Oireachtas Joint and Select Committees
Tuesday, 3 October 2017
Joint Oireachtas Committee on Jobs, Enterprise and Innovation
Mid-year Review of the 2017 Estimates for Public Services: Vote 32
Again, I welcome the Tánaiste and Minister for Business, Enterprise and Innovation, Deputy Fitzgerald, the Minister of State, Deputy Halligan, and the officials to this part of the meeting. I thank the Department for the comprehensive briefing it provided which was circulated to members together with a briefing document prepared by the committee's secretariat. The committee has agreed to proceed programme by programme and will initially focus on specific subheads before asking questions relating to the remainder of the programme. We will start with programme A, jobs and enterprise development on page 7 of the committee secretariat's briefing. We will provide copies of the briefing if members do not have it before them. I invite the Tánaiste and Minister for Business, Enterprise and Innovation to make a short statement giving a high level overview of this programme.
I welcome the opportunity to make introductory remarks relating to the mid-year review of my Department's 2017 Estimates. I am accompanied by the Minister of State, Deputy Halligan, who has responsibility for innovation, research and development. We have given the committee a briefing and I hope it will give members a clear understanding of what we are delivering for the money voted by the Oireachtas.
To summarise briefly, the 2017 total gross allocation for my Department and its offices and agencies is €858.42 million, an increase of approximately 6% on last year's allocation of €810.47 million as per the published Revised Estimates Volume. The Department's allocation is divided between €303.4 million in current expenditure and €555 million in capital expenditure. The current expenditure allocation includes an additional €3 million in Brexit-specific pay moneys provided in budget 2017 to support the recruitment of an additional 40 to 50 staff across the Department's Vote. I will confine my remarks to jobs and enterprise development and the Minister of State, Deputy Halligan, will provide details on the Department's innovation programme. If it suits the committee I will speak again when we move to section C with regard to regulation.
The total gross capital and current expenditure by the Department in the first six months of 2017 was €333.96 million. At that point it was €26.5 million behind the expected expenditure position as profiled at the start of the year, or just under 8%. In terms of current expenditure, the end of June position shows that gross expenditure was €135.9 million, which is approximately €6 million behind the original profile. The main reason for this relates to variances in pay and non-pay expenditure. These were due to a number of factors, including delays in relocating a number of departmental units, delays in filling vacancies in varying areas, timing delays and so forth.
Gross capital expenditure to the end of June was just over €198 million, which is €20.5 million behind the original profile. As the committee will be well aware, variances in capital expenditure can arise for a number of reasons, including timing of demands for grant offerings, timing of expenditure reports being submitted by agency clients, agencies own-resource income, which is a feature here, property-related issues and the quality of grant applications being made to an agency. Notwithstanding the capital expenditure variance at the end of June, it is my expectation that there will be a full spend of the Department's capital allocation in 2017. As advised, my Department secured additional capital by way of a Supplementary Estimate in 2015 and 2016. These moneys enabled it to meet some existing commitments and thereby enhanced the new business capacity of a number of its agencies for future years. In the event that capital savings arise elsewhere across the Exchequer by year-end, my Department will explore, in conjunction with the Minister for Finance, the possibility of seeking another Supplementary Estimate in late 2017.
I will briefly outline some of the aspects of the work of the Department in the jobs and enterprise area. At the end of 2016, more than 435,000 people were working in client companies being supported directly by the Department's enterprise agencies. That is an all-time record level of employment across the agencies. Allowing for the multiplier effect, I think it is safe to say a similar number of people were being indirectly supported in services and sub-supply. This means that in excess of 850,000 people - or two out of every five of those in employment - throughout the country are being supported through the enterprise agencies. Furthermore, it is interesting to note that approximately 90% of the Enterprise Ireland and IDA Ireland directly-supported jobs are full-time in nature.
During 2016, the enterprise development programmes of the Department's enterprise agencies also continued to make a significant contribution to growing employment in the regions with 52% of new jobs created by IDA Ireland clients and 61% of jobs created by Enterprise Ireland clients in 2016 being based outside of Dublin. IDA Ireland client companies created a total of 11,842 net new jobs across a range of sectors last year, with every region posting net gains. Total employment in overseas companies at the end of 2016 was 199,877, the highest figure ever recorded. I am pleased to state that progress has continued in 2017. IDA Ireland job approvals are up 22% in 2017 compared with the first half of 2016. Investments approved by IDA Ireland in the first half of 2017 will lead to the creation of more than 11,000 jobs as companies roll out their plans in the coming months and years.
The increased allocation made to the IDA Ireland's capital base in 2017 has allowed it to continue to further progress its regional property programme. In the first half of 2017, advanced facilities have already been constructed and completed in Sligo, Castlebar and Tralee. Preparations in respect of delivering advanced facilities and buildings at other regional locations also continues, with a further six expected to be completed in 2018.
More than 201,000 people are now directly employed by Enterprise Ireland-supported companies, the highest in the history of the agency. Significantly, 65% or 130,000 of those jobs are located outside Dublin. Enterprise Ireland clients also recorded export sales of €21.6 billion in 2016, an increase of 6% on 2015. This is a good news story in terms of job creation generally, regional job creation in particular and exports.
In May 2017 Enterprise Ireland launched a new regional enterprise development fund to the value of €60 million over a number of years. The fund is a competitive one and it will support the regional Action Plan for Jobs and the Action Plan for Rural Development as they are rolled out. There will be many collaborative initiatives in respect of that fund building on industry strengths and driving job creation across the regions.
The local enterprise offices, LEOs, play a key role in supporting employment. LEO-supported clients created 7,883 gross new jobs across all regions. That resulted in a net gain of an extra 3,679new jobs. At the end of 2016, the number employed across LEO client companies reached 34,000 jobsin total. This year the LEOs have targeted the approval of 920 projects for grant support, with an associated full-time equivalent of more than 2,300 new jobs. They have set ambitious targets in terms of mentoring and participation. They appear to be on course to deliver their targets for 2017 with the approval of 461 projects around the country in the first six months of 2017, which are projected to deliver more than 1,100 new jobs.
