Dáil debates
Tuesday, 6 October 2009
FÁS: Motion
6:00 pm
Róisín Shortall (Dublin North West, Labour)
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I move:
That Dáil Éireann:
— expresses its serious concern at the findings of the recent report of the Comptroller and Auditor General, which disclosed a shocking absence of financial control in FÁS including the expenditure of €600,000 on a television advertisement that was never broadcast, €9,000 on a car for a raffle that was never held and the expenditure of €622,000 which could not be accounted for;
— notes that serious breaches of procurement in the corporate affairs division of FÁS, over many years, had been detailed in the Comptroller and Auditor General's report of May 2008;
— notes that further evidence of waste of taxpayers' money on lavish travel arrangements, accommodation and entertainment for Government Ministers, FÁS board members and executives had previously emerged and had been confirmed in the interim report of the Committee of Public Accounts, published in February 2009;
— condemns the total failure of the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, and her two predecessors in that Department, Deputy Micheál Martin and Deputy Mary Harney, to exercise appropriate supervision of the agency and to prevent the wanton waste of taxpayers' money;
— believes that a far too cosy relationship was allowed to develop between the Department of Enterprise, Trade and Employment and the agency it was supposed to be supervising;
— condemns the generous financial package agreed with the former director general of FÁS, following his resignation in November 2008; believes that the package was not consistent with the Government's own guidelines governing the departure of chief executives of State bodies; and deplores, in particular, the irresponsible failure of the Tánaiste to seek legal advice on the matter;
— instructs the Tánaiste to examine all options for recovery of moneys paid to the former director general, over and above his statutory entitlement;
— calls on the Minister for Finance to bring forward revised guidelines on appropriate severance arrangements for officials who leave the public service;
— notes the resignation of the chairman of FÁS announced on 1 October 2009 and the statement confirming the intention of other members of the board to stand down;
— notes the importance of an effective and efficient training agency against the background of almost 450,000 on the live register; and
— believes that the majority of the staff at FÁS are hardworking and committed employees, who did not benefit from the regime of lavish expenses that has caused such public outrage;
calls on the Government to:
— restructure the board of FÁS along the lines proposed in the report of the Committee of Public Accounts;
— refocus FÁS on its core work as the State training agency, capable of meeting the needs of those seeking employment, by providing relevant and high-quality training; and
— ensure stringent accountability and oversight in respect of the spending of public moneys within both FÁS and the Department of Enterprise, Trade and Employment.
I wish to share time with Deputies Joanna Tuffy and Martin Ferris.
Róisín Shortall (Dublin North West, Labour)
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The Labour Party motion before the House tonight is about basic accountability. It is about addressing low standards in high places, which have been the hallmark of Fianna Fáil's hold on power over the past decade.
The scandals exposed in FÁS and the failure of the Government to address them adequately, typifies all that is wrong with the Government's attitude to the public service. The FÁS saga has been characterised by significant failings on several fronts, namely, a scandalous waste of taxpayers' money, an absence of accountability, serious breaches of procurement rules, a disregard for proper corporate governance, a lack of oversight by the board, an all too-cosy relationship with the supervising Department, a back-scratching culture arising from close personal and political connections between the executive, the board, the Department and the Ministers, and a disgraceful indulgence by senior executives in lavish entertainment and first class travel for themselves, their wives, their ministerial masters and various other hangers-on.
What makes the revelations in FÁS so difficult to take is the context in which they are set. There are 424,000 people signing on the live register at present. For many, notably those in the construction and retail sectors, there is unlikely to be much work for the foreseeable future. In that context, they need a training agency that is fit for purpose. They need an agency that is focused on identifying where they should upskill, and an agency that provides relevant and high quality training. The scandals hanging over FÁS for the past 18 months have deflected attention from this basic goal of the organisation. To some extent they have masked the dubious quality of many FÁS courses for the newly unemployed, the lack of co-ordination of services in certain areas and the short-term nature of much of the training courses offered. This is where the focus of the organisation should be, and the absence of this focus is probably the Minister's greatest failing.
The scandals are also set in the context of the call for wage restraint across the economy, but especially in the public sector. How can the Government possibly hope to convince any public servant to accept pay restraint when public servants witness the massive waste and see a senior executive with a dubious track record walk away with a €1.1 million handshake and a free car to boot — especially when that golden handshake was overseen and sanctioned by the very Ministers who are advocating pay cuts? How can the Minister possibly think people will accept that? At a time when Government Ministers are talking about cutting basic welfare payments to save money, how can this pay-out be justified? Just a few weeks before the golden handshake the Government told us it could not afford a cervical cancer vaccine for young girls.
For workers, taxpayers and citizens, this is contemptuous. Taken together with the bailout of the banks, the bailout of reckless property developers and the ongoing excesses in the Office of the Ceann Comhairle, it sends a clear message that Government Ministers and others who hold senior public positions care more about themselves and their cronies than the public they are meant to serve. The profligate attitude to public money so prevalent at a senior level in FÁS has tarnished the entire public service. The failure of Ministers to deal with this wastefulness has also completely undermined the moral authority of Government and has played into the hands of those commentators who question the very principle of public service.
I now turn to the severance package agreed with Mr. Rody Molloy. There are several aspects to this agreement that remain clouded in mystery. In the first instance, it is unclear under what legal instrument the top-up arrangements were made. At the meeting of the Committee of Public Accounts on 24 September 2009, the Secretary General of the Department of Enterprise, Trade and Employment stated that the top-up was provided for under section 6(3) of the Labour Services Act 1987, yet Government Ministers now insist it was made under guidelines issued by the Department of Finance. If it were made under these guidelines, did anybody in the Department read them before they concluded the negotiations?
The regulations show quite clearly that increased lump sum payments and enhanced pension entitlement for the departing executive of a semi-State body are only permissible in the case of the non-renewal of a contract or where a decision has been made to terminate a CEO's employment before the termination of the contract. The guidelines specifically state, "It is not therefore appropriate to make such payments where the initiative for the termination of a contract comes from the CEO concerned." However, both the Taoiseach and the Tánaiste are on the record as stating that Mr. Molloy resigned voluntarily. The Taoiseach told the Dáil on 26 November 2008 that Mr. Molloy "tendered his resignation to the board of that organisation", adding later that "he tendered his resignation of his own volition...". The statement issued by the Tánaiste on the previous day was headlined, "Tánaiste confirms resignation of FÁS Director General". Equally, the Secretary General of the Department of Enterprise, Trade and Employment, Mr. Sean Gorman, referred consistently to the departure of Mr. Molloy as a resignation during his recent contribution to the Committee of Public Accounts.
If Mr. Molloy resigned of his own volition, there was no basis for the huge financial package he was awarded at the expense of the Irish taxpayer, and the Tánaiste acted ultra vires. If Mr. Molloy did not resign of his own volition, the Dáil has been misled in a most serious way by the Taoiseach. There is a direct conflict between the accounts of Mr. Molloy's departure given to the Dáil in November 2008 and claims now being made by the Government. The only way to clarify this is for the Government to publish the text of the written agreement concluded with Mr. Molloy at that time. I call on the Tánaiste to do that now.
We also need clarity as to the role played by the Minister for Finance in approving the Molloy deal. The Minister has ducked and dodged on this issue, avoiding giving a direct answer at all costs. It was incumbent on the Minister for Finance, before he gave his consent to the deal, to be satisfied that both section 7 of the Superannuation and Pensions Act 1963 and his own Department's guidelines were adhered to. The Minister and his Department would also have required evidence of the status of Mr. Molloy's departure — if it was a retirement or a removal from office.
When the Department of Finance and the Minister heard the Taoiseach inform the House that Mr. Molloy "tendered his resignation of his own volition," they would have been aware that, prima facie, severance payments were impermissible under the 1963 Act and, further, were inappropriate and in total and express violation of the clear terms of their own guidelines. The Minister for Finance needs to account for his Department's total disregard for the law on this issue and this conscious and deliberate misuse of taxpayers' money. As regards the Minister's role, he appears to acknowledge he was generally aware of the negotiations; he does not say he sanctioned and approved the deal such as would amount to consent for the purposes of the Act. The Minister must also clarify the tax implications of the enhanced lump sum payment made to Mr. Molloy as well as possible benefit-in-kind implications of the famous company car.
