Róisín Shortall (Dublin North West, Labour)

I thank the Leas-Cheann Comhairle.

FÁS, as an organisation, was let down by senior staff, such as Mr. Roddy Molloy and others, some of whom have left and some of whom remain in senior management positions. They discredited the organisation and were more interested in feathering their own nests, living a high lifestyle at the expense not only of the taxpayer but of unemployed persons who were looking to FÁS to help them access training and employment. That was the real mistake of those staff. Not only did they waste public money, but they did not serve their clients. For that reason, I welcome the proposal to split FÁS. There is much good work being done at local level by area managers with employment services and training services, but as a brand, FÁS has been tarnished and because of the discredited senior management in the organisation, FÁS needs a clear new focus. I welcome the fact that the functions are to be split between the Departments of Education and Skills and Social Protection.

Not only is responsibility for the organisation changing to another Department, but the employment services are being incorporated into the Department of Social Protection. That is a good move which I support, but I hope it will not be merely a matter of changing the name or status of those who work in FÁS. The Minister must avail of this opportunity to radically reform, modernise and streamline the employment services so they are fit for purpose and respond to the needs of the unemployed, in terms of identifying gaps in their skill levels, the kind of training they require, where that training is available and the work opportunities available to them. They must ensure the unemployed are best placed and best qualified to apply for employment opportunities that arise.

At present, the organisation is a mess. When people lose their jobs, they go to the social welfare office to get their payment which is their immediate concern, but that should be only one aspect of the welfare system. Welfare payments help people survive financially, but the other side of the coin must be to ensure people remain dependent on the dole for the shortest possible period and that they are aware of all of the available training, education and employment opportunities. That must be the responsibility of the Department of Social Protection. In the past, there has been tokenism in this area in terms of jobs facilitators - only 67 of them to deal with the considerable numbers of those unemployed - and what the Department of Social Protection was doing was completely disjointed from that which other agencies were doing. I welcome the fact that the employment services are coming under the Department of Social Protection but it must result in added value for everybody involved. This opportunity must be used by the Minister to transform the way the system operates.

On a regular basis persons who make contact with my office ask how they would be affected financially if they went on a training course, if they were to take up part-time work, temporary work or casual work, or if they were to go into work full time. They want to know how that would affect their take-home pay. I do not know if there is anybody within the Department who is qualified to do that kind of assessment or analysis for a person. That is what people want to know. There does not seem to be anybody in the Department who can do the sums, who knows fully how the tax system or the welfare system works. When I say "fully", I mean it is not merely about getting the payments, but also about the secondary and in-work benefits. What we need are qualified staff who understand the welfare and tax systems and who can give that basic information to people.

We also need staff in the Department, whether they come from FÁS or are originally staff from the Department, who will meet on a regular basis persons who are unemployed to ask them about their needs and to ensure we have a good profile of all of the unemployed in terms of their skills level and gaps in training. We can then match those gaps with the courses being provided. That might sound like basic common sense, but that is not happening in many areas. FÁS sometimes provides certain courses for which there is no demand. Equally, there is a kind of overlap, and sometimes gaps, in services where FÁS might be doing one thing but the VEC is doing something else, or the local secondary school, the local partnership or the LES are providing other courses. The Minister needs to bring coherence to all of those services and agencies. There must be a one-stop-shop approach. That means that when a person signs on, he or she will be interviewed and provided with the basic information, advice, support and encouragement to get off jobseeker's payment as soon as possible. I hope the Minister will use the opportunity to do that.

I also hope when the Department takes over the employment section of FÁS that we will have sound data on what is happening. This morning, at the Joint Committee on Social Protection, we were talking to SIPTU and OPEN about the question of progression from CE and there were no data available on the length of time persons remain on CE. There is much confusion about how long one is allowed remain on CE, but there is no information available on the level of training of CE participants, for example, how many CE participants would have a FETAC level 5 award by the end of their CE training. We need this basic information because the focus of CE - I accept many of the services provided are worthwhile - must be on progression from the point of view of the unemployed. They must enhance their skills so they can move out into the open labour market and get work. We have no data on this and I hope that under the new arrangements we will have up-to-date data on what is happening here.

The other major area is with regard to rent supplement. I am quite disappointed with the Minister's proposals on this. They do not go anywhere near far enough in terms of what is required. In September 2008, the Committee of Public Accounts, having examined the entire area of taxation of rental income receipts, published a report. It found a hopelessly poor rate of matching PPS numbers. While the Department of Social Welfare, as it was at the time, asked for PPS numbers it matched less than half of them. Most of them were untraceable or bogus, which was incredible. The Committee of Public Accounts returned to the issue earlier this year when the Department came before the committee. We asked what was happening with regard to tax compliance of landlords in receipt of rent supplement given all the attention that was focused on it. We were told that PPS numbers could be traced for only 31,000 of the 96,000 tenancies.