The big issue facing the country - not least businesses and the enterprise sector - is Brexit. It is a generational challenge for all member states of the EU, not least Ireland. Clearly, there are threats and opportunities posed by the challenge of Brexit and that is a primary focus of Departments. We are central to the diplomatic effort that is ongoing, in addition to my colleagues across the Government. We are engaging with our EU partners, including the European Commission, individual member states and the European Parliament, as we saw today. We very much want to get across to them the uniqueness of Ireland's relationship with the UK and the potential impact of Brexit on Ireland. We are also engaging with counterparts in the UK at ministerial level. Members have a detailed briefing on that so I will not go into it in any greater depth.
The Action Plan for Jobs has a particular focus on Brexit and we are also carrying out a review of Enterprise 2025 in the context of Brexit. Every item of policy and work in other areas has to be Brexit-proofed in order that we might ensure that we have both the right policies and the specific policy responses in place. We are looking at a number of policy responses to help business as well. I could go into detail on those. My Department also has a number of initiatives in place to allow it - across the board - to have a better response to Brexit. I could go into detail on those if members would like me to do so.
I thank the Tánaiste very much. We will take questions. We will start with subhead A5, which relates to IDA Ireland. It is on page 9 of the briefing provided by the secretariat. We will also discuss subhead A7, which covers Enterprise Ireland. IDA Ireland makes up 43% of the programme's allocation and Enterprise Ireland makes up 34%. I call Deputy Niall Collins.
Will the Tánaiste provide an update on the filling of the additional posts that were approved for IDA Ireland and Enterprise Ireland in light of Brexit? What is the position in that regard? I presume that when the moneys were voted, sanction was granted to fill the posts. I would be pleased to hear what is the position on that. Could the Tánaiste also update us on the work of IDA Ireland in terms of the review of the Succeed in Ireland initiative and ConnectIreland?
As the Deputy said, additional pay was secured in the Revised Estimates, which was very welcome. That allowed IDA Ireland to increase its staff cohort for specific posts. Seven of the posts have been filled to date and the process relating to the remaining three is well under way. In addition, we recently secured sanction from the Minister for Finance and Public Expenditure and Reform to sustain a further 35 posts to assist IDA Ireland to continue its Winning Abroad programme beyond the initially sanctioned three-year term. Those 35 people have already been recruited and are working and they will be able to continue their work. That will be reflected in our new Estimate. I have been keen to track that to make sure the people were in place.
Of the 39 sanctioned Brexit-related posts for Enterprise Ireland, 28 have been filled to date and recruitment is ongoing for the remaining 11. It is expected that four of those staff will be recruited by the end of October and seven by the end of the year. I had a discussion with both organisations. They have a very active process to fill the jobs but it can be difficult sometimes to recruit. They have the funding and they expect to have the vacancies filled by the end of the year.
Typically, they are at assistant principal level.
They are good jobs and it reflects the job situation out there that there is a lot of demand for people. I believe they are very close to filling all the positions. They expect that by the end of the year they will be very close to having them all filled.
It is a mixture of permanent and contract. Some of the posts abroad tend to be a couple of years - maybe five year contracts - and it varies depending on the circumstances in different countries, on what people want and what the organisation needs.
Yes. I will get that figure for the Deputy and forward it to him.
On Succeed in Ireland, we have said previously that the Department will be commissioning an independent review of the Succeed in Ireland programme. That review will be carried out after the details of the initiative's full and final costs are available. That will equip us with a full understanding of the programme's results and its contribution to employment generation in the State. This is in the interests of good governance and ensuring value for money for the taxpayer. I hope the terms of reference can be finalised shortly. We are examining the responses to the public consultation and that will help to shape the final text. As the Deputy is aware, there was a public consultation that looked for observations on the draft terms of references. It received 17 different submissions from a broad range of stakeholders, including public representatives and the public. The review cannot begin until the full costs of the programme are clear and the full costs will not be clear until the ConnectIreland dispute with IDA Ireland is finalised, one way or another. I hope that this issue can be brought to a conclusion and we can move on to evaluate the programme and look to the future.
I thank the Tánaiste for her presentation. I have a query related to the questions asked by Deputy Collins. I was going to ask the same questions. The Tánaiste has said that IDA Ireland was allowed to employ ten extra staff to specifically deal with Brexit.
Deputy Frances Fitzgerald: Yes.
I am happy to have that clarified. I am disappointed with the Tánaiste's response on the Succeed in Ireland programme. I was going to ask the same question. It has taken so long for the terms of reference even to be agreed. This is a major issue. I have met with IDA Ireland and with ConnectIreland people in recent weeks and I find it inexplicable as to why we have not sorted out this situation. I understand what the Tánaiste has just said but I find it inexplicable. The idea of the Succeed in Ireland project was very good and it had the potential to bring jobs to small rural parts of the State where IDA Ireland probably would not be able to go, or would not have the resources to chase up three or four jobs here and five or six jobs there. I am very disappointed that we have not had any progress on this issue. The Tánaiste is aware that the matter was raised with the previous Taoiseach by a number of Deputies who expressed their concerns at the time. The delay on the subject is unacceptable.
I certainly agree with Deputy Quinlivan that I would like to see progress in this area. I have met with IDA Ireland and with ConnectIreland. I have had a very long and good meeting with ConnectIreland. I would really like to see an end point to this in trying to determine what the final costs are and to move on to the review. I agree with the Deputy that if there is the possibility of more job creation and if somebody feels that they have a contribution to make on regional jobs, then let us look as soon as we can at how the programme has worked to see what is the precise mechanism we could consider going forward.
I am equally keen and I hope that arbitration or mediation can be agreed by both sides so we can get to an end point on the issue between IDA Ireland and Succeed in Ireland, so we can examine this type of initiative and look to the future with regard to the kind of structure that will work. I have no doubt there were many positives. We must welcome anybody who can create the extra jobs but we must get the precise structure right going forward. It is hypothetical until the costs are clear in the current situation. We need to review the project and I am always conscious that it is public money. I assure the Deputy that I have not shut the door on it at all. I have met with both sides, had a discussion and tried to get some movement forward, which is what I would really like to see as soon as possible.