The question also remains as to whether there was a legal threat and how that impacted on the generosity of the agreed package. The Secretary General of the Department of Enterprise, Trade and Employment stated, "The threat of the courts was hanging over us." He went on to state. "It was also made clear that, if the individual believed that he was not being treated reasonably, he would reserve his right to take court action." Last week, however, the Taoiseach was quoted as saying, "The situation as I understand it is that the overall package was offered on the basis that it would be the agreed way by which he would leave the organisation quickly...the question of the threatened legal action, that's a matter...which could have emerged subsequently if there wasn't an agreement." Either there was or was not a legal threat. Either a legal threat was or was not made clear to the Government. If there was no legal threat, why the generous severance package? If there was a legal threat, why was legal advice not sought?
Reports suggest Mr. Molloy was granted his car as part of his resignation package. As we learned recently, a FÁS car going missing is not exactly a new phenomenon. This is all the more reason to ask if Mr. Molloy's FÁS car was part of his severance package. If it was part of his package, who approved it and on what basis? If there was no legal basis for it, can we have the car back, please?
The problems at FÁS do not begin and end with Rody Molloy. There is also a question of wider political accountability for the problems that have beset the organisation for several years. The former Ministers for Enterprise, Trade and Employment, Deputies Martin and Harney, must take their share of the blame for the excesses and absence of adequate controls in the organisation in the recent past. They, too, practised their share of cronyism.
In failing to respond to the problems, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, in particular, has a number of questions to answer. Her actions so far bear all the hallmarks of a Minister scurrying for cover rather than tackling the serious issues in a meaningful way. Why did the Tánaiste not take action on FÁS much sooner? The first indications of serious problems at FÁS came from a Comptroller and Auditor General report as far back as May 2008. That report identified a number of breaches of procurement rules, mismanagement of public money, overspending and a failure to achieve value for money. What did the Tánaiste do about the report? It seems she did little or nothing. She dithered and delayed and did nothing until the second Comptroller and Auditor General's report was published last month, at which point renewed media interest forced her into paying some attention to the problems.
As far back as February this year, the Committee of Public Accounts made several recommendations on foot of the first report of the Comptroller and Auditor General. None of these recommendations has been implemented to date. Later revelations in the Sunday Independent about the extravagant spending by FÁS executives brought the full media spotlight on the problem. Rather than sack anyone, the Tánaiste allowed the situation to drift and refused to take charge of the agency which had, for some time, been shown to be wasting huge amounts of taxpayers' money. Eventually, following public pressure she did an extraordinarily generous deal with the man who felt his only option was to resign. The Tánaiste should have consulted the Attorney General for his advice and specifically to have him clarify what rights and entitlements, if any, Mr. Molloy had, given that he was resigning and was neither dismissed nor was he retiring. This legal advice is available free of charge from the Office of the Attorney General. If the Tánaiste had bothered to seek it, she would have been told that Mr. Molloy did not have any rights since he had tendered his resignation.
Clearly, the Tánaiste hoped that by agreeing a sweetheart deal with Mr. Molloy, he would go away quietly and the whole FÁS debacle would fizzle out. Not only did she behave recklessly in throwing away €1.1 million of taxpayers' money and act ultra vires, but she set a very dangerous precedent for other cases in that she has provided what amounts to a general, blanket acknowledgement that resigning chief executive officers are entitled to certain rights and entitlements, irrespective of the true facts and circumstances surrounding their departure. The Tánaiste needs to make a statement regarding the role of the FÁS board in respect of the severance payment regarding the code of practice for the governance of State bodies. It is precisely this kind of action by Ministers which gives the public service a bad name and is seen to be condoning low standards in high places. In any other jurisdiction, the Tánaiste would no longer be in Cabinet.
Today, the Tánaiste published the Labour Services (Amendment) Bill 2009. Yet again, however, she has not gone far enough. From an initial reading, it appears the Minister will retain greater control of who is appointed to the board, perpetuating the cronyism that has riddled the FÁS organisation for many years. This makes matters worse. When the heat dies down FÁS will inevitably return to being the play thing of the Fianna Fáil Party.
Mary Coughlan (Donegal South West, Fianna Fail)
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That is not true.
Róisín Shortall (Dublin North West, Labour)
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The Committee of Public Accounts recommended that the Joint Oireachtas Committee on Enterprise, Trade and Employment be given a central role in selecting candidates for the FÁS board. Such a provision is not contained in the Bill in which the Minister has taken it upon herself to have full responsibility for all appointments made to the board. That is not progress.
Mary Coughlan (Donegal South West, Fianna Fail)
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Des Geraghty may have something to say about the Deputy's views on the board.
Róisín Shortall (Dublin North West, Labour)
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It is also interesting to note that while whistle-blowing protection is offered to employees of FÁS when they speak up against a serious wrongdoing in the organisation, no such protection is offered to employees in the Department of Enterprise, Trade and Employment. This is a significant problem which I ask the Tánaiste to address. Furthermore, it is astonishing, in light of the Molloy deal, that the Minister has published a Labour Services (Amendment) Bill which will not prevent further similar deals being made in future. If the Bill is meant to herald a new beginning, it falls a long way short.
The Government seeks to defend its position tonight by proposing a counter-motion which, in the usual self-congratulatory tone, seeks to pretend that the Tánaiste is doing something about the problems in FÁS. Nothing could be further from the truth. Long before the Tánaiste announced her investigation, the Comptroller and Auditor General was conducting an investigation and the Committee of Public Accounts was hearing evidence from the parties involved. While these detailed examinations must continue, by their nature they are taking place after the event. What we need now from Government is for meaningful action to be taken. The Labour Party motion seeks several key actions from Government to deal with the problems with FÁS and to effect greater accountability. It is long past the time we saw these measures taken.
I note that on this, the first night of this debate, not a single backbench Deputy from Fianna Fáil or the Green Party is present and the only person on the Government benches is the Tánaiste.
Mary Coughlan (Donegal South West, Fianna Fail)
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A parliamentary party meeting is taking place, as are discussions on a programme for Government.
Róisín Shortall (Dublin North West, Labour)
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I have a simple question for Fianna Fáil and Green Party backbench Deputies. Do they believe Rody Molloy deserved his golden handshake? Quite simply, that is the question on which the House will divide tomorrow night. If Government Deputies had been in charge, would they have allowed the golden handshake? Do they believe FÁS and other areas of the public service will ever be reformed if these cosy deals continue to be done? If they believe Mr. Molloy deserved his golden handshake, they should by all means vote to support the Tánaiste and Government. If, however, they do not believe he deserved it, they do not have any other option but to vote with the Labour Party tomorrow night.
Joanna Tuffy (Dublin Mid West, Labour)
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The Labour Party motion calls for FÁS to be refocused on its core work as the State training agency. The organisation is needed more than ever. As Deputy Shortall noted, almost 430,000 people are on the live register. It is extremely important, therefore, that FÁS is made fit for purpose. While the organisation has had many positive achievements over the years, in many respects it has not worked and has many faults. In addressing the revelations surrounding FÁS and restoring public trust in the agency, we must ensure an employment agency emerges that can deal with the needs of jobseekers.
The Labour Services (Amendment) Bill 2009 published today by the Tánaiste and Minister for Enterprise, Trade and Employment does not make provision to reform the functions of FÁS. Section 4 of the original legislation, the Labour Services Act 1987 which established FÁS, sets out the purposes of the new organisation. The needs of jobseekers in 2009 are much different from the needs of jobseekers in 1987. We are playing a different ball game in terms of the type of employment we need to create in this period of unprecedented economic crisis. What will the Minister do to reform the functions of FÁS in terms of how it provides services to job seekers and so on?
I mentioned an OECD report in the Dáil, which was published last year, which examined the services provided by FÁS and made recommendations. I asked for a debate on that report. It did not happen and I have not heard the Minister discuss taking a broad review of the services of FÁS.
