Joe Costello (Dublin Central, Labour)
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I thank the Ceann Comhairle for the opportunity to discuss this important issue. This problem has come out of the blue. Supervisors of community employment schemes are discovering when renewing insurance premiums that the cost of insurance has increased by exorbitant sums. Some have been quoted a threefold increase in the cost of insurance, which is unprecedented. In addition, no indication is being given for the reasons these increases are being introduced at this time.

Community employment schemes employ approximately 23,000 people nationwide. Increases in insurance premiums have become a feature of community employment schemes in the north inner city of Dublin. These increases are of major concern to stand-alone community employment schemes which do not have the wherewithal to pay them, whereas other schemes engaged in a broad area of activity may be able to soak up the increase.

The materials grant provides the funding used to pay insurance premiums. With the allocation of materials grants for 2015 complete, it is not expected that the funding will be increased or extended to cover the unexpected increases in insurance costs that are coming on stream. Certain community employment schemes are finding that they do not have the wherewithal to pay the premium.

I am aware that the Minister of State, Deputy Kevin Humphreys, is au fait with the issues involved. Allianz is the predominant company engaged in quoting insurance for community employment schemes, at least in the area I represent. This means competition is limited. The insurance industry should be consulted on this matter with a view to ensuring there is greater competition in this area. The Department must engage with the insurance companies to determine the grounds on which a threefold increase in premiums is being sought. To cite one example, the cost of insurance for the Dublin Adult Learning Centre, of which I am a director, has increased from €1,250 to €3,750 per annum. This quote came completely out of the blue. The centre provides schemes which have never lodged claims against the insurance industry. It is not a question of some bad claims being made and the company seeking to recoup some of the expenditure it has made. For this reason, it will be necessary to determine from Allianz the reason for the sudden increase in insurance premiums.

Will it be possible in the short term for the Department to meet some of the additional insurance costs being incurred by community employment schemes? This could be done by extending the materials grant to address the imminent problems a number of schemes are facing.

Kevin Humphreys (Dublin South East, Labour)
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I thank Deputy Costello for highlighting this issue, which has come to my attention only recently. He provided an example of the Dublin Adult Learning Centre, for which the insurance premium has increased by €2,500. This substantial increase was quoted without warning. I understand the reason the Deputy, as a director of the centre, community activist and public representative for Dublin, is concerned about the issue.

Community employment schemes are required to procure annual liability insurance to cover their schemes. In recent months, sponsors have been advising the Department of increases in insurance premiums for schemes. The main reasons for these increases advised to the Department when this was queried with the insurance companies were claims cost inflation, an increase in claims frequency in recent years, changes in the courts' jurisdiction, and a reduction in income from insurers' investments.

The Department has been in consultation with the main insurers of community employment schemes about the increases with a view to ameliorating them and seeking to limit the incidence of future claims. The Department recommends, in the first instance, that scheme sponsors seek alternative quotes to ensure they obtain value for money.

Insurance premium costs continue to be reimbursed from the community employment materials grants. Sponsors have been asked to be especially mindful of their legal obligations under the Safety, Health and Welfare at Work Act 2005 and in respect of the supervision of the health and safety environment of their employees.

Materials budgets are allocated on an annual basis and managed at divisional level. In general, the Department is not in a position to allocate additional moneys to the materials budget in 2015. However, if a scheme experiences particular difficulties, the sponsor should contact the local departmental office on the matter.

Like Deputy Costello, I am acutely aware of what community employment does for local communities. Not only do these schemes assist long-term unemployed people to return to work but many also provide valuable services.

I thank the Deputy for raising the issue. I share his concerns about the matter and I will continue to engage on it.

Joe Costello (Dublin Central, Labour)
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I thank the Minister of State for his reply and note the points he made. The industry provided four reasons for the increase in the cost of insurance premiums, namely, claims cost inflation, an increase in claims frequency in recent years, changes in the courts' jurisdiction, and reductions in income from insurers' investments. It would be interesting to have these factors quantified by the insurance companies. The reasons given appear impressive and suggest that there has been a significant increase in the number of claims before the courts and so forth.

Will the Department request a breakdown of the factors allegedly behind the increase in premiums? If it is the case that the cost of claims has increased, why have premiums suddenly increased threefold when one would expect them to increase on a phased basis? Did the increase in claims take place last year? Surely it occurred over a period of years, which would result in a gradual increase in premiums.

The insurance companies involved are trying to put community employment schemes out of business. If a standalone scheme whose only source of income is the moneys allocated under the materials budget is unable to secure an increase in the materials grant to cover the cost of an increase in insurance premiums, it will find itself in difficulty. It will certainly be in a negative position with its bank and the materials grant it receives in 2016 may not cover outgoings it makes in 2015.

This is a serious problem. It would be worthwhile inviting the industry to a meeting and encouraging it to engage more competitively in this area. A number of companies should quote rather than the limited number which quote currently. We must ensure the viability of any community employment scheme is not threatened by increases in insurance premiums. As the Minister of State noted, these schemes provide significant employment, support and experience for approximately 23,000 people. Moreover, participants change every couple of years. Community employment is at the cutting edge in terms of offering people who are unemployed an opportunity to re-engage with employment. Every effort must be made to ensure nothing undermines these schemes.

Kevin Humphreys (Dublin South East, Labour)
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It would be interesting and helpful to seek a breakdown of the factors cited by the insurance industry, although obtaining such a breakdown may be another matter. Two main insurance companies are involved in community employment. This issue was highlighted to the Department only recently. Until now, insurance for community employment schemes has cost approximately €50 per participant.

It has been brought to my attention that for some participants it has now gone to between €82 and €125. That is an increase of between 64% and 104% in insurance costs. The Department would struggle to deal with that rate of increase. Certainly, the Deputy's questions are very pertinent. In the first instance, I ask the schemes to get another quote if possible and to engage with the individual management structure. It is a cause for concern, and I thank Deputy Joe Costello for raising it in the House today.