John Paul O'Shea (Cork North-West, Fine Gael)
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I will read a note on privilege and housekeeping matters before we begin. Witnesses and members are reminded of the long-standing parliamentary practice that they should not criticise or make charges against any person or entity by name or in such a way as make him, her or it identifiable or otherwise engage in speech that would be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction that I might make.

Members attending remotely are reminded of the constitutional requirement that, to participate in public meetings, they must be physically present within the confines of the Leinster House complex. This is due to the constitutional requirement that, to participate in public meetings, members must be physically present within the confines or place where the Parliament has chosen to sit. In this regard, I ask any members attending remotely via Microsoft Teams to confirm they are on the grounds of the Leinster House complex if they wish to contribute to our meeting. I remind all those in attendance to make sure their mobile phones are switched off or on silent mode.

Today's meeting concern discussions on community enterprises, specifically the report entitled the Assessment of the Economic Value of the Community Enterprise Sector in Ireland. The community enterprise sector has played a significant role in contributing to the building of thriving economies at local, regional and national levels. We look forward to engaging with the witnesses to gain deeper insight into the report's findings and how community enterprise has further scope to benefit the regions and the country as a whole. With that in mind I welcome the following witnesses: from the Community Enterprise Association Ireland we have Ms Siobhán Finn, CEO; Ms Rashmi Kulkarni, project manager; Ms Patricia Frayne, centre co-ordinator from the Portlaoise Enterprise Centre; and Mr. John O'Connor, CEO of the Enniscorthy Enterprise and Technology Centre and The Hatch Lab in Gorey. I now invite Ms Siobhán Finn to make her opening remarks.

Ms Siobhán Finn:

I thank the Cathaoirleach and members for the invitation to address the committee on the economic value of Ireland’s community enterprise centres and hubs, and the wider enterprise development ecosystem they anchor across the country.

I am the CEO of the Community Enterprise Association Ireland. With me is Patricia Frayne, centre co-ordinator at Portlaoise Enterprise Centre since 2016, and John O'Connor, chief executive officer of Enniscorthy Enterprise and Technology Centre for close to 24 years, as well as the Hatch Lab since 2017.

As the national association for this sector, we are here not only to outline what has been achieved since the early 1990s, but also to highlight the practical and necessary steps now required to protect and strengthen the sector for the future. A cumulative public investment of approximately €200 million over the past 30 years underpins approximately 150 community enterprise centres, sectorspecific centres and innovation hubs across the country, supporting an estimated 3,500 micro and SME businesses and 18,000 fulltime jobs, while generating approximately €1.8 billion in gross value added each year. This is infrastructure that keeps jobs, services and opportunities rooted in rural and regional communities.

From within this environment, CEAI brings over three decades of grassroots experience and acts as an independent, sectorled delivery partner. As a member of the national hub strategy working group, and as the organisation behind the design and development of both the QHubs quality and innovation management programme and the competency and career framework for the National Hub Network, we are committed to supporting the Government and agencies to turn policy ambition into workable interventions on the ground. For clarity, the Government of Ireland Connected Hubs project, led by the Department, and the Community Enterprise Association Ireland are complementary, but fundamentally different in mandate, ownership and function. In simple terms, Connected Hubs is a Government infrastructure and publicly funded engagement platform, whereas CEAI is an independent association built from the grassroots, with over 30 years' experience supporting the sector.

Ireland's community enterprise sector is best described as the wider enterprise development ecosystem, comprising centres and hubs across the country and offering both specialist and generalist infrastructure to sectors ranging from childcare to food, technology, digital and the creative industries. The combined effect is significant social and economic value for the communities and regions they support. Long before the establishment of Connected Hubs or the concept of a National Hub Network, enterprise centres and hubs were already functioning as part of Ireland's core regional innovation infrastructure. They have provided affordable workspaces, wraparound supports, mentoring, training and access to networks, enabling locally born, indigenous firms to start, grow, internationalise and now decarbonise.

In 2023, CEAI commissioned the first independent assessment of the economic value of the community enterprise sector in Ireland. We found that the sector contributes approximately €1.8 billion in gross value added to the Irish economy every year, which represents more than a ninefold return on cumulative public investment since the early 1990s. This is a level of impact matched by very few other enterprise support instruments, particularly with such a strong rural and regional footprint. Yet, despite this demonstrated impact, enterprise centres and hubs are facing levels of financial and operational pressures that pose a structural risk to regional economic stability. At least half of the centres funded in the last decade are operating within six months of insolvency, struggling to meet the basic costs of staff, utilities, insurance and maintenance. Without timely and targeted intervention, centre closures over the coming decade are highly likely, weakening local enterprise ecosystems, eroding years of specialised capacity and diminishing the longterm value of the State's investment.

The Smart Regions enterprise innovation scheme, a €145.3 million ERDFcofunded programme launched in late 2023, was intended to be the main instrument to address these gaps, accelerate regional innovation and underpin longterm, placebased resilience. However, due to significant delays, administrative complexity and challenging processes, no more than €30 million in total will reach this sector, with the remaining funds currently being reallocated to other national priorities, thus removing what should have been a highreturn, lowrisk investment in critical regional infrastructure.