FÁS has done innovative projects over the years. It has trained thousands of apprentices and we have very skilled tradespeople here. With all the talk about the smart economy, we must not forget that we will always need skilled tradespeople. It is extremely important that we provide the best of education for our apprentices. There are many issues. We will require our apprentices to do different types of work in the future than was done in the past. For example, there are issues about needing to conserve energy in homes, which includes the work carpenters and electricians do.
There have been innovative programmes. My brother went on a placement as an engineering graduate to Japan. I worked on a social employment scheme in the early 1990s and it certainly helped me to get employment. There were problems; it was not perfect and there were many gaps, which I will discuss later. The McCarthy report recommends cuts in the numbers of special needs assistants by the Department of Education and Science. Many such posts were initially provided through FÁS training schemes.
FÁS training schemes have provided services in local communities which were not otherwise provided. Many schemes are unnecessary; the picture is not all bright in terms of the work done. However, there were innovative FÁS training schemes and much work was done in renovating heritage buildings and so on. One problem is that in 1995 there were 40,000 community employment schemes but now there are approximately 20,000 and growing numbers of people are unemployed, including graduates who have no jobs and are sitting at home drawing the dole. We need to do something about providing opportunities for people and FÁS is the obvious agency to do that.
I will discuss the negatives. In the OECD report I mentioned there is no engagement with jobseekers when they sign on now. That is the reality. People do not know where to go. In Lucan a person who loses his job, signs on for the dole but nobody is in place to discuss his needs, direct him to the various agencies or tell him what courses are available. There were 1,000 FÁS places announced by the Minister, which is a drop in the ocean, but most people in Lucan who have lost their jobs do not know about them and are reliant on people like me telling them about them. That is not good enough.
There needs to be much more engagement. People who have never been unemployed before and have been in the workforce for years are being left without proper engagement with the various training agencies and one of the most problematic in that regard in FÁS, because it waits for people to go to it. It does not go to jobseekers or examine their needs, except in a statistical sense, and that needs to be changed.
There is a lack of feedback. When I worked on a FÁS social employment scheme 20 years ago — I presume it is the same now — I was not asked if the scheme was any good, if it helped me or if training has been involved, because there was no training. Nothing like that is done by FÁS. There is duplication and a lack of liaison with other agencies such as the VECs and colleges who provide training and education for young people.
There are issues about the way FÁS is structured. None of that is being examined. There is a problem regarding all the scandals that have come out. There was a culture in FÁS which came from the Government, because there has been a culture of waste of public money and extravagant expenditure by the Government, which was followed through in terms of how the management and board of directors managed and governed FÁS.
Several things need to be done. Deputy Shortall raised the need to deal with ethics, the scandal about expenses and how the board of FÁS is structured and appointed, all of which needs to be followed up. The recommendations in the reports of the Comptroller and Auditor General and the Committee of Public Accounts need to be implemented. We also need to examine what we want FÁS to do, its functions and the services it provides. That is the bigger picture. The Minister has fallen down. She must use her ministry to provide for the needs of jobseekers and make sure we have trained and skilled people for our workforce according to the needs of the future and make sure we have sustainable employment.
There is a need, in terms of restructuring FÁS, to consult with the people who work there from the bottom up. There are many good people working there and it provides many good services. We need to bring everybody on board in the improvement of the agency because it is very important to our future economy. There is also a need to consult jobseekers. We should not just have statistics about the men and women who are unemployed. We need to know exactly who these people are, what their needs are, what level of training they have, what area of work they have aptitude for and what services and training FÁS can provide for them. When doing all of this it is very important that we engage all the agencies, not just FÁS, and work together to meet the needs of employees.
Martin Ferris (Kerry North, Sinn Fein)
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I thank the Labour Party for the opportunity to speak tonight. What benefit or advantage from the scandal at FÁS have those who have been left unemployed by a Government-fuelled recession? Was too much money spent on training initiatives or on unemployment schemes? If any excess in expenditure arose in FÁS, it should have related to training, upskilling and providing employment and opportunities for the thousands of people unemployed. There was massive institutionalised waste of public funds by Government and senior management in FÁS. Who would have thought that the main beneficiaries in the State training and employment authority would be those secure enough in their jobs to go on holidays to Florida while the recession hit those who needed FÁS most.
Today we see the publication of the Labour Services (Amendment) Bill. While we welcome actions to improve the governance of FÁS and the strengthening of accountability, some of the provisions are laughable. The greatest farce is the power bestowed on the Minister for Enterprise, Trade and Employment, in consultation with the Minister for Foreign Affairs and the Minister for Education and Science, to select the members of the board of FÁS. The Minister, Deputy Coughlan, gave Rody Molloy an extremely generous golden handshake on his way out without getting legal advice.
The Minister should not be empowered to make such decisions when her blatant incompetence has been plastered all over the news in recent weeks for all and sundry to see. Reform has to be implemented as quickly as possible. Sinn Féin already called for the Tánaiste to resign. She has stood over the indecent golden handshake given to the disgraced former director general, Rody Molloy, and has shown herself to be incapable of addressing the unemployment crisis and getting FÁS to do the job it was set up to do.
Unemployment continues to grow daily. Young men and women join the dole queues in alarming numbers. The unemployment rate in the country is more than 12.5%, but in my county it is now 27%. A new board needs to address the dire unemployment crisis and put in place training and upskilling programmes to meet the needs of unemployed workers. That this mess has been dragging on for the past 18 months is hugely damaging. Time has been lost, during which training and upskilling to assist in economic recovery could have been put in place.
Rody Molloy should have been sacked, fired, booted out and shamed for his disgraceful behaviour in FÁS, but he was not. He was allowed to resign and save face having squandered millions of euros of taxpayers' money. What we have seen is double standards in government. Government officials across the board have looked after their own by making sure they got a little extra something, while workers across the State have been feeling this recession harder than anybody else. Where was the Government intervention and support when, for example, the Thomas Cook workers had to protest in the headquarters of that company after being brought before the High Court for seeking a decent remuneration for themselves? Rather than helping such workers, Government officials went to a seedy backroom to negotiate with Rody Molloy, fluff up his best egg and give him a pat on the back. The FÁS expenditure scandal is another example of a branch of Government having no accountability. We should not have to wait for resignations. There should be no hesitation in sacking these people on the spot. It should be a case of "do not pass go and do not collect your executive pension".
Action needs to be taken now. We need to put in place a framework to monitor and enforce accountability procedures. These people are not above the law and should not remain in privileged positions when they readily abuse their power. There is palatable anger among the ordinary citizens of this country as they struggle to hold onto their jobs, their incomes are slashed and Government taxes further reduce their take-home pay. The Government has responded to that anger by establishing NAMA and offering extravagant pensions to directors. It is totally out of touch with the people. It has demonstrated its incompetence time and again. It has neither the brains nor the brawn to get Ireland back to work and out of recession. It has no mandate at this time. It is so compromised by its close relationship with developers, bankers and oil companies that it is unable and unwilling to relate to working-class people. An ideology of greed has manifested itself among this country's political elite, including the Government and its cronies. The Tánaiste has suffered from ostrich syndrome over the last few months as this expenditure wastage was revealed. The Minister, Deputy Harney, was embroiled in this scandalous affair during her reign as Tánaiste. Senior civil servants also enjoyed the fiesta at FÁS. It is apparent that burgeoning unemployment, cuts in social welfare and excessive taxes do not affect those in the Government's golden circle.
Not only do we want an end to this behaviour, but we also want to know how it came about. Who was to blame? Where does the buck stop? How was this allowed to happen? The answer is simple. As a former Member of this House said on television last night, successive Fianna Fáil Governments have developed a culture of corruption, cronyism and golden handshakes. NAMA is a case in point. The only beneficiaries of this form of Government intervention will be bankers and developers. There is no NAMA for ordinary people, such as the young couples who are currently in debt to the banks, struggling to pay their mortgages or whose houses have been repossessed. Young couples have been evicted by banks, which have then re-let those houses to those they have evicted. The taxpayers of Ireland did not consent to this when they were forced to bail out the banks. The banks, the developers and their political cronies have abused this country's system for their own greedy needs. There is a culture of cronyism and corruption within FÁS and within the Government. Deputies Coughlan, Harney and Martin have been embroiled in this scandal. The controls that were in place were simply bypassed, public money was squandered shamelessly and senior management oversight did not exist. The key issue that has to be addressed is the weakness in the system that allowed such wastage and disregard for taxpayers' money to occur without being uncovered. We need to consider how these indignities were dealt with.
