Thursday, 12 July 2012
County Enterprise Boards
Question 6: To ask the Minister for Jobs; Enterprise and Innovation if he will provide an update on the review of county enterprise boards being conducted by the Central Coordination Unit within Enterprise Ireland. [33860/12]
Question 13: To ask the Minister for Jobs; Enterprise and Innovation when he expects to abolish county and city enterprise boards; the expected savings; if he will prepare an impact analysis on jobs of the move; and if he will make a statement on the matter. [34018/12]
I propose to take Questions Nos. 6, 13 and 23 together.
The county and city enterprise boards, CEBs, receive an Exchequer capital allocation each year towards the provision of grants and soft supports to the micro-enterprise sector. Within this, individual capital allocations are made by the CEB central co-ordination unit, CCU, in Enterprise Ireland. A systematic approach is adopted to ensure objectivity and equity of treatment across the CEBs and determinants include local unemployment rates and trends, population, capacity to spend, existing commitments and regional spread.
The mid-year budget review is a routine budgetary exercise carried out by the CCU to monitor expenditure by the CEBs. This review is due for completion by the end of July. Its purpose is to identify any potential underspend and ensure that the CEBs' allocated funding is utilised to the maximum extent possible.
To enhance the service to small businesses at local level, the Government has decided to create a new small business unit within Enterprise Ireland. Enterprise Ireland will work with local authorities to establish a new network of local enterprise offices, LEOs, in each local authority to act as a one-stop-shop for micro-enterprise and small business. The service will be provided in local authorities and a formal service level agreement between Enterprise Ireland and the local authorities will be put in place. In time, synergies will be achieved in terms of a more streamlined model for the delivery of enterprise supports and interventions to the micro-enterprise sector. Some savings on current expenditure are envisaged in the medium term, for example, on reduced accommodation and administrative costs.
The aim is to provide a seamless and effective service that is of a high standard, supports local businesses and facilitates job creation. Primary legislation will be required and my Department is in contact with the Attorney General in this regard. An implementation group has been established under the chairmanship of my Department. It will develop an implementation plan with timelines and milestones for delivery of the new structure.
This question relates to the experience of CEBs. Today, an individual told me that his CEB had no money when he went to it in April 2011. He did not want to return to it this year because he figured that it would still have no money. When I contacted the CEB recently, it stated that it had money.
There is a great deviation between CEBs' first quarter results. Some have spent 90% of their money and some have spent 50%. What strategic tools are used in the delivery of funds to CEBs? They should base their strategies on demand, population sizes within their areas and levels of unemployment. They need to create demand rather than just respond to it. The CEBs, or LEOs as they will become known, should not be a part of the demand-led experience where enterprise is concerned. They should be used as a tool to awaken and create enterprise. May I contribute again, as a number of questions are being taken together?
The allocations are based on a weighting of factors, including unemployment and the capacity of CEBs to deliver new projects. It is a balancing act, which is as it should be, to encourage high performers and so on.
The Deputy is right, in that practices differ between CEBs. Some are in the habit of committing in advance and have high levels of commitment at any stage of the year while others adopt a different policy. The reform is intended to develop a service level agreement with local authorities, one that will go beyond the allocation of funds and consider the quality of mentoring and training to ensure that standards are being met. We will also use the LEO structure as the conduit for many of the micro-finance applications to ensure that they are backed by quality business plans. New policy instruments are in the hands of the LEOs, which are being developed, but we also want local authorities to knuckle down to their responsibilities and make the environment in each county as good as it can be for supporting businesses.
My question is somewhat different, in that it is more direct. I have spoken to the staff of a number of CEBs and to businesses that have engaged with CEBs previously and intend on doing so again. To be frank, no one has a clue as to what is happening. The Minister stated that he established an implementation group that would devise an implementation plan.
I am trying to ascertain - in a non-political fashion, I hope - on behalf of the people asking me approximately when all of this will be in place.
