Tommy Broughan (Dublin North East, Labour) | Oireachtas source

I welcome the opportunity to participate in this debate. I recall, probably like the Leas-Cheann Comhairle, participating in debate on the Industrial Development Act 1993 which put the three industry support State agencies - Forfás, Forbairt, now known as Enterprise Ireland, and the IDA - on a secure legislative basis. The 1993 Act was enacted in response to growing concern that the existing IDA was placing too much emphasis on attracting and supporting foreign-based multinationals and the fear that indigenous industry and business were not receiving an adequate level of State support. That concern very much existed in the early to mid-1990s and it still exists today.

While I welcome the Minister's stated intention of strengthening the capacity of the Department of Jobs, Enterprise and Innovation to drive job creation policy, I have some deep concerns that dissolving Forfás entirely may have a detrimental impact on the development of a coherent enterprise policy framework for Ireland. The Government repeatedly talks about its job creation schemes, such as the Action Plan for Jobs, and promoting job creation but despite Deputy English's comments, we still have an unacceptably high unemployment figure, with aeroplane loads of our best and brightest young people leaving this island.

A detailed analysis of the recent unemployment figure shows that part of the reason for the decline in the headline rate is due to increased take-up of schemes supported by the Department of Social Protection, such as JobBridge, but these schemes are doing little or nothing to promote enterprise. One of the lauded measures in budget 2014 was the start your own business scheme but in reality the scheme is very limited in its application and reach in only being available to personsunemployed for at least 12 months. Of course, many credit schemes have been developed by the Government but there still appears to be a lack of a co-ordinated and coherent approach to the direction the economy will take in the coming years.

Professor Seán Ó Riain of the department of sociology and the National Institute for Regional and Spatial Analysis at NUI Maynooth recently presented a paper, Enterprise Policy and Ireland's Economic Recovery, at a seminar organised by the Nevin Economic Research Institute. Professor Ó Riain gave a comprehensive account of Ireland's past and current approach to enterprise policy, including some of the key strengths and weaknesses of the policy. He referred, for example, to Ireland's reliance on FDI and continued difficulties of policy in supporting and developing indigenous enterprise. He has a positive outlook on some elements in his survey of enterprise policy, in particular the success in the software sector. However, he stated that "existing industrial policy has been relatively weak in addressing the links between the domestic and export economies".

The economist, David McWilliams, made the same point in today's Irish Independent in regard to the Cork city business region. According to his analysis, there are two distinct economies in Cork. One is the relatively high paying pharmaceutical industry clustered around Cork harbour - it is the highest paying industrial area in Ireland - which has provided good jobs over the years but which is subject to the vagaries of US and EU innovation and related supply and demand for medicines and pharmaceutical products. The other is the indigenous industry and business, with many shops and businesses throughout the city closed or desperately struggling to meet high rents and rates and other high fixed costs. These problems are on top of a lack of credit for SMEs.

In this context, the almost total failure of the Minister and his team to address the problem of high costs, including rents, for the domestic economy and to promote linkages with the export economy have been a key element in ongoing high unemployment and emigration. Professor Ó Riain has also has suggested that the "existing evidence suggests that the work of public institutions has been effective in supporting enterprise." I strongly support the State having a role in the conception and development of sustainable enterprise policy, in particular one that is supportive of indigenous industries. That is why I believe there a role of an enterprise policy unit, such as Forfás. Even though the staff and functions currently exercised by the agency will transfer to other agencies and the Department, I fear the dissolution of Forfás may have a detrimental impact on the development of Irish enterprise policy.

I recognise that Forfás has often, in its 20 year history, highlighted the linkages between national, regional and local enterprise policies and has had an important role to play in developing and supporting the State's overall enterprise plans but its dissolution is now taking place under this Bill. It was on the list of quangos Fine Gael, in particular, booted around the place before the last general election. The dissolution is also part of the so-called reform of the structure of local enterprise offices where existing structures are being amalgamated into local authorities. There is a fear that this so-called reform will undermine the independence of local enterprise schemes in supporting job creation.

