John Curran (Dublin Mid West, Fianna Fail)
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I welcome Mr. Bowe, chairman, Irish Local Development Network, ILDN; enterprise and employment committee and CEO, Dublin North West Area Partnership; Ms Anne Kavanagh, CEO, Paul Partnership; Mr. Larry O' Neill, CEO, South Dublin County Partnership; Mr. Eamonn O' Reilly, CEO, North East and West Kerry Development; and Mr Joe Saunders, manager, Irish Local Development Network. I understand Mr. Bowe will make an opening statement and members will then put questions, to which he or any of the other delegates may respond.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. If, however, 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.

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.

Mr. Michael Bowe:

I thank committee members for the invitation to speak to them. The Irish Local Development Network, ILDN, is the representative body for the country’s 49 local development companies, LDCs, often referred to as partnership companies. They are not-for-profit, multi-sectoral partnerships that deliver community and rural development, labour market activation, social inclusion and social enterprise services across the country. Last year they supported more than 15,000 communities and community groups and 173,000 individuals by delivering approximately €330 million worth of programmes on behalf of Departments and State agencies. Examples include the social inclusion community activation programme, known as SICAP, employment supports, Leader, education, child care, public health and social enterprise programmes and supports. The ILDN supports its member organisations through liaison with funders, research and policy development, publicity and communications, networking opportunities, advocacy and representation, training, group procurement such as insurance, Garda vetting, etc.

Specifically, in the context of the Department of Employment Affairs and Social Protection, local development companies deliver the following programmes on its behalf: the back-to-work enterprise allowance; Tús; the rural social scheme; the local employment service; jobs clubs; the community employment scheme and the jobs initiative. Through these programmes, in 2016 we placed almost 9,000 people in employment and 5,772 in self-employment; supported 336 social enterprises to employ a further 4,808 people, and placed and supported almost 11,000 other individuals in Tús, rural social scheme, community employment scheme and jobs initiative programmes. In addition to these outcomes, employment and training supports were provided for a further 20,000 individuals whose employment journey had not yet led to a job, including those experiencing multiple barriers to entering the labour market. A further societal benefit is the several thousand communities and community groups, the daily lives of which are enhanced by the contributions of programme participants to their local areas.

The background to the formation of local development companies is that they were set up by the voluntary sector on the invitation of the State to link hard-to-reach communities and individuals with State services and programmes. The relationship dates back almost a quarter of a century through all parts of the employment-unemployment cycle. We continue to enjoy a fruitful, ongoing collaboration with the Department of Employment Affairs and Social Protection and other Departments, on behalf of which we deliver so many services. Local development companies are community-led, bottom-up and not for profit in ethos. Their boards comprise local, voluntary directors alongside public sector personnel and, in many cases, employers, union and elected representatives. They link with local economic and community plans and local community development committees, usually known as LECPs and LCDCs, ensuring wide-ranging oversight and democratic accountability. We make decisions and base our services close to where they have an impact, ensuring our links with employers, job seekers and communities are harnessed for maximum effect. Because we operate multiple programmes in multiple sectors, our programmes do not compete with each other, but complementary supports can be offered to service users. For example, they may use our training, job seeker, child care and health promotion services simultaneously.

These are some of the distinguishing features of local development companies, but it is important that we also give the committee and the wider public assurances as to the quality, effectiveness, governance and value for money we provide. In that regard, let me make a few observations.

Regarding performance, LDCs are evaluated and audited by a range of external bodies. For instance, Pobal’s rigorous monitoring of our delivery of SICAP shows a significant surpassing of the prescribed KPI targets which have been circulated for the information of members. Included is the achievement, to a figure of 138%, of the progression to employment indicator, KPI1, for the latest year on record. Therefore, we are not opposed to independent measurement and evaluation. All of our programmes are subject to funder audit and inspection by local, national and EU statutory bodies and, in some cases, all three.

We still await publication of the Indecon report on the LES and jobs clubs, but in the meantime we can give some details of value-for-money aspects of the LES. Using methodology employed by the UK Centre for Economic and Social Inclusion which the Department engaged during its cost modelling for JobPath, Mayo LES has returned a minimum of €1.96 million to the Exchequer, while costing the latter €871,000. A three-year study at Ballymun LES found that a societal value of €2.77 was generated for every €1 invested. While these statistics are a few years old, we would welcome the release of the Indecon report on the LES and jobs club as a contribution to the current discussion. My comments are offered to demonstrate that LDCs are not seeking protected status, or a reduced level of oversight than the investment of public moneys deserves. We do not fear competition, KPIs or detailed oversight, but we do have reservations about using a payment-per-results model for social programmes owing to the impact on participants. Thus, we share the concerns raised at the committee on 25 January by Dr. Mary Murphy when she critiqued the impact of tendering and commissioning, as applied, saying it made operators "compete with one another for the attention of recipients rather than figure out what the best service is for those recipients."

The negative impact of the current model of competitive tendering on the beneficiary can be seen in the following ways. First, competitive tenders for social programmes are inefficient as they distract from the core work being done.

