Oireachtas Joint and Select Committees
Tuesday, 2 April 2019
Joint Oireachtas Committee on Social Protection
Indecon Reports on Job Clubs and Local Employment Services: Discussion
I ask everyone to turn off their mobile phones or to switch them to flight mode. I welcome Mr. Joe Saunders, Mr. Michael Bowe, Ms Anne Fitzgerald, Mr. Eamonn O'Reilly and Mr. Larry O'Neill From the Irish Local Development Network, ILDN, and Mr. Donal Coffey and Ms Caroline Kennedy from SIPTU.
In a few moments I will invite the witnesses to make their presentations and then members will have an opportunity to ask questions. First, I draw the attention of the witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence in regard to a particular matter and they continue to do so, they are entitled thereafter only to a 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 are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or 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 House or an official either by name or in such a way as to make him or her identifiable.
I invite Mr. Bowe to make his opening statement.
Mr. Michael Bowe:
I thank the committee for the invitation to respond to the Indecon report. I am accompanied by Mr. Larry O'Neill, chief executive officer, CEO, of the South County Dublin Partnership, Mr. Joe Saunders, manager of the ILDN, Ms Anne Fitzgerald, CEO of the Ballyfermot Chapelizod Partnership, and Mr. Eamonn O'Reilly, CEO of the North, East and West Kerry Development and vice chairman of the ILDN. I am CEO of the Dublin North West Area Partnership and chairman of the ILDN's employment and enterprise committee.
This paper is also part of a second paper that will set out for the Government a model for national employment services based on the not-for-profit model delivered by local development companies, LDCs. The service will be characterised by a more targeted approach, nationwide coverage and an initial focus of resources on communities in which the number of employed, underemployed and those on welfare payments remain high.
Members have received a copy of the full paper and I will read a summary version. The ILDN is the representative body for the country's 49 not-for-profit local development companies that deliver community services across the country. LDC boards comprise local, voluntary directors alongside public sector personnel and, in many cases, employers, unions and elected representatives. They link to local economic and community plans and local community development committees, ensuring wide-ranging oversight and democratic accountability.
Each year, LDCs support approximately 15,000 community groups and 173,000 individuals by delivering €330 million worth of State programmes, many for jobseekers, including the back to work enterprise allowance, Tús and the rural social scheme, RSS, local employment services, job clubs, community employment and jobs initiative. Currently, 19 LDCs manage 23 local employment service, LES, contracts. The remaining three are also managed by not-for-profit organisations. These activation supports are integrated with other social inclusion supports, facilitating jobseekers to simultaneously avail of complementary services such as training, childcare and health promotion.
In 2017 Indecon International Economic Consultants completed reviews of the local employment services and job clubs across the country.
It should be borne in mind that in 2016 the local employment service, LES, had been altered considerably from its original purpose and formulation in focusing on the long-term unemployed to a caseload and purpose reformatted for crisis times. The evaluation was not focused on the LES model as it has been designed but rather on a reformulation that had been rapidly constituted. We are now in an era more akin to what the LES had originally been designed for and this submission, while addressing the content of the evaluation, will have a focus on the employment services model required for today's operating environment, as I alluded to. The value of the LES and jobs clubs under review in 2016 was approximately €25 million. Combined, the services employ approximately 400 qualified and experienced staff. In 2016 the LES assisted 47,025 individuals, while jobs clubs assisted a further 19,663, giving a combined total of approximately 66,000 unemployed individuals in 60 separate locations across the country.
Indecon reported that the LES had achieved a placement rate of 28.8% against a target of 30% set by the Department of Employment Affairs and Social Protection. It should be noted that only employment for more than 30 hours a week is included in this figure. Excluded and not measured are jobs for less than 30 hours and placements in training, education and other necessary progression activities for those most distant from the labour market. It is against this background that the 28.8% achievement figure is independent evidence that the performance of the LES and jobs clubs is excellent when compared with similar operations nationally and internationally. Some 75% of LES clients reported that their interaction with the LES had motivated them to seek work or undertake further education or training. A further 71% of LES clients said LES supports had improved their employment prospects. Some 89% of employers surveyed reported that the LES had helped their organisation to find suitable candidates to fill vacancies. Some 83% of employers reported that the LES had provided an efficient recruitment service for their organisation. The two Indecon reports are more than 300 pages long and while there are many findings with which we could engage in more detail, the focus, rightly, is on the future. In that regard, Indecon has made seven recommendations. We will use our time to discuss their merits or otherwise.
The first recommendation is that there be a merger of jobs clubs and the local employment service. The recommendation is that, given their close relationship, consideration be given to merging jobs clubs with the local employment service. ILDN believes this recommendation would provide for a more integrated service for jobseekers.
Indecon recommends that LES and jobs clubs contractors should adhere to best practice governance. ILDN fully supports this recommendation and notes that all local development companies are registered companies with voluntary boards of directors. They are all registered charities. All local development companies with an LES or jobs club contract hold the Q Mark standard. As the companies hold contracts for several programmes across many funders, there is accountability, including to the Office of the Director of Corporate Enforcement, the Companies Registration Office, the Revenue Commissioners, the European Social Fund, the Charities Regulator and funder audits, while there is oversight through local community development committees and linkages with local economic and community plans.
On resources for the LES and jobs clubs, Indecon states: "Given the very significant reduction in the levels of unemployment, we believe this should be reflected in the overall resources provided for LES by the State". ILDN fundamentally disputes the logic of this assertion. As the level of employment recovers from the various crises, those who are most job-ready return to employment first and require the lowest levels of intervention and support. Local development companies and their LES operations work with those who are most distant from the labour market. Lack of marketable skills allied to social barriers requires deeper and longer intervention than that required in a recovering economy, with a 16% unemployment rate. At this point in the post-recession environment, the marginal cost of assisting others to access the labour market rises.
With regard to the recommendation that reads, "focus on the most disadvantaged activation and other client groups who are not currently obtaining assistance from other State-delivered/funded programmes", ILDN agrees with the configuring and resourcing of employment services in this way. Given the current buoyancy of employment creation, the support of those not currently on the live register or who are able to access what the International Labour Organization calls decent work should be an actively pursued policy objective.
The report's recommendation that the Department of Employment Affairs and Social Protection should consider multi-annual contracts in order that delivery agents can plan effectively is welcomed by the ILDN whose members already successfully operate multi-annual contracts, such as the social inclusion and community activation programme, SICAP.
On the configuration of local employment services, we would reverse the order of recommendations 6 and 7 to give more time to future services. Indecon recommends that amalgamation of services may be required to achieve greater economies of scale. The ILDN notes that there are multiple numbers of Tús, rural social scheme, RSS, and SICAP contracts While economies of scale should be explored, the grounded and local nature of Tús, RSS and SICAP by county and in agreed lots or areas in local development companies are major contributory factors to their success. The contracting Departments, the Department of Rural and Community Development and the Department of Employment Affairs and Social Protection itself, can testify to the effectiveness and efficiency of contract management by small teams in each area.
