Michael McNamara (Clare, Labour)
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As the Minister, Deputy Hogan, will be aware, in October 2012 his Department published the final report of the local government-local development alignment steering group. The conclusions contained in that report have far-reaching implications for the future of local development across the State. Clare Local Development Company currently employs 182 people on a wide range of programmes and schemes, including the Leader programme, the local community development programme, local training initiatives, a rural social scheme, a community employment scheme, the Tús scheme and a rural recreation project. In the coming months some 100 people will be employed on the Tús scheme. This is one of the highest levels of employment on the scheme across all local authority areas.

The main recommendation made by the alignment steering group relates to the establishment of a socioeconomic committee in each local authority area. In Clare and all other counties, these committees would effectively replace the local development companies. I can appreciate that the socioeconomic committees are being set up to address a perceived democratic deficit in the decision-making process and to give democratic legitimacy to the decisions that are made and to the dispersal of what are very large pots of money. The creation of new quangos will not automatically achieve this aim. It is not at all clear from the recommendations of the steering group who will be responsible for appointing the members of the socioeconomic committees. Neither is it stated whether the membership of the committees will entirely consist of local representatives. If it is solely the latter who will be involved, then difficulties will arise as a result of the fact that at least 51% of the membership of a body which administers Leader funding must come from social groups rather than local government. If the percentage is less than 50%, who will appoint the non-elected representatives?

People are concerned that local development as it currently exists will be emasculated and brought under the control of county managers. While that might be advisable and even beneficial in certain areas, it certainly would not be beneficial in every instance. What is proposed will certainly serve to emasculate local government. I look forward to the Minister's views on this matter.

Tommy Broughan (Dublin North East, Labour)
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Last week the 50 integrated local development companies held a briefing for Deputies, an exercise which proved very valuable. I was briefed on Wednesday by Mr. Willie Hamilton, chairman, and Ms Marian Vickers, CEO, of the Northside Partnership - of which I was a director for many years - and Ms Jeanne Deegan, CEO, and Ms Pauline McNamee of the Fingal Leader Partnership. It is fair to say that at the briefing in question there was a palpable fear that the entire ethos of local government which has been built up across the country in the past 25 years may well be swept away by the Minister's proposal to transfer core funding away from the local development companies to the new socioeconomic committees.

As the Minister is aware, the Northside Partnership was one of the first 12 partnership companies in the country. It has a remarkable track record of developing innovative programmes such as the Challenger programme in the area of education. The latter has had a profound impact on north-side communities by assisting young people in remaining in education at second level and in proceeding to third level. The Northside Partnership also pioneered the mediation system that is used to engage with unemployed people and encourage them to enter training and return to work. It has achieved astonishing success in this regard.

The Fingal Leader Partnership, which is led by Ms Deegan and Ms McNamee, also has a remarkable track record. The most recent survey shows that in 2011 it supported 630 people in getting into employment and 255 into positions on labour market programmes. In addition, it gave self-employment support to 299 people, assisted 144 people in becoming self-employed and supported 182 people in moving into further education and training.

We have a track record in this regard. The Acting Chairman, Deputy Terence Flanagan, will recall my using the old adage "If it ain't broke, don't fix it," at a public meeting on Monday evening last. That adage really applies in this instance. I have been involved in local development all my life and I campaigned on behalf of Leader and in support of allowing partnership organisations to build on what they were already doing in local parishes and communities.

It would be a pity if this were now to be lost in a morass of bureaucratic dead-hand development. This is the challenge for the Minister because this has happened in the past in local government. I urge him to listen to the local government development network and ensure that direct funding continues.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I thank Deputies McNamara and Broughan for raising this matter as it gives me an opportunity to deal with some of their concerns. I know the Deputies have read the documentation about the alignment of local government and community and this should have allayed some of their fears.

Putting People First: An Action Programme for Effective Local Government sets out a range of reforms that will place local government at the heart of local economic, social and community development. The programme includes proposals for enhancing alignment between local government and local and community development programmes and functions. Greater alignment is primarily about developing a partnership approach between the local government sector and the local development sector in the area of local and community development programming in order to bring about more effective delivery of these services to our communities and citizens.

I established an alignment steering group to study this area. The group's report outlined a number of recommendations for bringing a more coherent approach to local service provision with a more central role for local government in planning, decision-making and oversight of local development programmes. The Deputies will know from some of the problems which have arisen around the country such as Meitheal Forbartha na Gaeltachta and Mayo North East Leader programme that there is a strong requirement for greater oversight, in view of the fact that irregularities have been discovered in these companies. The steering group acknowledged the key strengths of the local development sector, including the local knowledge and expertise in local service planning and delivery developed by the sector.

It also recognised that there are certain limitations to the current local development model. For example, there can be a considerable administrative burden. Some companies spend 15% of the total funding on administration and others spend 30%. There is a potential for duplication and overlap because of the complexity of the local development landscape; the many different funding and reporting arrangements; the demands and hidden costs associated with the requirement on various stakeholders to participate in multiple boards and structures at local level.

