Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

Question 1: To ask the Minister for Community; Equality and Gaeltacht Affairs the action planned by him or agencies under the remit of his Department to stimulate job creation in Gaeltacht regions; and if he will make a statement on the matter. [29073/10]

Pat Carey (Dublin North West, Fianna Fail)
Link to this: Individually | In context

I also wish Deputy Ring the best in his next position, where I am sure he will be as committed as he has been in this position. I thank him for the contributions he has made.

It is a primary aim of Údarás na Gaeltachta to reverse the downward employment trend in the Gaeltacht and to effect the transition from a declining manufacturing sector to employment in services, including Irish-language centred employment. Atotal of €30 million has been allocated to Údarás na Gaeltachta from my Department's Vote for the year 2010. Extra funding of €2 million was provided as an additional support to the organisation at the end of 2009, bringing its overall allocation to €39.6 million. Thus, over the two year period 2009 to 2010, an t-údarás will have received almost €70 million from my Department's Vote to allow it to pursue its objectives.

In addition to Exchequer voted funding, Údarás na Gaeltachta also has access to other sources of income that enable it to promote and stimulate employment creating initiatives, for example, income generated from schemes, such as the community employment scheme and the rural social scheme and income from dividends, fees and the sale and lease of assets. Funding is also made available to an t-údarás by the Department of Enterprise, Trade and Innovation through the employment subsidy scheme and the enterprise stabilisation fund. These supports are important to businesses in the Gaeltacht and help them to continue trading and to protect jobs. Last year, for example, these two schemes safeguarded 605 jobs.

I am acutely aware of the challenges and the obstacles facing Údarás na Gaeltachta in the difficult economic environment currently being experienced at both the national and international level. In this context, it is encouraging to note that 710 new jobs were created in údarás client-companies in the Gaeltacht in 2009.

I would also draw attention to the fact that the Rural Development Programme 2007-2013 is being delivered by Meitheal Forbartha na Gaeltachta in Gaeltacht areas and includes measures providing direct support for investment and job creation. Under the programme, MFG has an overall allocation of almost €17.3 million, with a specific allocation of €1.68 million for business creation and development. Comhar na nOileán, the Leader-partnership company for island communities, most of which are in the Gaeltacht, has been allocated a total budget of €4.6 million under the programme.

Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

I thank the Acting Chairman and the Minister for their kind remarks.

Since 1997, the Government has spent more than €234 million on job creation in Gaeltacht areas. In that time, 13,763 jobs were created and 13,730 jobs were lost. In total, 33 jobs were sustained over 13 years at a cost of €234 million. That is proof that new ideas are needed.

We need new thinking and new policies for job creation in the Gaeltacht. What plans has the Minister to get new thinking and new investment in the Gaeltacht? The money we have spent over the last 13 years has been spent badly if in that time we created 33 jobs. The Minister has to admit that job creation is not working in Gaeltacht areas. What plans do the Minister and Údarás na Gaeltachta have to create sustainable employment in Gaeltacht areas?

Pat Carey (Dublin North West, Fianna Fail)
Link to this: Individually | In context

I have heard Deputy Ring make these assertions before. During the 13 year period from 1997, there were net increases in jobs in nine of these years and decreases in four years. During that time, Údarás na Gaeltachta has replaced jobs in traditional manufacturing sectors such as textiles, knitwear and engineering sub-supply with jobs in the modern economy - media, information technology, natural resource-based companies such as aquaculture and internationally traded and tradeable services - in the face of stiff competition from more advantaged areas in Ireland and competing areas in Britain.

The vast bulk of job losses occurred during the 2001 to 2003 period, when many of the international manufacturing companies, based predominantly in Gaoth Dobhair, scaled down their operations or transferred to low cost economies. Údarás na Gaeltachta responded by attracting and supporting new companies such as Arán Pita Teo. of Largo Foods, Euroflex, RA Pacáistí Teo. and the VHI, which continue to expand and increase their workforces.

The other major decrease in employment occurred in 2009, commensurate with the overall decrease in employment nationwide resulting from the downturn in the economy. The job performance in the environment in which Údarás na Gaeltachta operates has been more than satisfactory in my view. The average lifespan of a job in an údarás-supported project is approximately eight years. Typically, Exchequer investment is repaid on average in approximately three years. An average of 12% of jobs in Údarás na Gaeltachta client companies are lost as a normal part of the business cycle as sectoral trends change, enterprises restructure and companies streamline to improve their competitiveness. It is important to point out that the employment base in the Gaeltacht is providing good value for money for the taxpayer. Results from the annual business survey carried out by Forfás on the IDA, Enterprise Ireland, Shannon Development and Údarás na Gaeltachta highlight the significant impact that Údarás has had on the Gaeltacht and the national economy. The 2008 results for Údarás, which are the most recent, showed annual sales of €834 million, of which €400 million or 47.6% was in exports, which was an increase of 9.4% on the previous year. The annual total gross pay was approximately €266 million of which €220 million was net pay or direct local economic impact.

Based on these figures, the annual total tax PRSI paid to Revenue annually by Údarás client companies is €75 million, which is the most accurate reflection of value for money to the taxpayer. A total of 43.5% of Gaeltacht companies are engaged in research and development activities, with a spend of approximately €17 million. By any measure, these figures relating to economic impact demonstrate the exponential return the State has received from investment by Údarás na Gaeltachta in job creation in the Gaeltacht over the past number of years.

Charlie O'Connor (Dublin South West, Fianna Fail)
Link to this: Individually | In context

Time is up. I do not want to upset Deputy Ring on this day so I will ask him to be brief.

Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

I thank the Acting Chairman.

I disagree with the Minister. We have spent very badly in the Gaeltacht with regard to the amount invested and jobs created. A number of years ago, a US company based in my constituency contacted Údarás to state it was withdrawing jobs. Taxpayers' money was given to that company and it was allowed to keep that money to run on until after a general election took place. That money was never paid back to the State. I would say an agreement was reached between that company and Údarás.

Call centres do not represent sustainable jobs. What we need are new ideas and new thinking. The Minister should not forget we have very good people in the Gaeltacht areas and in every county in the country there are people who are prepared to invest in the Gaeltacht. As they are Irish they are not given the same opportunities as some of the US companies which we think will be great but which last a very short time. We need to encourage our native citizens to invest in the Gaeltacht areas.

Pat Carey (Dublin North West, Fianna Fail)
Link to this: Individually | In context

Unfortunately, I have to disagree with Deputy Ring. However, I will examine the case he cited. The vast majority of jobs created in the Gaeltacht are spin-off jobs from larger companies. For example, in the Connemara Gaeltacht there are many spin-off jobs from the medical devices and media areas. The companies I cited in the Donegal Gaeltacht are, by and large, companies of Irish origin.

Investment by Údarás in jobs in the Gaeltacht represents very good value for money. The role of Údarás includes job creation but it also includes improving the general environment where the Irish language and culture can develop and can be promoted. Central to this is creating an economic situation which allows people who live in the Gaeltacht to remain in the Gaeltacht.