I welcome the fact that the Minister is taking some steps but he is not going anywhere near far enough. His two predecessors used to state this had nothing to do with them as it had to do with the tax office. This approach is no longer acceptable. If €520 million of taxpayers' money is going to pay private landlords, the least we can expect is that the Department of Social Protection will play an active role in ensuring full tax compliance in the payment of this vast amount of public money. To date, the Department has been extremely lax in this area.

What the Minister proposes today is not enough. He has stated that the PPS number will be requested. Many landlords cannot be traced; nobody ever sees them or hears their names or addresses as agents are used. How will the Minister deal with the PPS number in such situations? A significant and growing number of landlords receiving rent supplement are non-resident. The minimum the Minister should do with regard to non-resident landlords is to introduce a withholding tax of 20%. There is no way this money should be paid without the State getting some tax clawback.

Overall, with regard to resident landlords, what the Minister needs to do is to ensure full tax compliance. A tax clearance certificate should be obtained before the State pays rent supplement. This happens in many other areas where grants are paid, for example grants to builders for bathroom conversions. A grant will not be paid unless a tax clearance certificate is produced, and the exact same should happen with regard to rent supplement. It is not enough even to do this. The area of rent supplement is crying out for major reform. In his speech, the Minister spoke about wanting to be a reforming Minister. This is probably the area in greatest need of reform.

Yesterday, we spoke about the perception that many people on welfare are better off staying on welfare rather than taking a job. This is not true; the vast majority of welfare recipients would be better off, and significantly better off, in employment. However, there is one category of welfare recipients for whom there is little or no incentive to go to work and this is people in receipt of rent supplement because of the way with the rent supplement system operates at present. The Labour Party proposes a number of reforms in this area. The ban on people working full-time receiving rent supplement must be removed. The withdrawal rate is far too drastic and this is the difficulty.

Yesterday, I gave the Minister the example of a married man with two children. If he moves from being on the dole to taking up a job he stands to lose €60 a week, not because welfare payments are too high or because the dole is too high but because of the way in which rent supplement operates. If there was a graduated withdrawal of rent supplement and if the automatic ban on receipt for anybody working 30 hours or more a week was removed a huge incentive would be provided for people to take up employment. This is the problem at present. Not only would this encourage people to take up rent supplement, it would result in significant savings for the State. A total of €19,000 or €20,000 a year would be saved if a member of a couple went back to work. It makes absolute sense to reform rent supplement and tackle it.

With regard to tax compliance, what the Minister should do is what several agencies have been imploring him to do for some time, which is to make local authorities responsible for rental support and pay rent supplements directly to the landlord. This is how abuse, tax evasion and social welfare fraud would be cut out. Significant issues are raised, such as some tenants not passing on the full rent supplement and landlords demanding top-up payments. There is much abuse in this area as the Minister well knows and the way to tackle it is to make the payments directly to landlords and not to catch the tenants in the middle. Every year, we lose millions of euro through deposits going astray because they are not given back by the landlord or because the tenant does not return them.

The Labour Party has calculated that if these reforms are introduced along with reform of the deposit system there is potential to save at least €100 million a year. If the Minister wants to make savings in welfare there are ways to do so that do not hit the most vulnerable. We are stating that €100 million could be saved in rent supplement in the coming year and €400 million could be saved over the next five years if the Minister were to introduce the reforms suggested by the Labour Party. Not only would this be a saving to the State, it would mean there would be incentives for people on welfare to go out and work. It would be worthwhile to do so, which it is not at present for many of them.

With regard to fraud, I want to express serious scepticism about the Minister's proposals for electronic certification, which are contained in the Bill. The system needs to be modernised in many ways, but what the Minister proposes with regard to people signing on by way of mobile phone concerns me. Given the level of fraud that already exists in the Department, I urge the Minister to tread very carefully in this area. He should start with a very small pilot scheme and rigorously analyse its findings. I am concerned it would open up the potential for further fraud. I am disappointed at the conservative targets for tackling fraud which the Minister is setting in the Department. It has been some time since the Minister has come anywhere close to meeting those targets.

I hope the public service card is available and is used widely in the coming months. I am disappointed there has been slow progress on it. I certainly hope the public service card will provide for biometric information. People who defraud the social welfare system are the enemies of those who genuinely depend on it. The Minister has a serious responsibility to ensure that he deals with budgetary pressures by eliminating fraud. This can be done on several fronts and we have given him ideas on it.

I look forward to a more detailed briefing on the amendments signalled by the Minister today. I hope we have it prior to Committee Stage.

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