Willie Penrose (Longford-Westmeath, Labour)
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Question 65: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her views on measures to strengthen the role of the county enterprise boards and, in particular, the removal of the limitation on the types of enterprise the boards can support by raising the limit on the number of jobs they can create to more than ten, as well as a significant increase in measure 1 funding to allow the boards to achieve their full potential in view of the continuing level of job losses in small and medium enterprises; and if she will make a statement on the matter. [44875/08]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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The 35 county and city enterprise boards, CEBs, are the principal deliverers of State support to the micro-enterprise sector in Ireland. They provide support to businesses with ten or fewer employees in the start-up and expansion phases and they promote and develop indigenous micro-enterprise potential and stimulate economic activity and entrepreneurship at local level. As locally based enterprise development agencies, the boards are well positioned to meet the needs of the local economy.

The main focus of the CEBs is on the micro-enterprise sector and will remain so for the foreseeable future. The eligibility criteria under which they operate and the range of financial and non-financial instruments available to their clients have been very effective tools in the development of the micro-enterprise sector in Ireland since the inception of the CEBs and have enabled the CEBs to provide targeted assistance to the micro-enterprise sector, with excellent results. While it is acknowledged that there will be differences in requirements in the areas served by the various CEBs, my Department is satisfied that the current arrangements for eligibility criteria have generally allowed sufficient latitude to individual CEBs to respond to the needs in their own areas. While CEBs are not in a position to allocate direct grant assistance to companies with more than ten employees, they are permitted to provide indirect assistance such as advice, mentoring and a broad range of training programmes, the value of which should not be underestimated.

The budget allocation to the CEBs has increased steadily over the last few years, and the 2009 allocation announced in the recent budget represents a 16% increase in the capital allocation over 2008. This is against a background of savings in other areas of Government activity and is a clear acknowledgement and endorsement of the importance of the boards and of the need that exists for their services, particularly in the current economic climate.

Willie Penrose (Longford-Westmeath, Labour)
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I thank the Minister of State for his reply. I think I will be pushing an open door as far as he is concerned because he comes from a business background. Notwithstanding the 16% increase in capital funding, which I acknowledge is significant, is it not a fact that the CEBs' budgets for last year had been expended by last April, leaving them without a penny to give out in capital at a vital time? They have had nothing between then and the recent budget announcement. Their funding has been inadequate and the demand for funding from new and expanding businesses far exceeds the available funds. That is a fact. If fuller funding was made available — the extra 16% is a help — there is no doubt it would result in a greater number of business development opportunities.

The Minister mentioned the mentoring role. Would he agree the demand for mentoring and information technology support programmes is very high and that these have a major and immediate impact on business growth, but that budget constraints mean the CEBs are not able to meet the demand? These supports are not available on a year-round basis, notwithstanding what the Minister of State said, and this hinders the growth of small businesses.

The Department of Enterprise, Trade and Employment has imposed quotas in the allocations of county enterprise boards, and the allocation of the measure 1 budget is restricted by this. Maximum amounts of 25% and 10% of the budget must go towards employment grants and feasibility study grants, respectively, while 30% of grants awarded must be repaid. Would the Minister of State agree that these quotas are not conducive to small business development and that county enterprise boards should be allowed to facilitate customer needs and not be restricted by meeting quotas? It is time to tackle the issue of refundable aid. All recipients of refundable aid must repay 30% of the grants they received to the enterprise board, and this significantly reduces the attractiveness of the grant and increases the level of administration required. Alternative grant aid agencies are not obliged to operate in this manner.

I hear what the Minister is saying with regard to businesses with ten or more employees, but he is a business person and he knows himself how critical ten employees are in any area. Would he accept there is a critical gap in the level of service provision to businesses with ten or more employees serving the domestic market? No agency has responsibility for development and there are no opportunities for business within this category to receive any financial support towards their expansion or development. These are the businesses that fall between two stools and I have advocated their cause.