In addition, in their 2017 report, Back to the Future: Reimaging the Role of the LES in 2020 Ireland, Dr. Mary Murphy and Ms Audrey Deane list the high transaction costs of contract design and bid preparation, management fees and profit margins of 15% to 20% as impacting on any claimed savings to the extent that such savings may not be realised. Second, the current model limits the focus of the work to the narrow and specific terms of the contract being offered. It prohibits the service from adapting to the inevitable changes in the operational environment over the duration of the contract. In practical terms, a competition can only be run every three to six years, locking all parties into pricing and services that may be more appropriate to a different time. Finally, it promotes payment by a narrow, usually quantitative interpretation of results which promotes cherry-picking and does not allow for deeper work. Is 30 plus hours of work per week the only measure of success we should now allow for those who are most distant from the labour market? That yardstick does not value the contribution of many employees and is potentially discriminatory.

Although we greatly welcome the recent and ongoing reductions in the live register, our services are generally not located in a world of averages. We operate in communities of stubbornly high unemployment and with those most distant from the labour market even in areas where the live register is low.

The nature and scale of unemployment is never static. The Department has outlined to the committee the necessity for it to be responsive to changing need. We support that objective and offer the following observations on the current model of contracting, the rationale for which was outlined as follows by the Department at the committee meeting on 8 March: "Contracting is considered to be the most appropriate approach to augmenting resource capacity to deliver services during a period of peak demand." Crucially, however, this model, as it has been operated, has not facilitated flexibility and has only relatively recently been ramped up in a labour market that is very different from that in being in 2011 when the National Economic and Social Council, NESC, made its report on support and services for unemployed jobseekers that was used to justify current arrangements. Contracted services under the pay-by-results model did not reach truly operational levels until 2016, at which stage there was annual spending of €25 million. The years 2017 and 2018 seem likely to be the most costly, with annual spending of over €50 million at a time when we are told we are on the cusp of full employment.

In contrast, when local development companies, LDCs, were tasked with setting up Tús in 2011, a new scheme was initiated with 6,999 participants engaged by 2013. In response to lower numbers on the live register, the Department is currently revising the Tús quota downwards as well as reducing the overall amount allocated to local development companies in service fees. Another example is the flexibility of the local employment services, LES, network in taking on an additional 50,000 referrals for no extra fee in 2012. There was no lock-in for the taxpayer in those two arrangements. Where such lock-in exists in other contracts, it should not be seen in isolation as it inevitably impacts on programmes where quotas and referrals can be altered without contract breach, as is the case between the Department and local development companies.

The crucial point about the current arrangements is that the Department rightly wants to be able to respond and react to the changing profile of unemployment and underemployment. Partnerships with not-for-profit local development companies are the most effective way to ensure that flexibility and responsiveness. Such partnerships allow for changing terms within the life of a programme rather than a rigid enforcement of contract terms. They further facilitate innovation and value for money as evidenced by new practices such as LES group engagement sessions and their work under the EU globalisation fund, all taken on without industrial relations, IR, issues or any additional funding to the companies. That approach has served the State well and LDCs are willing and able to do more in partnership with our colleagues in the Department, with whom we work extremely well on the ground and on an ongoing basis.

The ILDN and its members wish to be part of a dynamic employment supports and activation framework that is person-centred, flexible and responsive as well as value for money. We are available for increased roles in the design and delivery of new programmes and approaches with jobless households, people with disabilities, returning carers and new cohorts that may be unemployed or underemployed but are not visible on the live register. There are current challenges for the companies with regard to their own sustainability and how they are funded to play their role, but we believe that these can be solved once a clearer framework on contracted services is put in place.

We welcome the committee’s interest in our work and will take any questions that members have.

Willie O'Dea (Limerick City, Fianna Fail)
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I thank the witnesses for their attendance and opening statement. I do not have too many questions as the presentation more or less speaks for itself. I note Mr. Bowe's emphasis on flexibility rather than what is proving to be an extremely rigid pay by results system. I compliment the ILDN on its excellent work and look forward to the Indecon report which I am sure will vindicate that.

At a time of very high unemployment, the Government decided to hand over part of the work of the ILDN to a private company. We were told at the previous meeting that the figures at the time were such that that was absolutely necessary in order to deal with a crisis situation. Does Mr. Bowe agree with that? Could the ILDN have dealt with the situation effectively? I presume it would have needed more staff to do so.

I note what was said about averages and that the ILDN is focused on areas of high unemployment, of which there are several in my own city. Is the ILDN now properly equipped to do the work it was originally contracted for? Does it need assistance from any other source?

Mr. Michael Bowe:

I will take the first two queries and then hand over to Mr. O'Neill, who will deal with the figures. The local development companies could easily have risen to the challenge at the time with the numbers we did in 2012 with an extra 50,000. There is evidence of that and other programmes, such as the Tús programme which we ramped up from the beginning when given responsibility for it.

As regards current resources, they are reasonably adequate. Sufficient is made available by the Department to run the the LES and Tús services and we have other programmes and budgets to complement that. One would always look for more money but we currently have adequate funding.

Mr. O'Neill will give more detail on the figures. Deputy O'Dea may revert to me if I have not adequately answered his questions.

