Richard Bruton (Dublin North Central, Fine Gael)

We debated these issues on Committee Stage. Before discussing amendment No. 3, I wish to clarify a point. In case Deputy Tóibín believes there is just €10 million available for lending from this fund, the sum of €10 million is the equity going into the micro finance fund from the Department's budget. That is the equity on which borrowings of up to €25 million can be leveraged. In addition, the capacity to provide an additional €15 million in equity is permitted under the legislation. As we discussed on Committee Stage, the capacity of this fund, which is €10 million in equity and a maximum of €25 million in lending, is to lend an estimated €40 million over the next few years. The additional equity would allow for leverage up to the €100 million target we have set overall.

While I understand Deputy Tóibín's anxiety that micro finance play an important part, we have conducted much analysis of the level of demand for this type of lending vehicle and we are satisfied, on the basis of the assessment, that this will meet all the needs. However, considerable headroom has been built in so even if demand exceeds our expectation, there is plenty of headroom under the legislation. The advantage from the point of view of this House is that we will have to come to the House to secure its permission to increase the equity and Members of the House will have an opportunity to examine the success of the scheme. It is not bureaucracy but striking a balance between the two. While I understand what the Deputy is trying to do, I believe this is fair, reasonable and based on good practice in the House.

Amendment No. 3 is probably not adequate to achieve what the Deputy desires. The purpose of section 12 is to set out the name of the subsidiary and identify its share capital and ownership. Sections 3 and 4 list the share capital of the subsidiary as €1, which will be issued to Social Finance Foundation. It is indicated that the share capital cannot be revised without the consent of the Minister. The amendment seeks to remove the limitation on the share capital and the inalienability of the share. It offers no alternative structure for the subsidiary and the intent of the amendment is not clear.

As I understand it, the Deputy is concerned the Minister will not have sufficient belt-and-braces control over the operation of the fund. The Deputy proposes a fully fledged State-sponsored body. In the time available, the costs and benefits could not be detailed in a comprehensive paper. There are really no great benefits and only costs arise from the Deputy's proposal. What he proposes would require a full-time, permanent staff and executive. We would have to commit to pay and pensions in respect of the positions if they were created under a fully fledged statutory State body appointed by the Minister. It would be a much more inflexible tool and would be much more costly to put in place.

The Deputy asked whether the Minister would have sufficient controls to ensure the board will act in accordance with public policy and not go on a solo run. I can provide him with assurance. The board will be appointed by the board of Social Finance Foundation but following consultation with the Minister for Jobs, Enterprise and Innovation and the Minister for Public Expenditure and Reform. The board will consist of key stakeholders, including the Social Finance Foundation, the banks, the county enterprise boards or local enterprise offices, First Step Microfinance and other appropriate organisations. The board will have experience in micro-finance. It will meet quarterly and will provide regular updates on progress to the Minister. It will publish annual reports, which will be available to the Houses. Financial statements will be laid before the Oireachtas and there will be an audit and risk committee to oversee performance. There will be a credit committee.

The body's memorandum and articles of association will set out its remit and this will be a published document. The scheme I will be laying before the Houses will be the one in accordance with which the body will be delivering services. The body will be subject to audit by the Comptroller and Auditor General, as with every other State body. The due diligence of the European Investment Fund in respect of micro-finance agencies will apply. Deputy Tóibín is very keen that we draw on this. We have been drawing on it only to a limited extent to date under First Step Microfinance. There will be a due diligence procedure protecting the relevant moneys, including those of the State. We have committed ourselves to an internal review and to publishing a review after two years. The body will be subject to ethics in public office and freedom of information legislation.

All the reasonable controls that one could expect for a body are being put in place. The heavy commitment and governance involved with the setting up of a quango do not arise. What I propose is a more flexible way of responding to the need. Given the list of controls, I believe the Deputy can be satisfied the new body will stick to its remit. Its representatives will be happy to appear before the committee, of which the Deputy is a member, to account for its stewardship. We are meeting the needs about which the Deputy has rightly raised concern.

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