Joan Burton (Dublin West, Labour) | Oireachtas source

In the three years before the Government took office in March 2011 the number of people in employment fell by 300,000, one of the worst employment shocks any country had ever experienced following on from the disastrous bank guarantee. The number of people in employment has started to grow again and rose by 33,800 in the year ending in June 2013. In terms of the economy, that is a positive development. While there are still far too many people unemployed, both young and older, the trend is moving slowly but surely in the right direction. It is not moving as quickly as I would like, but it is moving in the right direction. This has had a beneficial impact on young people because the downward movement to a 28% youth unemployment rate in the first half of 2013 has bucked the trend in the European Union as a whole, in which youth unemployment has continued to rise. I am confident these positive trends will continue as the economy recovers. It is not fast enough for me and the Labour Party, but we are slowly but surely improving the situation.

Notwithstanding this return to growth, there is a requirement for specific national and EU-wide strategies to address the youth unemployment problem. The best way for young people to reach their potential is through decent, secure and fairly paid work. That has been my abiding political conviction since I first entered politics and it has informed me throughout my career. Sadly, we live in a world in which the availability of decent, secure and fairly paid work has contracted massively since the financial crisis. In addition to the scarring effect, there is an even more insidious aspect to youth unemployment - the bias and discrimination those who are unfortunate enough to be unemployed face in re-entering the labour market. Employers have a significant job to do in this country and on the island to get young people back to work. They have a critical role to play. My attention was recently drawn to US research which had found that employers would rather call back someone with no relevant experience who had been out of work for a few months than someone with lots of relevant experience who had been out of work for longer than six months. In other words, it does not matter sometimes how much experience one has. It does not matter why one lost one’s previous job; it could have been bad luck because one’s firm closed down and it had nothing to do with the individual. If a person has been out of work for more than six months, one faces an enormous uphill struggle to return to employment. That is particularly the case for young people who have never had a job or have limited work experience. That is why I have long advocated a formal guarantee that any young person will receive training, work experience or an apprenticeship within a short period of becoming unemployed.

The Government and the Department of Social Protection were at the forefront of securing agreement on the adoption of the European Council's recommendation on the youth guarantee. I decided to prioritise the recommendation as part of Ireland’s EU Presidency knowing that it set a significant target to achieve. It was not a case of running away and criticising but setting targets for achievements for young people. That was agreed at the meeting of social affairs and employment Ministers on 28 February in Dublin Castle under my chairmanship and formally adopted by the European Council in April. The recommendation urges member states to ensure all young people under the age of 25 years receive a good quality offer of employment, continued education, an apprenticeship or a traineeship within a period of four months of becoming unemployed or leaving formal education.

As part of the European Council's agreement on the EU budget for the period 2014 to 2020 it was decided, in association with the agreement on the youth guarantee, to provide €6 billion for a new youth employment initiative for regions with particularly high levels of youth unemployment. This funding will consist of €3 billion from the European Social Fund and an additional €3 billion from a new youth employment budget line. While it is recommended that the guarantee be implemented as soon as possible, it is recognised that implementation might be more gradual in some member states experiencing the most severe budgetary difficulties and higher rates of youth unemployment. At EU level, the Irish Presidency pushed for early production of implementation plans in all member states and payment of the €6 billion youth employment initiative to be front-loaded, in particular in the next two years, 2014 and 2015. Both suggestions were taken up by member states such as Ireland hoping to benefit from the youth employment initiative. As required, we are producing implementation plans by the end of this year and the remaining member states will produce their plans by next April. The €6 billion youth employment initiative is being front-loaded as suggested by this country. For our part, the Government is reviewing the current range of youth employment policies in Ireland to assess what measures will need to be taken to commence implementation of the guarantee. In line with other member states benefiting from the youth employment initiative, we intend to produce a concrete plan for implementation of the guarantee before the end of this year when it is to be formally decided and agreed to by the Heads of State.