Mr. Larry O'Neill:

JobPath came into its own in 2015 but when the decision was made in 2011 unemployment was at 16.5%. Perhaps the troika had something to do with the decision. One could understand the reaction to it. There was a correlation between JobPath ramping up and referrals to our organisations in certain parts of the country falling dramatically. It would have been helpful to have a more consistent level of referrals across the country. We do not currently offer our services country wide but we could have expanded in that regard. The partnership companies that do not run local employment services tried to provide that service in different ways and perhaps those resources could be enhanced to give us a national profile. My area did not suffer from a lack of referrals but in Dún Laoghaire-Rathdown, for example, referrals to Tús from 2015 dropped from 722 to 261 while JobPath was ramping up and there was a similar fall in referrals to local employment services there. Figures for last year indicate that local employment services were contracted for 20,050 referrals and received 15,900, which is a 20% failure in referrals. If those referrals which went to a scheme such as JobPath had been available to us, we would have received our full quota and there would not have been cuts to other programmes. It is a matter of simple mathematics.

John Curran (Dublin Mid West, Fianna Fail)
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On one specific point that has been raised, I wish to quote an excerpt from Mr. Conlan's contribution to the committee meeting two weeks ago.

I do not wish to delay the meeting on this matter and apologise for the interruption. Mr. Conlan's exact words were as follows:

I emphasise thatJobPath has not replaced any existing service provision, either that provided directly by staff within the Department or that provided under other external activation services... I emphasise thatJobPath does not have any negative impact on the existing local employment service, LES, and Jobs Club services. The Department has continued its contractual arrangements with the LES and Jobs Club providers following the introduction of JobPath.

I ask the witnesses for their response to those remarks.

Mr. Larry O'Neill:

Dún Laoghaire-Rathdown is one concrete example of many such cases around the country. We did not want to bring details of 20 cases with us but we can circulate statistics on these cases after the meeting. There is no doubt that JobPath is having an impact. If 60,000 referrals are removed from the system and transferred to JobPath in one year, it creates a gap in terms of what is available for the other providers. They have their own Intreo services and we are considered a second line service in that structure. Tús is downsizing, which would probably not have been necessary if the 60,000 referrals were available to us. Community employment vacancies are high nationwide and we in the local employment services have not fulfilled all our contracts because we have not received all our referrals.

John Curran (Dublin Mid West, Fianna Fail)
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I apologise again for interrupting.

John Brady (Wicklow, Sinn Fein)
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Mr. O'Neill's comments bring us to the central point we are trying to make. The joint committee is examining JobPath and its impact on services and schemes such as those provided by local employment services. I should point out that I was previously a board member of Bray Area Partnership and I am familiar with the critical work done by the various organisations across the State. I had to vacate my position on the board when I was elected to the Oireachtas and, as such, no conflict of interest arises.

A couple of weeks ago, officials informed the joint committee that the Department needed to build capacity when unemployment was high. As Mr. O'Neill made clear, the local employment services would have been able to ramp up their activities across the State to meet the increased capacity required by the Department. Did the Department ask the local employment services at any point after 2011 whether they had the ability to ramp up their services? Did any communication take place at any stage?

Mr. O'Neill noted that the number of places in the Tús scheme in Dún Laoghaire-Rathdown declined from 722 to 261, which is a startling reduction. I obtained figures via parliamentary questions on the number of referrals to local employment services across the State. These show a decline across the board. Mr. O'Neill indicated he would be able to provide the joint committee with figures from across the State. It would be useful if he were to furnish us with statistics in respect of Tús, community employment and so forth.

We know the Department is locked into a contract with Turas Nua and Seetec until 2020 or 2021. Are the witnesses fearful about the future of the schemes they operate? While I am aware that referrals are a major concern, are there other issues that affect the schemes operated by the local employment services and, if so, will the witnesses elaborate on them?

People with disabilities face serious challenges in terms of gaining and maintaining employment. Is there scope to increase provision for persons with disabilities on the schemes operated by the local employment services? Various reports have shown that the proportion of people with disabilities at risk of consistent poverty is much higher in Ireland than in many other European Union member states. It is also much higher than among other population groups.

I have spoken to a number of employees in various partnerships. The ethos of the local development committees means they are not-for-profit, take a bottom-up approach and are community-led. We are all aware of the tendering process in which the committees and partnerships must engage and the witnesses outlined the various difficulties they face in this regard. Concerns have arisen that in the event of one of the local development companies being unsuccessful in its tender, it may not be in a position to meet its obligations in respect of employment rights; in other words, it would be unable to pay the cost of redundancies or notice periods because these organisations do not allocate funding to cater for such a scenario. Has this concern been expressed by members of staff? I have spoken to a number of people who detailed the extensive tendering process in which the local development committees must engage. Some of the tenders have been ongoing since August or September 2017 and require a great deal of work. The organisations do not know until the last day whether they are successful and some of the staff working in them for ten or 15 years do not know if redundancy payments will be made if the tender is unsuccessful.

Is there scope to allow people in receipt of qualified adult payments to engage with the schemes? Many of those who receive the payment would like an opportunity to upskill. With unemployment levels falling and in light of the serious challenges presented by the JobPath scheme, is there an opportunity to ensure current levels of referrals are maintained?

