Richard Bruton (Dublin North Central, Fine Gael)

That is a problem. The Government is taking a range of initiatives. Clearly monitoring the banks' delivery on their targets is being done much more aggressively this year. There has been a series of meetings with the banks since the beginning of the year. Mr. John Moran, the senior official in the Department of Finance dealing with banking, is on the road show with the Minister of State, Deputy Perry, talking with the owners of small businesses and getting a much better understanding of their experience. To be fair, there are two sides to this. Small businesses are often presenting their loan applications in a way that is not sufficiently well developed to get approval and there needs to be a better presentation. The banks are also failing to inform people of their rights to challenge a refusal, including going to the Credit Review Office. Even though relatively few loan applications are being referred on to the Credit Review Office, in more than half of the cases, the decision of the bank is reversed. We need to get a much firmer handle on this area.

To supplement the targets for the banks, as Senator White recognised, we are introducing specific schemes to deal with market failure, including micro finance, the partial loan guarantee, the development capital fund, etc. The Senator asked why it is taking considerable time to develop these proposals, which is because we are developing them from scratch. Given that the State is entering an agreement to guarantee loans issued by a bank - the public are pretty sick of providing guarantees to banks - we want to be very sure that where we provide a guarantee it is small business that benefits. We need to get the scheme well designed and will soon bring legislation to the House to get Senators' endorsement because we will not spend money without their endorsement. We first designed the scheme and then contracted for an operator who is now in place. The next step is to get banks familiar with this product. They will have skin in the game - we are not taking all the risk and they will share the risk. We believe that this will mean that projects that are now being refused will be accepted. However, the State is taking a measured and managed risk and it must be done right.

The same is true of micro finance, which is being developed from scratch as there has been no State micro finance initiative previously. We are close to having developed a workable model that we can bring forward for implementation. These matters need to be designed correctly because I would not like to return in three years to fact the scrutiny of Senator Barrett saying that this was throwing good taxpayers' money after bad. We need to ensure it is done right.

Senators White and Clune took opposite positions on the restructuring of the city and county enterprise boards. Without being partisan, I must say I am very much in Senator Clune's camp on this one. We must develop a one-stop shop to which businesspeople can go to access information about licensing and planning requirements, business start-up options in the local area, details of grant eligibility, options for tax reliefs and concessions of different sorts. We want to deliver them in one place. We also want - I believe Senator White recognises this - a seamless connection with the centre of excellence that is Enterprise Ireland with its capacity to develop good policy instruments to deliver to small business. What will be different is that Enterprise Ireland will be setting standards as to what is expected of the local enterprise offices. There will be service level agreements and an expectation of a standard to be delivered, which is new. There has not been such demand or insistence on standards in the existing model, which is an important innovation.

Enterprise Ireland will also benchmark the local authorities in how they become more business friendly, including the speed with which they turn around licensing or other decisions and the price they charge for water or other services. There will be carrot and stick in this. We are seeking to bring the local authorities into the economic development challenge more centrally and have them linked into the enterprise family. However, it is a two-way process, which we believe is worth trying. It rationalises and consolidates the structures to offer a more streamlined service with the capacity to be better. Obviously, we must prove that it delivers and this is the work we must take on from here. Senator Clune also referred to the banking issue. She called for more co-operation between the IDA and Enterprise Ireland in certain areas and I endorse this view. Their job is to get indigenous companies into the supply chain and to get first-time companies to pick Ireland as a place to start. These are areas where Enterprise Ireland and the IDA can work together. There will be positive gains from closer work in these areas.

Senator Zappone is a zealot for social enterprise and I do not disagree with her. However, before we commit to creating a Department for social enterprise we must establish a model and determine how it can be supported and how it will develop. Most people here are too young to remember the late John Kelly. He used to be very withering in his criticism of those in State bodies who spent great deal of time buying the furniture and the brass plates to put up on the wall before slipping into lovely soft seats and then asking what they would do next. In this climate we must establish what we will do before we set up the brass plates, the soft seats and the centre and the unit. I am not being facetious; Senator Zappone has raised an important issue. There is capability and capacity here. Other countries have created models in which social entrepreneurs deliver public services more cost effectively and with better outreach and impact than a concentrated, centralised public service. We must find the vehicles that can release this potential. Any such vehicles are unlikely to be enterprise funding models in the sense of the funding model that our Department develops. Other models will be necessary such as the social bond, a concept developed in the United Kingdom which is effectively a form of tendering. It opens up the tendering system for the delivery of certain services by social entrepreneurs as opposed to in-house provision or otherwise. It is important to have a workable model and Forfás will work in this way.

Senator Harte commented on the Pathways to Work programme and related issues. This is another dimension to be addressed. Senator Reilly made the same point, asking why there was not more discussion of youth and skills. There were two parallel processes in the previous Government. Perhaps they should join together at a certain point but initiatives such as Pathways to Work, Springboard and the educational dimension have been developed between Deputy Joan Burton's Department and Deputy Ruairí Quinn's Department. My focus has been on the enterprise development end. There has not been extensive discussion about the skills needs of young people and skills conversion because this is the focus of the work under way in the Pathways to Work programme. This does not in any way diminish its importance.

The issues associated with Border counties represent a challenge as does regional development in general in the current climate. As Senators are aware, higher grants are available in the Border, midland and western, BMW, region. The IDA works within a target of at least 50% location outside of Dublin and Cork. While it did not deliver this last year, so far this year the plan is on target. This is a challenge especially in the case of overseas investment. Increasingly, the type of company coming to Ireland seeks deeper labour market pools and skills. They are keen to be close to the third level colleges. They seek large labour markets where there is diversity. This is a trend in the type of investment coming here and in the way it has changed. This is challenging. However, the IDA is examining how to encourage smaller companies to choose Ireland. Such companies can have a greater affinity with regional locations. This is an ongoing challenge, as is trying to find a competitive edge in the regions. Perhaps this is more a part of the Enterprise Ireland brief and the indigenous enterprise area rather than the foreign direct investment area. It may be more a case of securing expansions from within the existing base of foreign enterprise. Such ventures may be more regionally mobile than new investments coming for the first time. This is a serious issue and we discussed it in the context of the midlands last night with Deputies and Senators from the midlands. I recognise that it is a difficult area.

Senator Sean Barrett raised a range of issues which go well beyond the debate under discussion today. These included the adequacy of economic evaluation and so on. There is no gainsaying that economic evaluation has been weak in recent times and we must be a great deal more forensic. The case put forward by Senator Barrett to the effect that Enterprise Ireland and the IDA are top-heavy with administration must be scrutinised.