Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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85. To ask the Minister for Social Protection if her Department has researched and estimated the total loss to the Exchequer, including social welfare payments made and tax/PRSI forgone, which potentially arises where employers opt to engage an intern under the JobBridge scheme rather than employing someone on the minimum wage; and if so what would that loss be if 5%, 10%, 20%, 30%, 40% and 50% of JobBridge placements involved such displacement respectively. [24275/14]

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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I am asking the Minister to acknowledge and publish the figures on the very significant costs of the JobBridge scheme. Not only does each JobBridge position cost the Exchequer a weekly social welfare payment plus €50, it also incurs a cost to the Exchequer in terms of taxes and PRSI foregone because of displacement where jobs are not advertised and filled as they ought to be. I ask the Minister the total cost to the Exchequer of the JobBridge scheme given the assumptions on displacement.

Joan Burton (Dublin West, Labour)
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The Department will spend close to €1.1 billion this year in a range of employment, education and internship schemes. The major scheme is the community employment scheme, with expenditure of close to €358 million. The back to work allowance accounts for close to €113 million, while JobBridge spending stands at €82 million. All modern economies invest in education, training and work experience with a view to developing people's careers over their working lifetimes. In addition, various European studies have shown that young people who are not in employment, education or training are seriously at risk of becoming long-term unemployed, with associated poor life outcomes.

JobBridge internships are designed to break the vicious circle whereby unemployed job seekers need experience to secure job offers but cannot gain such experience without a job. In the past, one of the barriers faced by job seekers in building up that experience was that they lost their social welfare payments if they took up work experience opportunities, as they were deemed to be unavailable for work. This problem was compounded by additional costs incurred, such as travelling to and from the location of their work experience. As Minister, I introduced JobBridge to remove these barriers and open up a new pathway to employment via internships.

I am pleased to say that since its launch in 2011, JobBridge has provided a valuable work experience and development opportunity to just under 30,000 unemployed job seekers, of whom approximately 23,000 have completed the programme. There are just under 7,000 persons currently engaged on internships. More importantly, independent research indicates that the rate of progression to employment via JobBridge is higher than under any other domestic scheme and significantly higher than comparable schemes elsewhere in Europe. The research found that 61% of interns entered paid employment within five months of completing their internships.

Additional information not given on the floor of the House

The research, published in April last year, also examined the displacement and deadweight impacts of JobBridge to estimate the value for money to the Exchequer of the scheme. In summary, the data indicated a displacement impact of just over 6%. The research indicated that JobBridge, based on 2011 and 2012 performance, and contrary to the suggestion in the question that it would give rise to opportunity costs, generated positive value to the Exchequer of approximately €15 million over a full year.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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The Minister is probably aware of the economist and researcher Michael Taft. He has outlined an example of a large company taking on 14 young JobBridge interns for six months instead of recruiting at the minimum wage, which the company should be encouraged to do. It might even be encouraged to take on staff under a JobsPlus mechanism. In the example, the loss to the Exchequer over the six months includes the €144 per week social welfare payment plus the €50 top-up and lost employer PRSI of €765, which is not included in the Minister's figure of €82 million. There is also the fact that the income tax that would have been paid had someone been employed directly is lost. In this example of 14 young interns, JobBridge is costing the Exchequer €81,000 while the company is receiving the equivalent of a subsidy worth €136,000.

Can the Minister confirm the full cost of the displacement in the workplace in terms of pay and conditions is included in the €82 million she mentioned rather than just the subsidy paid on top of the social welfare payment?

Joan Burton (Dublin West, Labour)
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Economists like the one mentioned talk about displacement effects and the people who would have got work anyway. Based on research from 2011 and 2012, contrary to the suggestion of Deputy Ó Snodaigh about opportunity cost, JobBridge generated positive value to the Exchequer of €15 million over a full year. Perhaps what the Deputy's economist is failing to take into account is where people get a start and work experience. As a society, we put great emphasis on education but people come out of education at various levels after the leaving certificate, after a degree, after a masters and a doctorate in the case of some people I have come across, they have gone through education but they have no work experience. In a labour market where it is difficult to get a job, not having that magic thing of some work experience means good people cannot be seriously considered by employers for vacancies. If they get a start with JobBridge, they get the experience. The research shows that, subsequently, over 60% of them go on to be in paid employment five months later. We must look at the totality of the return to the individual, to the company and to the organisations that use their services. This includes community organisations that go out of their way to give interns high quality work experience. Then, people get a start in the labour market.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Michael Taft is not my economist and hopefully he is nobody's economists. I think he is an independent economist and was probably closer to the Minister's party in the past than mine. The Minister mentioned independent research but she has never quoted the following fact from her Indecon report. One of the questions to the employers was whether they would employ someone if JobBridge was not available, which is the displacement level. The level is 29%, as 29% of host companies said that, in the absence of JobBridge, they would have offered paid employment to the interns. Some 29% were willing to admit publicly that they were glad they could scam the Government, get the subsidy and gain a competitive advantage over companies close by. The question is what the full cost to the Exchequer is and, as pointed out in the Indecon report that the Minister is forever quoting at me when I raise JobBridge, some 30% of the companies would have employed someone. That would have led to more money for the Exchequer and more money in the pockets of at least 30% of people. JobBridge is now being made compulsory, forcing people into the scam. It should be changed.

Joan Burton (Dublin West, Labour)
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Deputy Aengus Ó Snodaigh does a great disservice to the 30,000 people who have done JobBridge on an entirely voluntary basis at over 13,000 host organisations range from SMEs, larger companies, community organisations and not-for-profit organisations of various kinds.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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And multinationals.

Joan Burton (Dublin West, Labour)
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The Deputy does people a great disservice to describe their attempts to get back on their feet or, having finished various courses including high-level college courses, to get a job. It is a bit sad that Sinn Féin should decry-----

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Companies should pay these people.

Joan Burton (Dublin West, Labour)
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It is regrettable. Is Sinn Féin's view of Ireland that we will all be on social welfare and does it want no one to be at work? Sinn Féin seems to want no one to be at work.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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The Minister is not at the Labour Party hustings now.

Joan Burton (Dublin West, Labour)
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The scheme is to allow people who have completed education and are, in the current market, unable to get employment-----

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Paid for their work.

Michael Kitt (Galway East, Fianna Fail)
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Please allow the Minister to continue.

Joan Burton (Dublin West, Labour)
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The Indecon study showed a displacement rate of 6%. If the Deputy studied displacement rates, he would know that this is an extraordinarily low rate. In fact, the return to the State from the people who participate in JobBridge every year-----

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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The figure is 29%.

Joan Burton (Dublin West, Labour)
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-----and then get a job and leave the social welfare system has been €15 million for each of the past two years.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Look at the figure in the report - 29%.

Joan Burton (Dublin West, Labour)
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I am telling the Deputy what the figures are. The saving has been €15 million.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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The Indecon report has a figure of 29%. The Minister is wrong. She has not read it.

Joan Burton (Dublin West, Labour)
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The report states that 89% of the people who participated in JobBridge were very satisfied with the experience.

Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Twenty-nine percent of the companies have written people off.