Against that backdrop, we propose two priority areas for action: first, to strengthen regional investment schemes through structured engagement with the sector, with future schemes designed in close consultation with CEAI as an independent and experienced voice from within the ecosystem; and, second, to prioritise key interventions that drive capability building and innovation performance, with support for CEAI to champion and deliver these transformational programmes for the sector. Finally, I would highlight that the national development plan identifies enterprise centres and hubs as key instruments for supporting regional employment. Similarly, the European Innovation Scoreboard 2025 recognises their role as critical regional innovation enablers, recommending stronger public–private partnerships and improved resourcing of regional innovation ecosystems, particularly outside Dublin.

A continued focus on aligning enterprise policy with rural and community development objectives is essential to securing the future of the sector. Our ask is not for a new or costly architecture, but for targeted, modest and phased investment and reform. This approach would stabilise existing regional infrastructure, better align schemes with national strategies, and fully leverage the sector as a low-cost, high-impact driver of competitiveness, regional balance, and the green and digital transition.

John Paul O'Shea (Cork North-West, Fine Gael)
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Thank you. We move to the members, who have seven minutes for questions and answers.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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I welcome the witnesses and thank them for being here. I also thank them for the work they do. It is not a secret that I am a big fan of the work they do. I have a couple of questions. It all seems very reasonable - modest investment, massive impact - which is the kind of thing we like to hear. Can the witnesses talk us through the potential? Ms Finn said a large number of enterprises are within six months of insolvency. For all the good work that I am aware of, and which is very important, that really jumped out at me. It is a worry. It is one of those things: we are all going to miss it when it is gone. When talking about a modest investment, what are we talking about in real terms? What has been the result of any engagement CEAI has had to date with Government Departments, and what is it hearing from them?

Ms Siobhán Finn:

I will give the perspective of the national association, and I will then call on Mr. O'Connor and Ms Frayne, who are in the weeds every day, dealing with the challenges. From a national perspective, what we see is that there is a disconnect between policy decision-making, the design of funds and the reality of what is happening on the ground. There is an expectation on the part of the Government and the funding agencies that centres and hubs are entirely self-sustaining. That is not an unreasonable ambition in the longer term, but by "longer term" we mean somewhere between seven and ten years, not the kind of three-year timeframe that is currently wrapped around the funding allocations, whether previously, the regional enterprise development fund, REDF, and Border enterprise development fund, BEDF, or currently, the Smart Regions scheme.

The gaps that arise between funding streams put significant pressure on centres and hubs when it comes to their operational costs, such as salaries, utilities and the increase in energy costs in the last couple of years. It has been crippling in many situations, particularly because a lot of these centres and hubs are located in old buildings. The business models within the centres and hubs do not work as effectively as they should unless they have very experienced enterprise centre managers and leaders, such as Ms Frayne and Mr. O'Connor. That is why they are here today.

The centres and hubs are responsible for accommodating, supporting and driving the development of businesses in regions around the country. That is where the added value comes from. This core infrastructure cannot be expected to function at a level that remains dependent upon grant funding that is intermittent, discontinued and created with incredibly difficult terms and conditions around it. For us, the bridge is working with the sector when it comes to designing these schemes, as opposed to developing the schemes at the Government level without any prior consultation or engagement, and then rolling out a scheme that is effectively unworkable for the majority of the centres and hubs around the country.

Those that are in danger of closing the doors, some sooner rather than later, tend to be the newer locations.

They operate with business models that have not been designed in a way that will support the running of the centre and the facilitation of programmatic interventions. Mr. O'Connor and Ms Frayne have first-hand knowledge of what that needs to look like.

Mr. John O'Connor:

I will begin by talking about our clients. When somebody comes to me for the very first time to start a business, the first thing I tell them is that it will take three years to fail or seven years to succeed. Yet, the funding models for enterprise centres only give us three years to be in profit. If we are telling our clients that this is the case, how can we do things differently or better?

The biggest issue with many of the new centres or hubs is critical mass. They were not big enough. We all got excited by a wave of remote workers and thought hubs were the new thing but in reality, unless X amount of people come through a door every day it will not pay. There is a critical mass. I estimate about 15,000 sq ft, which is the bones of about 80 people renting from us, whether that comprises a company with 80 people or 80 individuals, is required to pay for the day-to-day running of the centre and a professional manager to run it. Anything below that does not make sense, just like any shop or business. That was where the problem arose. A lot of hubs were set up without being thought through in terms of the business model and whether there was a long-term future. Many came from community projects at the side of a community hall or a county council decided to try something. A proper business model was not thought out.

I have been in this business for 27 years and what makes us unusual is that we have critical mass and have gone through a recession. I had a pretty hard time in 2012 and 2013 when nobody came through the door. We had an empty enterprise centre. We got through it and we are ready for that to happen again. I can see it happening again.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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That resilience takes experience. It is the case that a business will either last forever or be gone quickly.

Mr. John O'Connor:

Absolutely. The business model is the thing. The buzzword in social media and the newspapers is "hot desking". That does not work. Hot desking is somebody walking in and asking for a desk on a once-off basis, and will never come back. They are not a client. They are a once-off customer. You need long-term and consistent people coming through the door. There needs to be an agreed procedure so that they can start a business and we will help them during that process and grow together. That is what happens.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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That is what makes a successful centre.