Indecon recommends that active consideration be given to an open public competitive procurement model for the future provision of services, and the Department of Employment Affairs and Social Protection has indicated it is preparing to follow this recommendation and procure for services within three months with a view to having such contracts in place for 1 January 2020. The ILDN makes the following observations. There are many good examples of State-funded programmes that are not contracted through an open procurement model, particularly in the labour activation area. If there is to be a new procurement process, it should keep the needs of jobseekers and value for the taxpayer at its core. This will require an objective assessment of all inputs and deliverables. Currently, effectiveness of employment services is evaluated by a single indicator: placement in employment of more than 30 hours per week. If commissioning is to be considered, it must take full account of the objectives of the service and the costs of delivering all parts of that service, including the elements of the journey to job readiness.
International experience in competitive contracting of employment services by a payments by results model has yielded unsatisfactory and unintended results. I refer the committee to relevant academic literature, in particular the work of Greer and others. The downsides of a privatised, pay by results model include removing experience and eliminating community organisations with a track record from competing. Local development companies, as delivery agents for Government, are generally prohibited from retaining a profit on most of their programmes, including the local employment service, LES, and thus their lack of reserves will remove them from a payment by results model. Gaming the system by creaming through prioritising the low-hanging fruit, parking those most distant from the labour market and coercion of those who wish to build a career rather than accept low-paid precarious work are among the methods identified in the research.
While open commissioning may initially appear attractive in cost terms, these are quickly offset by increased and often unclear procurement costs. More crucial, however, is the likelihood that the taxpayer will be tied into expensive, inflexible contracts often designed for a different phase of the boom-bust cycle. They compete with existing State-funded initiatives to the detriment of the latter.
The ILDN recommends that whatever procurement model is devised, it needs to take cognisance of the social inclusion aspects of delivering an employment service targeted at people most distant from economic activity, and the not-for-profit contract model operated by the Department of Rural and Community Development for SICAP. Local development companies, LDCs, given their national coverage, provide a ready-made and workable solution to the challenge of reconfiguring employment services to include large elements of social inclusion work with targeted cohorts. The success of the Tús, RSS and the back-to-work enterprise allowance schemes are current examples, offering value for money and agility to the contracting Department.
Any changes to the current model require a greater lead-in time than proposed, given the need for an ongoing service to jobseekers, the rights of employees and the proper planning and development to be undertaken by boards of local development companies.
Above all, the LDC capacity for full wrap-around service integration is required to meet the needs of today’s jobseekers. The need for such an approach is independently identified by the 2018 EU country report on Ireland.
It reads: “Some progress made, with the presentation of the Action Plan for Jobless Households, but groups furthest away from the labour market still require an integrated approach to helping them enter it."
The Irish Local Development Network recognises that public employment services need ongoing adaptation to meet the changing needs of jobseekers but points to the success of the not-for-profit community model since 1991 and its greater effectiveness over a privatised, payment by results model in addressing deep-rooted unemployment. The reconfiguring of the community-based model for current challenges offers jobseekers, employers and the State the optimum solution, which is accessible and locally based but has national coverage, is agile, has high governance standards, is linked to local democratic processes, is values-driven and has high personnel skills.
I thank the committee for the opportunity to present today. We are happy to take any questions members may have.
Mr. Donal Coffey:
I work as a mediator in the Cork city local employment service, LES. My colleague is Ms Caroline Kennedy from PAUL Partnership, and she is a jobs club leader. We are going to split the presentation between us.
I thank the committee for inviting us to speak. We are here as representatives of the SIPTU local employment service, LES, and the jobs clubs national committees, which represent our colleagues throughout the country. The committees comprise partnership and non-partnership LES and jobs clubs. The history to our being here is as a result of meetings we have had with Deputies Brady and O’Dea and we thank them for facilitating our attendance today, which is much appreciated.
As background, we have written to the Minister for Employment Affairs and Social Protection on a number of occasions requesting a meeting to discuss the proposal of her Department to replace the community-based LES and jobs clubs with an open, public competitive procurement model for future provision of services. We eventually received a reply offering an opportunity to meet an official from the Department of Employment Affairs and Social Protection. This meeting took place on Wednesday, 20 March, and the Department official was accompanied by two colleagues.
Our presentation sets out the reasons both the LES and jobs clubs should remain as a not-for-profit model within the community. It is an honour to be invited to Leinster House in the same year that Dáil Éireann celebrates its centenary. The LES and the jobs clubs may not have been around for 100 years but we are approaching the quarter century, having been set up in the mid-1990s, and the end document refers to 1991. We have been very much a front-line, person-centred service. We have always operated in a not-for-profit structure and are an integral part of our local communities. We would like to give the committee a brief history and background to the LES and jobs clubs and to describe how we operate.
The interim report of the task force on long-term unemployment of February 1995 laid out the template for the LES, which led to the jobs clubs model being developed to compliment and support the service. The report has survived multiple key marks and the clearing out of our offices, and it is our bible. In fact, it has multiple parentage in the sense that it crossed two Governments, given the early 1990s was a fairly tumultuous time, and there are many claims to the success of that document. The report reads: “The aim of the Local Employment Service would be to provide the gateway or access point to the full range of options which should be available to enable a long term unemployed person return to the world of work – these include guidance, training, education and employment supports”. Although many years have passed since the publication of this report, the values and the ethos it set down for the new service back in 1995 still very much prevail to this day, in particular being client-centred and responsive to the individual needs of clients.
It has been these clear values and operating ethos that have enabled us to be a successful service. Time and again, we have been able to adapt our operating procedures to changing circumstances and official requirements while remaining constant to our overall values and operating ethos with a view to increasing a person’s potential employability.
We are the gateway for unemployed persons because of our location within areas with typically high unemployment levels. We are ideally located when people come looking for support or wish to undertake short job market training courses such as Safepass or forklift driving, for example. Many of our long-term unemployed clients have been able to escape long-term unemployment and re-enter the world of work by undertaking such courses. A significant percentage of those who use our services to access programmes such as the community employment scheme and Tús will gain full-time employment thereafter. The LES and job clubs did not set themselves up to be the experts in all of these diverse areas. The aim was to establish effective networks with all key stakeholders and other service provider. The network approach has continued to the present day.
Ms Caroline Kennedy:
I am a member of the SIPTU national job clubs committee. I am based in Limerick where I am the job clubs co-ordinator. I will run through some aspects of how we operate and what we do on a day to day basis.
The job clubs service is a community based not-for-profit model. The local employment service, LES, and job clubs are local supports for jobseekers that match clients with employment, education and training opportunities within their locality. The LES operates in 25 areas, while the job clubs operate in over 40 locations throughout Ireland. Ours is a public employment contracted service which is operating successfully with a not-for-profit ethos. We are based in the heart of communities throughout the country, with local offices in communities such as Moyross and Mayfield, urban centres like Clondalkin and more rural areas in counties such as Kerry and Mayo. As both services are rooted in the community, it enables them to have a greater insight into the needs of the individual and the community and issues that may impact on the employability of the individual. We have built a wealth of local knowledge of the local services and supports available to the individual. This allows for collaborative working relationships between multiple services.