Ireland was successfully awarded funding from the European Commission for a pilot youth guarantee project in Ballymun earlier this year. Numerous stakeholder organisations such as IBEC, Ballymun Job Centre and the National Youth Council of Ireland have agreed to participate in the pilot project. The Government has commissioned the OECD to assist in developing a youth guarantee implementation plan. It has been asked to identify best international practice and how it might best be applied to Ireland. The development plan will be completed before the end of the year in time for the commencement of the 2014 budget. The Taoiseach and I spent a day in Paris last week meeting our counterparts, the Ministers for social affairs and employment and the respective Heads of State in a series of discussions under the aegis of the French President and my counterpart, the Minister for employment and social affairs, which confirmed continued support for the youth guarantee with a view to implementing the programme in 2014.

It is important to recognise that we already operate a number of programmes to assist young unemployed persons and keep young jobseekers close to the labour market. Five main approaches are being taken to tackle youth unemployment: education, training, job search assistance and guidance, work experience and encouraging job creation. These actions range across a number of Departments and agencies and include the JobBridge national internship schemeoverseen by the Department of Social Protection which is focused on providing work experience for young people aged under 26 years. A recent independent evaluation of the scheme by Indecon Economic Consultants indicates that three out of five of those who complete their internships subsequently progress into paid employment.

This 61% progression rate is one of the best outcomes for such a scheme anywhere in Europe. Thirty-three thousand people have been involved in JobBridge, which is entirely voluntary. More than 9,000 firms and organisations have offered to host JobBridge internships. Both figures are quite remarkable in such a short period.

With regard to education and training, the Youthreach programme provides 6,000 integrated education, training and work experience places for early school leavers without qualifications or vocational training who are between 15 and 20 years of age. The back to education allowance scheme run by the Department of Social Protection provides income maintenance for unemployed people returning to further or higher education. More than 6,500 young people participated on this scheme in the previous academic year. There have been well over 20,000 participants overall.

Approximately 12,000 persons aged under 25 completed a training course with FÁS in 2012. This excludes apprenticeships and evening courses, which are additional. This year, MOMENTUM, a scheme for education and training interventions that is part of the Government's Action Plan for Jobs initiative, has been rolled out by the Department of Education and Skills.

A new recruitment incentive called JobsPlus, established in July, has been developed by the Department of Social Protection. Under this scheme, employers will receive an incentive of €7,500 for recruiting a person unemployed for between 12 and 24 months, and an incentive of €10,000 for recruiting a person unemployed for two years or more, paid monthly by electronic funds transfer for each month of employment the employer gives. At a typical starting wage, this incentive covers the cost of approximately €1 in every €4 of an employer's wage costs. This mirrors what happens in countries such as Austria where there is a direct wage subsidy to the employer. Young people are likely to be major beneficiaries of this initiative as employers tend to hire young people when there is a recovery in employment. From 1 January, the scheme will be open to any young person under 26 who is unemployed for more than six months. There will be much interest among employers.

The scale and nature of any additional measures required for the implementation of a guarantee at national level will depend on the trend in youth unemployment and, in particular, the number of young people likely to experience periods of unemployment of more than four months under current policies. While recent trends have been positive in this regard, the implementation of a guarantee will almost certainly require an expansion in the range of opportunities on offer to young people in the form of further education and training internships, subsidised private sector recruitment and supports for self-employment. Expenditure on these programmes is substantial. It is estimated that the cost of participation on relevant programmes by unemployed young people in 2012 exceeded €170 million. This relates only to programmes aimed primarily at the registered unemployed. There was substantial further expenditure on schemes such as Youthreach, which is aimed primarily at younger early school leavers.

As I stated, we are extending JobBridge to those who are unemployed for just six months and in the relevant age group. An additional 1,500 young people will be allocated positions under the scheme. We are ensuring an additional 1,000 places on the Tús scheme. We are developing a pilot programme to support young unemployed people under EURES. Some 2,000 training places for under-25s are being ring-fenced by the Department of Education and Skills under the MOMENTUM programme, and we are starting a young entrepreneurs programme through the Department of Jobs, Enterprise and Innovation. In total, the provision across these headings in the 2014 budget is €46 million. I am not quite sure where the Sinn Féin figure came from. I suspect it is one figure in the budget of the Department of Social Protection alone. I can check it for the Deputies. I believe their figure is erroneous.

I look forward to the negotiations reaching a successful conclusion. Next year, we will be spending close to €100 million on the relevant programmes in addition to what we have been spending. I look forward to young people getting a series of expanded opportunities.

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