The Minister mentioned there would be some cost savings but, frankly, I cannot see them. The Minister and his officials have told me on a number of occasions that there will be no reduction in staff and the people in the business development section of the local authorities will join the new people and form a unit that will cover a range of areas. Where will these new one-stop shops be housed? Will everybody move into the local authority building or will there be a separate office? Has the Minister any indication of how this will work in practice and when it will do so?
We have established an implementation group which has had a number of meetings already. Those people are putting together a plan for the implementation which will include timelines, and I expect to have very substantial progress made by the end of the year. There is a legislative requirement which must come before the House, and I do not expect to have that before the start of next year.
The group working on the implementation plan includes representatives of the enterprise boards, the professionals in the field and representatives of the managers of local authorities. Our aim is to gain a "win-win" position from this and enhance the delivery of service locally by supporting those working in local enterprise offices with a centre of excellence in Enterprise Ireland and by developing new tools, setting standards and driving quality. Local authorities will also be embraced to make them part of solving the problem for local business and have a business-friendly system. This is a challenging change and I acknowledge that not everybody would support it. It will none the less deliver a better quality of service for business in local areas, which is the objective.
I have made my points on the dangers of having the local authority involved, as it is a cost and regulation centre for small businesses. Therefore, there is a natural antipathy for small businesses. There is also a lack of culture within local authorities towards enterprise, and I agree with Deputy O'Dea's comment that there is very low morale within county enterprise boards throughout the State. Since the days of the former Minister, Batt O'Keeffe, the people in those organisations have not known, from one day to the next, what will happen to them. It is a limbo-like process for such an important tool.
Local control is very important. Will the Minister ensure the control, development and orientation in each county will not migrate to a regional status through Enterprise Ireland's control and that there will be an orientation towards the needs, knowledge and experience in the locality? There are a number of partnerships and Leader programmes throughout the State which also fund enterprise. There is sometimes at least a perception that there is an overlapping of activities, so does the Minister have plans in that regard?
The Minister mentioned standardisation and equality of training, which is very important. There is much work going on with the creation of SOLAS, and the VECs also provide training. There must be a system whereby standards can be equalised and raised, and there should be an understanding between VECs and SOLAS, etc.
There is now certainty about the future of county enterprise boards, and it will be to deliver a one-stop shop within local authorities as part of the enterprise family. They will be answerable, through a service level agreement, to Enterprise Ireland, which is establishing a centre of excellence for the support of small business. We have a clear structure that will give people certainty. We will retain local control and there will still be a local evaluation committee. Decisions will still be taken and the evaluation will be done locally, albeit under a service level agreement. We will ensure this is being done in a way that stands up to scrutiny, and although we will not interfere in individual decisions, we will want to see that the overall impact produces quality.
I know the Deputy's comments reflect the views of many people that local authorities are a dead hand. My experience with city and county managers is that many have ambition to be part of driving change and enterprise growth in the area. These are dynamic people that we must harness to the support the process. The success of this initiative will depend on local county and city managers, along with local authority members, wanting to make their county or city the best place in which to do business and the best environment for supporting small business and start-up companies. We depend on that.
My experience of city and county managers is somewhat mixed. I have a brief question. I do not want to pre-empt the work of the implementation group but I welcome the information communicated by the Minister that one of the matters it would deal with is the processing of the microenterprise loans at local level through the structure outlined by the Minister. Will the Minister give the House some idea of what other services might be provided? Would they include legal and accountancy advice or help in accessing finance? Does the Minister see it as a vehicle to assist small business in accessing the export market?
Small companies with potential would enter the export market through Enterprise Ireland. It has 31 offices overseas and has expertise and a programme to support exports. It has also put in place a first-time exporters' division.
Exactly. For a small business, there will not be a ceiling that cannot be breached. If a company has export potential and there are only two people involved, they will be able to access the system through Enterprise Ireland.
To be clear, I have not said it will process the microfinance loans, and there will still be a "microfinance Ireland", as it were, that will make decisions on applications. The people who will help applicants put together the business plans will be local. They will not make decisions at a local level on loans or issue them. They do not have the authority. They will be one of the brokers, and others will include the likes of Inner City Enterprise in Dublin. These are people who work with start-up companies in high unemployment areas.