The LES and job clubs work with clients in using a person-centred approach, with the emphasis on providing a range of personalised, tailor-made supports. We support our clients in availing of informal and formal certified training programmes. Many clients also take the first step back into employment through engaging in various labour market programmes such as the community employment scheme, the rural social scheme, RSS, and Tús. The LES and job clubs support clients to make this progression. The LES has worked with Departments to deliver specific training programmes to meet employer and client needs, thus securing sustainable employment for clients in their locality. The community employment scheme, RSS and Tús programme are the backbone of many services operating in communities. It is often in these services that the routine of getting back to work, building confidence and having a sense of belonging and purpose creates the stepping stone to further training and employment. The supports available to jobseekers through the LES and job clubs include progression planning, guidance and mediation, addressing barriers and building confidence, training and education, as well as access to labour market programmes such as Tús and the community employment scheme. We also provide assistance through practical job search supports such as designing CVs, interview preparation and mock interviews, as well as through post-employment supports, providing access to financial support and information provision.
The recent Indecon report acknowledged that unemployment levels had fallen nationally. According to the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, the unemployment rate currently stand at 5.3%. However, our experience as practitioners on the ground shows that there continues to be a client group which is very distant from the labour market. Those in this group often present with multiple barriers to employment which can include having no work history, limited educational attainment, limited English language skills, homelessness, low literacy levels, lack of confidence and low self-esteem, age, transport access difficulties, lack of childcare supports, ill health and, in some instances, addictions. The currently favoured “work first” approach, where only full-time employment for more than 30 hours is considered to be progression, is extremely difficult for those who are encountering a variety of barriers. This is where both formal and informal supports are required to work with the individual. The LES and job clubs recognise that the career progression journey for those who are most distant from the labour market begins with the focus on working with the clients where they are at, using a person-centred approach.
The Irish National Organisation of the Unemployed, INOU, services research report of 2016 recognised the expertise the LES had developed in supporting people who were long-term unemployed. The report notes that a good example of effective inter-agency and organisational work is the link with local job clubs.
The employees of both the LES and job clubs are highly qualified, trained and experienced with a vast range of local labour market knowledge, established successful networks and work in the heart of the community. Both services have a workforce that is adaptable, innovative and values the empowerment and person-centred approach towards sustainable employment. LES and job clubs have a proven track record of responding to the needs of Government; through our flexibility and adaptability we have proven that we are responsive, proactive and with the ability to meet the evolving demands of those who are unemployed – this is evidenced through the increased capacity of clients who were referred to the services during the height of the recession.
As the Indecon report states, the objective of the job clubs is to provide a range of services and supports for jobseekers and for employers. There are four elements to this service: formal workshop training; one to one engagement; CV preparation; and, a drop-in service. Clients are referred to engage in these supports through the Department of Employment Affairs and Social Protection and the local employment service.
Formal workshop training covers a variety of topics including identifying individual client skills and local job opportunities; understanding the interview process; CV preparation; application forms; using the Internet to search for job; and, group participation and motivation. The one to one engagement that is provided offers practical and personal support to clients on a one to one basis and this can include everything from structuring CVs, job applications, job coaching and pre-interview support. The clients are assisted with the preparation of their CV. This is often the initial engagement in the activation process for clients. Many clients avail of the drop-in service where they can use the facilities and resources such as Internet access, computers, phones, printing and they can also use the JobsIreland website. Most of our facilities around the country were very busy last week with clients preparing for the Department of Employment Affairs and Social Protection's National Jobs Week, with jobs fairs running throughout the country. Our facilities enable clients of the service to be ready to properly engage with potential employers at the job fairs.
The Indecon report states that the clients surveyed for the report on their experiences with job clubs agreed their response rate exceeded typical response rates, showing that 21.5% of clients responded to the survey. The results speak for themselves. Some 80% of clients said the job clubs supports had improved their prospects of getting employment; 79% of respondents stated that their engagement had motivated them to find work or undertake further education and training; 77% of clients said their participation boosted their self-esteem and self-confidence; 26% received assistance to find work for more than 30 hours per week; and 23% received assistance to find work under 30 hours per week. These statistics demonstrate the positive impact that job clubs have on clients who engage with us and are supported in their journey towards employment.
The Indecon report further highlights the positive relationships we have developed throughout the country with employers. Some 79% of employers said that job clubs helped their company to find suitable candidates for available jobs; 81% of employers established effective ongoing relationships with job clubs staff; 86% of employers became knowledgeable of the support services available to them; 75% of employers gained employees who perform well and are reliable; and, 60% of employers filled vacancies they could not fill otherwise.
Let us consider the impact on the unemployment rate by job clubs and the local employment service. In January 2012, the unemployment rate stood at 16%. Through the combined work of Intreo, the local employment service and the job clubs, the rate fell to 9.3% by the summer of 2015. This equates to a reduction of 6.7% and is prior to the introduction of the Department's for profit employment model.
I will hand over to my colleague, Mr. Donal Coffey, who will speak about the local employment service.
Mr. Donal Coffey:
I thank Ms Kennedy. The local employment service is a unique service model that is delivered by highly qualified staff who offer a customised person-centred service while being cognisant of the complexity and multi-dimensional causes of unemployment and how this impacts on individuals and communities. The skilled staff focus on active listening, understanding and interpretative skills to facilitate clients who are most distant from the labour market to address the issues and barriers which affect their ability to access employment, education or training.
Future market changes will continue to have a significant impact upon those who are already categorised as being most distant from the labour market. This underscores the need for a guidance-focused mediation services for those most in need, namely the model practised by the local employment service.
We believe that this unique model should be available throughout the State and that a proposal from the ILDN in its paper, Responding to the Jobs Crisis: Local Development Companies working in Partnership with the Department of Social Protection, dated 15 November 2013, should be revisited. This paper proposed extending the LES to areas of the country which currently do not have this service. We believe that the LES is a proven model of best practice and one that should be available throughout the State. This would allow for the development of a bespoke employment service based upon local area need. Murphy and Deane stated in 2016:
In the crowded and increasingly competitive activation space the LES is very well positioned, integrated and embedded in the communities of interest with highly and relevantly skilled staff. Current EU policy affirms the LES in the landscape of activation policy and services, restates its core and unique selling point: its closeness to its customer base, its specialist skill set and its integrated position within the topography of community, voluntary and statutory services.
A major element of the Government’s Pathways to Work 2016-2020 plan focuses on the consolidation of existing activation services and expansion of same to new groups including: one-parent families; people living with a disability; jobseeker transition recipients; part-time employees and qualified adults. This element is reflected in one of the policy recommendations contained in the Indecon report on the LES, which states: "We recommend that LES should in future focus on the most disadvantaged activation and other client groups who are not currently obtaining assistance from other State delivered/funded programmes."
We view this as a positive element to the report as the groups listed are the very people that the LES was established to work with, its original client base. The current skillset of the LES is well placed to meet the needs of the groups listed as it is what the service has done for more than 20 years. The Indecon report highlighted that 75% of LES clients state that their engagement with LES has motivated them to find work or to undertake further education or training, while 71% of LES clients said that LES supports had improved their employment prospects.