The Tánaiste and Minister for Enterprise, Trade and Employment is responsible to the Dáil for overall expenditure, employment and labour force policy. How well has she done to date? That her home county has the fifth highest rate of unemployment in the State speaks volumes in itself. The result of the referendum on the Lisbon treaty in her constituency was a further reflection of the dissatisfaction of citizens with her job performance. The underlying truth is that the buck stops with the Tánaiste. I commend the Labour Party on proposing this motion. I hope the legislation that was published today will deal with this problem, although I have my doubts. We do not want the circumstances over which the Tánaiste has presided to arise again. I refer, for example, to the expenditure of €600,000 on a television advertisement that was never broadcast. Similarly, €9,000 was spent on a car for a raffle that was never held, while a further €622,000 cannot be accounted for.
Mary Coughlan (Donegal South West, Fianna Fail)
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I move amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"recognises:
--- the critical role of FÁS, as the State's employment and training agency, in assisting the Government meet the current training, upskilling and employment needs of the workforce;
--- the difficulties that the current economic situation poses for the unemployed and their families;
--- the work ethic and commitment of the majority of FÁS employees across the country;
--- the serious deficiencies in financial controls highlighted in the Comptroller and Auditor General's Special Report No. 10 on Non-Commercial State Sponsored Bodies (Special Report No. 10), published in May 2008, and the subsequent confirmation of irregularities in the report of the investigation, requested by the Tánaiste and Minister for Enterprise, Trade and Employment, by the Comptroller and Auditor General into Advertising and Promotion in FÁS (Special Report No. 66);
--- the need for change and reform of the governance structure at FÁS;
--- the need to ensure greater accountability and transparency at FÁS; and
--- the need to restore public confidence in the ability of FÁS to deliver on its training and employment mandate;
commends the Government on:
--- the speedy and appropriate response of the Tánaiste and Minister for Enterprise, Trade and Employment to the issues raised regarding the lack of financial controls in certain areas in FÁS contained in Special Report No. 10, which came to her attention in May 2008, including:
--- securing immediate clarification and assurances from FÁS that the practices highlighted in the Special Report No. 10 with regard to FÁS had ceased and that adequate systems and controls were in place to prevent any recurrence;
--- requesting the Comptroller and Auditor General in September 2008 to undertake an investigation of the Advertising and Promotion activities of FÁS Corporate Affairs since 2000 and to report on the effectiveness of management and control systems across the FÁS organisation;
--- obtaining confirmation from FÁS that it was now fully compliant with Department of Finance regulations regarding foreign travel;
--- instigating a review by the Department of Enterprise, Trade and Employment into the science challenge programme that resulted in the cessation of the programme and its related foreign travel activity;
--- securing the speedy departure of the former Director General of FÁS without further damage to the FÁS organisation and interruption to the work underway to improve financial controls and governance at the organisation, on terms in line with the arrangements available should his contract have been terminated by the Board of FÁS;
--- seeking a review of the severance arrangements provided to the former Director General of FÁS in the light of a recent statement from a FÁS board member regarding the deliberate withholding of information from the Board of FÁS; and
--- ensuring that FÁS implemented measures to improve financial control and governance across the organisation including:
--- the restructuring and tightening of controls in the Corporate Affairs function, which is at the centre of the Comptroller and Auditor General's investigation;
--- the implementation of a revised structure for its Internal Audit including resources for additional staff and external co-sourced audits;
--- the commencement of a full audit of all procurement locations by FÁS Internal Audit which is due for completion by the end of the year;
--- the cancellation of all credit cards in FÁS with the exception of one which is used to purchase books and periodicals; and
--- the reduction of the FÁS advertising budget to a minimum;
--- confirming her determination to implement all appropriate changes arising from the fourth interim report and recommendations of the Committee of Public Accounts on Special Report No. 10 following its publication in February 2009, and the report (Special Report No. 66) and recommendations of the investigation requested by her and undertaken by the Comptroller and Auditor General into Advertising and Promotion in FÁS following it being submitted to her in June 2009; and
--- publishing legislation to amend the Labour Services Act 1987 so as to provide for a governance structure with greater accountability to the taxpayer, and including:
--- the restructuring of the size and composition of the Board;
--- removing the automatic right to nominate individuals for appointment as Board members from bodies not directly accountable to the taxpayer;
--- making the Director General of FÁS accountable to the Oireachtas;
--- a situation where a director's fiduciary duties do not prevent the P.T.O. director in question from reporting to the Minister;
--- requirements in relation to disclosure and conflicts of interest; and
--- protection for members of staff who report serious wrongdoing in the organisation; and
--- the work of the Tánaiste and Minister for Enterprise, Trade and Employment in:
--- refocusing and targeting FÁS policies and budgets on the particular needs of those unemployed and seeking work;
--- putting measures in place to ensure that those who become unemployed are given effective employment services and training supports to assist their return to employment, including:
--- doubling the capacity of the job search supports system provided by FÁS Employment Services and the partnership-based Local Employment Service to 147,000 places per year;
--- the quadrupling to 92,000 places in short training courses, which are occupation-specific and will give individuals specific skills so they can compete for specific job vacancies;
--- the introduction of specific initiatives to activate the unemployed including the creation of 3,800 places for redundant apprentices, increasing the total number of places on the Community Employment Scheme to 22,700 this year; and the introduction of an innovative new Work Placement Programme;
--- the introduction of new FÁS courses to train and re-skill people for the new clean-tech and green economy; and
--- instigating a comprehensive review of the efficiency and effectiveness of labour market programmes, the report on which is currently being finalised."
Since my appointment last year as Tánaiste and Minister for Enterprise, Trade and Employment, my goal has been to get the bottom of what happened in FÁS and to fix the problem in a way that ensures, to the best of my ability, that it does not happen again. These are simple and clear objectives. It is understandable that people can sometimes be frustrated by how long the process takes. Members of the House will be aware of the importance of due process. If I were to adopt a course of action that prejudices due process in any way, or if I were to deal with the serious issues that have arisen in FÁS in a purely politically expedient way, the Deputies opposite would be the first to object and to call me to account in this House. The Labour Services (Amendment) Bill 2009 was published today following proper and due consideration of the various issues by me, the Department of Enterprise, Trade and Employment, the Committee of Public Accounts and the Comptroller and Auditor General. The Bill's strong and considered proposals send a clear signal to the public and to FÁS that there will be a root and branch cultural change in accountability and transparency at the agency. I acknowledge that members of the Committee of Public Accounts from both sides of the House have rightly played an important role in the legislative process. The importance of following due process was further emphasised today, in a separate development, when the Garda Bureau of Fraud Investigation decided to bring criminal charges against a FÁS senior manager for deceiving FÁS of taxpayers' money. This is a significant indication of the seriousness with which the State is taking what has emerged at FÁS. A further Garda investigation is continuing at the agency. The work of both the Internal Audit Committee and the Comptroller and Auditor General is also continuing.