Ms Anne Kavanagh:

I will address the Deputy's first question on whether we were asked to consider scaling up the local employment schemes in response to the high levels of unemployment. At no stage were local development companies given the option to create a nationwide local employment scheme, LES, model and ramp up the LES to meet the requirements. The Department engaged with us on increasing the number of clients coming to the LES under the existing model and we changed our model of engagement with clients in response to that. However, we were not given the option of choosing to broaden and deepen the LES provision, as opposed to going to a pay-by-results private tender model.

Mr. Michael Bowe:

There is a danger of being locked into figures and referrals. While the number of referrals has declined, we must remember who it is we serve, which is those at the greatest distance from employment. They are at the centre of everything we are involved in and I genuinely believe the local development companies, with all their bits and pieces, are uniquely prepared to deal with that complex set of problems. While employment is the end result in the ideal scenario, the journey into the world of traditional employment can take months or years and sometimes it never ends. For this reason, it is better not to get locked into the issue of figures.

The decline in the number of referrals means that theoretically staff have been freed up to spend more time with those who most need assistance, which is what we are there to provide. We take the most difficult cases and in that regard, I would like to correct a certain comment that was made. We do not have an issue with the quality of candidates and I do not like the use of that term. We were established to respond to unemployed people who walk through our doors, regardless of their circumstances or the issues involved. We are uniquely structured in terms of the level and quality of staff and systems we have in place and the cross programmes we have to try to make this match work in order that a better outcome can be achieved for the individual and his or her family as a result.

Perhaps it should be broadened so that it is not merely about the contract going to one company or another. I certainly believe we are well disposed to and capable of responding to those sorts of issues. We are uniquely qualified to do so.

Mr. Eamonn O'Reilly:

We mentioned the design of the programmes in our submission. We were involved in the design of the Tús programme before it was rolled out. We would welcome engagement with any Department, including the Department of Employment Affairs and Social Protection, on the ideas it might have. As Mr. Bowe said, our job is to work as closely as possible with those who are disadvantaged. This brings me back to the point that was made about engagement with the qualified adult schemes. We would look to do that. The new ability programme funding that was released recently is very positive. Some of our companies have supported local projects to go for that. Others have gone for it themselves. A point was made about employment rights in cases in which tendering is not successful. That is a huge difficulty for us. Our voluntary boards certainly see that as an issue as well.

Alice-Mary Higgins (Independent)
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I thank the witnesses for their presentation. The need to examine carefully what we mean when we talk about flexibility and responsiveness has come across very strongly. A hard contract that has been tied in over the long term, with one or two versions of success, is not necessarily the most flexible thing. The point has been well made that it took from 2011 to 2015 for this to start to be put in place. During the height of the unemployment crisis, we saw some very creative responses from local employment services and local development networks.

I should say for the purposes of transparency that I worked briefly in a support role as a consultant with Wexford Local Development on a project relating to youth unemployment in the south east. It was a great experience for me. It was inspiring to see the level of genuine care that was being provided to support and empower young people in an unemployment blackspot. The idea of flexibility came across even in the small cohort I was supporting. The route out for one person turned out to be opening a business, somebody else went back into education by going to college and another person who was an artist had to find a way to be an artist. The kinds of roles that other people were looking for were more straightforward. It was a case of overcoming issues of isolation and balancing issues of care. The diverse needs of those in the small cohort I worked with meant that the right choices which had to be made to allow them to find a route forward were similarly diverse.

A one-size-fits-all recipe cannot be applied. It was to the benefit of those involved that the multiple schemes which have been described were happening under one umbrella. All kinds of other schemes, including Tús and local heritage development schemes, allowed for cross-pollination and facilitated a creative approach to finding the right response. That is very important. It comes back to the key point that Mr. O'Reilly made about design and delivery. Part of what I was doing with these young people involved ensuring they became empowered not just to receive employment policy, but also to help to shape it. During the time of the European youth guarantee, the young people with whom I was working were pushing for a rural youth guarantee pilot that would address some of the specific issues associated with rural unemployment and poverty among young people. We still have not achieved such a pilot. As my colleagues on the committee will be aware, I am continuing to push for it. The agents in question were not just receiving policy - they were in a position to give feedback on what was and was not working and they were empowered to cultivate such a dynamic. That is such a different level of work and case work. It was certainly very inspiring to me.

I was very struck by what the witnesses said about flexibility and responsiveness. The Government needs figures so that it knows who is needed and where unemployment is going up and down. It is crucial that there is flexibility and responsiveness to the varying needs of clients. I was struck by the references that were made to jobless houses, people with disabilities, returning carers and other new cohorts. There needs to be a willingness to find flexible and appropriate responses. I absolutely echo what has been said about the hidden unemployed, particularly qualified adults and those who are receiving the transitional jobseekers' payment. We spoke about lone parents in a separate context. Many activation supports are provided on a voluntary basis to those who receive the transitional jobseekers' payment. This should be done on a voluntary basis for qualified adults as well. The right supports to help such people are not always available. There is a need to ensure there is a wide range of options, including solutions that do not always involve 30 or more hours. In some cases, labour market activation should be built initially through part-time employment or education that is constructive.