The skill set and guidance/counselling orientation of the LES shows that it is the best qualified, and most ready, to re-embrace the following target groups; long term unemployed of more than two years, youth unemployed, those with educational disadvantage and specific, sometimes gendered, barriers (older long term unemployed men, female lone parents and qualified adults). Migrants will be of increasing relevance. The LES is particularly well placed to respond to such needs and work with local goals and targets and focus on the very long term unemployed. (Murphy and Deane, 2016: 13)
An analysis of the Mayo LES discovered that the service cost €871,480 but returned a minimum of €1.9 million to the State. The probability formula used for this study is also used by the UK Centre for Economic and Social Inclusion, the equivalent of the Economic and Social Research Institute, ESRI. This organisation is trusted, and indeed favoured, by the Department of Employment Affairs and Social Protection as it was hired for its cost modelling work for JobPath, according to Murphy and Deane.
In April 2016, the Ballymun Job Centre conducted an analysis of its LES to discover the gross and net cost of the service. A conservative study approach was adopted as not all job-placed clients were counted. Even with such a conservative approach, a net cost of €125,626 was generated. This is also from the Murphy and Deane report in 2016.
The Indecon report of 2018 shows that the cost per full-time employment placement is €2,544 and this figure is further reduced when part-time employment is factored in. This figure compares well to the €3,718 per full-time employment placement attributed to the private JobPath service. It is important to note that the figure of €2,544 does not take into consideration savings the State will make in less welfare transfers and income it will receive from tax receipts. The Indecon report outlined that the LES achieved a progression rate of 28.8% into full-time employment, that is working 30 hours or more per week.
The examples I have given briefly outline the monetary benefits provided to the State by the LES. However, when measuring the true worth of an employment service, it is vital to recognise the existence of non-monetary value. The non-monetary value inherent in a community based, not-for-profit employment service helps to create social and economic benefits for the wider community.
Such a return cannot be achieved through a payment-by-results employment service as it is and can only occur through a service that is client centred, holistic and not motivated by profit.
It should be noted that the capacity of the LES to work within its original ethos and guidance model was impacted by the economic crises. The restructuring of FÁS saw LES being subsumed into Intreo. Adaption by the LES to the Intreo administrative architecture and case management system has meant a narrower interpretation of outcomes as there is an emphasis on only counting full-time employment of 30 hours or more as an outcome
A policy recommendation arising from the Indecon report for both LES and job clubs is that active consideration should be given to an open or public competitive procurement model for the future provision of services. The Minister and officials in the Department of Employment Affairs and Social Protection have stressed that an open or public competitive procurement process must occur due to the perceived requirements of EU competition policy and rules pertaining to state aid but we would question this. A clearer reading of EU guidelines on competition policy and rules pertaining to state aid outlines how member states can work within the EU procurement environment while still protecting services of general interest. It is our view that the LES and job clubs fall into the category of services of general interestand so can be protected from an open or public competitive procurement process. Services of general interest expressly include services provided directly to the person, such as social assistance services, employment and training services, childcare, social housing or long-term care of the elderly and people with disabilities, according to Murphy and Deane.
We have a lot of concerns about the impact of open or public competitive procurement to the community and voluntary sector. In the UK, open or public competitive procurement or commercialisation and privatisation of many community and voluntary sector activities has had a hugely detrimental impact on the work and independence of the sector. Open or public competitive procurement contracts, such as the original JobPath tender, make payment conditional on results, thereby inserting a profit motive, and insist on a minimum company turnover per annum. In the original request for tender for JobPathin 2014, a minimum of €20 million in turnover per annum was needed for any would-be bidders. Any future open or public competitive procurement that may arise from the Indecon report with such a condition attached would automatically exclude the community and voluntary sector from participation and would see the wholesale closure of the vastly experienced and successful LES and job clubs network.
Ms Caroline Kennedy:
We thank the committee for the opportunity to make this presentation and look forward to answering any questions or concerns committee members may have. We believe it is essential that the LES and job clubs are provided with the opportunity to continue with the successful model of providing a community based, not-for-profit employment service. We endorse the work of the ILDN in acknowledging that the future of public employment services is best served within a not-for-profit model. The national committees of LES and job clubs has a number of recommendations for the Oireachtas committee, the first of which is to ensure the continuation of a not-for-profit, community-based model with equal recognition given to all progressions. We also recommend that all client groups including one-parent families, people living with a disability, jobseeker transition recipients, part-time employees, qualified adults, underemployed people and those from new communities should be assisted, as well as the most disadvantaged activation clients and other client groups who are currently not receiving any State assistance. We recommend the provision of a person-centred service with an engagement model based on need rather than set time limits. Our fourth recommendation is the use of multi-annual contracts for forward planning and stability of employment, as per the Indecon report, and finally, we advocate a partnership approach with the Department's systems to provide an improved client-centred service
I thank Mr. Coffey and Ms Kennedy for their opening statement. A significant number of members have indicated that they wish to contribute. Members will be given an opportunity to ask a number of questions. A number of representatives of ILDN have not made a contribution so far and they are more than welcome to contribute to the responses to members' questions. I am not suggesting that everybody needs to answer every question but the witnesses, including those who did not make presentations, can respond to the issues raised should they wish to do so.
I ask members to be as brief as possible in order to give our witnesses an opportunity to respond to their questions. Deputy O'Dea is first.
I welcome the witnesses to the meeting and thank them for their attendance. This committee was delighted to be able to facilitate the ILDN and SIPTU, both of which have made excellent, compelling and comprehensive presentations today. I congratulate them on that.
I have a number of general questions. Mr. Coffey mentioned in his submission that SIPTU had a meeting with departmental officials on 20 March, after a number of futile attempts to meet the Minister. What was the outcome of that meeting? Did Mr. Coffey get any sense that the Government has changed its mind about the public procurement issue? That is, in my view, a fiction. Is the Government still holding to its view in that regard? Mr. Coffey said that some people are referred directly for employment while others are referred for further training, education and so on. What is the percentage breakdown in that regard and has it changed with the end of the recession? Has there been a significant change in recent years?
The witnesses do not agree with some of the Indecon recommendations, most notably a reduction in resources because unemployment has fallen and the obligation to engage in public procurement. They argue that the recommendation to reduce resources because employment levels have improved is fatally flawed. The initial purpose of the LES was to assist those people who were the greatest distance from the workplace, in other words, those who were long-term unemployed. That focus obviously changed during the recession when the LES had other categories of people to deal with but now the LES is back to its original purpose. The Indecon report's recommendation is based on the LES as it was at the height of the recession, not as it is now. Indeed, that is reinforced by the fact that Indecon recommends that the LES focus on the long-term unemployed. I fundamentally disagree with that proposal from Indecon, for the reasons stated. While economies of scale have a certain attraction in theory, in the context of changes made to MABS and its sister organisation, the jury is still out. In that sense, I would be very hesitant about getting into economies of scale here.
On the public procurement question, I agree with the witnesses. If we have a system of public procurement along the lines suggested in the Indecon report, which is apparently supported by the Minister, we will completely eliminate the community and voluntary sector. The sector will not be able to participate or compete. I believe that the explanation relating to EU rules is fictional. I agree with the witnesses on that as I read those rules recently and employment services clearly fall within the definition of services of general interest.
