said that it would not happen, and it did not happen.

Finally, I will say it is never too late to make the right decision. The chair of CIB spoke about a decision made by the board last week. If that decision is going to be carried through without any real addressing of the issues I have raised, I think we are going into very dangerous territory. Effectively, it is the back door to seizing control of MABS with the option to walk away if something goes wrong. What do I mean by that? What CIB did not tell the committee is that they are going to select the directors of the eight new boards. They will select them. They are going to interview the people who will chair these new boards. They are effectively going to become the shadow employer. By becoming the shadow employer, responsibility will transfer to the Government and the staff will have claims to be civil servants with all the perks that go with that.

That is the reality. This has never been examined.