Shane Ross (Dublin South, Independent)
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Question 21: To ask the Minister for Jobs; Enterprise and Innovation his views on that the cost per job in Enterprise Ireland supported companies that has increased from €4,278 in the years 2000 to 2006 to €12,254 in the years 2004 to 2010; and if he will make a statement on the matter. [21595/11]

Richard Bruton (Dublin North Central, Fine Gael)
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As part of the Forfás annual employment survey, the overall cost per job is calculated each year by reference to the cost of jobs created during and sustained to the end of a seven-year period. The accepted accounting measure for the cost per job is cost per job sustained. This is calculated by taking into account all direct agency expenditure on all Enterprise Ireland client companies in a seven year period. Only jobs created during and sustained at the end of each seven year period are represented in the calculations. The cost per job calculation takes the total grants paid to companies to undertake development projects at both start-up and expansion stages and the new jobs that arise from these projects.

Enterprise Ireland's investment policy facilitates a grant and-or equity mix. Equity investments would typically be made in early stage companies where a greater level of risk is posed. Funds realised from the sale or repayment of equity related investments are deducted in the cost per job calculations. Over time this funding policy has been a driver of the declining cost per job sustained up to 2006. This declining figure was primarily due to the impact of large financial support in 2000. Such refunds were largely attributable to the sale of shares in one company that resulted in a refund of over €100 million in 2000 and that formed part of the calculation up to 2006. The financial supports from 2000 are no longer relevant to the calculation for cost per job sustained in the subsequent seven year period.

Since 2006 the cost per job sustained has increased. Other factors resulting in the increases in recent periods include that Enterprise Ireland provided additional supports such as the Enterprise Stabilisation Fund to ensure Irish-owned companies were in a position to withstand the worst recession in decades. The fund which was introduced in 2009 made payments of €79.2 million in the period 2009 and 2010. Also, additional supports relating to dairy, beef and sheep funds were introduced in 2008. These are administered by Enterprise Ireland on behalf of the Department of Agriculture, Fisheries and Food and form part of the calculation. A lower number of jobs was sustained for 2004-10 compared to earlier seven year periods in the context of the severe recession. The jobs sustained figure for the 2010 period was 43,800, while for the earlier period it was 48,029.

Additional information not given on the floor of the House.

Enterprise Ireland is focused on the objective of increasing exports and consequently employment through a range of interventions such as driving sustained research and development and innovative activities through direct supports for in-company research and development and collaboration; international sales, including supports to drive sales and marketing capabilities of companies and the support of 31 overseas offices; building leadership and management capabilities, encompassing Enterprise Ireland's Leadership 4 Growth programme designed and run in conjunction with Stanford University; embedding competitiveness improvements through a tailored programme of lean initiatives; and financial supports which can take the form of grant aid to support business development activities in established companies. In innovative start-ups Enterprise Ireland takes equity positions to support the start-up business plan.

We must champion the cause of companies which can create good jobs in sustainable activities. Enterprise Ireland will play a vital role in contributing to the building of a strong, sustainable and innovative enterprise sector.

Shane Ross (Dublin South, Independent)
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To paraphrase the Minister, it seems that post-2000, particularly in the last two years when the curve got very steep, Enterprise Ireland has been supporting companies it has already supported in the past with the new Enterprise Stabilisation Fund which amounts to €80 million this year. The fund is being used to back up Enterprise Ireland's earlier judgment. What it refers to as viable but vulnerable companies have been supported. Does that not call into question the earlier judgment made? It has supported companies which would now be in trouble if it had not put more money into them. There is a new fund of €80 million for companies Enterprise Ireland has already decided to support, which was certainly a questionable judgment. Because of its Exchequer funding increases from €396 million last year to €420 million, is Enterprise Ireland costing too much to finance? Why is the Exchequer continuously putting money into this State agency which, in turn, has to put that money into companies which it has already backed and which it refers to as viable but vulnerable?

Richard Bruton (Dublin North Central, Fine Gael)
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I do not think it is a fair judgment that these were bad choices. Internationally, the recession we have experienced has been unprecedented. Anyone who has part of his or her business in the Irish market has suffered a 20% drop, while world markets have dropped by about 10%. This has been an exceptional maelstrom for Irish business. While I was not party to the decision to provide temporary relief, if jobs were lost, each job lost would have cost the Exchequer €20,000 per person in jobs that must be judged viable before the fund is accessed. It is unfair to imply the original choices were bad; this has been an extraordinary collapse that has not stemmed from those successfully trading overseas, rather it is a domestically created crisis, coupled with the international recession. However, we could not call into question the selection of companies.

The Deputy has asked if we are spending too much on Enterprise Ireland and I do not believe we are. We must develop an engine of indigenous growth and it is a criticism of Irish industrial policy that only 10% still comes from indigenously owned companies. To be fair to Enterprise Ireland, it has dramatically reduced in size in recent years; employment in the agency has fallen by 40%. That is not say, however, we can afford not to be vigilant. We must ensure every line in every programme delivers value for money. I will be applying such vigilance to the programmes.

Shane Ross (Dublin South, Independent)
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There are two interpretations and the Minister is taking the benign one, while I am taking the more critical one. There is a case for saying Enterprise Ireland is covering up its mistakes with the new money it has received in the rescue fund. It is difficult to find out what companies are involved. Enterprise Ireland costs about €94 million a year, about €2 million per week, including €4.5 million in travelling expenses. Does the Minister not view with concern that more than one third of its budget is used for administration purposes rather than for grants to SMEs?

Richard Bruton (Dublin North Central, Fine Gael)
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This was not the subject of the question.

Shane Ross (Dublin South, Independent)
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Correct.

Richard Bruton (Dublin North Central, Fine Gael)
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My understanding is that the vast majority of Enterprise Ireland's staff are customer-facing. In other words, they are dealing daily with businesses, either on their research or marketing needs. This is not a huge, top-heavy administrative operation. Obviously, every section of this Department will have to be under scrutiny. We are under an obligation to reduce the numbers employed in every section. Enterprise Ireland, as well as the rest of the Department, will see its staff reduced in the coming years. I will be determined to ensure that this does not impact on the quality of the service going to Irish business. We need to be more cost-effective and I will look for that in Enterprise Ireland, as in every other operation. However, I do not think a prima facie case has been made that this is an ineffective use of an organisation that is not well managed. The contrary is my view.