Mr. John O'Connor:

That is what makes a successful centre. It is not about success for us. If we have a business that grows it is success for everybody. It is in our best interests for businesses to grow. We are also a little bit different than other agencies. Enterprise Ireland, LEOs and even banks are providing money so that when businesses start they are suited and booted and pretend they are brilliant. We are a supplier. We know when they cannot pay us or have a bad Friday and are scared to go home to their partner to say there is no money this week. We can see that the whole time. We are an agent in enterprise support but walk the corridors with people.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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It is more of a wraparound concept. Having been that person at home getting that news, I understand. I am sure all of the help is very much appreciated by people. My time is up. I will get a chance to come in in the next round if that is okay.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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I thank the witnesses. We see some very successful enterprise centres in our communities. Others are not as successful. The witnesses have come with huge success. They outlined a few examples of what they put that down to. Playing devil's advocate, do the witnesses still see a role for enterprise centres, especially when people may be running business in a different format than they were in the past? Many people are working remotely from all parts of the world. We do not have as many people in the more traditional businesses such as professional services. People working in professional services still go to offices, but perhaps that is not the case in the new financial businesses that are being set up. People seem to work in more remote settings.

Ms Siobhán Finn:

Enterprise centres are much more than just a building.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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That is the nuts and bolts of this. In terms of paying insurance, rent and-----

Ms Siobhán Finn:

An enterprise centre provides the physical infrastructure to allow individuals to start and scale their businesses within local communities. The add-on, aside from the physical infrastructure, is the kind of support Mr. O'Connor has spoken about. There is on-site mentoring and advisory support, whether that is sitting in an office or walking the corridors with people. There is community building and engagement. Companies start to work with each other when they discover they have shared needs in the same building, such as through using each other's services or sharing supply chain solutions for both companies. Businesses keep jobs local. I spent Monday in Base Enterprise Centre in Fingal. What is happening there is absolutely incredible, and it is just one example. It is supporting community enterprise and community employment schemes. It has businesses that started in one unit which are now occupying three units because they are scaling. It is providing significant local employment and community supports through a community café and many other different engagements in the community. The sum of the total is what a community enterprise centre brings to a local environment.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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I acknowledge some are doing great work but others are not. How many centres are there around the country? Which ones are thriving? Can the witnesses tell us the percentage of those that are thriving and those that are not?

Ms Siobhán Finn:

We would say it probably breaks down into thirds. The top third are doing exceptionally well.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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Are they located in urban areas?

Ms Siobhán Finn:

It is a mix. A number are located in university towns and cities. They will be very much held up as the shining light of the sector. The middle third are doing exceptionally well in their own right but potentially are not reaching what they are capable of doing because they are not getting the type of support and interventions they need, like the QHubs quality and innovation management programme or capacity building training and learning interventions from staff running the centres. They are doing incredibly well when it comes to having a fully functioning business model and reserves sitting in their bank accounts, as well as ticking all of the boxes for why they were set up but they have not progressed to the top tier for a number of reasons.

There is then the bottom third, which are struggling to pay their utility bills and are failing to keep their staff in place because of the constant worry of not having enough money in the bank account at the end of the month or quarter to pay staff salaries. They have boards that with the best will in the world, were appointed at a time when setting up a community enterprise centre seemed like a great idea for the community but potentially do not have the skill set to keep that centre alive and to keep that ambition growing in the community. There are probably close to three or four centres around the country that will close before the end of this year. I am aware of that at first hand because they ring me and tell me that.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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Sometimes things do not work and we might need to diversify and do something else. Would the witnesses concede that the bottom tier should close?

Ms Siobhán Finn:

Not necessarily. With the right kind of support and intervention, they may succeed. It comes back to the business model. I am thinking of one centre in particular, which I will not name but is in a very rural location. It is a small centre with about six units. What has kept the centre alive is that it was fortunate enough that a multinational secured its largest unit simply because it wanted free parking outside an urban area.

This particular location is within a 30-minute commute of a major city. This multinational wanted a landing space for a number of its employees. This centre offered sufficient office space and sufficient parking, which is a challenge in a city centre, and the company landed there. It is the anchor tenant for this particular centre in a village with no more than 1,000 people living in its hinterland. That anchor tenant has kept this centre alive because it keeps the rent roll consistent. That model does not work for everybody but it works for many centres, particularly the smaller ones. That is educational as to what the right kind of business model looks like. I say all of the time that there is no one size that fits all but that there is a place for everybody. That anchor tenant keeping the centre alive and keeping the doors open has resulted in the retention of somewhere in the region of four additional local businesses. It also provides employment for somewhere between 30 and 50 people in the local community, whether as core employees or ancillary service providers like delivery drivers. That makes a huge difference when it comes to keeping people local and keeping villages alive, which is what this committee is about. It is critical for the future of our regions.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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Is Ms. Finn's request for funding made on the basis that we sometimes need to provide subsidies when really good services are being provided in remote parts of rural Ireland?

Ms Siobhán Finn:

That is 100% the case. When you look at the income and revenues of other key services provided in local communities, they are subsidised, whether through Pobal or one of the other organisations that front that kind of support from Government. That is not happening for our sector, however. It needs to happen. There seems to be a challenge around understanding our sector. There are approximately 500 people employed full-time in the sector. These 500 are responsible for creating opportunities for an additional 18,500 individuals to remain in their local communities. That cascading knock-on effect is not being recognised.

Catherine Ardagh (Dublin South Central, Fianna Fail)
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Deputy Gallagher is from Donegal and represents rural Ireland. He will say how important this is, especially for towns like Ballyshannon and smaller towns in Donegal. We need to do everything we can to bring business back to these areas. It is vital.