It would be useful if the witnesses would expand on where they believe there is designed potential for new schemes and new ways of working. I ask them to comment on some of the issues that have not been addressed, such as the idea of a youth guarantee pilot for young people in rural areas. I would like to refer to the wider joined-up community development role of the Irish Local Development Network. There was serious pressure on local development and community development partnerships during the recession. The increasing focus on employment under the 80:10:10 rule meant that other aspects of community development, such as support for older people, for the very youngest or for youth clubs, were operating in a shrinking space of funding. Is there any sense that funding is coming back into these complementary areas, which are not as disconnected as we might think? People operate in families, etc. It is totally inappropriate that funding is being pulled away from the partnerships in the employment area. As this is happening, is there a corresponding return of funding into other areas? How do they fit together from the network's perspective?

Mr. Michael Bowe:

Mr. O'Neill will take the first question and Ms Kavanagh will take the second question.

John Curran (Dublin Mid West, Fianna Fail)
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Perfect.

Mr. Larry O'Neill:

Reference has been made to the different schemes we are using. There needs to be more flexibility in how this is measured in local employment services. If the measurement that applies to a single mother returning to the workplace is 30 hours or more, that is just not a feasible measurement at all. It is a huge achievement to get somebody in a disadvantaged area who has responsibility for children into a part-time job. It is not measured or accredited in any way. We are not looking for money for it. We are looking for recognition that a distance has been travelled in a very big way. The same can be said of placements on Tús and community employment schemes. We are dealing with people who could be said to have needed a pre-Tús scheme. We are literally training people to attend at 9 o'clock every morning. That in itself is part of the distance travelled model. We need to be much more flexible than strict. My personal view is that funding is not coming back into this area. Funding is leaking out of the area at a rate of knots. We are moving towards everything being based on the market and tendered for. I know from my experience in the OECD that this is not what is happening throughout Europe. Departments here are saying that we have to line up with the Europeans in this regard, but this is not what is happening in Europe. Our local employment service is one of the most complimented services in the OECD. Why would we change something that works very well?

Alice-Mary Higgins (Independent)
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I would like to ask Mr. O'Neill a follow-up question.

John Curran (Dublin Mid West, Fianna Fail)
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Very briefly because there are other members waiting to get in.

Alice-Mary Higgins (Independent)
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There has been a recommitment to the European social pillar in recognition of the neglect of social funding. Is there any sense of this new mandate from Europe being invoked?

Mr. Larry O'Neill:

There will probably be a lag of three years between the OECD deciding that this is a policy we should follow and it being implemented on the ground at national level.

Ms Anne Kavanagh:

The second phase of the social inclusion and community activation programme reflected the reality of the need for broader-based community development to work and involved a rebalancing from the tight focus on employment in the first social inclusion and community activation programme. It would be helpful if new programmes at national level were not designed within the context of a single Department only.

There should be cross-departmental involvement in the design of programmes which then can serve to avoid duplication and support the creation of programmes that will identify gaps and provide services that are needed. Broad-based community development is a significant part of that, particularly in disadvantaged communities, for example, in Limerick city.

Mr. Eamonn O'Reilly:

We would welcome rural youth employment because much of the economic development has happened in the east and we are losing our population. Empowering the youth to be part of the cross-departmental programme design would be powerful. There is a good rapport between our local offices and the ESB and the other agencies and that can be done from the bottom up to include them as well.

John Curran (Dublin Mid West, Fianna Fail)
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I would like to follow up on a number of issues with Mr. O'Neill before letting Deputy O'Dea back in. He gave figures for capacity versus lack of referrals for Dún Laoghaire-Rathdown. Deputy Brady asked him to make figures available for other areas. Second, he indicated in a previous reply that some of the criteria to measure performance were not fit for purpose. I do not know whether he has a document in this regard. Third, the referral figures for Dún Laoghaire-Rathdown were shocking. I do not know if that is typical of all areas but are there areas in which schemes are in jeopardy? There must be a point in time when the number of referrals is so low that the scheme should cease. Is that a concern?

Mr. Larry O'Neill:

That is not a concern right now but every area in the country has been impacted by a lack of referrals, particularly in respect of the two schemes under which the number of places will drop from 8,500 to 6,000. At a time a private contractor is taking 60,000 referrals per year, it does not take much logic to understand where the places are going. Some of the reductions are stark for the organisations dealing with them but there is no risk to the schemes per se.

Mr. Michael Bowe:

At this point in time, we are not aware of a company in jeopardy or difficulty as a result of the reductions. The good part is that there is dialogue with the Department as the reductions are being managed. It is evident that there are some reductions but nobody is in trouble. We will find a way to manage it. Hopefully, everything will ramp up again and we will be able to respond in that way because there are still plenty of unemployed people for whom Tús or community employment is an appropriate starting point.

With regard to the national rate, we do not have the totality of the Department's national figures. We can surmise but it is the Department that has them.

