Thursday, 10 July 2014
Ceisteanna - Questions - Priority Questions
Small and Medium Enterprises Supports
4. To ask the Minister for Jobs, Enterprise and Innovation his views on the main impediments to the small and medium enterprise sector's ability of firms to increase employment; the actions he is taking to resolve these issues; and if he will make a statement on the matter. [30047/14]
I ask the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy John Perry, what he regards as the main blockages to SMEs' ability to grow employment and how we can support the SME sector, our most stable sector, in its efforts to grow employment and prepare for the upturn in the economy.
Since coming into office the Government has had a clear focus on assisting SMEs which make up over 99% of businesses in the enterprise economy in Ireland and account for almost 70% of people employed to establish, expand and export, with a view to driving economic recovery and creating jobs across the country. One of the priorities of the Government has been to identify and act on the impediments to the ability of small and medium enterprises to increase employment.
The advisory group on small business which I established in June 2011 reported on 23 November that year. The report identified a number of impediments ranging from weak demand, access to finance, labour costs and flexibility, the cost of doing business, competitive practices, access to public procurement, mentoring, management development, debt and insolvency to easy access to information. These impediments have been the subject of a range of actions within An Action Plan for Jobs. They include: a first stop shop through the local enterprise office, LEO, network; more accessible supports for recruitment such as JobsPlus and JobBridge; new instruments for access to finance; enhanced support in developing new markets overseas and through global sourcing; and access to information and support.
In addition, new legislation has provided for the streamlining of company law to make it easier for small and medium-sized businesses to form and operate. We have also reformed the wage setting mechanisms by removing the inflexibilities which prevailed. Legislation to strengthen competition and consumer law, including, in particular, the introduction of powers to regulate practices in the grocery sector is going through the Oireachtas.
A further major source of jobs growth in the SME sector is start-ups. The establishment rate of new businesses fell by 30% in the crash. A key challenge we are addressing is to create an environment in which more start-ups will occur, survive and grow to scale. The recent forum on entrepreneurship is a major contribution to this objective. As a follow-on to the forum, the Department shall shortly publish Ireland’s first policy statement on entrepreneurship.
On the 2011 report, I ask the Minister of State to outline the issues that remain to be addressed. We could beat each other over and back on access to credit which is not yet available for many businesses which want to expand. Banks are in the habit of lending to safe businesses, but businesses with good plans to increase employment which might be risky are not finding a home. The Joint Committee on Jobs, Enterprise and Innovation will be publishing a report on the issue next week and will make some suggestions in that regard.
The Minister of State also mentioned the issue of procurement, which remains a major source of frustration for small businesses, in particular. They are not given access to procurement. This is an area on which I ask the Minister of State to work in conjunction with the LEOs, now that they are linked with local authorities. The announcement made yesterday by the Minister of State at the Department of the Environment, Community and Local Government of funding to renovate local authority housing stock is an example of where small companies and trades people can make a difference and create employment. However, many of them will be restricted in tendering because of the current position on procurement. I ask the Minister of State to update us on the issue.
On procurement, last week we had a meeting with Mr. Vincent Campbell. We have also met Mr. Quinn.
We had a discussion about how best to deal with this through collaboration and ensure smaller companies can avail of major opportunities in the procurement sector. There is a demand to ensure small companies can be included in that very essential process. That is very much the Government's current task. I assure the Deputy we will provide an update and we look forward to reading the report next week. Procurement must involve smaller companies submitting joint bids, and such a process is now being examined. Procurement is about getting the best value for money, but it must equally bring quality. There is ongoing discussion with the Office of Government Procurement on the best way to proceed, and I will update the Deputy when that is concluded.
There is also the matter of bureaucracy and red tape. Work has been under way in the Department for some time to address the number and type of regulations. How effective has that been in the past three years since the issue was identified in November 2011? Is it now easier for companies to do business with regard to licences, etc.? Will the Minister of State provide an update on the work done on the one-stop shop for retail licensing?
That is going to EU tender at the moment. A review has been done of the 159 licences within the State and we expect that in the final quarter of this year the EU tender process, involving up to 40 different licences and 15 State authorities, will be complete. There will be a single portal for the issuing of licences. Within our Department there is a high-level group on business regulation and we have cut over €200 million from the cost of doing business. The establishment of local enterprise offices and easy access to setting up businesses through incoming company law will provide opportunities and ensure the laws of the State are proportionate to the size of the company. The high-level group has been very effective in many ways and we have a very effective committee that is representative of all sectors in the economy. We have taken many of the recommendations on board, particularly relating to the time taken to set up a company. The portal for licences will be on stream by the end of this year.