Ms Siobhán Finn:

We have some really good community enterprise centres around Donegal. From talking to some of the representatives up there, I know they see a real challenge around keeping community enterprise centres to the forefront of conversations at Government level. In fact, one enterprise centre official recently asked me whether Government had forgotten about them because the focus is very much on the new. There is a place for technological and creative industries. We need the sum of everything. However, the centres that are providing core services in local rural communities cannot be forgotten.

Pat Gallagher (Donegal, Fianna Fail)
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I thank the witnesses for their presentation. Rural Ireland would be much the poorer if we did not have these hubs. Looking at the map, they are spread all over the country, particularly along the west coast. Does the association co-operate with or receive any funding from Údarás na Gaeltachta or Roinn na Gaeltachta in respect of Gaeltacht areas?

Ms Siobhán Finn:

We have a good relationship with the team in the údarás. I was speaking to some of them only yesterday. The údarás has the Gteic network, which has about 30 locations around the country at this stage. It is doing really good work and recognises the work that we do. We collaborate on different projects. CEAI does not receive any funding from the údarás and I am not aware of the údarás funding any of the community enterprise centres. However, it does fund the Gteic network, which is an important part of the overall national network of enterprise centres around the country.

Pat Gallagher (Donegal, Fianna Fail)
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Is CEAI excluded from Gaeltacht areas because an t-údarás provides a service in those areas?

Ms Siobhán Finn:

No, we are not excluded at all.

Pat Gallagher (Donegal, Fianna Fail)
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Do I take it that CEAI works in conjunction with each other-----

Ms Siobhán Finn:

Yes, absolutely.

Pat Gallagher (Donegal, Fianna Fail)
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-----to ensure there is no overlapping?

Ms Siobhán Finn:

There is no overlap. In fact, as part of the development of the QHubs programme, we had a national advisory group and the údarás was represented on it. CEAI also sits on the national advisory group for the imminent hubs strategy, as does the údarás. We work hand in glove with it when the opportunity arises.

Pat Gallagher (Donegal, Fianna Fail)
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The witnesses have talked about support on-site, mentoring and almost taking people by the hand. Do they find that many of those they have been dealing with over the years go on to greater things and have to move out? Do they move to other sites within the locality or do they move to other areas?

Ms Siobhán Finn:

Mr. O'Connor and Ms Frayne are probably best placed to talk about the success stories, of which there have been many around the country. Companies may start with a single employee before occupying one office unit and then two, scaling up and moving on. Would they like to give some practical examples of what they have seen?

Ms Patricia Frayne:

Within our centre, we have a mix of business accommodation. Many clients coming in would start in our designated desk room, which is a room with shared facilities. That is normally where people start and find their feet. Before they even get to that stage, they have probably started at home, in the spare room or at the kitchen table. The development of a business is a slow process. As managers, we certainly would not advise people to take on unnecessary costs too early in their journey. People should establish their business first and take things slowly. As Mr. O'Connor says, it can take seven years so people should not rush in thinking they need a very fancy office on day one. We start clients in that designated desk room and then, as space becomes available or as the company grows and the owner thinks about taking on some help, we try to move them on into one of our smaller office spaces. From there, they might go into a slightly larger space. Having said all of that, some people are content with building a business and may want to keep a level of control. As Ms Finn has said, there is a space for everybody. Not everybody has aspirations to have a workforce of 50 or 100. In my experience, some people are quite happy to grow their business to a certain extent, provide a good service to their clients and provide the level of employment they are comfortable with. There is space for people like that all around. Mr. O'Connor may have had other experiences.

Mr. John O'Connor:

The majority of businesses get to their comfort level and stay there. We were very lucky. We had one company, Taoglas, whose founder, Dermot O'Shea, started on his own. He now has 500 employees worldwide. He now lives in Silicon Valley because most of his work starts from there. At the start, he was with us for two years and going absolutely nowhere. His parents did their best to get me to convince him to stop what he was doing. He sold 20% of his shares for €20 million last year and is still the biggest shareholder in the company. He is probably our biggest success. When Sonru left us, it had 60 employees. Another company left only last year with 15 employees. The beauty of their leaving is that they leave empty space behind them. They are then in the local newspapers. They normally leave because they get new funding and outgrow our facilities. They have to move on to their own place. That is what my job is about.

Pat Gallagher (Donegal, Fianna Fail)
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What frightens me most in all of the contributions is the three-year and seven-year periods. You have to prove yourself in three years. History shows that, if you are going to fail, you will do it in three years.

Mr. John O'Connor:

I have walked into offices within two or three months to tell clients they would be better off not paying for the next month and going home. I can tell. They are sitting there waiting for business to come in the door but it does not. You sometimes have to tell people that it is not working for them. Even on the advice you get, every week, I meet two or three people with start-ups that never even come in the door. The citizens advice centres send them to me.

These could be people who are going back to work through self-employment, doing something off the farm, or trying to set up a secondary business like beekeeping. We are just trying to give them a little bit of advice on where and how to get funding. Most of them cannot get funding but we are trying to give them a business model and help them through the process. The trick is to give themselves two to three years because it will take that long. They will not be able to buy anything decent for about seven years, at the end of the day.

Pat Gallagher (Donegal, Fianna Fail)
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Are all of these in the private sector?