It has been suggested that the Government wants to proceed with a latter day, reheated version of JobPath and that this will be the focus for the future. I want the Government to know that Fianna Fáil is strongly opposed to that and will not support it. We have a great habit in this country of fixing things that are not broken. We do not fix a lot of the things that need fixing and we have developed a habit of fixing things that are not broken. The LES and job clubs model is clearly not broken and there is no need to fix it.
I welcome the witnesses and thank both the ILDN and SIPTU for their very insightful opening statements.
I agree with everything contained in their opening statements. The critical part of this process will be the Minister's appearance before us on Thursday. As such, it is important that we hear what the groups have to say so that we can put their concerns, observations and questions to the Minister.
Unfortunately, this is an ideological battle, the seeds of which are long planted. In 2012, the unemployment rate was 16%. There was a 6.7% decrease in that rate through schemes before the onset of the privatised model, that being, JobPath's Turas Nua and Seetec. When the Minister claims in the Dáil that JobPath has been the most successful labour activation scheme in the history of the State, I refer her to these statistics. They raise a question about why the then Government did not consider expanding the successful schemes. It did not do so because it was ideologically driven to privatise and hand this work over to the payment-by-results model. We are here because of JobPath.
Let us consider other statistics. The Indecon report showed a placement rate of 28.8%. This related to employment of over 30 hours and did not include other activation measures, for example, training, education and other key components that break down the barriers facing individuals who have been away from the workforce for a time and address their specific needs. These critical components have not been taken into consideration. Under JobPath and the privatised model, a mere 14% placement rate has been set as the target for Turas Nua and Seetec. These figures are polar opposites. The Minister deems them successful even though they are not reaching their target of 14%. The number of people who have engaged with Turas Nua and Seetec and have been placed in long-term employment of 12 months or longer shows a massive fall. According to the figures provided by our colleagues in SIPTU, finding someone a placement in full-time employment of 30 hours or more costs €2,544 under the LES, which does not take into consideration savings from other activation measures, for example, training and education. This is money well spent and represents just a fraction of the cost under JobPath, which is in excess of €3,718.
Reading through the Indecon report, I was struck by the role of the mediator. I deal with many people who have gone through JobPath not once, but twice. Now people are being referred to JobPath for a third time. Their individual needs in terms of upskilling or mental health issues are not being taken into consideration. The mediator can refer someone for counselling. That is important, as it cuts to the chase and deals with individuals' needs, yet there is no scope for it in a privatised setting. This is another stark difference between JobPath and the LES.
I agree with most of what our guests stated. However, I wish to make a couple of points on procurement. In the Indecon report, no argument is put forward for opening this sector up to public procurement. Not even the suggestion of EU procurement rules stands up. This recommendation seems to have come out of thin air. We need legal clarification from the Minister. The €20 million condition for the JobPath tender cannot be used if the Minister puts it out to public procurement. The not-for-profit model is the one that works. As Deputy O'Dea stated, if it is not broken, do not fix it.
I thank our guests witnesses for their interesting presentations, which contained useful analysis. Two points jumped out at me, the first of which relates to Indecon's recommendation that we should move to an open, competitive public procurement model. I immediately thought of the national children's hospital, broadband and CervicalCheck. What a great model. Look at the results it has already provided. What a recommendation. I really liked the challenge to the idea that we must move to a competitive public procurement model because otherwise we would fly in the face of perceived EU requirements under competition policies and rules. Our guests have put forward a good challenge to that.
I just mentioned to Deputy Brady something that we had not done yet, namely, invite Indecon to attend in order that its representatives might discuss the recommendations in the report. All of the boxes it states must be ticked by services in reducing unemployment locally are already being ticked by existing schemes, which have had fantastic results. Before the for-profit model of employment activation was introduced via JobPath and so on, there was a 6.7% reduction in unemployment between 2012 and 2015 through the methods provided by our guests' organisations. Compare that with the reduction achieved by Seetec and Turas Nua. These figures beg the question of where Indecon gets the idea that we must move to a public procurement model.
I will ask a question and perhaps someone involved in the job clubs will answer it. The submission contains a list of client groups that present with multiple barriers, for example, limited education, no work history, homelessness, low literacy skills, age, distance, ill health and addictions. Disability is not mentioned. Will someone comment on ability programmes and how they are funded? If they are not funded by the organisations represented, why is that the case? How is disability addressed?
It is very clear that the model the witnesses have presented to us is one that works with communities and human beings as opposed to a punitive for-profit model that leads to an "I, Daniel Blake" result in many cases. We recently saw evidence of how Seetec and Turas Nua were panning out for our communities. Witnesses have appeared before us, with a scheme from Wicklow describing the detrimental impact of the privatisation of labour activation. It does not work. It is a for-profit model and is not about the people or their communities. Clearly, Indecon's report tells us that our existing model gets results. If it is not broken, why try to fix it? All of this is being done because it is ideological. There is an idea that we must do what the EU tells us and undertake everything on a competitive public procurement basis. The evidence provided in these submissions refutes that. I thank our guests for providing it.
I welcome our guests and thank them for accepting the invitation to attend, which was originally extended by Deputy Brady and me.
It is fundamental to this process that we hear directly from those on the front line who are providing this important service, a service that I certainly value. Despite these angelic good looks and this baby face, I have been a public representative for 20 years. I have used the services in Louth, predominantly in Drogheda but also in Dundalk, a great deal and I have referred, as have other public representatives, many constituents to those services. Public representatives with some experience do not refer constituents and use services such as the local employment service, LES, and jobs clubs if they do not work. All of us around this table know, and have the evidence from our work, that these services do exactly what is said on the tin.
I am concerned this review draws conclusions and makes some recommendations that are not embedded in the narrative of the report. By that I mean the proposition there would be a competitive public procurement process for labour activation schemes and the types of sustainable supports that are required, and that they would be put out for public tender is a little bizarre. I say that from a number of perspectives. There is significant evidence and enough evidence objectively analysed in the Indecon report to justify not only the continuation but also the strengthening of the LES and job clubs model throughout the country if we are to address the very deep and entrenched problems we have in terms of the number of jobless households in this country.
We tend to congratulate ourselves every month when the live register figures come out and when we drill deeper into the CSO data in terms of the very welcome and growing employment rates in this country, but we also wilfully ignore the fact that one in six households in the country are jobless, which is a huge stain on our society and a problem in terms of our economic and social cohesion into the future. Successive Administrations have not managed to deal with that. As I have said repeatedly, the idea of work is not necessarily only about the weekly or monthly pay packet but also about the dignity of work and the contribution that work makes to our society. The LES and jobs clubs have an enormous role to play now and in the future in reaching those hard to reach citizens who require wrap-around, customised, tailored services that the pay by results profit-driven model cannot address in any way to anyone's satisfaction.
I am not convinced either that an open procurement system is required. It is not required at all based on points the witnesses made and points made by Deputy O'Dea and others. I am convinced that at the top of the system - I do not necessarily mean the political system - there is an ideological motivation that insists that private is good and public or community-based approaches are bad. That is unfortunate. The reality is, and I will be upfront with the witnesses, a political campaign needs to be run over the next short period to convince the political system and the higher echelons of the public service that we need to maintain and grow these types of services that are critical if we are to address the issues that those one in six jobless households face because it is only through this community-based activation model that this can be done.
