Dáil debates

Friday, 17 October 2014

Social Clauses in Public Procurement Bill 2013: Second Stage [Private Members]


10:30 am

Photo of Tommy BroughanTommy Broughan (Dublin North East, Independent) | Oireachtas source

I warmly congratulate Deputy McDonald and her Sinn Féin colleagues on their introduction of the Social Clauses in Public Procurement Bill 2013. I agree strongly with its basic principle in providing specific recognition of the need to hire unemployed persons and apprentices on publicly funded contracts through the use of social clauses. This is an issue I have raised before with the Minister for Public Expenditure and Reform, Deputy Howlin, in the House. Deputy McDonald also mentioned European legislative developments in this area, as well as the initiatives taken by the former Northern Ireland Minister for Regional Development, Conor Murphy, which we could emulate on this part of Ireland.

I note that there has been a small pilot programme on the Government's part to ensure that a certain percentage of workers hired on public contracts come directly from the live register, particularly in the schools building programme. However, I have major concerns about how this is working generally. Serious issues having been raised by workers and trade union representatives about the effect of their being forced to become self-employed through the RCT, relevant contracts tax, system.

The Bill is timely given the commitment of the Government in budget 2015 to increase capital expenditure for the first time in seven years following cuts of 70% since 2008. The welcome small resumption of a social housing programme will bring into sharp focus the need to ensure that the Government's stated aim of getting people back to work is actually realised, and the use of social clauses as proposed in the Bill is one of the measures needed.

Another issue that has come to my attention recently is the urgent need to get local unemployed people working on local projects, particularly construction projects, which may arise in their areas. I recently met unemployed constituents who again proposed that local unemployed construction workers, of which there are a significant number in Dublin Bay North, should be hired on a housing project due to commence soon in Darndale, Dublin 17. One of my local colleagues, Councillor Larry O’Toole, has been interested in pursuing this issue.

Section 2 outlines the requirement for social clauses to be contained in public procurement contracts worth more than €1 million. Section 2(b) provides for the hiring of one unemployed worker for every €1 million of project value, while section 2(c) provides for the hiring of one apprentice for every €2 million of project value. Sections 3, 5 and 6 provide for invigilation by the Office of Government Procurement of compliance with the social clauses as proposed in the Bill.

I welcome the Bill's provisions. I am also grateful for the useful note prepared by the Library and Research Service on it. However, its paper refers, as did the Minister of State this morning, to an alleged potential negative implication of the Bill - that is, the costs associated with enforcement of social clauses. Developers and employers might raise such an issue. Surely any costs associated with such an invigilation process, however, would far outweigh the benefits of increasing employment opportunities for the significant number of construction workers who remain unemployed since 2009.

Like other Members, including Deputy McDonald, I previously asked the Minister for Public Expenditure and Reform, Deputy Howlin, how social clauses in public procurement contracts could be applied. When I last asked him about it in April, he informed me of the approval last year by the Government’s contracts committee for construction of a pilot initiative to be included in the National Development Finance Agency’s devolved schools programme. The Minister stated:

A clause has been included in the contract which requires that 10% of the person-weeks worked on the contract be undertaken by individuals recruited from the ranks of the long-term unemployed. There is also a requirement for 2.5% of the person-weeks on the contract to be undertaken by apprentices.
However, the Minister suggested that such clauses could not be applied more generally to public contracts because of their displacement effect on employed people. I am not entirely sure if this argument would stand up to close scrutiny, particularly when we have such significant levels of unemployment in the construction sector. The introduction of new public capital contracts will inevitably involve the need to recruit additional workers who are not already in employment. Being involved in other local community development projects in Dublin Bay North, I have noted that several companies can be involved in a contract, or one could be partnering a small local company. There may be scope through local development bodies to implement this social clause provision.

I have also asked the Tánaiste and Minister for Social Protection, Deputy Burton, and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, for their views on how more employment opportunities could be created for unemployed construction workers on public contracts. They expressed support for the initiative from the Minister for Public Expenditure and Reform. The pilot scheme in place, however, is just a small first step. The former Minister for Education and Skills, Deputy Quinn, advised me in April that across three contract bundles for building works on 15 schools, eight unemployed people had been hired in one of the contract bundles, with only a further two hired in the other two contract bundles. Still, I welcome the ongoing progress of the pilot project as outlined by the Minister of State this morning and the fact that he is to accept this Bill.

A related concern, of course, exists with regard to the schools building programme in its treatment of workers on some sites operating under the programme. I have referred to this issue on several occasions in this House, including last week during the debate on the Workplace Relations Bill 2014. I, as well as Sinn Féin and Fianna Fáil Members, have asked numerous Ministers to address the concerns of workers on some of the sites. The primary issue at the heart of the whole matter is the continued use of the RCT system to force construction workers into self-employment and very low wages. This is borne out in the statistics, which show that the majority of RCT workers are registered in the construction sector, representing around 40,000 people each year. Some workers on these sites allege that the RCT system is being forced upon them to drive down the overall price of the job. I recently referred my concerns about the matter to the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Nash, who informed me he would take the matter up with the Department of Social Protection and the Revenue Commissioners. A dramatic change in the treatment of construction workers is needed. I noted that in his budget speech the Minister for Public Expenditure and Reform cited the success of the schools building programme and said it was the preferred model to be employed in the social housing projects pledged by the Government. I presume legislation will be introduced on the new off-balance-sheet vehicle to which Ministers referred last week as part of the response to the desperate need for housing.

There is also a need to provide locally based construction employment opportunities. Over the past few years, I have been asked several times by unemployed construction workers in Dublin Bay North about whether there should be a social clause in all public procurement contracts mandating the employment of workers registered in our local exchanges in Coolock and Kilbarrack. The most recent figures for September 2014 show that between the two offices there are over 8,500 people on the live register. During the past year there has been a particular focus on the final phase of the Darndale parish refurbishment at Buttercup Park. This has been ongoing since Garret FitzGerald was Taoiseach. We have battled for this last phase for the past ten years. It is expected that the work to construct 35 homes in north Buttercup will commence shortly. Yet, in an area with some of the largest numbers of unemployed construction workers, there is no commitment to employ workers from the north Coolock-Donaghmede ward of Dublin City Council. Unemployed workers ask why the council does not insist on a provision in public contracts whereby even 10% to 15% of local unemployed construction workers would be considered for those positions. I know that colleagues on the council have been trying to pursue the involvement of local small and medium-sized enterprises in major contracts. In the huge North Fringe district of Dublin City Council and Fingal County Council there is a plan to build up to 30,000 houses, which would comprise a town similar in size to Tralee. It is remarkable that over 5,000 homes and thousands of square metres of commercial development were built in this region during the Celtic tiger years with little or no local labour. It must also be noted that some of the construction, such as that of the notorious Priory Hall, was of a very poor standard.

I have been a director and board member of the Northside Centre for the Unemployed for nearly 25 years.

We recently passed a motion which strongly supported the idea of social clause contracts and greater local involvement. I warmly welcome Deputy Mary Lou McDonald's Bill. In the past seven years skilled construction workers have suffered greatly owing to the building crash and it is critical that they be facilitated in returning to the work at which they excelled and which earned them a decent living during the good times.


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