Local development companies will be key players in the new structures. They will be a key partner on the socioeconomic committees. They will also continue to implement the programmes on the ground using the bottom-up approach. None of us should expect autonomy. Our citizens want to know where their hard-earned money goes and they want a say in how it is spent.

The alignment process presents us with an opportunity to provide more meaningful impacts for our communities, especially when resources are scarce and likely to be more scarce, particularly in the rural development programme. I am confident that both sectors can work in partnership - in a way that builds trust and respect between them - to deliver efficient, sustainable, joined-up and easy to access services for our communities.

Michael McNamara (Clare, Labour)
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I thank the Minister for his reply. He mentioned a number of local development companies which are in trouble. It is important to point out that County Clare was not among them as it is one of the more successful ones. However, I appreciate that there are companies throughout Ireland and we have to legislate for the entire State and not just one county.

On the other hand, the European Commission and the European Court of Auditors have shown that local development programmes run by local authorities in other member states have performed poorly. The Irish model of local development companies has been favoured by the European Commission. With that in mind I am very glad to hear that the Minister proposes to give the local development companies an important role in implementation and on the boards of the new committees which will be established. There is a fear that these will have just a token representation of perhaps one member on the board. What is needed is a greater range of information on the proposed role of the board and, more important, who will comprise that board. The question is whether it will effectively be in the power of the county managers. The entire thrust of Putting People First is to give powers back to elected representatives and to restore the county manager to a chief executive position rather than being effectively the power behind the throne which is the case very much at the moment with the power of elected representatives very much emasculated. I thank the Minister for the clarifications he has provided.

Tommy Broughan (Dublin North East, Labour)
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The Minister referred to a number of companies where irregularities have been discovered. I represent companies and I served with one company in particular for many years. That company had an outstanding pioneering role in local development. The Northside Partnership came from the community. Local development organisations before the Northside Partnership in the 1980s paved the way for the programmes carried on by the Northside Partnership. They are the really successful companies. There is a real fear of the effect of the dead hand of local bureaucracy. In that era I remember some excellent local authority officials but also some officials who acted as a road block to any kind of innovative development and social entrepreneurial development. Social entrepreneurship is a key aspect.

Contracts for funding of the rural Leader social inclusion programme are due to expire at the end of this year. There has been no word about the renewal of contracts and how funding may be handled. I ask the Minister for his views. Does the Minister envisage that all the staff of these companies will be transferred to the local authority to be directly managed by the county manager? As my colleague, Deputy McNamara stated, there is a fear that this spark of initiative in all the really good companies could be extinguished by the Minister's hand.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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We can always rely on Deputy Broughan for the easy way out.

Tommy Broughan (Dublin North East, Labour)
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I take the hard way; the Minister takes the easy way.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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I have no intention of transferring a total of 1,968 staff to local authorities. I have no intention of doing that. I do not think the taxpayer has any intention of doing it either.

Tommy Broughan (Dublin North East, Labour)
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I am glad to hear it.

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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The document on local government which I published some time ago will position local government with the overall responsibility - not the dead hand as referred to by Deputy Broughan. Perhaps he had a bad experience with local authorities . The powers we envisage giving local authorities and the level of accountability we expect of them means we will not see any dead hand flourishing in the local government structure of the future. I want to see the same happening on the community side. Local authorities will have a central role in the oversight and planning of local and community development programming. We will have a democratic input for the first time on decisions on how money is expended in our community. The alignment steering group recommended clearly that the bottom-up approach should be embedded as an integral part of this planning and decision-making. I support that view.

I met the Irish Local Development Network in recent days to discuss the issues in advance of its lobbying session with Oireachtas Members. We agreed eight out of nine items on the agenda so we have made a lot of progress even at that meeting. We have agreed to meet again at the end of February. Unnecessary fears or misunderstanding may be about which are sometimes motivated by others. I want to assure the Deputies that I will be taking a proactive approach to ensure we have a good partnership between local government and the community.

Our approach has the support of the European Commission, contrary to what the Deputy may have been told. The Irish model of a community-led approach is unique. We are the only country in the European Union to have this approach so it is bound to be unique. The European Court of Auditors did not single us out for any special mention, contrary to what Deputy McNamara may have been told. Ours is the only model of the private company approach. Other European countries have a structure in place which is a partnership between local government and the community.

I inform Deputy Broughan that we do not know what money we will have in the next round because the European budget has not been agreed yet. It is hoped this will be disclosed in the next few weeks. We will know then what will be the level of funding. All the indications are that it will be lower. I assure Deputy Broughan that any moneys for this new structure will be ring-fenced for community-led development, whether in rural or urban areas. The community-led approach is alive and well. It will continue to be alive and well but there will be a democratic input into any new programmes from 2014 to 2020.