Will Mr. Bowe elaborate on the fact that the network has developed a proposal for an ongoing community-based activation programme? It is very important in the context of what we are facing into over the next few weeks and months and the challenge to the system that the Irish global development network, the LES, the jobs clubs, SIPTU and others who favour this approach would outline precisely what it is that Mr. Bowe, and indeed I, are in favour of and not only what we are against. It is important that those of us who believe in this system should articulate that and ensure we are leading the debate on this and not only responding.
I thank the witnesses for their presentations. I have had a great fear regarding the activation process for many years. The witnesses will be aware that it started off in France. It was first mooted many years ago and our Government took it on as being the way forward. Even the European Anti-Poverty Network at the time critically analysed it in terms of what would happen. Since then we have seen €149 million being spent on JobPath.
I have a few questions for the witnesses. Have any of them seen the contract between the Department and the private companies that have - we have to name this - displaced many of the services that were provided by the local employment services in communities? We have never been able to get the full details of the contract in terms of what was promised. What do we need to do to stop the privatisation of activation services? Collectively, we have to do that, one way or the other. It has not worked here and it has not worked in any other country.
I want to move on to the Indecon report. How reliable are the data and the statistical information in the report? I suggest the statistical information in it is inaccurate. To take the example of a county such as Mayo, the report identifies there were 65 pathways to work referrals in 2016 when in fact there were 650. Also, it states there were only 5% attendance rates which would obviously be brutal but in fact the attendance rates in Mayo were 80% to 90%. In the context of the report being done only over one year, would it not be common and good practice for a report to be done over a number of years to get an accurate picture of where things were at?
I am reluctant to give the report credibility and it certainly should not inform the way we go forward in terms of activation and job services. Are the witnesses aware of any plans the Department has drawn up because the report cites there is a surplus of staff in regard to the numbers on the live register as they are? Are discussions taking place with staff or the union around what will be done? Are the witnesses aware if the Department has drawn up a plan for the dismantling of the existing structures in terms of redundancies, lease agreements, contracts with service providers and the disposal of assets? I would like answers to those questions.
I thank the witnesses for their presence here and for the very good work they do. The displacement of the services within the local employment services through the privatisation of them is disgraceful. Within the local employment services, how open can the services be when they are dependent on the Department for funding? I have a problem with that in that perhaps people are being forced to collude with the pathway they are being brought down in terms of the provision of services.
I thank the presenters who have made a very strong case for the work that they do. Like many others, I know the work they do is thoughtful, effective and has a meaningful impact. As well discussing this issue and speaking to people who have navigated unemployment and found support form local employment services and jobs clubs, I had the opportunity in the past to work with Wexford local development network in dealing with a group of rural unemployed young people. What was striking about that was that space was made to listen to them as a group and to examine what the joined-up supports might be for those who were young and unemployed in rural Ireland.
That listening capacity should be used to taper the supports offered to the needs of the individual and particular contexts. That is what the local employment services have done and it is important.
The straight statistics show that the progression rate into employment achieved by the LES, at 28%, is far higher than the equivalent figures for the for-profit services. Will Mr. Bowe or any of the other witnesses comment on that? The presentation on job clubs noted that 26% of participants found employment of 30 hours or more per week and 23% found employment of under 30 hours per week. In addition to the progression rate of 28.8% for users of the local employment services, that is, those who have progressed into employment of 30 hours or more per week, do large numbers of users of the Irish Local Development Network move into employment of less than 30 hours per week? We know the importance of building labour market attachment for those who may be lone parents or caring. It is the foundation for a pathway into employment in future. The 15 hours of childcare that is available is helpful. Many who start with a 15 or 20 hour working week benefit on their journey back. Perhaps the ILDN representatives might comment on that cohort. Again, the blunt measure of 30% has not captured it.
I was struck by some of the other information, including that 89% of employers said they had been provided with a suitable candidate. Let us consider the kind of revolving door experience for employers and jobseekers who have navigated the other system. Suitable candidates are being provided and suitable employment and options are being offered. I was struck by the emphasis placed on equal recognition being given to different outcomes. For example, an outcome relating to someone returning to long-term education is important. How does the ILDN check this given that the system does not allow us to capture the detail as it should? How can the ILDN monitor those kinds of impacts?
Other community supports are offered through the local development networks. Have the ILDN representatives seen any ancillary benefits for those who have navigated the systems? What are the knock-on effects on those who may be either younger or older than working age but whose family members are navigating the system? We know there have been distressing impacts on children and older people when they see others navigating the system or penalties within another system.
I want to discuss the issue of procurement. The European directives provide scope in this respect. The witnesses quoted community workers' research. Reference was made to how services of general interest are allowed and that is completely correct. It is interesting. JobPath was the first time competitive tendering was used and European directives were cited as the justification. In fact, social services are explicitly excluded from the competitive tendering obligation. As we go down a privatised route, it is true that it becomes more difficult to roll back from it, which is an important issue. I am bringing forward legislation this week relating to competitive tendering, which is not the most appropriate route.
I am concerned that the Indecon report only used the term "cost-effective", an out-of-date phrase, when the term currently used is "most economically advantageous tender". There is scope within the European directives to make price and quality of equal value in determining these decisions. Will the ILDN comment on the kinds of quality criteria that should be put in place if we go down that route? Again, as I said, competitive tendering is a blunt instrument and an inappropriate route. My legislation this week aims to make "price and quality" the default mode with "lowest cost" becoming an exception rather than the rule. I agree with others that the case has not been made for competitive tendering.
I will finish by pointing to one or two of the key potential advantages in this regard. It was stated clearly that the people who are most distant from employment require a different quality and level of support. I note the unemployment rate had been reduced from double figures to single figures through the work of local employment services and job clubs before any private for-profit actors became involved. In that context, we were debating the just transition in the Seanad earlier this week. Climate change measures may be taken that could require the retraining of large numbers of people to enable them to move into new sectors.
Will the ILDN representatives discuss how a joined-up approach offered by the local employment service and jobs clubs could be of support as people transition from certain industries into new careers and options? There is a certain flexibility when an organisation is not operating for profit because it does not have to answer to shareholders. I support the idea of multi-annual funding as recommended by Indecon, but I know that there is more scope when people do not have to answer to shareholders with returns each year. Will the ILDN representatives comment on this issue? How will the local employment service respond to new needs, including the impact of Brexit or climate change or the closure of a sector? Is there flexibility in that regard? Can a service not constrained by an obligation to provide quarterly returns deliver better?
I will afford all of the delegates an opportunity to respond. I am conscious that some of the comments made are relevant, specifically as we look at the design of a new programme. The ILDN has welcomed the idea of having a multi-annual programme. We cannot look at what happened in the past four of five years and say we are going to repeat it for the next four or five as we will be looking at a different problem. We had a recession and high unemployment levels, but they have come down. Mr. Bowe referred to the expression "post-recession". We are in a different situation. The problem we are facing is that many people who are long-term unemployed come from geographical and economic areas that would have traditionally had high unemployment rates. They still have high unemployment rates. Some individuals come from a background of intergenerational unemployment. These issues will not be addressed in the same way as they would be for someone who lost a job for a year or so and then retrained, re-skilled and re-entered the labour force. We are looking at a different issue.