Willie O'Dea (Limerick City, Fianna Fail)
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I must apologise because I have another appointment at 12 noon and, unfortunately, I must leave the meeting. The exchange has been most informative. The figures for Dún Laoghaire-Rathdown are replicated throughout the country and it has been the experience in my own area. Deputy Brady has received information on LES in replies to parliamentary questions and I have had some communications from the Department. Together they give rise to a scenario where a central element of the rationale presented to the committee by departmental officials for JobPath is flatly contradicted. To the question of whether the programme has affected referrals, the answer is indisputably "Yes". According to what we were told at our most recent meeting, it is as if two different organisations were dealing with two different sets of the population and there was no conflict whatsoever. That is a matter of concern because the committee's role is to ensure the money spent on social protection is properly spent and we are getting value for money. All this gives rise to fundamental questions about the rationale for the decision taken in 2011 in the first place.

I was also taken aback by Ms Kavanagh's comment in reply to Deputy Brady that there was no consultation whatsoever. In my naivety, I had thought that when the big decision was taken to set up another agency and hand some of the work over to a private agency that the existing State organisations would have been contacted and the Department would have asked them if they could do the job and whether they had sufficient resources and, if not, what additional resources they needed. I thought that was the process. The decision was taken at a time public expenditure was severely curtailed and one would have thought there would have been a forensic examination into how to get this job done rather than simply handing it over to a private operator for the sake perhaps of being seen to do something different.

Reference was made to vacancies on CE schemes throughout the country. To what extent would that issue be alleviated if we got rid of the ridiculous rule whereby somebody signed up to JobPath cannot avail of a CE scheme?

Mr. Michael Bowe:

If I recall correctly, the Department was concerned about having a person on two or three schemes. This goes back to an ideological statement. People who are long-term unemployed need multiple interventions. They might be on several bits and pieces and, therefore, confining them to a particular route in a centre for a period is not an ideal way forward. We are in a position to provide a multifaceted response, which is the correct way forward for an unemployed person. I do not wish to comment on the policy per sebut that is the correct way forward. No single organisation, including ourselves, should lock a person in for a period. We should all be open to make sure that he or she is getting the best pathway forward, whatever that may be.

John Brady (Wicklow, Sinn Fein)
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I refer to Ms Kavanagh's response to my question regarding the engagement with the partnerships to ramp up the ability of the LES to respond to, and cater for, the needs of the unemployed. It is interesting that the LES is the most complimented in the OECD. I know from my interaction with the service that its work is phenomenal. If the witnesses have documentation to back that statement up, it would be useful. The fact that there was no engagement to ramp up the LES's response is unbelievable.

Once people are referred to Seetec or Turas Nua, they are locked in for 12 months initially. The Department says it has examined this and it will bring forward changes to make it easier for people once they are locked in to go back on to a CE scheme, for example. Have there been conversations or communications with the network in this regard? These people should never have been put in JobPath in the first place because inevitably they were going to end up on a CE or an another scheme, which should have been the first port of call. That is where the LES has been so good for many years. It works with the individual, identifies the need, whether that is training, a CE or a Tús scheme, but the problem with JobPath is participants are locked in for 12 months. Has there been engagement with the network regarding these individuals to make it easier for them to come back to it when JobPath is finished with them?

It is bonkers. It is putting the cart before the horse, but I will ask the question anyway.

Mr. Michael Bowe:

There are three parts. When a person is referred to the two entities to which the Deputy referred, they are locked in for a period of time. There is clear evidence from the last quarter of 2017 that in coming up to the end of the year they are referred back by the Department to the companies. There certainly have been no changes to the Tús, rural social or community employment schemes. The one exception is the back-to-work enterprise allowance, BTWEA, scheme. Where an individual is with either Turas Nua or Seetec but would like to set up a business and qualify for the BTWEA, he or she can be released back to the partnership company. It is an interesting complementary service between the Department and SICAP where two programmes works in tandem for the benefit of an individual and the outcome is self-employment. The BTWEA scheme referral is the only exception of which I know and we are providing the service across the country. My colleagues can correct me if I have it wrong, but there is certainly no move under the community employment and Tús schemes. We are seeing evidence that as contracts come to an end people are being referred back under an agreed protocol to the partnership companies. That is probably why we are seeing an increase in the last quarter in the percentage quota. It came up a little as programmes were coming to an end. I hope I have addressed the question.

Alice-Mary Higgins (Independent)
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I have a question on the same point. It is about the lock-in. When the delegates are managing multiple schemes within the local employment service, do they have flexibility which enables them to say there is a different scheme or project if a certain scheme or project is not working for a person? The person-centred approach is key. Are there people who come back after one year away from an appropriate scheme in which they have been set back a little? The loss of a year can be significant.

What are the links with the back-to-education scheme? How are routes back to education managed within the services? How could it be managed differently than from JobPath?

Ms Anne Kavanagh:

I will take the first part of the question. We have flexibility. One of the interesting things in the way the partnerships work is the way in which a client can come to us and benefit from a number of services. In Limerick they very often come initially through one of the community schemes such as the community education or another service. We deliver many of our services at community level. They may then participate in Tús or the community employment scheme and be assigned to a mediator in the local employment service. They will have the opportunity to undertake some education and training courses. If they are called for a job interview when they are ready for employment, they will receive interview preparation training from the jobs club. Sometimes the work will not last and they will come back and receive other supports. It depends absolutely on the needs of the individual involved. We have flexibility to support them in different ways, perhaps pre-development with SICAP. There are a number of initiatives in that regard.