That is very welcome. To be honest, prior to the Tánaiste becoming the Minister for this Department, the committee had spent quite a lot of time debating this issue. The committee feels that there was a lot of contacts and links made abroad. We are worried that, in light of Brexit, we might lose those substantial contacts while all this is going on. Obviously if something is going to court it must be dealt with but at the same time many people felt that some good work was achieved. A lot of contacts and good progress were made, and members would hate to see that lost. I am very happy to hear that the Tánaiste has not closed the door on it and that we can expect something in the future from it.
I would like arbitration or mediation to bring that phase to a conclusion, and then to move on. I am certainly happy to pursue this. I agree with the Chairman's comments and anyone would be happy to pursue jobs from whatever source. IDA Ireland is doing a very good job. It has more foreign direct investment in the pipeline. Recently I have seen at first hand the trade missions and so on, as has the Minister of State, Deputy Halligan, and connections being made with firms. There is huge interest in Ireland, particularly in the post-Brexit situation. Many firms who have headquartered in London are very keen to examine the possibility of relocating to various parts of Ireland, cities and regional areas, especially when it comes to manufacturing.
I am curious about the Enterprise Ireland situation and I am glad to hear that it has made some hires in the past months. Will the Tánaiste tell the committee where the overall employment for Enterprise Ireland stands now, as a comparison to 2012? I understand there was an exodus of key skills around that time.
With regard to the number of people employed in Enterprise Ireland now, it is around 570 people. I do not have the figure for 2012 to hand but I am happy to get that for the Senator and I will write to him with it.
My point is that I believe the figure was significantly more in 2012. I am concerned because we are facing the greatest economic challenge for decades and it is worrying that, notwithstanding the increase in employment that has been achieved in Enterprise Ireland, we seem to have significantly less people employed in the key State sector than we did five years ago. This does not seem right to me.
With regard to many of our agencies we do have to look at where we have come from economically. Of course it is very regrettable that there was downsizing due to the economic crisis we faced, but once we had the ability to invest we have been building up again. It is a priority, as the Senator saw in the budget last year, and it will be a priority again, to continue to build the staff of Enterprise Ireland and IDA Ireland.
The Senator is aware that the Taoiseach recently announced an exercise that is now under way that will be helpful in examining the global footprint of all our agencies in particular. There has recently been more investment in Bord Bia and the Department of Agriculture, Food and the Marine and the roles of Enterprise Ireland, the IDA and our embassies are being examined in the context of the substantial increase the Taoiseach wants to see in the coming years. The Senator is correct that now that the economy is recovering we need to invest in those agencies and particularly so in view of the challenges posed by Brexit. We will not be found wanting in terms of supporting the agencies to have appropriate staff in place.
I also welcome the comments regarding ConnectIreland. I shared some of my experiences of the agency when living in Australia during the height of the economic crisis with the former Minister for Jobs, Enterprise and Innovation, Deputy Mitchell O'Connor. It was said that we are going to face the biggest economic crisis in decades. The biggest economic crisis we have had was nine years ago, not decades in the past. While Brexit will be a huge challenge, the unemployment rate is now down to 6.1%, which indicates that the agencies have been performing. In the interest of balance, perhaps the Tánaiste could furnish the committee with more or simpler specifics about the return from those agencies over the past three to four years and their achievements since the Action Plan for Jobs was put in place. More investment will be needed, which I would welcome, in particular in regard to the Asia Pacific region. I welcome the contribution of ConnectIreland in terms of its provision of opportunities of referrals through social meetings, in particular for emigrants who were not at board of management level or similar, and it was very much on the tip of emigrants' tongues because of that. One could often find out about jobs through social and personal interactions. A departmental official said that one of the biggest referrals to him through ConnectIreland resulted in several new jobs in the regions and that is to be welcomed. I ask the Tánaiste to furnish the committee with specific statistics on efficiencies. It is all very well having several personnel in an agency but increased efficiency and the consideration of that must be targeted.
I take the Deputy's point. It is interesting to note that Enterprise Ireland has supported the highest level of jobs ever. It has added more than 10,000 jobs per annum since 2012. As Senator Gavan pointed out, that was done with reduced staff resources. It has become more expert. I was on a trade mission last week with Enterprise Ireland representatives and I saw it reaching out to businesses, the initiatives it is taking and the way it is working. The level of expertise within the agency has grown and the return on that can be seen in terms of jobs. Its target is 60,000 extra jobs and €56 billion in exports by 2020. We are seeing a return on investment in it. There was a constant series of new job announcements from January to August of this year in the food and aviation sectors and so on. There were announcements of 150 new jobs in Dawn Farm Foods in February, 200 new jobs in Fenergo in Dublin, two new jobs in Coolmore Foods, 80 new jobs in Parc Aviation in Shannon, new jobs in Cork and other parts of the country and that list goes on. The return is there. It is a very expert agency. There is a high level of praise from companies in Ireland and abroad for the expertise that has been developed in Enterprise Ireland and the IDA. Businesses are comparing them with other such agencies worldwide and say the level of service from Enterprise Ireland and the IDA is second to none, which is absolutely true and we are seeing the return on that. I take the point that there is no room for complacency in the context of our very challenging situation, as Senator Gavan said. We need to keep the effort up to ensure we can deal with the challenges posed by Brexit.
I want to briefly confirm what the Tánaiste has said. I was on a trade mission to South Korea and Japan and the level of expertise shown by Enterprise Ireland in such countries and the recognition of that by the Governments there and the agencies that work in conjunction with Irish agencies was really superb. For agencies from a small country, the IDA and Enterprise Ireland in particular punch well above their weight across and outside Europe under very difficult circumstances. There is evidence not only from Europe but from around the world that they are doing exceptionally well under difficult circumstances that might become more difficult because of Brexit. Enterprise Ireland is highly regarded in countries I have been such as Brazil and so on.
The average cost per Enterprise Ireland job sustained over the seven years from 2010 to 2016 was €7,350, which is a significant drop from the average of €13,717 during the period from 2008 to 2014. That points to efficiencies being made and a better value return being obtained at a cheaper cost, which is very positive.