One major concern I have relates to the references in the Indecon report to centralising, economies and efficiencies. It needs to be the exact opposite. A more local response is required, not only of the employment service but also in engaging with other providers of services in areas. The people with whom we are dealing are further removed from being employable. The problems are intergenerational and long term. There is work to be done for those of school age today if we are to assist communities that have suffered the effects of long-term unemployment. We need to work that far back into the system, rather than only with the person on the live register.
The presentation made by the ILDN highlights how one of the key advantages stems from being community and locally based. It comes from the connections with others organisations in the local area. That is important and probably not reflected adequately in the Indecon report. That is my view of the report.
We will start with SIPTU. Mr. Coffey should feel free to join in. We will work across the members of the deputation.
Ms Caroline Kennedy:
I wish to address a couple of the questions Deputy O'Dea put to us. There was no definite outcome from the recent meeting with the Department of Employment Affairs and Social Protection. The Deputy also asked about employment and training and the percentage difference. I can only speak from the perspective of Limerick, but there has been a difference. Last year's figures suggest we are looking at a 25% transition into employment. There are still 10% to 15% who are engaged in activation and training programmes. The percentage has not changed in recent years. We still have approximately 10% to 15% engaging at that level and it is not recognised in the work we do.
I will address the comment made by Deputy Smith on people with disabilities. We work with people who are referred to us and on the live register. Generally, people in receipt of a disability payment do not fall into that category. Often people who present to us have a hidden disability. We engage with and support them as best we can. We often refer to the EmployAbility service which is a specialised service for people with disabilities. I hope that answers the Deputy's question.
Mr. Donal Coffey:
I will respond to Deputy O’Dea's question about the meeting. On my way here this morning I saw the statute of Countess Markievicz outside the building. I made reference to the centenary.
As well as being the first Minister for Labour, she was the first woman Minister for Labour and from the west. I pay tribute to Ms Noreen Parker who is also from the west. She is our SIPTU person and travels the length and breadth of the country representing the community sector. I also pay tribute to her colleague Mr. Eddie Mullins.
Unfortunately, the current Administration, like the previous one - I will use a phrase used by our friends in the North - seems to be a cold house for trade unionists who do not seem to receive much of a welcome. Our colleagues, the community employment supervisors, have been trying to have an issue sorted out since 2008. It is now 2019 and it still has not been resolved. Although it is not one of the issues we are discussing, it is important to raise it. All they are asking for is a pension entitlement. Some of them have been working for almost 25 years and they still do not have it. I note that the issue has been raised with the committee also. The Minister's father was a trade union activist. She might, therefore, like to revisit the issue, perhaps over a cup of tea and with a warmer welcome. It is more important to listen and follow up for my trade union colleagues who are working at the coalface. If issues are not taken seriously and not followed up, we could end up in a similar situation like that in France where there is mayhem and chaos on the streets with the gilet jaunes. The powers that be should remember what they should be doing.
Ms Anne Fitzgerald:
On local development companies, we have prepared a model for local company-led employment services. We will circulate it as a paper. I will briefly cover some of the key points made within it.
There was a point made about local development companies, of which there are 49. We are non-profit bodies to be found in every community in Ireland. We are to be found in every urban and rural setting. We reach into every parish and group. We have national coverage that the Department has identified as a priority in the delivery of employment services. We have the necessary infrastructure which can also deliver economies of scale because we have the capacity and staffing required. We can do with more in the areas in which the LES is not funded. That service is only to be found in 25 locations. With a little additional investment, we could upscale to expand and provide services in the counties in which there none available, including Roscommon and Leitrim.
An important aspect of the local development companies is their boards which are made up of employers, representatives of trade unions, healthcare and education services and local bodies. Local public representatives also constitute part of the boards. We have that local knowledge and investment. Local development companies are both big and small enough.
I refer to all of the research conduction into social inclusion which is the core purpose of local development companies which are not-for-profit bodies. They do not provide employment services only. They do not provide education and disability services only. They deal with all matters pertaining to the promotion of social inclusion. That is important because it speaks to the need for the wrap-around services the most excluded in society require. They require services throughout their lifespan which local development companies can offer on an integrated basis. That means providing services for the families and households with which we are interacting and which include early years education, preschool, national school and secondary school services, as well as in making the transition to third level and in working with young people who are early school leavers. It is not that we do one thing - the purpose of this meeting is to look at employment services - we do much more in working with those most distant from the labour market. When one works with people most distant from the labour market, one misses the impact of all of the other factors mentioned. What is unique about the local development companies is their ability to work with such persons throughout their lifespan.
We are non-profit bodies. What does that mean? We do not make a profit, but in one sense we do. It is the social benefit that accrues from our work to the communities we serve. It is not a cash dividend for shareholders but a social benefit for communities, individuals and citizens of the State.
We were asked what we needed to do. We are at a crossroads. As a society we have to decide the services we will provide. It is a matter of political will in deciding which model we will choose. That is why this opportunity to present to the committee is of considerable value. It is a political choice as to whether we will go for the for-profit or stick with the non-profit model.
On public procurement, there is a mixed view. In late 2017 the Department of Employment Affairs and Social Protection went to tender with a national programme for persons with disabilities. We deal with the programme, although not always under the headings under which funding is available. Under our programme headings, it is an important target group. There was a public procurement process for the national ability programme which was restricted to non-profit companies. Therefore, as late 2017, there was a precedent for how we should do it.
I emphasise that we have wrap-around services throughout a person's lifespan and can demonstrate the outcomes. We have an evidence base for our work that has been established by the capacity of staff and their strengths over 20 years. We have the infrastructure to deliver.
Mr. Eamonn O'Reilly:
We welcome the national coverage of this issue. The local employment service and jobs clubs do not receive national coverage, unlike most other programmes such as SICAP, Tús and the RSS. The LES is available in some areas. In the areas where it is not available, coverage is provided by SICAP and other programmes. The union side of the house also welcomed this.
I will answer some of the questions asked. When one is talking about jobs for under 30 hours a week, it certainly has an affect on rural areas because some people are involved in tourism, which employment can be precarious. While the system recognises this - we can track such employment on the system, as Ms Kennedy stated - it is not taken into account in the reports such as the Indecon report, which is a pity. As alluded to by everyone, it is about improving quality of life, rather than merely having a paid 30-hour a week job. There is a lot more to it than that.
On climate action, the fact that they are integrated companies, as Ms Fitzgerald mentioned, means that we can bring it across to the rural development and LEADER programme sides. In the past few years we have engaged on ecotourism, rainwater harvesting and biodiversity. It means that, as the Chairman mentioned, as integrated companies, we can respond to local needs. We are delivering on national policy in a way that is community-led which is a real advantage.
The Chairman mentioned the long-term unemployed and others. We also have other programmes, as Ms Fitzgerald mentioned. For example, we have a moving-on project under the programme for employability, inclusion and learning, PEIL, an initiative for women returning to the workforce who are not on the live register. It is a successful programme, through which over 100 women have come. We are in a flexible position. We are managed by voluntary boards, the members of which are driven by and focused on the needs of the local areas they represent.