I have one final question before the Leas-Cheann Comhairle stops me. The small business forum has recommended that enterprise boards be a "first-stop shop" for all small business needs and take primary responsibility for information dissemination. This has yet to be implemented. The existence of a single source for obtaining business legislation, start-up information, training, advice, mentoring and finance would be helpful to all new business owners and would use the expertise contained in enterprise boards to maximum effect. Would the Minister of State agree this is fairly important?

Finally——

Brendan Howlin (Wexford, Labour)
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I will call the Deputy again.

Willie Penrose (Longford-Westmeath, Labour)
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All right. I know this Minister of State and I think he is on my side.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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There is a lot in what the Deputy is saying. I suggest it is time we had a full and broad discussion at the committee of which he is Chairman, the Joint Committee on Enterprise, Trade and Employment, about enterprise boards, the SME sector and so on, and how we are engaging with them. It should be remembered that from 1993 to 2007 almost €190 million was given out to the boards in grants. There has been significant demand and they are meeting the demand for mentoring, further education, capital grants, refundable loans and all the rest of it. The increase of 16% will undoubtedly help them. There are now new demands on those boards. I have asked officials within my Department to consider the activities of the boards and to engage with them to try to understand what is now needed in our new economic circumstances.

Deputy Penrose asked about businesses with more than ten employees. It should also be remembered that Enterprise Ireland is now responsible for the boards, and the combination of the boards and Enterprise Ireland offers seamless support for the SME sector, from micro-enterprises to businesses with more than ten employees and export companies. An effort will be made to help these export companies grow and to engage with the companies that are employing more than ten people to see how we can be of assistance to them. As I said in my initial reply, mentoring, advice, further education and such support is as vital to these companies as finance, particularly now. In the context of the overall operation of the boards, I am happy with their performance, but there is perhaps a need for political debate at a committee meeting.

There is a misunderstanding out there, and I would like to correct the Deputy's assertion that there was no funding from the boards from June onwards. That is not true. At the end of last year we reallocated some of the money that was not being spent under the various measures because there were different demands within the local economies for certain enterprise boards, and they must respond accordingly. They have never been unable to respond because of a lack of support from the Department or from Enterprise Ireland. It is a new scene out there. It is being reflected upon and new measures will be introduced if necessary. The boards are working well. I meet them on a regular basis and engage with them and I am open to a full discussion, as I said, at the committee.

Willie Penrose (Longford-Westmeath, Labour)
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I will certainly take up that suggestion and invite the Minister of State to the committee.

I was given a reply to a parliamentary question which stated that seven boards did not have a penny after last April or May. Either that reply was right or I am wrong. However, we will leave that. Would the Minister agree that in these changed economic times, enterprise boards should be in a position to offer higher rates of grant aid to businesses in higher potential growth areas, for example, the alternative energy sector, the IT sector, health management and areas of scientific development? At present there is no added incentive they can offer to anybody who displays exceptional entrepreneurship in these areas, although they offer the possibility of creating significant employment. Could we ask Forfás or another agency or economic forecaster to indicate what types of enterprise should receive additional support? There is an opportunity there, particularly in these straitened economic times.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I remind the Deputy that 20,000 companies have received assistance over the years from enterprise boards, and 35,000 jobs have been created.

Willie Penrose (Longford-Westmeath, Labour)
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I know. That is why I want more.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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That is also why I want more.

Willie Penrose (Longford-Westmeath, Labour)
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I am greedy for more — I want to get to 70,000.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I have a firm belief in that sector. We should engage with such businesses to find out what supports we can give them in the context of their demands and the new economic circumstances, and that is exactly what I am doing. I am willing to consider new ways of supporting them and to discuss with the Deputy's committee what we can do within that budget and in view of the 16% increase we have received.

Within the boards, we got a large response to Tech Check, which provides technology audits for companies to allow them to see where they are falling behind within their own organisations. We have supported them in this regard. There is a focus on support of that kind for companies. In addition, we need to consider new green technologies and companies associated with these because that is where new jobs will be created in future.