I thank the Tánaiste. In regard to Deputy Neville's comments, I have to put on my regional hat. It is very welcome that national unemployment is down to 6.1%. Unfortunately, in Waterford and the south east the unemployment rate stubbornly remains approximately 3% above the national average and is currently at approximately 9%. The Minister of State, Deputy Halligan, will support me on that. Although there have been many good news stories in recent years, I ask the Tánaiste to keep up her renewed emphasis on the regions because while it is welcome for new jobs to be created there, they must be well-paying jobs that will allow people to get mortgages and buy houses. Particular emphasis has been put on the regions in recent years but it does not seem possible for the unemployment rate in Waterford to come within 1% or 2% of the national average and any renewed emphasis on the region would be welcomed.
It is important to note that the south east had one of the highest levels of unemployment and that has significantly dropped, albeit that the employment rate has not increased to the same level as the rest of the country. However, unemployment has dropped significantly and employment has risen significantly. I met the directors of the IDA last week. The Tánaiste has been in contact with me on several occasions on this issue and has been to Waterford to visit Enterprise Ireland local enterprise offices and so on and there is a recognition that a lot more needs to be done. I do not like to only mention Waterford. As the Chairman knows, the situation pertains to the entire south-eastern area. There is a recognition of the needs of the area and only last week, a new greenfield site was opened with the IDA, which will be announced in the coming days and hopefully will attract another big company to Waterford. It is important to note that the south east has historically had higher unemployment rates than most parts of the country but it has significantly dropped in recent years. However, the Chairman is correct that the rate in the area is 2% or 3% behind that of many other regions.
I welcome the Tánaiste, the Minister of State and their departmental officials. Brexit is a huge challenge but, as Deputy Neville said, the financial crash we experienced a number of years ago was also a huge challenge and many people wrote the country off and said it could not succeed in getting out of it. We were laughed out of court when it was said that we would create 100,000 jobs but that has been done and surpassed.
I congratulate the Ministers on the ongoing success in reducing unemployment and increasing the number of people at work. I welcome the approach regarding ConnectIreland, which made a strong presentation to the committee. It has a role in creating more jobs and, given the challenges that we face, we need to avail of every strand of job creation.
As opposed to their numbers, I acknowledge the quality of people working in Enterprise Ireland, the IDA and elsewhere. It is important. It is probably a good sign of the economy being so strong that all of the quality people are already gainfully employed and we must tease them back to the Department and Enterprise Ireland to help us attract more jobs.
The figures for the cost of job creation that the Tánaiste mentioned do not just reflect what she alluded to, but also the attractiveness of Ireland as a country in which to live and work. That is due to societal change and an approach to the value of work. The Government is right to discuss increasing the threshold for the marginal rate to make work more valuable for people instead of increasing the base cost for prospective employers. Let people take more money home in their pockets and give them more disposable pay. People will argue that we need more money for services, which we do. Thanks to the approach that has been taken, though, we actually have more money now. In every sector, more money is being invested in many services.
I wish to raise with the Tánaiste an issue that has significant potential to create further jobs in tourism, namely, greenways. The Tánaiste and the Chairman will be aware of the greenway in Waterford. The classic one is in Mayo and cost €12 million to put in place but returned that amount in one year. Greenways present opportunities for coastal routes in north County Dublin, particularly given the train stations. People could cycle out from the city. The 27 million people arriving at the airport would have somewhere to go. Cafes, restaurants and other businesses would spring up along the route. It is a stunning, coastal route. This is a no-brainer. I hope that the Tánaiste will use her undoubted powers of persuasion on the Minister for Finance to ensure that extra money is invested in greenways. I do not just mean for north Dublin, but for a pot of money. Previously, I called for €200 million to develop greenways.
From the Global Economic Forum of a number of years ago, we know that there is an ever-increasing population of people between the ages of 60 and 80 years who are relatively wealthy, well and healthy, and are looking for entertainment and things to do. Walking and cycling are the sorts of thing that interest them. Flipping it over to the younger population of Dublin, for people to be able to go for a cycle with their families in safety is difficult to do now. Rural roads are not safe for that type of cycling and the city is not inviting in that regard. A safe cycleway along the coast of north County Dublin or all the way back to the south county - that would not bother me - would have societal gains from the point of view of families being outside and exercising together. All of that is positive. I did not want to let the opportunity pass without mentioning it.
In terms of the development of greenways, the economic indicators in Scotland, Switzerland, Austria and so on for the past ten or 15 years have shown their economic value. They attract proficient cyclists, walkers and so on from other countries. SMEs also set up along their greenways. As the Chairman knows, 37 or 40 small businesses - pubs and restaurants - have been reinvigorated and redeveloped along the Waterford-Dungarvan greenway. Senator Reilly is correct.
In recent years, Fáilte Ireland started promoting greenways, particularly in countries like France and the Netherlands where people are big into their cycling, parts of northern England and so on. This summer, we saw people from those countries travelling to Ireland specifically to cycle on our greenways and stay in the hotels and bed and breakfast accommodation along them. It will probably take another year or two, but I am positive that the economic benefits will be profound in the coming years. I agree with the Senator that we should continue investing in greenways, given that those that we have invested in have been good for the economy.
I will take up Senator Reilly's point. Attracting industry also entails issues of lifestyle, the facilities that are available in an area, atmosphere and diversity. Having met companies, all of these factors are considered together before a company makes a decision.
I will put some job numbers on the record that the Chairman will appreciate. Last year, 4,429 new jobs were delivered by Enterprise Ireland, the IDA and LEOs in the south east, or 12 new jobs per day. The overall number of jobs created in the south east from the first quarter of 2015, which is the baseline year, to the second quarter of this year is 13,000. That represents good progress.
I recognise the challenges facing some areas. The south east was mentioned. More initiatives are probably needed. I met the regional committee when I was in Waterford and had a good discussion about its plans. If all of the initiatives are viewed together, one will begin to see employment increasing, but some areas face more challenges than others. I take that point while recognising that we are also moving in the right direction.