For the benefit of the House, I wish to set out some specific details of the actions I have taken since I was appointed as the Minister with responsibility for this matter. The full extent of the content of the FÁS internal audit report, INV 137, which raised concerns about certain procurement practices in the FÁS corporate affairs division, came to my attention after the publication of the Comptroller and Auditor General's special report No. 10 in May 2008. That report dealt with a number of issues that arose in recent audits carried out by the Comptroller and Auditor General on non-commercial State-sponsored bodies. The issues identified centred largely on failures relating to procurement processes, governance and financial management. In the case of FÁS, the Comptroller and Auditor General concluded that formal internal procedural guidelines were not observed in the corporate affairs division. He found there was a failure to achieve value for money in the way FÁS managed its relationship with its principal advertising agency and the way it conducted business with contractors for major events. He said that the absence of a strategic IT plan within FÁS while a website project was being developed facilitated the misdirection of resources. Following the publication of this report, I took immediate steps to deal with the problems that had been identified. When I met the chairman and the director general of FÁS in June 2008, I sought assurances that the issues raised in the special report were being addressed and emphasised the importance of FÁS securing value for money in its expenditure. On 30 June, I instructed the Secretary General of the Department of Enterprise, Trade and Employment to write to the then director general to ask for a comprehensive report from FÁS setting out the measures it had taken to tighten its internal controls to prevent a recurrence of the practices raised in the Comptroller and Auditor General's special report. The then director general responded in writing on 1 July, setting out in detail the remedial actions taken in addressing my and my Department's concerns. Notwithstanding the actions taken by FÁS and in the light of the seriousness with which I viewed the findings of the Comptroller and Auditor General's special report No. 10 and the issues that emerged subsequently, in September 2008 I considered that it was necessary to have an independent review of the effectiveness of management and control systems in place across the entire organisation. I therefore requested the Comptroller and Auditor General to consider undertaking a special review of FÁS and he acceded to that request.
Róisín Shortall (Dublin North West, Labour)
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That was under way.
Mary Coughlan (Donegal South West, Fianna Fail)
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No, it was not.
Róisín Shortall (Dublin North West, Labour)
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It was not up to the Tánaiste to request the Comptroller and Auditor General to do anything.
Mary Coughlan (Donegal South West, Fianna Fail)
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My intention in requesting the review was to ensure that appropriate public procurement procedures exist to prevent or detect irregularities or wrongdoing and to examine and report on the activities of the FÁS corporate affairs area since 2000. This was in order to achieve reasonable assurance on whether there were any occasions of potential fraud or irregularity in that area other than those already brought to light by the FÁS internal audit unit. The Comptroller and Auditor General confirmed that he would finalise the scope of his new review after the Oireachtas Committee of Public Accounts had completed its hearings with the management of FÁS in October and November 2008 regarding the Comptroller and Auditor General's special report No. 10 and the 2007 FÁS accounts. The report of those hearings issued in February 2009, by which stage the Comptroller and Auditor General had begun preliminary inquiries in his new investigation. This action resulted in the publication of the Comptroller and Auditor General's special report into advertising and promotion in FÁS in September 2009.
Róisín Shortall (Dublin North West, Labour)
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What did the Tánaiste do about that?
Mary Coughlan (Donegal South West, Fianna Fail)
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This is the first of two reports into FÁS, the second of which is currently being drafted by the Comptroller and Auditor General.
In November 2008, after initial intense negotiations on the terms of his departure, the then director general tendered his resignation following reports of excessive travel expenditure in the organisation. In the interest of allowing FÁS to focus on its core mission, an interim director general was appointed. I again met the chair and some members of the board of FÁS and expressed my further concern at events that had taken place in the corporate affairs division.
In regard to the issue of foreign travel in FÁS, I instructed the Secretary General of my Department to ensure that FÁS was compliant with Department of Finance regulations.
Róisín Shortall (Dublin North West, Labour)
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The Tánaiste should have been doing that anyway.
Brendan Howlin (Wexford, Labour)
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Allow the Tánaiste to continue without interruption.
Mary Coughlan (Donegal South West, Fianna Fail)
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In December 2008, the chairman of FÁS confirmed in writing that FÁS was fully compliant with Department of Finance regulations in regard to foreign travel.
As the foreign travel issue centred around the science challenge programme, in December 2008 I commissioned an internal review into the science challenge initiative. The review focused on whether the initiative as it then operated offered value for money and in drawing its conclusions would make recommendations with regard to its future. The working group carrying out the review comprised officials from my Department, FÁS officials who had not hitherto been involved in the administration of science challenge, Forfás and Science Foundation Ireland. Senior officials from the Higher Education Authority were also consulted.
The working group's principal conclusions were that the science challenge programme was outside the main remit of FÁS, did not represent best value for money on the basis of efficiency, effectiveness and economy and offered no evidence to show that it had, in itself, contributed to the goals of the Government's strategy for science, technology and innovation.
In light of the working group's findings, I directed the Department to make the necessary arrangements for the commencement of the orderly wind down of the science challenge initiative once all existing commitments for the 2008-09 academic year had been met.
Róisín Shortall (Dublin North West, Labour)
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The Department should have been doing that anyway.
Mary Coughlan (Donegal South West, Fianna Fail)
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This has now been carried out.
In terms of supervision of any agency it is important that a parent Department should satisfy itself that systems are in place to effectively manage public funds. However, this should not be interpreted as Departments having to take onto themselves responsibilities that properly belong to the bodies concerned. That is why, in addition to my Department's monitoring of activities, the second mechanism for ensuring adherence to the requirements of the code of practice for the governance of State bodies is so important. My Department ensures this is achieved through the assurances in the FÁS annual report each year that steps have been taken to ensure an appropriate control environment. This is in line with Department of Finance guidelines that require that Accounting Officers should satisfy themselves that the requirements of the code of practice for the governance of State bodies are being implemented in State bodies under their aegis.
Róisín Shortall (Dublin North West, Labour)
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The Tánaiste had a representative on the board.
Mary Coughlan (Donegal South West, Fianna Fail)
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Since the code of practice was issued, it has been confirmed by FÁS each year over the period 2002-07, with the exception of 2006, that steps were taken to ensure an appropriate control environment. It also stated that the audit committee on behalf of the board conducted a review of the effectiveness of the system of internal financial controls and that no weaknesses were found in the system which resulted in any material loss, contingencies or uncertainties being disclosed in the financial statements or the auditor's report on the financial statements. It was not until the 2006 statement on internal financial control, which was dated 27 June 2007, that it was noted that an internal audit had pointed to some weaknesses in procurement and that the board had taken steps to address them.
Since becoming aware of the issues in FÁS, I and my officials have been in constant contact with the organisation to ensure that it puts in place proper procedures to improve corporate governance. In this regard I welcome both the work of the Comptroller and Auditor General and the Committee of Public Accounts, as well as the publication of the committee's fourth interim report.
The measures FÁS has implemented to improve financial control and governance across the organisation include the restructuring and tightening of controls in the corporate affairs function, which is at the centre of the Comptroller and Auditor General's investigation; the implementation of a revised structure for its internal audit including resources for additional staff and external co-sourced audits; the commencement of a full audit of all procurement locations by FÁS internal audit, which is due for completion by the end of the year; the cancellation of all credit cards in FÁS with the exception of one used to purchase books and periodicals; and the cessation of the opportunities exhibitions and the reduction of the FÁS advertising budget to a minimum.
I want to address the issue of the severance package awarded to the former director general of FÁS. Mr. Molloy's severance package, which was negotiated to secure his departure from the post of director general, was broadly in line with the package he could have claimed under his employment contract had it been terminated by the board of FÁS.
Mary Coughlan (Donegal South West, Fianna Fail)
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I assure the House that the decision to agree to the addition of years to his pension entitlement was not taken lightly. Securing his departure in a non-litigious manner was considered to be in line with the best interests of both the FÁS organisation and the taxpayer. The severance package was agreed in accordance with section 6(3) of the Labour Services Act 1987.
Róisín Shortall (Dublin North West, Labour)
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No legal advice was taken.
Mary Coughlan (Donegal South West, Fianna Fail)
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I should point out to the House that any question of dismissal is, in the first instance, a matter for the board of FÁS. In this regard, it should be noted that if the board had dismissed him, the procedures involved would have been time consuming and in the absence of due and fair process could possibly have ended up in a court action.
Róisín Shortall (Dublin North West, Labour)
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It might have been within the law, however.
Mary Coughlan (Donegal South West, Fianna Fail)
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It would not have been possible to effect the necessary speedy change of director general, which was in the best interests of FÁS, its clients and the taxpayer. At all times during this process I acted in line with the advice of officials of my own Department and the Department of Finance.
There had been considerable comment both inside and outside the House in regard to the issue of whether legal advice was obtained, and whether it was necessary to obtain legal advice on this occasion. I want to make it clear to the House that in regard to the issue of legal advice on the veracity of any possible legal action by Mr. Molloy, this did not arise as, although present, concern over legal action was not the deciding factor.