Mr. Larry O'Neill:
It will be difficult to address all of the comments made. I have made a list of sorts.
Deputy O'Dea referred to economies of scale. This economy of scale is an imaginary development that has happened in the United Kingdom where one of the impacts of the work programme has been the destroying of local community groups. That applies to both urban and rural areas.
Mr. Bowe and I have visited some of them over there and I have relations with groups in Liverpool and London. They have been put to the pin of their collar to stay open to the public. The work programme has sent people to these charitable organisations for training without contributing to the training, yet it claims the benefit when somebody gets into a job. I would not like to see that repeated here, but there is a sense that an element of that is happening in Ireland. We know the not-for-profit sector has served the State very well in providing services the State could not provide either at a local area or an economic level. These services range from mental health services to ordinary health services to lifelong learning to dealing with migrants. Somebody asked about disabilities. We run individual personal support, IPS, programmes for people with disabilities. There is an array of stuff out there on which we have worked and we will continue to work on it. That is where we should be.
Regarding procurement, there is some sort of illusion that the EU is directing that this must go to public procurement. That is not correct. Mention was made of the recent one, but SICAP is a model that was approved by the Attorney General, so this is not just something that was taken off the shelf and run with willy-nilly. It was approved by the Attorney General. We have given senior Department officials copies of the entire suite of procurement documents so they can understand exactly how SICAP operated for a not-for-profit organisation. We would like to see that happen. We welcome the Bill that has been introduced that brings into effect an EU directive. As the Chairman knows, I have been talking about this for a long time. Ireland is one of the few countries that has not adopted this directive. We are out of step because we are not actually looking after the social inclusion and the social services parts of the tendering process in Ireland. We go spectacularly for the buck only. My final comment would be that there is a history and level of skill among our staff. We work in a society. We do not work in an economy and we want to continue to work in a society that cares for the least well-off.
Mr. Joe Saunders:
I thank members and welcome the reading, research and thought they put into the report and the issues before us today. The first thing that comes out of multiple comments is members' concern about whether the findings of the Indecon report necessarily lead on to the recommendations, particularly the one to consider a privatised model. Our reflection on that is very clear. It is a non sequitur. The proposal to move automatically to consideration of competitive procurement does not arise from the evidential findings in the report.
I want to address a number of societal challenges that members have raised, such as climate change, Brexit, factory closures or automation. These things are coming down the line. The LES and job clubs model has worked especially well because it is not just a job-first model. It works with people in employment so those people in precarious employment or bogus self-employment or those whose jobs are at risk are part of the client base. In that regard, every local development company has a link with its local third level college and education and training board, and ILDN is linked in to several colleges in the institute of technology and university framework. We are very concerned about the societal changes that are coming down the line and the need for reskilling as opposed to just a job-first approach.
Regarding that job-first approach, we have the Indecon findings but we also have a research arm of the State, namely, the ESRI. I want to quote from its proposal from January 2019 for research for pre-employment supports. It says that as employment increases, those who remain unemployed are likely to experience multiple barriers to labour market participation, meaning that employment is far from an immediate and realistic prospect for many of them. It goes on to say that for these groups, job creation alone is not sufficient in ensuring full employment. That reflects the concerns of many members about how we conceive the issue.
In that regard, local development companies stand ready to offer national coverage to the new cohorts who need to be brought in and who, as citizens, deserve a national employment service.
Mr. Michael Bowe:
It is to be hoped we will address all of the questions. If we have missed anything, please come back to us. I am sure members will do so. Deputy O'Dea reflected on figures. I hope I have his question right. I can confirm that the figures for the LES and the job clubs in 2017 and 2018 are comparable to the outputs for 2016. They are probably not quite as high as the figure of 28.8%, but given that the cohort is becoming more difficult, one would expect it to be lower. The figures still stand up in terms of the numbers that both the LES and the job clubs are delivering. The target is 40% for the job clubs, not 30%. "Remarkable" is the word I would use to describe outputs given the scale of the budget and what has been delivered.
In response to Senator Nash, there will be an information campaign - I do not know if we like to use the word "campaign" - with all of the Senators and Deputies over the coming weeks to try to convince them and the Government about a correct way forward, not just a self-serving interest on our part but on behalf of clients. We want to convince them that the for-profit sector is not the way forward. I say that as someone with 30 years in this business, both at the front line and now as the CEO.
Senator Conway-Walsh asked two questions. We have never seen the contract so we have no idea about it. She asked a question about the figures in the Indecon report. That is an interesting question. If we look at the two reports, which run to 300 pages each, there are definitely figures and commentary with which one would disagree, but in the overall scheme of things, what the Indecon report says is that a service such as this is required. One tries not to get caught up in some of the parts with which one might disagree. Overall, I believe the figures are reasonably accurate in the broadest sense. We would disagree with some of them. I do not know if that answers the Senator's question. It is easy to have a go at things on specific pages, but if we look at the thrust of it, one would accept some of the figures. We would strongly disagree with how some of the recommendations evolved out of the report, but we have commented on that.
Some of the other questions, such as those from Senator Higgins, were dealt with by Ms Fitzgerald. There is a choice for elected representatives at this time, not just the Government. What do we want to do with the most vulnerable in our society, the 5%? We are all very much of the view that just because we have full employment, we cannot move off. For a relatively small investment, groups like ourselves or the community can work in a not-for-profit way and deliver a multitude of benefits that may not all be about employment. They might be about changes in lifestyle, households, families, benefits and children. The Government must grasp that it is not about the money at this time. It is not for profit. It is about what we want to do with the 5% in our society. That is where we play a part and what we are committed to. Others play a role in that as well. I hope the collective part of the Dáil can bear in mind that just because we have X, we still need to provide services for the 5%. It will pay dividends down the road.
I thank all our witnesses for their attendance today, the opening statements and their response to the questions. Deputy Brady clearly indicated that this is part one of a two-part process. We will address the Minister next week. It is very important to be fair and compliment the witnesses on the presentations because while we have the Indecon report, we are looking forward to the future of some sort of new employment service. I do not like to pick out one individual but Ms Fitzgerald indicated very clearly the range of services and the contacts that ILDN and the various companies have at community level. In respect of dealing with people who are long-term unemployed where there are greater barriers, she explained that type of local infrastructure very well.
The Chairman had left the room when I asked whether it would be possible to get Indecon to come before the committee to be queried about the report. I would like to know how it added one and one and got six.
Mr. Donal Coffey:
Senator Nash spoke about the difficult to reach section of the population. This has been a learning process for me. When the local employment service, LES, started, it was a gateway for people in the community to reach information on jobs because in Cork they would have had to travel into the city centre, which would have made it quite difficult. That was the idea behind the LES that it would reach out into the community. Roll on 20 plus years and the gateway is different. It is the gateway into communities, including the difficult to reach section of the population. A lot of services available through the LDC partnerships could actually be channelled through our offices, especially because we are linked with the unemployment service. The live register is a universal church and we meet a lot of people. The LES is very useful and I believe the Government underestimates its potential.
I knocked the cold house, but I thank front-line staff in the Department of Employment Affairs and Social Protection and the former FÁS who have always worked very closely with us. As a front-line worker, I acknowledge them in this forum.