Briefly. I support the comments on greenways, which have considerable potential. However, I will revert on my previous point. It has been shared with me that, in 2012, Enterprise Ireland employed 742 staff as opposed to 570 this year. That is a drop of 172. Notwithstanding the point that Deputy Neville rightly makes about ensuring that the organisation operates efficiently, I will point to the comments of the Minister of State, Deputy Halligan. We all accept that these people do a wonderful job, so it is shocking to find that, as we face into Brexit, Enterprise Ireland - a key agency - is 172 staff down on where it was.
I raise this matter because a key member of that organisation has told me that morale among staff in this country is extremely low due to the deficits in skills and numbers and the pressure they are under. I call on the Minister to address this issue seriously. We are discussing a 22% reduction in staff numbers at a time when we need to find new marketplaces for our businesses. It is not good enough to be operating with that level of employment.
The Government has shown its commitment to increasing resources. The Senator must remember that, at the time, it was a merger of three agencies. Obviously, we will always listen to Enterprise Ireland. In terms of the global footprint and putting more people on the ground, both in Ireland and globally, there is a high-level plan to achieve that. The Senator's comments must be taken in the context of the merger and the economic situation. It is important that we consider the quality of the output. Although many factors impacted on the unemployment rate reducing from 15.5% to 6.1%, it is clear from the figures that I have given that the work being done by the agencies has become efficient and less costly per job. These are good signs.
I see great enthusiasm from Enterprise Ireland staff. The feedback from everyone who comes into contact with them, businesses nationally and internationally, is striking in how positive it is about the work that Enterprise Ireland and, indeed, the IDA are doing on the front line.
I can give the committee my direct experience since I took up this job. That is genuinely what it is.
Yes, they are. Five members of staff are working in the Department's dedicated Brexit unit, which is one of the responses in place to deal with Brexit. As Tánaiste, I chair the co-ordination group that meets the agencies as part of the planning of the Brexit response. I have already chaired one of those meetings. An internal cross-divisional group of senior officials, chaired by the Secretary General of the Department of Business, Enterprise and Innovation, is overseeing the implementation of our Brexit response. There is also a cross-departmental Brexit trade and investment group at assistant secretary level. Within the Department and across the Government, there is a focus on co-ordinating the response to Brexit, which will affect many Departments and sections.
The Tánaiste said that the full capital spend was used up. Does she think any of the additional moneys that were allocated to her Department this year will not be spent and will have to be carried forward until next year?
As the Tánaiste said, I have responsibility in the Department for issues relating to research, development and innovation, or RDI. I am happy to speak about the importance of innovation and to outline to members some of the activities being delivered under the programme B expenditure area. I am pleased that by comparison with the position at the start of 2016, an additional €65 million has been invested in research and innovation through my Department. This includes a supplementary allocation in late 2016. Since I took up this portfolio, it has been clear to me that innovation has a key function in driving productivity growth, which is the most sustainable basis for improving Ireland's economic growth and overall living standards. Innovation is central to Ireland's competitiveness and the ability of companies based in Ireland to compete internationally.
Key economic indicators show that firms which were not RDI-active suffered the greatest job losses during the recession, while innovation-active firms displayed higher resilience and growth in terms of rates of employment, exports and added value. Pay levels in RDI-active firms are 10% ahead of the average. Since 2006, the number of researchers working in the enterprise base has increased by 67% to over 17,800. This indicates that there has been a major increase in knowledge transfer from public research to the private sector, which represents significant progress on a central innovation policy objective.
The strong science and innovation base we have built up over the past decade and a half has yielded results in terms of economic and societal impact. When the European innovation scoreboard was published last June, I was pleased to note that Ireland was ranked first in the EU for SMEs innovating in-house and second for SMEs with product or process innovations. We must continue to ensure, therefore, Ireland has the capabilities it needs to develop, grow and attract innovative enterprises. Our investment in research and development and our highly-educated workforce is crucial to the development of an ecosystem from which success can emerge.
Investment in research and innovation through my Department is all about delivering tangible economic impacts. In 2017, under programme B expenditure, approximately €323 million will be invested in RDI programmes by my Department through its enterprise agencies, primarily Science Foundation Ireland and Enterprise Ireland. Further investments are being made through the Tyndall National Institute, the European Space Agency and the programme for research in third level institutions. I will highlight a few key achievements in the year to date.
Last month, we announced that €72 million will be invested over the next six years in four new world-class Science Foundation Ireland, SFI, research centres. Importantly, the new centres will be supported by 80 industry partners, which will provide €38 million to support cutting-edge basic and applied research with strong industry engagement, economic and social impact. This is an example of the collaboration between innovation, SFI, research and development and multinational companies, particularly in areas like pharmaceuticals and IT. The four new centres will focus their research work on important areas like advanced manufacturing; identifying alternatives to finite fossil fuel resources and the treatment of chronic and rare neurological diseases. The need to do research in these four important areas has been recognised across the world. We are doing it here in Ireland. Last month also saw the beginning of a €43 million five-year investment in the SFI investigator programme, which sees funding go directly to leading researchers and their teams. Projects receiving funding include work to develop new types of antibiotics and the development of magnetic materials for next-generation data processing.
We spoke earlier about Enterprise Ireland, which this year has continued to support research, development and innovation across our indigenous enterprise base. Over 30 commercialisation fund projects have been approved already this year. Equity investments have been made in 37 innovative high-potential start-ups. Over 600 collaborative projects between Irish-based companies and Irish higher education institutes are supported through a range of initiatives such as innovation vouchers, innovation partnerships and technology gateway projects at our institutes of technology.
A new meat technology centre was established by Enterprise Ireland in conjunction with Teagasc earlier this year to create a strategic research and innovation base in beef and sheep meat processing for this country. It brings to 14 the total number of technology centres that are supported by Enterprise Ireland or IDA Ireland. I am pleased to note that over 600 companies are working within these technology centres. This is phenomenal when taken as a percentage of the population. Our extremely high level of investment in other countries is one of the highest across Europe.
