Seanad debates

Tuesday, 2 December 2008

3:00 pm

Photo of Billy KelleherBilly Kelleher (Cork North Central, Fianna Fail)

I welcome the opportunity to speak about our national training and employment authority, FÁS. As well as talking about the recent publicly aired matters relating to the administration of FÁS, I will outline the important and valuable role it is playing in the context of the serious challenge facing the Irish labour market.

The downturn in the economy has had a significant impact on the labour market and is likely to continue to do so into the future. Forecasts for employment have been revised downwards for this year and 2009 by all commentators. The recent CSO quarterly national household survey puts the seasonally adjusted unemployment rate for the third quarter of 2008 at 6.3%. The rise in unemployment is compounded by the international credit crisis and a general slowdown in employment in all sectors. Ireland is not alone in finding itself in this position. Many countries throughout Europe and elsewhere are experiencing similar difficulties in their labour markets. Recent statistics from EUROSTAT reflect this, with the unemployment rate in the 27 member states rising to 7.1% in October 2008.

The Government is putting in place measures to ensure that those who become unemployed are provided with effective employment services and training supports to help them return to employment. Increased budget allocations have been provided to FÁS to deal with the increase in unemployment. Specifically, an additional €5 million has been provided for training the unemployed and an additional €4 million to subsidise the employment of redundant apprentices in 2009.

FÁS is working closely with the Department of Social and Family Affairs to ensure a speedy response to the rising live register numbers. FÁS has, in conjunction with the local employment services provided by area-based partnerships, geared up its employment services further to provide greater capacity for the increased referrals from the live register. There is active engagement with the unemployed after three months on the live register to assist them in progressing towards employment, training or active labour market programmes. FÁS has also put in place a series of actions to facilitate redundant apprentices in completing their studies. These include allowing them to progress to their next off-the-job phase of training without having to do the next on-the-job phase. FÁS has also established a register of redundant apprentices by trade in order to identify these people at the earliest possible point in time and has prioritised the need to locate employers to sponsor the completion of apprentices' off-the-job training.

As regards training for those who become unemployed, FÁS will provide, in 2009, a range of certified, short, flexible and modular programmes in construction sector related activities, which are expected to remain buoyant despite the slowdown in construction. Several programmes are already in place and the frequency and range of these will be expanded in the coming months. FÁS has also established a training fund to enable a speedy response to identified re-training needs for low skilled and redundant craft workers. In 2009 FÁS will open evening classes without payment of a fee to people who are unemployed.

The Department of Enterprise, Trade and Employment and FÁS will continue to work together to monitor trends and activities in the industry and will work with all relevant stakeholders to ensure timely and satisfactory responses to assist redundant construction workers and apprentices to secure alternative employment, whether in the construction sector or another area of the economy. FÁS has a specific policy in place to deal with redundancies and company closures. It offers a tailored approach as early as possible to the workers affected with a view to assisting them to access alternative employment. This applies to workers in all sectors, including construction. Each response is tailored on a case-by-case basis.

As part of the consultation process in the case of company closures and major redundancies, FÁS establishes the scale of the redundancies, the skills profile of the employees affected, the number of years' experience of the employees, level of education and any other information deemed relevant to the particular case in question. In addressing the issue of redundancies, FÁS liaises with other relevant agencies such as Enterprise Ireland, IDA Ireland, city and county enterprise boards and the Department of Social and Family Affairs. It also works closely with the agencies to identify and support individuals who wish to start their own business.

FÁS has recently been at the forefront of national media coverage in the context of matters relating to expenditure. These matters are under examination by the Committee of Public Accounts. The origins of this case go back to October 2004 when my colleague, the current Minister for Health and Children, received an anonymous letter containing allegations of impropriety within FÁS. The letter was referred to FÁS and the then director general instructed the FÁS internal audit unit to conduct an investigation into the allegations. As is normal practice, the FÁS internal audit report was sent to the Comptroller and Auditor General.

The Comptroller and Auditor General expressed concerns with matters arising in the report. On 9 May this year, the Comptroller and Auditor General published a report which dealt with a number of issues that arose in recent audits of non-commercial State bodies, including FÁS. In the case of FÁS it referred to the FÁS internal audit unit's investigation into allegations of impropriety in procurement activities undertaken by or on behalf of the corporate affairs division of FÁS. The Comptroller and Auditor General's findings were based on irregularities discovered by the FÁS internal audit unit.

On foot of the Comptroller and Auditor General's report the Tánaiste discussed the matter with the former director general of FÁS and expressed her concerns about the need to secure value for money in public expenditure. The Department also followed up on this matter directly with FÁS to seek formal written assurances that the practices referred to in the Comptroller and Auditor General's report had ceased and that adequate systems and controls were in place to prevent their recurrence. To further allay concerns highlighted by the Comptroller and Auditor General's report, in September 2008 the Tánaiste requested the Comptroller and Auditor General to report on the effectiveness of management and control systems across the FÁS organisation. The Comptroller and Auditor General acceded to this request and I understand he has said that he will determine the scope of his examination following the completion of the investigation by the Committee of Public Accounts.

In making this request of the Comptroller and Auditor General, the Tánaiste was keenly committed to ensuring that FÁS makes the best use of scarce public resources in the current challenging economic climate. The Tánaiste last week met the chairman and some board members of FÁS and reiterated her disquiet at the recent revelations concerning activities in the public affairs division of FÁS. However, the Tánaiste welcomed the board's assurance that action had now been taken to deal with these matters. The board stated that a full examination of past practices is required to ensure that the organisation can move forward with best practice corporate governance procedures in place.

The Tánaiste made it clear at that meeting that she wanted the FÁS organisation to remain focused on its core mission, given the employment and training challenges facing the country, and she expressed her support for the continuing work of the board in that regard. In particular, she acknowledged the ongoing commitment of the staff of FÁS to meeting these challenges. She placed particular emphasis on their work in addressing the situation affecting redundant apprentices, training for the unemployed, providing supports for people with disabilities, up-skilling the workforce and the continued operation of community employment schemes.

I also welcome the board's statement of 29 November that it intends to strengthen the internal audit function within FÁS. This will help accelerate the audit work already under way in the corporate affairs area and will also help the organisation interface with the Comptroller and Auditor General as soon as he begins his examination of the effectiveness of the management and control systems in FÁS. As Senators are aware, the former director general of FÁS resigned last week and I look forward to the board's proposals on how the position can be filled as quickly and as effectively as possible so FÁS can continue to deliver on its core mandate.

The Department of Enterprise, Trade and Employment is also carrying out a review of the efficiency and effectiveness of labour market programmes delivered by FÁS and Skillnets. This review was initiated prior to the current controversy coming to light. The review will also draw conclusions about the adequacy and balance of resources in the context of current and future labour market policy challenges, including the national skills strategy. The steering group conducting the review is chaired by a senior official from the Department and includes members from the Departments of Finance, Social and Family Affairs, and Education and Science. FÁS and Skillnets are also represented on the group and it is supported by Forfás. The review, including its conclusions and recommendations for an effective future labour market strategy, is expected to be completed by the middle of next year.

The current controversies over certain administrative practices within the agency clearly represent an unwanted distraction from its real purpose of providing national support to this country's labour market.

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