Mr. John O'Connor:

No. We have a business model in our enterprise centres. Basically, we need a guarantee in order to open the door. We need to get money from some place that can guarantee that money. County Wexford Childcare Committee rents three offices from us. As that money is coming from Pobal, I know we are going to get paid in that instance, at least. Our start-ups could go bang in the morning. We are not guaranteed that money. We have a principle in our place whereby one third comes from the Government or a semi-State body, one third comes from the service providers that Ms Frayne spoke about - the ones that get comfortable like our web developers and our printing company; they are not going to grow but they are a good local business - and the final third comes from what I call risk ventures. We know they will not pay us at some stage in the middle of this three-year period, when the Enterprise Ireland or LEO grant runs out, but we have to stick with them and hope they will come right. We cannot publish on the paper that they defaulted with us. We just take it on the chin and say, "that is grand, go home".

Ms Patricia Frayne:

Similarly, we have a mix of clients. With those we consider to be our safe money, that core guaranteed funding allows us to take a chance at an early stage on a start-up that we have met, that is committed to its idea and that we really want to succeed. Balancing the books is probably one of the hardest parts of our job. We have to make sure we have enough money to look after our own costs, our own overheads and our own centre's development. Things are moving so quickly now that we are constantly having to innovate and upgrade. As Ms Finn said, a lot of the buildings are older. Our enterprise centre will be open 20 years next year. It is a building of its time. We are constantly dealing with challenges and the challenge is at the top. Every enterprise centre is different. Every enterprise centre manager has a very different background and skill set but we have to be experts in many areas in order to manage the business successfully. It is a business. Putting in the right person is vital, obviously, and salary support is key in our sector. Some of the hubs that Ms Finn knows of, which are now experiencing difficulties, may not have had the strength, the financial model or the ability to ensure the financials were in place. If those things are right, everything else will flow.

Mr. John O'Connor:

I totally agree. The committee is listening to two people who have been in the business for a while. We have developed and got the knowledge. The biggest fear now, going forward, is that this knowledge will disappear. QHubs is basically trying to standardise the hub and enterprise centre model from the grassroots up rather than from the top down, and not from Government agencies saying what we should do. I had many people during Covid telling me what I should be doing with hot desking, etc. They all had the right answers but they did not really know what it was like to open the door. If we do not have at least 60% of rent guaranteed to come in before we open the door, we should not open it.

John Paul O'Shea (Cork North-West, Fine Gael)
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As the co-ordinator in Laois, can Ms Frayne give us a synopsis of the size of the premises, the number and type of clients, and so on?

Ms Patricia Frayne:

Our centre is just over 20,000 sq. ft. As I said, it is almost 20 years old and the building is of its time. It was built back in the day when we had a mix of office accommodation and industrial units. That is quite unusual now because the model and the thinking has swung a lot more outside of that. Those industrial units are worth their weight in gold. We have started so many businesses in them and we continue to do so. They rarely turn over at this stage and if they do, they are no sooner nearly empty than they are gone again. I will give the committee some examples of the types of clients we have in those units. We have a chap who does bespoke carpentry and a lady who looks after wedding decor. When people are getting married, they do not necessarily want what the hotel is offering as decor. It is a whole new vista. She has a most beautiful unit because it is full of flowers, candelabras, silk arches and all sorts of things. They are in our industrial units. Then we have our designated desk room, which is used by people who are working on their own but are happy to share a space. Some of our clients would be employees of companies that are supporting remote working but want them in a business environment. We have seen a little bit of that. Companies do not want people working from home any more. They like them to have a business location, proper Wi-Fi and proper amenities.

John Paul O'Shea (Cork North-West, Fine Gael)
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How many industrial units are there?

Ms Patricia Frayne:

We have five industrial units, five designated desks and 16 small offices of various sizes, because of the way our building is laid out. Some of them would be one- or two-person offices and some would be slightly bigger.

John Paul O'Shea (Cork North-West, Fine Gael)
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In terms of staffing, Ms Frayne is the co-ordinator. Who else is there?

Ms Patricia Frayne:

That is it. I have some part-time help. That is the problem. It is not a job; it is a vocation. I am saying that completely truthfully. We go above and beyond. Mr. O'Connor would be the same. We could go up early in the morning and close up late at night. We also hire out meeting and training rooms and we have seen huge growth in that sector. People have turned away somewhat from hotels and like to support the facility. We have excellent facilities. We were lucky to get funding to help us along the way to upgrade all of those but that could mean early mornings and late nights. Any enterprise centre manager will say the same. Ms Finn knows so many from around the country and that is what they do.

John Paul O'Shea (Cork North-West, Fine Gael)
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Ms Finn made reference to thirds. How many are in the network in total?

Ms Siobhán Finn:

We would have in the region of 150.

John Paul O'Shea (Cork North-West, Fine Gael)
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Are they all affiliated to the organisation?

Ms Siobhán Finn:

Yes.

John Paul O'Shea (Cork North-West, Fine Gael)
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What is the affiliation fee?

Ms Siobhán Finn:

It is minimal. It is €365 per year, so around €1 a day.

John Paul O'Shea (Cork North-West, Fine Gael)
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How many are affiliated?

Ms Siobhán Finn:

They would all be affiliated in one way or the other.

John Paul O'Shea (Cork North-West, Fine Gael)
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What was the number?

Ms Siobhán Finn:

About 150.

John Paul O'Shea (Cork North-West, Fine Gael)
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In terms of the €145 million that came from the RDF co-funded programme that was launched in 2023, why has the drawdown been so slow?