I have been involved in local enterprise initiatives and supporting small businesses in my constituency for many years, as a founding director of the Coolock Development Council, which is now the Northside Community and Business Centre, and as a director of the Northside Centre for the Unemployed and the Northside Partnership. The Northside Community and Business Centre is a member of the National Association of Community Enterprise Centres which recently published a document showing that more than 9,000 new jobs were created in businesses in enterprise centres over the past ten years. It also suggested that 1,133 businesses would not have started if the enterprise centres did not exist. Clearly, community enterprise centres have had a very supportive role in job creation.

However, I share the concerns that are being felt by many of most dynamic partnerships and local leader operational areas - one of the best of those companies is operating in the constituency of the Minister of State, Deputy Sherlock - that future absorption of these community economic structures into local government will impede their social entrepreneurial instincts and achievements. For example, I noted that during the Ó'Cuív-Fianna Fáil-Green Party era that local partnerships and development companies were being more circumscribed and spancelled by Government Departments. I often had it out with Deputy Ó Cuív, when he was Minister, in this House and in the hallways.

The Minister, Deputy Bruton, has never been part of the social entrepreneurial movements in Dublin Bay North, although he was invited many times. He has chosen not to spend his time in local development, as I and others have done. The Minister is continuing that process. The dull hand of the Departments of Jobs, Enterprise and Innovation and the Environment, Community and Local Government will now envelop all the greatly reduced community enterprise structures. My experience in politics has been that Fine Gael and the Progressive Democrats, in particular, have always been deeply hostile to the social enterprise model and to social entrepreneurs, like my director colleagues and myself in Dublin's northside. In my first days in the Dáil, I remember hearing two deeply hostile speeches from the Tánaiste, Deputy Gilmore, and the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, on community development. They did not seem to understand that somebody on the left of politics should be at the forefront of social entrepreneurship.

Sections 17 and 18 refer to the transfer of Forfás functions to Enterprise Ireland and the IDA and the Minister, respectively. I acknowledge that the Minister stated that a strategic policy division will be created within his Department on the dissolution of Forfás. However, this is part of programme of centralising power and will undermine the independence that the existing policy unit in the current form of Forfás in developing and elaborating State enterprise policy. How are we to know that this strategic policy division will not become politicised and driven by the ideology of the Minister of the day rather than reflecting an objective view about the direction enterprise policy should take?

The CEO of Forfás recently informed the Committee of Public Accounts that co-locating the research capability of Forfás in the Department might shorten the gap between policy development and analysis and implementation for SMEs.

That might well be the case, but many people think the strategic policy unit could best serve this country if it had an independent role. I note that Forfás received €51.4 million in 2012. Is it not the case that moving the existing functions of Forfás to the other agencies will be more expensive? Several Fine Gael Deputies have suggested that it will be cost-neutral, but will that be the case? Will the management of current shared services continue, for example? The splitting of costs across multiple agencies and Departments often results in further expense for the State. I hope the Minister of State will respond to that point when he speaks at the end of this debate.

There does not appear to have been an independent evaluation of the performance of Forfás since its establishment. Therefore, it is hard to fully determine why it should be dissolved. Has the ESRI or any other independent economic entity reviewed the role and performance of Forfás to date and made the case one way or the other for its dissolution? The same point could be made about agencies like Enterprise Ireland, IDA Ireland and Science Foundation Ireland. I note that in 2012, the Forfás annual employment survey and found that 9,000 net jobs were created. This figure is almost negligible, given that nearly 400,000 people are unemployed.

A great entrepreneur, Mr. Chris Horn, recently made a valuable comparison between the national enterprise policies of New Zealand and Ireland. It was good to hear that New Zealanders fear us in the area of enterprise creation. That says something for us. Perhaps they are starting to fear us on the rugby pitch at long last as well. Mr. Horn's comments serve as a reminder that the work of Forfás and other agencies needs to be benchmarked against international comparators in countries like New Zealand, Singapore, Taiwan and Denmark. Israel, for example, often goes head to head with Ireland in trying to attract foreign direct investment in the computer area.

The dissolution of Forfás and the sharing of its responsibilities among IDA Ireland, Enterprise Ireland, Science Foundation Ireland, the National Standards Authority of Ireland and the Department of Jobs, Enterprise and Innovation must ensure barriers to enterprise and social enterprise in Ireland will be tackled. Constant invigilation and review of the performance of the Department and its agencies is critical for the full recovery and future development of the economy. I remain concerned about this Bill.

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