Róisín Shortall (Dublin North West, Labour)
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No, it is that what the Tánaiste decides to do should be within the law. That is the point, she broke the law. She did not take legal advice.
Brendan Howlin (Wexford, Labour)
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Allow the Tánaiste to make her contribution.
Mary Coughlan (Donegal South West, Fianna Fail)
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As I outlined at the outset of my remarks, I have today published the Labour Services (Amendment) Bill 2009.
Billy Kelleher (Cork North Central, Fianna Fail)
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She did not break the law.
Róisín Shortall (Dublin North West, Labour)
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She did break the law.
Mary Coughlan (Donegal South West, Fianna Fail)
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When enacted, this legislation will improve the effectiveness and governance of the board of FÁS and strengthen the accountability of its director general to the Oireachtas. The Bill takes account of the recommendations made by the Committee of Public Accounts in its fourth interim report and the work of the Comptroller and Auditor General. My main purpose in this Bill is to effect a number of amendments to the Labour Services Act 1987 in order to improve the effectiveness and governance of the board of FÁS and strengthen the accountability of its director general to the Oireachtas. I propose to make the following amendments: to reduce the size of the board from 17 to 11 members; to change the composition of the board by providing that the Minister for Enterprise, Trade and Employment may select its members, in consultation with the Minister for Social and Family Affairs and the Minister for Education and Science-----
Billy Kelleher (Cork North Central, Fianna Fail)
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Are the unions cronies?
Róisín Shortall (Dublin North West, Labour)
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It is making matters worse.
Brendan Howlin (Wexford, Labour)
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Members should allow the Tánaiste to make her contribution without holding side debates.
Mary Coughlan (Donegal South West, Fianna Fail)
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-----in a non-prescribed manner based on a person's particular talents and experience-----
Róisín Shortall (Dublin North West, Labour)
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Common membership, no doubt.
Mary Coughlan (Donegal South West, Fianna Fail)
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-----to include the director general as an ex officio member of the board; to introduce a rolling system of appointments to the board; to implement the recommendations of the Committee of Public Accounts relating to the accountability of the director general of FÁS and the fiduciary duties of directors appointed by the Minister; to introduce provisions relating to the disclosure of interests by board members and the staff of FÁS; and to provide protection for FÁS staff who act in a bona fide manner as whistleblowers. My publication of this Bill sends a clear signal to the public, and to FÁS, that I want to restore public confidence in its ability to deliver on its training and employment mandate.
Last month the live register fell by 16,500 persons. This was a welcome development and was the first decrease in the live register figures since September 2008. However, despite this decrease 423,600 persons remain on the register and the Government is committed to continuing to provide these individuals with the necessary assistance during this difficult period.
On an on-going basis significant numbers of unemployed persons leave the live register. From October 2008 to September 2009, 150,530 are recorded as leaving to employment. This is a positive trend that shows there are still jobs available and that the Government activation measures are assisting the unemployed to develop their skills and secure employment.
To respond to the increasing numbers of people on the live register, I am working closely with my colleagues, the Ministers, Deputies Hanafin and Batt O'Keeffe, to ensure that appropriate responses are developed and put in place to meet the upskilling needs of those who are losing their jobs or facing uncertain employment prospects. My Department alone is investing €1 billion in the provision of a range of labour force measures that will provide training and work experience opportunities to assist those who have lost their jobs.
FÁS employment services, together with the local employment services, have put in place measures to double the capacity to cater for the rise in referrals from the Department of Social and Family Affairs. The implementation of these measures has increased the annual referral capacity to 147,000 persons this year. These measures and others represent a significant step in meeting the considerable challenge of supporting the unemployed.
In a difficult employment climate such as that which we currently face, the importance of training and education is vital for everyone within the workforce. The impact such opportunities can have for those who are out of work and are seeking to rejoin the labour market, cannot be overstated. To assist individuals through the provision of education and training opportunities, I have also almost doubled the number of activation training and work experience places provided by FÁS to over 130,000. This is a substantial increase on the 66,000 places which were available at the end of last year.
Specifically, there are additional training places on short courses available to the unemployed. This year my Department, through FÁS, will deliver approximately 92,000 short course training places to the unemployed, which is a quadrupling of the number of similar courses which were provided last year and reflects the Government's efforts in increasing relevant supports for the unemployed.
In addition, in the supplementary budget the Government announced its intention to establish a programme that will provide valuable work experience to individuals who are unemployed and who have had limited experience to date. My colleague, the Minister, Deputy Hanafin, and I jointly launched the work placement programme on 2 June. The programme will provide 2,000 individuals who have been unemployed with a six-month work experience placement including graduates.
Since the beginning of 2008 there has been a significant contraction in activity in the construction sector. This contraction has been accompanied by a substantial reduction in the numbers of people employed within that sector. This has had a severe impact on individuals who are currently undertaking an apprenticeship. Unfortunately, at present there are 5,700 redundant apprentices who are seeking to complete their apprenticeships. The Government is fully aware of the difficult situation in which these redundant apprentices find themselves and that is why it is committed to assisting redundant apprentices to gain employment as soon as possible in Ireland or abroad in order that these individuals may complete their apprenticeships.
I have introduced a wide range of measures designed to help alleviate the present situation by enabling 3,800 redundant apprentices to progress their apprenticeships this year. The measures include FÁS putting in place a measure whereby apprentices who are made redundant can progress to the next off-the-job training phase in the education sector. This means that they do not need to do their on-the-job phase and can go directly to the next off-the-job phase.
FÁS has also introduced an employer-based redundant apprentice rotation scheme to provide support for employers to provide on-the-job training to 500 redundant apprentices when they have released their employed apprentice to a scheduled phase 4 and phase 6 off-the-job training phase in the institutes of technology. ESB Networks have agreed a programme with FÁS to provide on-the-job training to eligible redundant electrical apprentices at phase 5 and phase 7, and this programme will provide 400 places over a period of 18 months. The institutes of technology are also providing an 11-week certified training programme for 700 redundant apprentices who have completed their phase 4 training but where another training opportunity is not currently available to them.
As was already noted in the FÁS internal audit report INV 137, and confirmed by subsequent investigations by the Comptroller and Auditor General, primary responsibility for the procurement and promotional activity in question lay with corporate affairs section of FÁS. I have already outlined in some detail to the House the changes that have been introduced into procedures within FÁS.
The fact that there were problems in one area in FÁS does not in any way reflect the work of the majority of the staff in FÁS, who are hardworking and committed to their role in supporting those who avail of the training or employment activities of the organisation. I acknowledge the excellent work carried out by them. Their commitment and professionalism are crucial in helping to deal with key labour market challenges currently facing this country.
The record shows that I responded quickly and effectively to the issues relating to FÁS as they presented themselves to me. I have at all times worked to ensure that the FÁS organisation can refocus to address the key challenges of unemployment through its job search, training and employment programmes.
Billy Kelleher (Cork North Central, Fianna Fail)
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On a point of information,-----
Billy Kelleher (Cork North Central, Fianna Fail)
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-----an issue was brought to the floor of the House by Deputy Shortall accusing the Tánaiste and Minister for Enterprise, Trade and Employment and the Minister for Finance of breaking the law. That is a serious charge in this House and I would ask the Deputy to withdraw it. We can have a cut and thrust debate inside here in normal discourse, but this is a very serious allegation. I heard it on the record and I want it removed.
Brendan Howlin (Wexford, Labour)
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Any serious charge like that should be made by way of substantive motion. I do not want a debate about the matter now. The Minister of State has made his point. If Deputy Shortall wishes to make a brief comment about it, I would ask that it would facilitate the House if that charge was made that it be withdrawn.
Róisín Shortall (Dublin North West, Labour)
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I have made the point inside and outside this House that the decision to grant Mr. Molloy a severance package was not in accordance with the law, and I stand over that claim.
Billy Kelleher (Cork North Central, Fianna Fail)
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Deputy Shortall is accusing the Tánaiste and Minister for Enterprise, Trade and Employment and the Minister for Finance of breaking the law.
Brendan Howlin (Wexford, Labour)
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The charge is that an action was outside the law and I think there are precedents for that charge. I call Deputy Clune.