The value of European Space Agency contracts secured by industry has reached €5.47 million and is on track to reach its €12 million target for this year. Every €1 we invest in the European Space Agency leads to a return of between €6 and €8. The research and development work being done by the 62 companies across Ireland that are working within the agency are recognised across the world. I refer to the work being done by scientists and people with PhDs. Approximately €424 million of Horizon 2020 funding has been won by our researchers, companies and research organisations to date. While this positions us well to achieve our target of €1.25 billion, we must not be complacent about that. I am particularly pleased to note that over €94 million of this funding has been awarded to small and medium-sized enterprises through the Horizon 2020 SME instrument.
The Tyndall National Institute, which is recognised all over the world, is one of our greatest research institutes. It is the country's largest dedicated research centre. It operates in the ICT sector which, as we know, is of huge economic importance. At this point in the year, the institute is on track to deliver on its targets of €6 million in income through engagement with industry, collaboration with over 200 companies and Horizon 2020 drawdown of €7 million with 20 new projects funded.
Ireland has become a global innovation leader. We must continue to invest in research, development and innovation if we are to secure a vibrant and strong economy over the next ten, 15 or 20 years. We need a strong innovative enterprise base and growing employment, sales and exports. We have to be internationally competitive. I say that because as technology advances and drives industrial and economic growth in countries across Europe and the world over the next ten, 15 or 20 years, our scientists and researchers will have to be at the top in developing innovative projects. I think we are there. I will give a couple of examples in the area of research and development. Ireland is ranked third in the world in agricultural science, which is phenomenal. We are ranked first in the world in nanotechnology. We are in the top ten in the world for innovative scientific projects and research.
Our record in research and development is recognised by countries such as Japan, Korea, right across Europe and by bodies from the European Space Agency to NASA in the US. I think we are doing exceptionally well, really hitting above the belt. It is important that we continue to invest in innovative projects and in research and development.
I thank the Minister of State, Deputy Halligan, for his presentation. May I put on record my thanks for all the briefing sessions that were organised for members in the Department? The session with Science Foundation Ireland was excellent.
Sinn Féin launches its pre-budget submission this morning and under the heading of enterprise, I have a section on Ireland's application to join CERN. Will the Minister of State confirm whether it is the Government's intention to apply for either associate or full membership of CERN? I am aware that in 2014, the then Department of Jobs, Enterprise and Innovation conducted a study on proposed membership of CERN and it concluded that the case for joining CERN would be very strong, if satisfactory membership conditions could be achieved at around the same cost of associate membership. Obviously the full membership fee is approximately €10 million but associate membership is €1.5 million a year. Has provision been made in the budget to cover the cost of membership or associate membership of CERN? Is it the Government's intention to apply to join CERN?
I thank Deputy Quinlivan for his incisive questions at the many meetings he attended in the Department. In regard to Irish membership of CERN, Innovation 2020 contains an action in this regard and we are already negotiating Ireland's membership options. In January 2016, the then Minister of State with responsibility for skills, Deputy Damien English wrote to CERN in order to commence the process. There have been ongoing discussions between my Department and CERN at both official and ministerial level throughout 2016 and 2017. Officials from the Department, Enterprise Ireland and Science Foundation Ireland visited CERN in 2016. The Director General of CERN visited Dublin and met my predecessor.
The information that has been gathered has provided my officials and me with a comprehensive understanding of the potential benefits of CERN, however, the cost of membership is also significant.
The cost of Ireland becoming a full member of CERN is in the region of €15 million per annum. Alternatively, Ireland could become an associate member for 10% of that cost, that is €1.5 million per annum. An associate member enjoys reduced benefits, and reduced access to contracts and enterprise. Based on the significant cost of joining CERN, and the European Southern Observatory, which I know that Sinn Fein and Fianna Fail Party are interested in, we are assessing the money that can be spent on this investment. In my view, if it is possible, I think we should join CERN for the benefits that could accrue. At present, the Department, Enterprise Ireland and Science Foundation Ireland are in discussions. It would be wrong for me to say that we will have the financial wherewithal to do this straight away and join. I know that Deputy Quinlivan has a great interest in Ireland joining CERN and I give him my word that when a decision will be made I will tell him.
Obviously the regulatory offices and agencies play a key role in ensuring that markets, including the labour market, work efficiently through smart regulation, which encourages innovation, competition and high standards of compliance and protection of consumers but without unnecessary regulatory cost.
I will outline briefly some of the key activities of a number of the agencies under the Department. Since its establishment the Workplace Relations Commission through the new adjudication service has reduced the number of legacy employment rights industrial relations complaints. The numbers have reduced from 2,397 in November 2015 to fewer than 50 at the end of June 2017. That is a very striking reduction. The number of equal status legacy cases has also been reduced from 1,298 to 482 cases. I think that is really important. In terms of handling current complaints the adjudication service received more than 6,000 specific complaints in the six months to the end of June 2017, but decisions in respect of complaints now issue within eight months, with the majority being issued within a shorter timeframe. The service is responding in a faster way and in a much better timeframe than what users of the previous structures experienced. Some 2,671 inspections have been completed to date this year, with a total of 1,000 employers found to have been in breach of the regulations.
The figures for the Companies Registration Office Ireland, CRO, reflect the present economic situation. The first half of 2017 was very busy for the CRO. The number of Irish companies on the companies register is 211,110. There were 2,713 external company registrations, and one can imagine the significant level of documentation, which was well over 250,000 documents, and some 74% were processed through e-filing but in excess of 11,000 new companies were incorporated, an average of 1,875 each month, and more than 13,000 new business names were registered with the CRO in the first half of this year. That is a reflection of the economic activity that is going on in terms of businesses and companies. It is very encouraging. This level of new businesses being formed is to be welcomed.
The Low Pay Commission comes under my Department. Deputies and Senators will be aware that in July 2017, the Low Pay Commission recommended a further increase in the national minimum wage of 30 cent, bringing the minimum wage up to €9.55 per hour. Responsibility was recently transferred to the Minister for Employment Affairs and Social Protection for that part of the work of my Department.