Ms Siobhán Finn:

Frankly, because the scheme is not fit for purpose. It was designed in a way that was incredibly difficult to navigate. It was one scheme with four different streams. There should have been four different schemes, each with an application process that fit with the requirements of the particular scheme. For example, the Cathaoirleach mentioned that he visited a social enterprise recently. That organisation has benefited from capital investment through the scheme. It is only one of two in the whole country that has benefited from capital investment but I can count at least ten that wanted to benefit from capital investment. One person said to me that he threw the application in the bin after six months because it was such a difficult process to navigate. I say to individuals that there is no such thing as free money and it is not right to believe that money should be just thrown out left, right and centre. As I heard somebody from an agency say recently, the tap cannot keep dripping. I absolutely agree with that. However, there is a duty of care on the part of funders to understand the requirements of those making the applications. Also, when successful applications are made, what does the delivery of that application look like for the centres themselves?

I know of centres that have applied for the funding just to keep the doors open. That is not why they should be applying for funding.

John Paul O'Shea (Cork North-West, Fine Gael)
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Exactly. Does Ms Finn have a position paper on how the smart regions enterprise innovation scheme could be improved?

Ms Siobhán Finn:

Yes, I have.

John Paul O'Shea (Cork North-West, Fine Gael)
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It might be important to share that with the committee and its clerk, who might be able to circulate it.

Ms Siobhán Finn:

I will. I was before the Joint Committee on Enterprise, Tourism and Employment last October and I submitted a position paper to it following that. I would be very happy to share it here.

John Paul O'Shea (Cork North-West, Fine Gael)
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That would be very welcome. Could Ms Finn go through the two priority areas mentioned in the submission to simplify them a little more for us?

Ms Siobhán Finn:

I will. The committee will have heard about the development of the national hub strategy and the fact that its launch is imminent, despite the fact we have waited for more than three years for it to appear.

There are two key interventions that have been funded by, created and developed by the CEAI for the sector. One is the QHubs quality and innovation management programme. It is a world first. The focus is on driving the performance of the sector across six key pillars, which include quality management, innovation, governance, strategic relationships, ICT and environmental governance.

This was a national project driven by representatives from key national organisations, including the committee's associated Department, the Department of Enterprise, Tourism and Employment, IDA Ireland, Enterprise Ireland, Údarás na Gaeltachta and Skillnet Ireland, and a number of other bodies. I am very happy to supply the committee with all the information.

We funded part of the development of that programme as a requirement under the REDF. Eighty per cent of the cost of developing the programme came through the REDF in 2019–20. We provided the balance, namely, 20%. Ours is the only organisation in this sector that has funded interventions from its own reserves. Every other intervention for the sector has been funded through the Government. We are not asking for a blank cheque but we are asking for a commitment, through the national hub strategy, to include QHubs, not as an intervention or measure developed by a third party like ourselves but as the key action for the sustainability of the sector. That is for the centres and the hubs. The people involved, including the likes of Mr. O'Connor and Ms Frayne, need ongoing support and recognition of the work they are doing.

The CEAI is in the midst of developing a level 9 master's programme in social economy. It is not just for our sector but for the entire social economy sector across Ireland. The programme is, as far as we know, one of the first to be developed internationally around social economy. It is being driven by people from the sector. It is a grassroots initiative because people like me talking to people like Mr. O'Connor and Ms Frayne recognised how important it was to recognise their work. Ms Frayne described it as a vocation. I meet and have the privilege of working with hundreds of people like Ms Frayne and Mr. O'Connor around the country. What they are doing is a vocation. One day they are dealing with potentially blocked facilities, the next day they are reporting into their board and somewhere in between, they are expected to write a smart regions application. There is no clear understanding of what these people are doing on a day-to-day basis, yet they continue to do it. That needs to change.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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I have two very quick questions. The potential of the whole working-from-home revolution was absolutely banjaxed by the Government. It was a missed opportunity. Not everyone can work from home. People are not stupid in this regard. I represented people for years and realise they know themselves when they cannot work from home. The woman on reception knows her job cannot be done from home, because she needs to be physically sitting at the reception desk. The cleaner and nurse are in the same position. However, I am referring to people who can work from home. It did not happen and the policy was appalling. Some of the uncertainty has caused people to just not trust working from home. Add that to the Government-sponsored housing crisis. People in overcrowded accommodation would love to be able to go to a hub but they cannot.

There are all sorts of conditions that would lead us in the direction of recognising good-value hubs as a good idea but they are not sustainable if people cannot commit. While there is flux in the policy, people are not in a position to know what can be done and are therefore not in a position to use hubs. That is very much a lost opportunity.

On the last page of the statement, two points were made. One relates to strengthening regional investment schemes through structured engagement. That is a good idea but what Ms Finn is telling me is that the engagement, or maybe the non-engagement, has been top down instead of ground up. What would structured engagement look like? Let me put this very bluntly: would it look just like the witnesses looking for money or would it look like something else? I do not believe it would look like looking for money but I am trying to be blunt just to get to the answer. What would structured engagement look like? Where would we get to that would be better than where we are now?

Ms Siobhán Finn:

It would involve engagement from the beginning, co-designed programmes and giving us a voice at the table from the outset.

I am not here to damn the smart regions scheme from start to finish but I am saying that when it was launched in November 2023, we knew it was not going to work. From early 2024, I attempted, through the CEAI and different routes, to engage with the Government and funding agencies to say it was not going to work. Frankly, we were not listened to. The proof of that is €30 million spent out of a pot of €145.3 million for the sector. That inexcusable. It could have changed-----

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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That was €30 million drawn down out of a pot of €145 million.