John Curran (Dublin Mid West, Fianna Fail)
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We have spent a fair amount of time referring to the individual and the suite of options available when he or she presents. In Mr. Bowe's opening comments he made reference specifically to the societal benefit of some of the schemes. He talked about the three-year study in Ballymun. Will he tell me a little more about it? He indicated that it had shown that for every euro spent the societal benefit was €2.70.

Mr. Michael Bowe:

The studies date back a few years. I am certainly no expert when it comes to understanding what it actually means. In pounds, shillings and pence one can see it written on a piece of paper. I assume there are people who write up these formulas, but I do not quite get it. However, it is the evidence. That is why we would have loved to have seen the publication of the Indecon report to bring it out further and see what is the current status. I will try to answer the question in a different way. On a daily basis, one sees the impact in the community as somebody moves on. It is hard to capture the hidden benefit in other parts of the family as somebody moves on. It is hard to quantify the impact of something like it, but every organisation sees it, including the Department and Turas Nua. We all see the other side of the benefit to society, including the reduction in health care costs and social welfare payments. I do not know if I am answering the Chairman's question, but I do not really have hard facts. I assume the people who carried out the studies knew how they were putting the figures together; therefore, we take them at face value and as fact.

Alice-Mary Higgins (Independent)
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For persons who participate in community employment and other schemes, there may be benefits to their children in terms of their participation. Schemes that may not provide for full employment may have inter-generational benefits.

Mr. Michael Bowe:

I do not think it is a maybe but an absolute fact. However, it is hard to capture. I am sure we all know families or friends who have experienced it. People do not shout from the rafters and say what the knock-on effect on their family has been. They do not want to talk about these things, but they are real. There may be small or big gains. One thing we see quite clearly under the back-to-work enterprise scheme is the change in a family's status when an individual is actually having a go. It might be in a small, one-person business - it does not matter - but the change is obvious. It would be lovely to see it being quantified in a particular way.

Mr. Larry O'Neill:

We also need to see the benefits in the wider community. Community employment, job initiative and Tús schemes are sustaining community centres throughout the country. In most community projects the people at reception or those undertaking light maintenance tasks, for example, are participating in schemes learning their trade. In Tús one of the biggest benefits has been gained under the care and repair schemes which offer older people, in particular, but also people with disabilities and anybody who is disadvantaged the opportunity to engage in light maintenance tasks in their houses. There was a case in Saggart, in our area, in which a woman was cooking breakfast for three men every Friday morning who came to maintain the lawns. It was not about maintaining the lawns but about the company. It was in an area which, unusually for an area adjacent to a city, was isolated. We also support community health projects. There is a huge input from the Tús and community employment schemes, in particular, in supporting such projects. If that infrastructure was to shrink, it would have a huge impact, particularly on disadvantaged communities. It is an important factor in looking at the overall picture.

Mr. Eamonn O'Reilly:

I will make a related point. While participants referred to JobPath are locked in, they are effectively locked out of the service about which Mr. O'Neill spoke. The community services being provided are now struggling a little. They offer real jobs, whether supplied under the community employment scheme, Tús or the rural social scheme. They add value and build the community. That is another reason.

John Curran (Dublin Mid West, Fianna Fail)
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As we approach what is technically called full employment with JobPath companies still in existence and a contractual arrangement that they will receive a certain number of referrals from the live register, looking foward, what are the concerns of the delegates? Are there alterations to any of the schemes that should be considered to ensure that in an era of much higher employment they will remain sustainable?

Mr. Michael Bowe:

I will try to answer that question. It is a difficult one to answer. We have to act on our own beliefs. The service was set up 25 years ago to respond to particular problems and the challenge of the Government was to be flexible. It was a time when the long-term unemployment figures were a lot higher. As we get to the magical figure of 4%, there is still a cohort with whom we should do something and about whom we should not forget. We can look at the schemes which are working, but there has to be a group which will work specifically with that cohort. Ours is the correct vehicle. Assuming we are doing our job well and are under scrutiny and answerable, it offers the best template to provide a wrap-around service. There are others who can deal with the short-term unemployed and address the peaks and valleys. I am trying not to get into problems while answering a question about a contractual issue. We can respond and have the staff and wherewithal to do so.

John Curran (Dublin Mid West, Fianna Fail)
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Are there other comments?

Ms Anne Kavanagh:

On the concept of full employment, we constantly hear the classic economist definition of full employment, which is 4% unemployment comprising 2% frictional and 2% structural. That is not what we have had in areas of severe disadvantage in this country for many years. We have inter-generational entrenched unemployment in particular areas and among particular groups of people. There is a real danger in accepting that classic economist definition of full employment that we assume that everything is fine once we are near 4%. That is something we must constantly keep in mind in our analysis.

Alice-Mary Higgins (Independent)
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Hidden unemployment and under-employment, particularly in an era of precarious work, are issues where those skills will be needed.