The Office of the Director of Corporate Enforcement, ODCE, obviously plays a very central role in facilitating compliance with and enforcement of company law. Again, let me put some statistics on the record, because I think they are very interesting, between 2012 and 2016, investigations by the ODCE have resulted in 977 company directors being restricted and 65 company directors disqualified by the High Court, with directors' loans infringements totalling €221 million rectified on foot of action by the ODCE. That is quite a volume of work. However, following the outcome of the ODCE's prosecution of a number of persons, and Judge Alymer's decision in May 2017 to acquit Mr. Sean FitzPatrick, the then Minister at the time requested the Director of Corporate Enforcement to submit a report on the issues highlighted by Judge Aylmer in his ruling. That report was furnished to me on 23 June 2017 under section 955 of the Companies Act 2014. I have referred the report to the Attorney General for advice and specifically as to whether there are any legal impediments to publishing the report and discussing its contents in the Oireachtas. Of course, I would like to publish the report and will do so as soon as I get legal clearance.
The Competition and Consumer Protection Commission, CCPC is the other regulatory body charged with enforcing competition and consumer protection law. They have done a great deal of work this year. The first conviction in Ireland for bid rigging, resulted from an investigation into a cartel in the flooring sector. The first custodial sentence was also handed down against a trader for misleading a consumer in the sale of a clocked car. I think many will be interested to learn that the commission has been looking at misleading practices in the sale of clocked or crashed cars. The CCPC continues an investigation into potential price signalling in the motor insurance sector as well. The CCPC has held some 27 witness summons hearings and obtained more than 1.24 million emails and documents from parties under investigation into potential price signalling. That is clearly a very serious and detailed investigation that is currently under way.
They are looking at anti-competitive conduct in the ticketing sector. Some 99 files into potential car clocking in the motor industry were opened in the first half of the year and unannounced inspections commenced in car garages across the country to ensure compliance with consumer protection legislation. In the year to date, the Competition and Consumer Protection Commission, CCPC, has received 44 merger notifications, 41 of which were cleared within 30 working days. That is a phase 1 assessment. As at 30 June, in another important area on which it spends a lot of time, there were 114 live investigations into unsafe products on the market, which could include anything from dangerous toys to products that could cause harm in the home. It is very centrally involved in that work as well.
I hope that gives a flavour of some of the agencies under the aegis of the Department at present.
In respect of the Office of the Director of Corporate Enforcement, ODCE, I had occasion recently to meet the present director, Mr. Ian Drennan. I was very impressed by him. He is showing a lot of energy and dedication to the job. In advance of the Anglo trial, which we all know about, there was a series of engagements between the ODCE, the Tánaiste's Department and the Department of Public Expenditure and Reform in respect of the sanctioning of posts. Is there any issue today between the ODCE and those two Departments in terms of sanctioning posts and resourcing? I have read that the report on the Anglo trial, which was furnished to the Tánaiste and which she sent to Attorney General, referred to resourcing issues which are ongoing within the office. It is obviously a hugely important office. Can the Tánaiste provide an overview of what additional resourcing requests are before her today and what requests for personnel or additional resources remain to be sanctioned and fulfilled?
The Deputy is right that there were some issues, particularly in terms of recruiting specialist posts. That has been in the public arena. I understand people have been recruited to some of those specialist posts and there is no issue in terms of sanction for them or in moving forward in respect of recruitment, either between ODCE and my Department or between ourselves and DPER.
The five forensic accountants were appointed and were provided with specialist software in the first half of 2017 to enable them to present the findings of their investigations visually. Following the appointment of the initial forensic specialist in May, work has commenced to create a forensic laboratory, with specialist hardware and software having also been procured. All of these developments will enhance the ability of the office to progress its investigations. Those issues in terms of getting the financial support for the ODCE to approve people have been dealt with.
I want to ask about the Health and Safety Authority, HSA. I will begin with a brief quote from an RTE report, which stated that "the country's workplace safety agency says it currently does not have sufficient resources to perform all of its duties to the highest standard." Speaking on RTE's "This Week" programme, Martin O'Halloran, CEO of the HSA, said he has written to the Government looking for additional personnel to meet the demands of a growing national workforce.
Over the past decade, 200 people have died on Irish farms yet the number of farm inspections carried out by the HSA has fallen from 3,112 to just over 2,000 between 2012 and last year. Those are very concerning statistics. How many additional personnel has the HSA requested? Has it requested additional funding for 2017? Have other agencies or offices under the Tánaiste's remit requested additional staff or funding? If so, which agency and how many staff?
I also want to ask about the Workplace Relations Commission, if I may. We had its officials in recently in respect of the fishing industry. It was concerning to hear that they are going to have to step back on their inspection programme even though there are now charges of people trafficking, because they simply do not have the resources to cope. How many labour inspectors are currently employed? Would the Tánaiste consider the case for increasing the number? Sinn Féin carried out a survey of the hospitality industry which showed huge non-compliance with basic terms of employment and conditions. We know there are major problems out there and that there has been a constant shortage of inspectors. I would like to know how the Tánaiste intends to address the issue. I thank her for her patience as I have asked quite a few questions.
I am aware that during an interview on RTE radio last Sunday, Martin O'Halloran, the CEO of the Health and Safety Authority, stated that he had submitted a workforce plan to my Department requesting, I think, 48 additional posts for the HSA. That was just received on 20 September as a draft plan. I have not had an opportunity to study it in detail yet. The topic under discussion on Sunday was farm safety. There were two very tragic accidents at the time of the ploughing championships, as we know. I visited the HSA stand at the ploughing championships and thought they were doing extraordinary work and getting huge attendances in terms of raising awareness and focusing on farm safety. I would want to support that work in every way possible so that we can improve safety on farms. We do not want to see those tragedies being repeated. One death is obviously one too many.
Yes. I met some of the families that are working with the HSA and have lost loved ones through farm accidents when I was at the ploughing. They are doing excellent work in trying to increase awareness and I think we would all want to support that.