8:00 pm
Deirdre Clune (Cork South Central, Fine Gael)
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I wish to share my time with Deputies McCormack and Varadkar.
The motion tabled by Deputy Shortall and the Labour Party outlines many issues surrounding the operations of FÁS, particularly the reports that have been published by the Comptroller and Auditor General and the Committee of Public Accounts. These reports have given rise to serious concerns among some but they have also given rise to outright rage among many as they outline the outrageous spending excesses at FÁS by a select few.
FÁS is an agency working on the ground with people who find themselves unemployed and in need of training and education. I agree that there is much good work done by that agency and many of its employees. Those employees are disconcerted and disappointed with the outcome of the deliberations of the Comptroller and Auditor General and of the Committee of Public Accounts.
FÁS is still responsible for spending of €1 billion per annum. It is charged with carrying out an important function on behalf of the State, namely, training those who are unemployed. It is needed now more than ever. There are 430,000 people unemployed and in need of its services, yet FÁS is now under scrutiny in the media and in this House and the Committee of Public Accounts for its total failure to ensure that public moneys were spent appropriately and with due consideration and responsibility. Instead, we have been subject to a litany of excesses — overspending, lack of adherence to procurement guidelines, and failure to account for spending and justify decisions that resulted in excess spending. I recognise that the Comptroller and Auditor General is carrying out further investigations and we heard today about a prosecution in our courts. However, we must remind ourselves that many of the outcomes we have heard so far are the result of an anonymous letter that was sent to the former Minister for Enterprise, Trade and Employment, Deputy Harney, who passed it to the chairman and the board of FÁS, resulting in the internal audit report INV 137.
I acknowledge that the Tánaiste, who has left the House, has requested a report from the Comptroller and Auditor General. However, the point being made in the motion before the House, with which I agree, is that two other Ministers were also responsible for overseeing the activities of FÁS, namely, the former Ministers for Enterprise, Trade and Employment, Deputies Mary Harney and Micheál Martin, at the time these excesses which have now come to light were taking place. Those Ministers and their accountability are also in question.
Last week in the Committee of Public Accounts, the true size of the pension payment to Mr. Molloy was revealed. The actuarial value of the pension is estimated to be €1.2 million, which is outrageous. Ordinary people who have paid into their pensions and are now watching them go down the drain would never in their wildest dreams have hoped to contribute to a pension of that value. However, it appears that a person who decided his position was no longer tenable and volunteered to resign found himself in a position to negotiate or was presented with a golden handshake. We need to get to the bottom of this. The whole episode smacks of certain people looking after one of their own rather than letting a person go because he had failed in his duty to oversee the spending of public money. It would not happen in the private sector and it should not happen in the public sector.
I am disappointed the legislation published today does not include a firm commitment to deal with issues such as this. Guidelines are not good enough; we need legislation to ensure that public officials who have acted inappropriately and failed to live up to the commitment entailed in their employment can be let go or dismissed. This did not happen in the case of Mr. Molloy, who was offered a golden handshake. He had offered to resign and it seems he was doing everyone a favour by offering his head on a plate. At that time FÁS was in the eye of the storm. The internal audit report was before the Committee of Public Accounts, and Mr. Molloy had been on the radio that week defending the excesses in the area of foreign travel, which were not in keeping with Department of Finance guidelines. He subsequently admitted the interview was a mistake and, within days, went to the then chairman of the board and offered his resignation. Anyone who has read the transcript of the Committee of Public Accounts from last week will recall the long day described by Peter McLoone. Mr. Molloy came to him before 8 a.m. and it was close to 8 p.m. when the deal was finally struck.
It is extraordinary that there was no concept of the impact this inflated pension payment would have on the public. People are outraged by it. They cannot see why somebody who should have been dismissed and volunteered to resign was entitled to a golden handshake as if he was retiring after a long career in which he had excelled himself, when in fact he had failed to deal with breaches of guidelines, particularly in the corporate affairs unit of FÁS. Throughout the saga that is unfolding we have had an alarming insight into the lack of control and oversight that existed. Public procurement guidelines were ignored on a regular basis. Anybody who has worked with a public body or local authority, as I have, will know that even when buying so much as a lawnmower, tenders must be sought. However, individuals in FÁS gave themselves the freedom to breach these guidelines, to award lucrative contracts without seeking tenders and to ensure in some cases that those in the know were awarded contracts.
There are serious questions with regard to the amount of money spent on advertising. Between 2002 and 2008, €40 million was spent on advertising and related activities, including jobs fairs and activities to promote science. This was at a time when we had full employment. One of the sad outcomes of these excesses was mentioned in the opening statement of the director general of FÁS to the Committee of Public Accounts last week when he stated that advertising spending in FÁS was being reduced by 90% this year pending a strategic review by the organisation of a new communications and marketing strategy. This is a time when FÁS and the service it offers are most needed. Expenditure on foreign travel is to be reduced by 60%, and the science programme, which was mentioned by the Minister in her speech, has been cancelled. This was the reason for much of the foreign travel and-----
Deirdre Clune (Cork South Central, Fine Gael)
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-----junkets, and contributed to the excesses we have seen. A total of €8.2 million was spent on the science programme, of which €3.5 million was spent on advertising. This is a programme that was aimed purely at primary school students; yet somebody in FÁS deemed it worthwhile to spend €3.5 million on advertising, when a direct marketing programme to these primary school pupils would have been far more appropriate. When we raised this with the current director general and the former chairman of FÁS last week, they had no answer. It is obvious that nobody was overseeing this programme and there was no measure of its value. We now have it from the Minister that it did not have any value. It did not have any clear direction and did not contribute to increasing interest in and uptake of science, as it was intended to do. The opportunities programme has been cancelled for 2009. The chairman of the board, Mr. McLoone, resigned last week as he no longer had the confidence of the Minister. I note that following last week's board meeting, other board members intend to stand down in an orderly fashion.
The concerns of the Committee of Public Accounts have been acknowledged by the Minister. It is hoped all the recommendations of its report will be implemented. We await a report from the current director general of FÁS on how those recommendations have been implemented. As a member of the Committee of Public Accounts I found it most frustrating — the situation seemed farcical at the time — that when the committee requested information from FÁS, it was not available to us in many cases under the Data Protection Acts, yet that information was instantly available to the media under the Freedom of Information Act. That is a direct contradiction and a recommendation in this regard has been included in the Committee of Public Accounts report. This practice undermines the integrity of the committees of this House. I believe the recommendation in this regard will be of value to all committees.
The Tánaiste today published the Labour Services (Amendment) Bill 2009. I am disappointed to note that power to appoint members to a board is retained by the Minister for Enterprise, Trade and Employment in conjunction with the Ministers for Education and Science and Social and Family Affairs. Again, these decisions will be taken behind closed doors with no opportunity provided for the public, public representatives or Members of this House to question them and so on.
Two weeks ago, Fine Gael put forward a Private Members' Bill, namely, the Public Appointments Transparency Bill 2008. Deputy Leo Varadkar spoke on the Bill which would have been an important step in ensuring transparency in respect of appointments to public bodies such as FÁS, the HSE or the soon to be established NAMA. There has been enormous growth during the past decade in the number of public bodies in this country. Currently we have approximately 1,000 agencies across national and regional level. Many people on those boards are doing a fine job.
We proposed that any board in receipt of public funds of more than €1 million should be subject to the provisions of the Public Appointments Transparency Bill, that the names of appointees to such boards be put before the Houses and that the chairman would be invited to appear before the relevant committees of these Houses and given an opportunity to set out his or her credentials and ambitions for the job. This was perceived as a witch hunt and it was stated that the private lives and concerns of these individuals would be torn apart in a public fashion. However, that is not the case. The Bill would have provided an opportunity for people to appear before a committee of these Houses and to state publicly their case in regard to how they believed the position to which they would be appointed could be fulfilled. Disappointingly, the Bill was not accepted. The publication today of the Labour Services (Amendment) Bill 2009 provides for more of the same in that appointments will be made behind closed doors, in a private fashion with no opportunity for public representatives to question them.
