John Perry (Sligo-Leitrim, Fine Gael)
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I thank the Ceann Comhairle for allowing me to raise this very important issue, and the Minister for attending.

The role of the county enterprise boards, particularly that of Sligo County Enterprise Board, is of great concern regarding small companies. The parent company, the Department of Enterprise, Trade and Employment, is in the process of adding further constraints on how it operates with smaller companies. The concern is that such constraints, affecting up to 2,000 small companies in Sligo with fewer than ten employees, are not in the best interests of the development of small enterprise. It is estimated that up to 20,000 people work in such small companies.

While I certainly welcomed this week's announcement on funding for Enterprise Ireland for larger companies, when it comes to the development of smaller ones, funding for enterprise boards is a little over €1.5 million. There is potential for job creation, and it certainly has a great impact if up to 20,000 people are employed in 2,000 companies in Sligo.

Small businesses face great difficulties, including burdensome and costly administrative regulations, rising local authority charges and high rates. Many business people feel that they receive no return on these charges. Water charges are high, and yearly rate increases bring little or no benefit. There is poor access to information and advice and inadequate infrastructure. It is difficult in certain cases when one is starting small to access finance, and there can be a weak management capability.

All those smaller companies are starting from scratch, and it is particularly important that we consider the level of support for them. The enterprise boards need a high level of capability, but there has been limited engagement by the Department with the boards' chairmen and voluntary directors, showing little appreciation of people's continuing role in development when working on the boards. It is very unfortunate when one considers the opportunities for job creation in the economy of Sligo or any county. There has been a lack of development and great emphasis on job creation. Some 85,000 small companies in Ireland employ up to 347,000 people, and in Sligo up to 2,000 companies employ perhaps 20,000, yet there is a lack of back-up to exploit potential.

Within the last three years, some €650 million was stolen from the social insurance fund, despite the great contribution of employees and employers who receive little or no support. That is true of the services sector but also of manufacturing and those who set up in small enterprise parks. It is not merely about retail but about the creation of enterprising, manufacturing and IT jobs, which is a very important role. The Minister should consider the level of funding. Enterprise Ireland in Sligo, based on the announcement made during the week, supports high-potential start-ups, which means companies based on technological innovation likely to achieve significant growth in three years, sales of €1 million per annum, employing ten or more, export-oriented, and ideally led by an experienced team with a mixture of technical and commercial competence. That definition includes early-stage, product-led, research and development companies, with equivalent sales and employment potential. These are the companies with which Enterprise Ireland is dealing.

I believe that from the small acorn the large oak grows. Nothing is happening with small companies, and while the competition is very important in the retail trade, the manufacturing sector is different. There is an institute of technology in Sligo, and thousands of students are leaving the region. It is regrettable that there is not more support, and I call on the Minister of State to deal directly with enterprise boards, which are the vehicle for it. Small companies, the backbone of the economy, need that. The Government has failed to deliver to them, especially in the Sligo region.

Tony Killeen (Clare, Fianna Fail)
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The core function of the county enterprise boards is to develop indigenous enterprise potential and stimulate economic activity at local level. In carrying out that function, the CEBs have performed extremely well over the last 13 years, making a significant contribution to direct job creation and the development of an enterprise culture throughout Ireland. Over that period, the boards have supported some 17,000 projects, which resulted in more than 30,000 new jobs being created. In addition, some 80,000 people have benefited from the management training provided by the boards. l acknowledge the vital role that the voluntary board members have made to ensuring that the work of the boards is effective and relevant to local conditions.

However, it is important that we regularly review and evaluate the types of support and assistance that the CEBs offer to ensure that they remain properly and appropriately targeted in the context of the changing environment in which the boards operate. The budget for the network of CEBs is now €30 million per annum, and there is a clear obligation on us to ensure that the money is used in an effective and efficient manner.

Against that background, a comprehensive review of the role of the CEBs was carried out by Fitzpatrick Associates in 2003, the tenth anniversary of the establishment of the boards. While endorsing the continued role of the CEBs in the delivery of State support to the micro-enterprise sector, the Fitzpatrick report made several recommendations designed to improve the overall effectiveness of the network.

The recent Small Business Forum report also endorsed what it saw as the key recommendations of the Fitzpatrick report: that CEBs should renew their focus on their core enterprise and entrepreneurship responsibilities, minimising the wider local economic development activities with which they had increasingly become engaged; that CEBs should gradually shift the emphasis of their activities away from the provision of grant aid support towards repayable supports, the provision of business information, advice, training and capability enhancement; that a central CEB co-ordination unit should be established in Enterprise Ireland to provide leadership, direction, technical support and shared services for the network of CEBs; and that the national micro-enterprise co-ordinating committee should operate fully and meet regularly.

The CEBs themselves were involved in the 2003 Fitzpatrick review, through both extensive consultations with, and submissions to, the consultants carrying it out, as well as through their representation on the steering committee that oversaw production of the final report. The subsequent recommendation that the CEBs be integrated into the mainstream enterprise development system by establishing a CEB central co-ordination unit in Enterprise Ireland was welcomed by the CEBs in their response document, Driving Entrepreneurship and Small Business in Ireland.

The proposed new central co-ordination unit in Enterprise Ireland was subsequently supported by the enterprise strategy group and approved by the Government in 2005. The role of the new unit will be to provide a range of strategic, administrative, financial and technical supports to the CEBs with the ultimate objective of enhancing the effectiveness, efficiency and impact of the CEBs and the development of micro-enterprise in Ireland and contributing to a greater level of consistency and best practice across the CEB network as a whole. The Department has been working with Enterprise Ireland and the CEBs regarding arrangements for the establishment of the new unit, and it is hoped that it will be operational within a few months.

The Department is firmly committed to active dialogue with the CEBs. Officials from the Department meet representatives of the CEB network very regularly. Those frequent meetings are used as a vehicle to explore the most appropriate and balanced way to respond to the evolving business and economic environment, including the implementation of the recommendations of the Fitzpatrick and other reports.

In the context of the dramatically more favourable business and economic environment, CEBs have been evolving their policy focus and client support interventions gradually over the years to reflect changing needs. Increasingly, the CEB focus is now on enterprise promotion, generation and growth rather than simply on job creation, as was largely the case in earlier years. The cultivation of entrepreneurially active local communities around the country is now central to the overall CEB mission, with activities directed at expanding business management capability, encouraging increasing levels of female participation in business, and providing education for enterprise through college curriculum design and student enterprise schemes. We do not seek to place constraints on CEBs.

The Department of Enterprise, Trade and Employment is engaged in dialogue with the CEBs to determine how best we can continue to adapt to this changing economy. Both the Department and the CEBs want to build on that success. The Ireland of 2006 is thankfully in economic terms not the same Ireland of 1993. It is vital we offer supports to indigenous micro-enterprise which are appropriate, targeted and ultimately effective.