John Brady (Wicklow, Sinn Fein)
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I wish to return to the issue I raised around the tendering process and employment rights for staff working in partnerships in companies across the State. Ms Kavanagh said that the boards are very aware of the concerns and the real life issues. Have those concerns been brought to the Department's attention or that of the Minister? With the expanded role of what was the Department of Social Protection, now having taken on employment affairs also, there are serious concerns and these are being expressed by staff because of the structure and funding model. Have any of these concerns been expressed to the Department regarding the tendering process and the roll out?

Ms Anne Kavanagh:

Where there is likely to be a reduction in funding or where the loss of a tender that would impact on the employment rights of individuals, of course those issues would be raised with the Department. It is not something of which we have yet had any direct experience, thankfully.

Mr. Michael Bowe:

A good example is the issue facing us with the reductions in Tús at the moment. An orderly discussion is taking place behind the scenes to try to reach what might be a difficult exit strategy. If it is done in the right way, at a governance level, it can be managed, albeit that it may be difficult at the end. The lesson is that some of these schemes and programmes go up and down and the exit strategy should be prepared as part of the contract discussions so that when the inevitable downsizing occurs there is a plan in place for it and there is not chaos. It is difficult enough when one is coming to the end of a scheme but it is better to plan for the exit and be ready, rather than leaving it to the end when there is chaos. One ends up wasting a great deal of everyone's time. I compliment the part of the Department that is looking after Tús which is trying to manage a reduction in an orderly way. It is just common sense.

John Curran (Dublin Mid West, Fianna Fail)
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On managing reduction in an orderly way, if the duration of Tús was extended, one might not be managing a reduction. There may be other ways of trying to look at the issue. That feeds back into the societal and community benefit of the schemes. If one looked at it purely in terms of a cost-benefit analysis, the reduction in that scheme might not be warranted. That is a question that needs to be asked. I know there are problems with the use of the term "full employment", but as we approach full employment, it does not mean that reducing the size of some of those schemes is the correct decision. Their structures may need to be changed or the duration may need to be longer. When Tús was introduced in 2011 unemployment was going through the roof and a one-year turnaround was aimed at getting people back into work. Over the years, all those schemes have been modified and varied to reflect the economic situation of the day. The example was given about Tús being resized or whatever. Maybe it should not be resized but instead remodelled to meet a different need. That is an observation to a comment that does not require an answer but we need to reflect this.

I do not think the members have any further questions, but if Mr. Bowe or his colleagues have any concluding remarks, they may make them now.

Mr. Michael Bowe:

My only concluding remark is, as ever, to invite any members of the committee or Members of the Oireachtas generally to visit any of their local partnerships where they can see what is happening, critique it and ask what is happening. That is probably the best way to find out what we do and make a commentary on it. That invitation is always there.

Mr. Larry O'Neill:

The qualifications and experience of our staff in the local employment service, in jobs clubs and even in the management of the other programmes is the rich mix that turns out the results we have had. We need to maintain that standard of quality. We are quality assured. Those who are most distant from the market deserve the very best which this State can offer them. I can think of many phrases such as cut price or yellow pack, and while I do not want to insult anybody, we must steer away from that model of engagement. These people need extra-sensitive handling and supports and for avenues to be opened up to them that they are often unaware exist at all. That is one thing we can do with an integrated model and I hope that we will continue to do it for a long time to come.

Mr. Eamonn O'Reilly:

It was mentioned it earlier, but if the local employment service had national coverage it would go a long way. The social inclusion and community activation programme, SICAP, the rural social scheme, RSS, and Tús are all covered nationally. The rural areas which the Senator mentioned would be more seamlessly covered then and the flexibility that has been talked about could be delivered as required.

Ms Anne Kavanagh:

We are very happy to continue to work in partnership with the Department in the delivery of employment services and supports as part of the dual stranded employment service, which is what the local employment service was established to support.

Mr. Joe Saunders:

I will make two concluding points. I will put some flesh on the bones on the matter of community benefits which the Chair raised. A Tús quota of approximately 8,000 and a rural social scheme, RSS, quota of around 3,000 represents several thousand community groups that have real people allocated to provide services to them. The people are allocated to the community sector not to the private sector. Any tinkering with or adjustment of the quotas has implications beyond the narrow activation needs of the individuals accessing the community services. Particularly from a rural perspective, and 35 of our members are rural companies, and the challenges they face in sustaining viable communities, these schemes play a very central role which must be taken into account.

Senator Higgins asked about the design phase of programmes prior to the delivery phase. It is worth bearing in mind that local development companies came out of an experimentation background. Several of our programmes are embedded and are part of life. However, what we did especially well was to respond to a call that acknowledged that nobody had all the answers to a particular problem but we need to try to pilot. Maybe we have been somewhat afraid to pilot in recent years. Now that we are at the cusp of what one might call full employment, there are difficult cohorts, new phases or a certain intractability in some areas, as has been acknowledged here, and nobody has the answers. We are open for that experimentation phase. Given that we are close to those communities and those sectors in communities, we are well placed for piloting and that element of the work outside of delivery, also needs to be taken on board.

John Curran (Dublin Mid West, Fianna Fail)
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I thank Mr. Bowe and his colleagues for attending today. The witnesses have not only provided answers to the questions but their opening statement sets out the situation very clearly. I thank them all for their contributions today.