It is important we ensure there is accountability in future and that guidelines are adhered to. I am amazed that Department of Finance guidelines in regard to foreign travel and procurement were not adhered to. The response to this has been a promise to review the current structure, to talk to individuals, to train people in procurement and how they should behave in an appropriate fashion, all of which should be standard. Anyone dealing with public funds should realise the importance of the task involved. When dealing with public funds, there should be a higher level of accountability than that which would pertain in the private sector. The lack of adherence to procedures in FÁS and the riding roughshod over guidelines has been a shocking revelation to us all. There is more to come. Currently, 22 internal investigations are ongoing at FÁS. The Comptroller and Auditor General is compiling a further report in this regard. It is hoped that following this whole sorry saga we will have in place procedures and structures to ensure accountability at all levels and that those employed in State bodies behave in a responsible fashion and remain conscious of the fact that they are dealing with public funds for which they are accountable to the taxpayer through these Houses.
Pádraic McCormack (Galway West, Fine Gael)
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I welcome the opportunity to contribute to the Labour Party motion which states that far too cosy a relationship was allowed to develop between the Department of Enterprise, Trade and Employment and the agency it was supposed to be supervising. The motion also condemns the failure of the Tánaiste and Minister for Enterprise, Trade and Employment and her predecessors, Deputy Micheál Martin and Deputy Mary Harney in not exercising appropriate supervision of the agency to prevent wanton waste of taxpayers' money.
As a member of the Committee of Public Accounts, I have observed and followed closely the scandalous waste of taxpayers' money that took place urged on by the management structure of FÁS with the board, at the very least, turning a blind eye to what was going on. The Tánaiste today published the Labour Services (Amendment) Bill 2009 which proposes to reduce the number of members on the board of FÁS. However, this is a classic case of closing the stable door after the horse has bolted. Not alone has the horse bolted, it must be a couple of miles down the road. While the measures being taken now may be useful, the Tánaiste did not face up to her responsibilities when she presided over what happened at FÁS.
While the management of FÁS flouted procedures and wasted money on travel, unnecessary advertising, junkets for management and board members, the board of FÁS appears to have been asleep on the job and should have resigned a year ago. I am not following the trend of the past month or two in calling for the board of FÁS to resign. At a meeting of the Committee of Public Accounts on 4 December 2008 I stated:
I will ask the question rather than the Government. Given that the board has been negligent in this issue, should it not consider its position?
I put that question to the board at a meeting of the Committee of Public Accounts on 4 December 2008. I also referred at that meeting to the travel issue and the responsibilities of the board in that regard. I listened carefully this morning to Mr. McLoone's statement. The words were well spoken but the board seemed not to accept any responsibility for any negligence regarding travel. There was no provision for payment of travel expenses and Mr. McLoone said spending on travel was inappropriate but the board did not look at payments.
In the Labour Services Act 1987, it states a member of staff of An Foras Forbatha, a predecessor of FÁS, other than the elected chairman or the staff of the subsidiary, shall be paid out of moneys at the disposal of An Foras Forbatha or the subsidiary as the case may be. Such remuneration and allowances for expenses incurred by him and An Foras Forbatha or the subsidiary, as the case may be, will be paid with the consent of the Minister for Finance — the Minister for Finance had to consent to spending. When that question was put to the Taoiseach, who was then Minister for Finance, in the Dáil, he said the Minister could not be expected to follow up every little detail, that it was the responsibility of the board. Clearly, the board was negligent in looking after its responsibilities.
I also asked Mr. McLoone if he realised when he was appointed chairman of the board that it was the responsibility of the board as set down by the Minister to approve of such payments, and he said "Yes", but the payments were not presented to him or for approval by the board. There was a game of cat and mouse between management and the board at FÁS in not bringing the necessary information to the board and the board was negligent in not seeking that information which was necessary for them to carry out their duties as members of the board.
After the meeting of the Committee of Public Accounts last year, Mr. Molloy went on "Today with Pat Kenny" to justify the extraordinary expenditure and waste of taxpayers' money in FÁS. After that his position became untenable and he offered his resignation to the Minister. Fast forward to the last meeting of the Committee of Public Accounts and we discover that Mr. Molloy eventually resigned after being awarded an extraordinarily generous pension and a lump sum worth more than €1.1 million.
The waters get very muddy here. The impression giving by the Secretary General of the Department, at the last meeting of the Committee of Public Accounts, was that Mr. Molloy had threatened litigation if he did not get the extraordinary deal. This was not clearly spelled out but it was strongly hinted at. That was the news story for the next few days and the media ran with it, that Mr. Molloy had put a gun to the Minister's head and would not resign unless he got this package. The following Sunday, the Taoiseach stated that Mr. Molloy never threatened legal action.
I do not know what happened. I believe on the morning Mr. Molloy offered his resignation, the embattled Tánaiste and Minister for Enterprise, Trade and Employment consulted the Taoiseach, as would be natural in this case, and I presume the Taoiseach told her to get the best deal possible for Mr. Molloy and they would see how things work out. Once the Tánaiste went with that information to her officials, they were obliged to carry out the request of the Minister in arriving at the best deal. Clearly the officials did not remove any benefits from Mr. Molloy in the deal they eventually worked out.
At the end of the long day of negotiations, after Mr. Molloy had apparently offered his resignation in the morning, the deal was worked out and the Taoiseach had to be informed of it. He was informed and signed off on it, and we are told the Minister for Finance gave his go ahead to the deal. We are then told by the Green Party Ministers that they knew nothing about the deal. It appears that three Cabinet members signed off on the deal. If that is how the Government operates, it is a funny system.
Mary Coughlan (Donegal South West, Fianna Fail)
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It is not appropriate to say that if we do not have the facts. That is not factually correct. Deputy McCormack is a member of the Committee of Public Accounts and he would be aware of the facts.
Róisín Shortall (Dublin North West, Labour)
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So did they not sign off on it?
Mary Coughlan (Donegal South West, Fianna Fail)
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It was nothing to do with the Taoiseach.
Pádraic McCormack (Galway West, Fine Gael)
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I do not know if any other Cabinet members were aware, none of them have admitted they were. I do not know what happens at Cabinet level, perhaps it is a matter of Cabinet confidentiality. The Green Party Ministers, however, have stated clearly they were not aware of this deal. They are aware of it now and seem to accept it as part of the price of staying in Government, they do not seem too concerned about it from what I can see.
We have lately discovered that, on top of the generous settlement given to Mr. Molloy, he also drove off in a car. Is this the same car exposed at the meeting of the Committee of Public Accounts, the car that was purchased for a raffle, paid for and never delivered? The committee could not establish where the car paid for out of public funds went or if it is indeed the car Mr. Molloy drove away in. I would like to know, if it is possible at this stage to get a clear answer to anything that has happened at this level.
There was collusion between the chief executive of FÁS and the board of directors, especially as they travelled abroad together at great expense to the State, where they all seemed to have a good time. Most of them had bank cards they could use to charge up extraordinary amounts to FÁS during their deliberations abroad. The science programme they were visiting has been cancelled, although I do not know why they were sending FÁS people to it. Was the intention to send them into space? I do not know what they were doing there, except having a good time at taxpayers' expense.
It is extraordinary that at a time when there was practically full employment, we were spending €40 million on advertising and promotion of fairs, unnecessarily promoting FÁS when there was no need to spend such amounts on advertising. FÁS had an annual budget of €1 billion from the taxpayer to run its affairs and it seems that coming to the end of each year, if the budget was not spent, someone invented another advertising campaign to waste another €500,000. Some €600,000 was spent on a television advertisement that never appeared, a criminal waste of taxpayers' money. The FÁS executive, to get another €1 billion, was justifying the expenditure of €1 billion the previous year, no matter how it was wasted.
That amount has now been cut back, following the revelations from the Committee of Public Accounts. I pay tribute to members of the committee from all parties in the way they have teased this out, at times getting this information from board members was like pulling teeth. They diligently stuck to their task. This has given FÁS workers on the ground a bad name. We must acknowledge that they have done great work on community schemes. If they claim expenses, they must produce receipts for everything they buy, be it a spade, shovel or wheelbarrow. If FÁS was run at the top in the same way, we would certainly have a better organisation.