Ms Siobhán Finn:

There was €145.3 million announced for a scheme for our sector in the last quarter of 2023. The scheme is closing within the next couple of weeks because of the ERDF's use-it-or-lose-it policy. The moneys are going elsewhere because they will not be drawn down by our sector. Twenty million euro has been allocated. That was announced before Christmas. I have been told through the channels I work with that probably about €10 million has been held back. The rest is going elsewhere. I am sure the money will be very much warranted and very well invested, but that is not the point.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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That was funding earmarked for the witnesses' sector that is now-----

Mr. John O'Connor:

Yet we need about €100,000 to upgrade centres like Ms Frayne's. It could not be done with €100,000, but it would go a long way. It will give the building another good seven years of strength.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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Seven years seems to be the key.

Mr. John O'Connor:

It will bring-----

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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I do think that will bring a measure of sustainability and viability-----

Mr. John O'Connor:

Some of the older buildings now just need a facelift or a little bit of work. The €30 million was spent on a handful of buildings. To build one of the new hubs, it will cost anything between €5 million and €15 million. They still are only getting the same rent as us. They do not make sense.

Ms Patricia Frayne:

Most of us do not have a huge amount of financial reserve. Many of the grants are front-loaded in that you have to have your money upfront and then your grant claim will come in afterwards.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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You nearly have to demonstrate that you do not need it to know you will be able to get it.

Ms Patricia Frayne:

You have to go to Clann Credo or Community Finance Ireland. You have to go to a funding agency to get bridging finance, on which interest is paid, to enable you. The only exception to that was the Enterprise Ireland Covid funding in 2020. I spoke to somebody after that was made available and thanked them because not having to have the bridging finance actually saved us. That was the exception to the rule.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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However, there is a model that works, because that worked.

Ms Siobhán Finn:

That scheme was co-designed-----

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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I wonder whether there is a wee pattern there that somebody might recognise. In any event, the guests are very welcome and I thank them very much for their information.

Mr. John O'Connor:

On another aspect of what the Deputy was asking about, there are also small interventions. It is not just about the money. Our broadband usage went through the roof in the last year because of AI. We needed to upgrade it three times last year because AI means ten times more usage than a normal Google search. In our second place, in Gorey, which is a lot closer to Dublin, it is all AI people, tech people, and staff in the financial services sector. It is a case of understanding what will be required. I spend nights and days trying to learn about AI so I would be able to give help and support to our clients. We need a lot of capacity building as well.

Louise O'Reilly (Dublin Fingal West, Sinn Fein)
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However, if there is capacity building, you can build the capacity.

Mr. John O'Connor:

Yes.

Pat Gallagher (Donegal, Fianna Fail)
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Ms Frayne is the centre co-ordinator. Does the centre have an enterprise manager as well or is she that person?

Ms Patricia Frayne:

I do all functions. I have a lady who gives me some ad hoc assistance. I am solely responsible for the management, promotion and development of Portlaoise Enterprise Centre.

Pat Gallagher (Donegal, Fianna Fail)
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It is amazing that when someone comes into the centre for a hot desk or whatever, Ms Frayne has to be an expert in everything.

Ms Patricia Frayne:

You absolutely do.

Pat Gallagher (Donegal, Fianna Fail)
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As Mr. O'Connor said, he is now possibly an expert in AI. A few years ago, like the rest of us, he would have known about it. It is remarkable. It was interesting to learn a lot about the centres and the work that they do.

Ms Patricia Frayne:

Every enterprise centre manager that one talks to will have had a different background that brought them on their journey. My own background is that I am a chartered accountant. Through my training and practice, I would have always worked closely with SMEs and owner-managers. It was nearly a natural progression that I have ended up in this role where I can bring that skill and knowledge to the table and signpost clients. A quick conversation with somebody may suddenly open up the area of weakness that they need help with. Mr. Gallagher, all centres and I would work very closely with the likes our local enterprise offices, business support units and all those other agencies. We need to have those contacts and the knowledge of what they all provide so that we can signpost people and help them. The key part of our role is to support those people who are trying to make their business dreams come alive.

Pat Gallagher (Donegal, Fianna Fail)
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I was pleasantly surprised recently. I know a family very well. A lad who was teaching decided he would import sportswear and put their logo on it from the east. He saw the opportunities that were there. I could not believe it last week when I went in. The fabric starts at one end of the production unit and produces it the whole way through. It was not about bringing people in to pack boxes and cut material. Expertise was needed, and that expertise was found within the local area. The business has salespeople on the road now. I do not think we fully appreciate that. I am a great person for supporting the private sector because the private sector is the engine of growth in the economy. Businesses have to know on Friday morning if they have enough to pay the wages on Friday evening. There is no bottomless pit. I am sure that the witnesses have come across a lot of people like that, so well done on the work that they are doing.

What can we do to help? The witnesses' request is not for a new costly architecture, but targeted, modest and phased investment in return. What would that consist of?