None of the new posts identified in the draft workforce plan relates to the farm safety inspectors, actually. In respect of the farming sector, the draft workforce plan states that farming inspectors are resource-intensive and that the authority has actually developed new ways of engaging with farmers, such as the various farm walks and knowledge transfer groups. They are approaching some of the work around farm safety in a different way, other than through straight inspection. It is about engaging in these kind of events as well. They have reported that this kind of engagement - I accept that inspections have a role - has the potential for a long-term impact with farmers, along with more targeted inspection campaigns.
Senior officials from my Department are meeting Mr. O'Halloran tomorrow to discuss the HSA draft workforce plan. The number of inspections did fall in recent years due to staff reductions and changes in the character of inspection activity, notably in the farm sector. They have engaged in smarter work practices in order to ensure the message of improving workplace health and safety continues to reach the largest possible audiences. The kind of initiatives they are taking include the development of the BeSMART online risk assessment tool, the publishing of e-learning courses in the agricultural area and the introduction of a programme of informative farm walks. They have also updated the HSA's inspection data management system to increase the ease and efficiency of data entry through a simplified system and a new smartphone-based field inspection data app.
It is a bit like what we were saying about Enterprise Ireland. They are finding new and sometimes more effective ways of working. Most inspections are targeted at the high-risk sectors such as construction, agriculture, forestry, manufacturing, mines, quarries, the transport of dangerous goods by road and the chemical sector.
Following the end of the moratorium on public service recruitment, my Department has given the HSA sanction to replace the number of inspection staff who left the HSA in 2016 and 2017. The organisation is currently in the latter stages of recruiting 11 inspectors who, subject to the acceptance of contracts, etc. should be able to start work in quarter 4 of this year. The organisation is changing some of the ways it works but it is also recruiting extra inspectors.
I echo the sentiments expressed about farm accidents and the provision for safety measures on farms because I represent a rural constituency. Obviously any initiative that can be brought forward to increase farm safety is very welcome. A lot of the solution rests with education and a change of culture. The initial research shows that there are different demographics of farmers and different risk categories.
The point made about inspections is very valid. Let us remember that farm inspections cover a range of issues, including the environment and the rural environment protection scheme, REPS. I urge that a co-ordinated approach is adopted for inspections. There have been times, not in terms of farm safety, where farms are visited by a Department inspector and separately an inspector from the council where they contradict each other's findings. That situation should be borne in mind in terms of more inspections. I say that without detracting from the work of the HSA. I support the call for greater health and safety but urge that inspections are co-ordinated to make it easier for farmers to carry on with their business. Nowadays farming is a very demanding profession and often times farmers work in a solitary environment. They do not have the amalgamation of a team around them yet they must manage all of the demands placed on them.
I was asked one other question that I did not answer. In the WRC there are 50 plus inspectors serving out of 165 staff of the WRC. I think there has also been a recent internal competition and it is expected that between three and five more inspectors will be appointed shortly.
I acknowledge what the Tánaiste has said. To be frank, as someone who has worked as a trade union officer for over a decade, that number of inspectors is inadequate given the increase in precarious work in recent years and the shocking abuses in the fishing and the hotel industries, in particular. The number of inspectors needs to be addressed. In fairness to the Tánaiste's staff and the Workplace Relations Commission, they are completely understaffed in terms of tackling the abuses that are quite widespread and rampant in some sectors of our economy, and I stress the words "some sectors of our economy". We know, from first-hand knowledge, that the bodies do not have the resources they need to tackle the problem, and employers also know. The situation sends out the wrong signal entirely.
I think the WRC is doing extremely good work. From the information that I have given the committee one can see the amount of progress it has made in dealing with complaints in a more timely way, conducting inspections out of the 2,000 plus inspections that are conducted in the workplace. As a result, 1,000 employers have been found to be in breach.
The Senator mentioned the fishing sector. Let us consider what the WRC has done in that area. Since it published its report in 2017, it has signed a memorandum of understanding, MOU, with other areas to support co-operation in terms of enforcement and information sharing. I think that is very good. It has also conducted an information and education campaign in the whitefish sector. It has engaged with industry stakeholders to enhance compliance, training ten WRC inspectors at the National Fisheries Training College for deployment on fisheries inspection. It has undertaken more than 200 inspections on the whitefish fleet involving 176 whitefish vessels over 15 m in length. It has detected almost 200 contraventions relating to 110 vessels to the end of June 2017 and initiated five prosecutions where compliance by other means was not secured. One can see very active work by the WRC in an area. I agree with the Senator that what emerged was absolutely unacceptable but action has been taken. The Department of Justice and Equality has also taken various actions in terms of some of the abuses. As the Senator will know, visa criteria were changed in terms of the fishing industry. The WRC is very actively involved in the particular area mentioned by the Senator.
I shall clarify one point, Tánaiste. I do not dispute the good work that has been done. The committee was quite impressed with what the WRC had to say when it came here. What worried me, and I think a number of others, was the WRC admitted that it would have to step back and cannot continue the number of inspections that it wants to conduct because of the resource issue. That is a concern.
I have questions on the Personal Injuries Assessment Board. The backdrop to my queries is the rising cost of insurance in terms of personal insurance, motor insurance, home insurance and business insurance. As part of the debate an issue has been flagged to me by some members of the legal community. They feel that the Personal Injuries Assessment Board could and should be quicker to deal with claims. I do not know whether I believe such a claim. I ask the Tánaiste to comment on the resourcing of the PIAB. Similar to the Office of the Director of Corporate Enforcement, ODCE, has the board requested additional resourcing in terms of manpower or any other resources to deal with its workload?
The first point to be made is that the board is self-funding, and that is very positive. The general reaction to its work is that such work has led to a more efficient management of injury claims. The board appears to be very efficient in the way it carries out its work. Maybe the Deputy can supply me with the details and I can come back to him. I do not really have further information. Perhaps, Deputy, I would link with him directly.
Do members have any further questions on section C? No.
I thank the Tánaiste, the Minister of State, Deputy Halligan, and their officials for attending today. The engagement is important and this meeting was constructive. That concludes all of our business on today's agenda. The joint committee is now adjourned until 4 p.m. on Tuesday, 17 October when we will commence discussing the cost of doing business. I thank everyone for attending.