Jonathan O'Brien (Cork North Central, Sinn Fein)
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Question 11: To ask the Minister for Jobs; Enterprise and Innovation his plans to change lending practices within banks towards giving credit to businesses on the basis of their health and potential rather than on the assets that they have. [14721/11]

Éamon Ó Cuív (Galway West, Fianna Fail)
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Question 13: To ask the Minister for Jobs; Enterprise and Innovation if he will give an assurance that the proceeds from the sale of State assets will be used to fund job creation measures. [14635/11]

John Perry (Sligo-North Leitrim, Fine Gael)
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I propose to take Questions Nos. 11 and 13 together.

An Exchequer allocation is provided each year under the Estimates process for the funding of the county and city enterprise boards, CEBs. Allocation of funding to individual CEBs is conducted each year by the central co-ordination unit, CCU, within Enterprise Ireland. In determining these allocations a systematic approach is adopted by the EI to ensure the maximum degree of objectivity and equity of treatment and clarity on the allocation of funding. This approach involves the provision of funding on the basis of a standard allocation to each CEB as well as an extra allocation that is determined mainly by population but which also takes account of issues such as local unemployment trends, capacity to spend, existing commitments and regional spread. The Exchequer allocation is made in the context of the overall public finances and in 2011 amounts to €27.242 million, of which €15 million in capital is available for direct grants and training, mentoring and advice services to micro-enterprise clients. The bulk of the current allocation to each CEB pays the salaries of the business advisers and other staff who provide direct advice and mentoring to client companies. This represents a strong investment in the micro-enterprise sector, notwithstanding the additional level of demand on CEB services generated in the current difficult economic climate.

None of the CEBs has exhausted their annual funding for this year. However, in regard to their capital allocations for 2011, the aggregate position of all 35 CEBs at the end of May is that grants approved to be drawn down by year end amount to 85% of the available Exchequer grants allocation moneys. Approvals in respect of soft supports such as training, mentoring and advice services to micro-enterprise clients amount to 74% of the available Exchequer grants allocation moneys. This represents the level of capital commitments at the end of May and the actual level of expenditure to arise will depend on the extent to which and the speed of the projects approved being finalised by the promoters. I point out that moneys committed to a project are open for 12 months, and that CEBs can carryover 50% of commitments into the following year. However, they are required to have a zero balance of funds at the end of each year.

The CEB central co-ordination unit within Enterprise Ireland works closely with the CEBs throughout the year reviewing individual expenditures to ensure that the funding allocated to the CEBs is utilised to the maximum. Should it arise during the year that some boards are not in a position to spend all of their annual allocation - a point raised in the questions tabled - for example, where an approved grant is decommitted late in the year if the project has not started, it is reallocated to any boards that are in a position to spend additional funds within the year. Moneys identified under this process tend to arise late in the year, are not generally significant, and are allocated to other CEBs who have viable projects that can draw down the funding. However, the €3.3 million made available in the last quarter of 2010 was additional to the Exchequer funding originally made available to the CEBs for that year.

It is a matter in the first instance for individual CEBs to determine how they will use allocated funds in the most effective way. Some boards may choose to commit all of their available funding as projects present themselves, even if this means that their funding is committed relatively early in the year, while others may decide differently.

Substantial funds have been allocated to the CEBs this year having due regard to the pressures on Exchequer finances. While I accept that it is vital that CEBs continue to promote and support enterprise development, due to the finite nature of public finances, it is not always possible for a CEB to provide financial assistance to every eligible project that presents itself. This is an operating reality with which all CEBs are already familiar. Tables showing the relevant data have been supplied to the Deputy.

Catherine Murphy (Kildare North, Independent)
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I thank the Minister of State for his comprehensive reply. My attention had been drawn to an inadequacy in this respect in Kildare and I note that there is a means whereby funds can be moved from one place to the another. It appears obvious that the success rate of start-ups is very much predicated on the amount of effort spent on business planning and feasibility studies before the enterprise is up and running. If we are to encourage people to move from welfare to self-employment - in the micro-enterprise sector an enterprise can have up to ten employees - it is essential to monitor the position to ensure there is sufficient funding and that such funding is stable at the very basic level. There is a saving on both sides if people can avail of the system and move from welfare to this sector and in many enterprises that is case. I will carefully study the content of the Minister of State's long reply.

John Perry (Sligo-North Leitrim, Fine Gael)
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I thank the Deputy for her question. The CEBs stimulate enterprise potential at local level and play a key role in creating jobs in the local economy. I fully respect where the Deputy is coming from, namely, that an allocation of funding to a enterprise board may have been spent. There is a system at the year end whereby there can be a reallocation of unspent funding. Much of the funding is in the form of repayable loans. Clearly, the mentoring, supports and entrepreneurial encouragement given by enterprise boards have been very effective. The case for the need for the continuation of such supports has been well made. The funding allocated by enterprise boards is only a small part of the supports given. There is also support given by the banks on foot of the investment in the two pillar banks. They will be very much focused on lending such support. Some €20 million will be made available to small companies over the next three years. Such companies will work with the enterprise boards. Enterprise Week is very much promoted by enterprise boards in local counties. Enterprise boards play a critical role in providing mentoring and assistance with the formulation of business plans. I agree with the Deputy that they have been successful. They have encouraged many successful businesses and when the plans are finally put together by the Government, I am sure they will provide a focused service with solution-centred desks for small companies in every region.

Peadar Tóibín (Meath West, Sinn Fein)
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There is no doubt that enterprises that have business plans and research carried out at the very start of their experience are more likely to exist in five years time and their productivity is also much more likely to be higher. One of the major problems is at a time of the biggest jobs crisis in the State we have an infrastructure around the State, the county enterprise boards system, most of which have exhausted their grant funding for feasibility studies, etc. One woman-----

Michael Kitt (Galway East, Fianna Fail)
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A question, please, Deputy.

Peadar Tóibín (Meath West, Sinn Fein)
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What will be done at this crisis time to ensure that people who have feasible business ideas that would create indigenous jobs will get the funding they need this year?

John Perry (Sligo-North Leitrim, Fine Gael)
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On that point, I draw the Deputy's attention to the level of soft supports given by enterprise boards. It is all about business plans and the formulation of them. The boards are certain that funding is only one part of the success of any company. The formulation of the business plan, meeting an enterprise officer, getting the mentoring support and the initial allocation of funding are important aspects. There are many ways to securing funding be it through the credit unions or the local banks. Clearly, the banks are now beginning to have a focus on small enterprise. The figures I have indicate that all the funding allocated has not been spent by the enterprise boards to date. That is a fact. They can carry forward unspent funds in their allocations to next year.

If the Deputy wants to forward me details of a particular case, I will be happy to examine it. The central co-ordination unit operated by Enterprise Ireland closely monitoring the allocation of funding and it has carried out a review. It has been effective and increased funding in the last allocation to enterprise boards. What is involved is not only about giving money, although it is a help. It is the level of the formulation of a business plan, which in many cases can be the difficulty in a business surviving, especially if it does not have the necessary feasibility study carried out and the concept of the business plan thought out. What is involved is not the matter of putting money into a business that is not viable - the viability of the project must be assured. It is not about giving out handy money to assure an entrepreneur that the level of support will meet the needs and survival of the project. It is about the overall due diligence required on the application. The Deputy can rest assured that within the Department such money is still available and can be reallocated from one country to another if the need arises.