Ms Siobhán Finn:

What we would like to see is a process where we as an organisation could potentially support centres and hubs on a curated journey of change if there is a business model that needs support, tweaking and adjustment or, if it is not working at all, to be changed. Rather than getting to a point where I am taking a phone call from a manager of an enterprise centre that has been in existence for 20 years saying that they cannot afford to pay their membership fee this year and are closing by the end of the year, my first reaction is to tell them not to worry about the membership and to ask what we can do for them. They had got to a point where their business model had failed, but they had nowhere to go in the five years coming to that point to get the kind of support they needed other than advisory supports from the likes of myself or having conversations with the likes of Mr. O'Connor and Ms Frayne around the country. I would describe it as a type of citizens advice bureau for the enterprise centre sector where they can come and get that curated support, mentoring and interventions like the QHubs programme and a framework to help them to do what they need to do to stay alive within their local communities.

Pat Gallagher (Donegal, Fianna Fail)
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I wish to draw a comparison. We can fully identify with the people who have to be an expert in every aspect. They could be a TD. When people come to us, we almost immediately have to be an expert in everything, even down to surgery and making contact. The witnesses' job can be a difficult one, but I wish them well. I hope that the Department and the Government will fully realise that, without the witnesses' organisations, we in rural Ireland in particular but also elsewhere would be a lot worse off.

John Paul O'Shea (Cork North-West, Fine Gael)
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I thank Deputy Gallagher very much. It was a good way to finish.

On the complication with the grant system that Mr. O'Connor and Ms Frayne mentioned, what were the main problems in that grant system? How could things improve?

Mr. John O'Connor:

When I looked at it initially, there was the de minimis change up to 15 years. It was only three years up to that point. I realised that means I cannot apply for a grant for 15 years or I have to pass it onto the tenants in the centre. They are all looking for grants. That is their de minimis gone as well. I said that I was not going to do that. That was before I looked at the application form at all. When I did look at it, it was so tedious.

The Enterprise Ireland grant that was given during Covid asked us what we wanted as opposed to prescribing what we could be given and making us jump through thousands of hoops before we could get it. That is the way that I saw the smarts region grant.

Ms Siobhán Finn:

There is significant complexity around match funding depending on the stream one goes under. As I mentioned, there are four. In the case of stream 2, which is supporting cluster consortia, it is a 50% match funding. That match funding has to either come from existing reserves or you have to draw down your loan. As Ms Frayne explained, drawing down loans for enterprise centres is a significant additional draw on resources. Stream 3, which is programmatic and intervention, was 80:20. It was 20% match funding, but there was also the challenge of the de minimis to pass through. Stream 1 was hugely challenging. As a case in point, two applications that I am aware of around the country that secured funding required the involvement of the local authority. There were all kinds of penalties and clawback mechanisms around the structure of the funds. Understandably, the local authorities were cautious in their approach to drawing it down. The fourth stream was around priming and feasibility. Again, that is 80:20 match funding. For example, we are in the midst of finalising a feasibility application. That is an 80:20. From our reserves, we will draw 20% of the cost of the project, which is around €60,000 or €70,000. However, it is for the benefit of the sector, so why are we funding a feasibility study at 20% when the benefit goes into the sector and the wider economy? Why is it coming from our reserves as a non-profit? That is the big piece that is hugely challenging. There is an irony in there. The number of enterprise centres and hubs that we work with and that exist around the country are all companies limited by guarantee. They are non-profits. They are supporting the creation and sustaining of at least 18,000 full-time jobs, the majority of which are in the private sector.

Mr. John O'Connor:

To add to that as an enterprise centre manager and a director of CEAI, who is going to pay for Ms Finn and Ms Kulkarni's salaries? We still have to give 20% of our budget to a feasibility study to help enterprise centres.

John Paul O'Shea (Cork North-West, Fine Gael)
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That was very well explained.

Mr. John O'Connor:

The CEAI has no natural income. At least it can be said that centres have a natural income. The association itself does not have any form of income, but we need it.

Ms Siobhán Finn:

We have to be mindful too. Most of us, especially those of us constituted as CLGs, will have a voluntary board of directors. We always have to mindful of not putting our voluntary board into a position that is not comfortable.

If we are taking on borrowings or whatever, we must be mindful that people have given their time freely to help with governance, strategy and direction. When we are applying for various things and looking for funding, we must strike a balance to ensure our financials, etc., are properly put in place.

Pat Gallagher (Donegal, Fianna Fail)
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Ms Finn is the chief executive officer. Does the CEAI have a national board?

Ms Siobhán Finn:

I have a board that has national representation on it. Mr. O'Connor is one of my fellow board members and directors. We draw representation from centres and hubs right around the country.

Pat Gallagher (Donegal, Fianna Fail)
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Does the CEAI board include an official from the Department?

Ms Siobhán Finn:

The Department and Enterprise Ireland cannot have board members or cannot put people on our boards, certainly on the board of the CEAI. I am not sure about the centres themselves. I had this conversation with Enterprise Ireland recently. It can nominate somebody to sit on an advisory council for us, which we are in the middle of pulling together at the moment, but not onto our board as a director.

Pat Gallagher (Donegal, Fianna Fail)
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That is a pity because such a person could act as a conduit between the CEAI and the Department.

Ms Siobhán Finn:

Yes, 100%.

Mr. John O'Connor:

There is an issue with a conflict of interest in trying to get a grant off Enterprise Ireland if a person is a director as well.

John Paul O'Shea (Cork North-West, Fine Gael)
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Of course, yes. We are out of time. I thank all of the witnesses. I thank Ms Finn and her colleagues for their attendance. I also thank them for providing the briefing materials in advance. We very much appreciate that. This discussion will provide a lot of food for thought in terms of the future commitment of this committee. I propose that we suspend for five minutes to facilitate a change of witnesses.