Wednesday, 2 October 2013
County Enterprise Boards (Dissolution) Bill 2013: Second Stage
I welcome this opportunity to present the County Enterprise Boards (Dissolution) Bill 2013 to the Seanad. The purpose of the Bill is to give effect to last year's Government decision to reform the system for the delivery of State supports to micro and small enterprises by dissolving the current county enterprise boards structure and creating an enhanced enterprise support model to be delivered at local level by a new initiative establishing local enterprise offices. The creation of the local enterprise offices will result in the establishment of a local first-stop shop for new entrepreneurs and existing micro-enterprise and small business owners. The offices will become the front door, so to speak, through which all information on State supports for small and micro-businesses can be accessed and signposted and through which other supports and bodies with programmes relevant to small business as well as important local services and compliance requirements can be provided. In summary, the new local offices will deliver the following under one roof: local entrepreneur support programmes, a suite of other enterprise supports and development services, and other business development services of the local authority. We will have a renewed local emphasis on enterprise and job creation, combining the best of the community enterprise boards, local authorities and Enterprise Ireland.
I propose to outline first some background to the rationale for reforming the system for delivery of supports to micro-enterprise. At both national and local level, the indigenous micro-enterprise and small business sector - the lifeblood of our economy - is central to economic recovery, job creation and the future development of the economy. Our vision is to ensure locally accessible supports are available that will nurture entrepreneurship and promote the creation and maintenance of employment, with a dedicated culture of delivery. This reform is a major commitment in the programme for Government and a core element of Action Plan for Jobs. In recognition of the changes to the social, economic and technological landscape of Ireland in recent years, this strategic reform of the system for delivery of support to businesses will make the operating environment more coherent, responsive and conducive to entrepreneurship at local level.
County and city enterprise boards have had an impressive track record in job supports over the past 20 years. The local enterprise offices structure will draw and build on the positive enterprise culture of the successful county enterprise board model which supports 33,000 jobs, 900 new projects per annum and almost 25,000 training participants. Under the new arrangements, the local enterprise offices will deliver tailored supports to the highest standards, in a partnership between the local authorities and Enterprise Ireland based on a robust service level agreement. The proposed reforms offer a major opportunity to leverage the skills, resources and experience of the county enterprise boards, Enterprise Ireland, local authorities and the local business community to create an on-the-ground approach to local entrepreneurs and small businesses, which dovetails with national enterprise supports and agencies.
As part of the reform of the system of local enterprise supports, the first-stop shop service will be delivered through a network of 31 local enterprise offices nationwide. The offices will deliver the combined functions of the county enterprise boards and business development units of the local authorities, as well as developing an enhanced service to business at local level. The local enterprise offices will be the first-stop shop through which all information on supports for entrepreneurs and small and micro-businesses can be accessed. Where businesses have clear high growth potential, they can be fast-tracked to the next level of support from Enterprise Ireland or other State agencies.
Locally, the local enterprise office will act as the catalyst and advocate for the establishment of a best practice enterprise culture. It is envisaged that there will be a high level of co-ordination and collaboration between local enterprise offices and other providers of support to the micro and small business sector, for example, chambers of commerce, institutes of technology and Leader partnership companies. There will also be greater co-ordination of delivery of services between local enterprise offices in each area and other actors to support a regional strategy for enterprise and jobs. They will be incentivised to come together to pool expertise and resources and co-operate on a regional basis to deliver various services, for instance, running joint training and mentoring programmes. A competitive funding element will also be designed and introduced to support the best projects to demonstrate success and best practice and encourage high performance and innovative ways of working across the local enterprise office network.
The local enterprise offices will be supported by a centre of excellence, which has already been established within Enterprise Ireland. The centre will lead, develop and manage the enhancement of a support service that generates innovative small and micro-enterprises capable of increasing employment, exports and value added to the economy. In practical terms, the local enterprise offices, enabled by the centre of excellence, will draw upon a first class online support resource which will offer a range of tools and information relevant to all businesses in the State. The centre of excellence, which is up and running, will have a high capacity and will enable local enterprise office staff and companies to identify startup and development issues and signposts to appropriate supports. A newly developed website will proactively promote a range of tailored State supports, both financial and non-financial.
A key aspect will be self-assessment tools and best practice case studies. In addition, the functions of the centre will include the following: promoting innovation and best practice in the approach to supporting start-up and entrepreneurship; working in conjunction with local enterprise offices to design and deliver appropriate national training and management development programmes at local level; developing a common approach to mentoring and mentor management; providing ongoing training and development for local enterprise office staff; reviewing and benchmarking the services and supports available from each local enterprise office to promote best practice; developing and reviewing the service level agreements and promoting high levels of performance and appropriate metrics; and developing and overseeing metrics on the quality of the local business environment.
The local enterprise offices will be underpinned by a robust service level agreement between Enterprise Ireland and each local authority which will set out protocols relating to the following: budgets, project evaluation and approval; micro-enterprise policy guidelines, as articulated by the Department of Jobs, Enterprise and Innovation; robust performance indicators measuring employment, start-ups and other metrics; roles and responsibilities of the relevant bodies, namely, Enterprise Ireland, local authorities and local enterprise offices; benchmarking the success of local enterprise offices; and corporate governance.
This detailed service level agreement will provide a framework for the delivery of an enhanced service to micro-enterprise and will be periodically reviewed to ensure impact and value for money are being optimised via the local enterprise office network.
A key element of this new structure will be the consistent application of the policy and best practice across all local enterprise offices from the evaluation of applications to the spending of budgets allocated. This will be monitored using the agreed service level agreement in each local authority. The ongoing drawdown of budgets by LEOs will be contingent on their reaching agreed targets. The highest level of corporate governance will be applied. This will involve the articulation and dissemination of the new national micro-enterprise model, the allocation of budgets in line with agreed funding guidelines, including spot-checking and quality assurance, the management of assets and liabilities, and ongoing engagement with stakeholders.
To ensure that local enterprise offices are delivering best practice supports for entrepreneurship, research into international programmes will be carried out in conjunction with the evaluation of current programmes run by the local enterprise offices. A series of metrics form part of the framework service level agreement and will be tailored to suit the size and capacity of each local enterprise office. They will be included in a local enterprise development plan, to be agreed annually between the local enterprise offices and Enterprise Ireland, which will serve to address the development needs of micro-enterprises in each county.
Financial and staffing implications will arise from the Bill. It is to be expected that over time there will be some savings resulting from the removal of costs associated with the individual company status of each county enterprise board and reduced rental costs associated with the relocation of some offices. However, initial direct savings will be modest because it could take some time to realise these savings due to existing rental arrangements. Some small additional initial expenditure will be needed, for example, for staff training and to develop a single local enterprise office website to replace the 35 existing sites. There will be no savings on staffing arising from the dissolution of the county enterprise boards because existing staff will be redeployed to the LEOs.
Section 1 defines certain terms used in the Bill. Section 2 defines the functional area of a city and county council for the purposes of the legislation. Section 3 states that any expenses incurred in the administration of the Act shall be paid out of moneys provided by the Oireachtas. Section 4 empowers the Minister to appoint, by ministerial order, the day on which the county enterprise boards shall be dissolved. Section 5 enables the Minister to dissolve the county enterprise boards on the appointed day.
Section 6 relates to the transfer of functions. It provides for the following: the transfer of the existing functions of the county enterprise boards to Enterprise Ireland; the transferred functions to be performed by a local authority, in the functional area of that local authority, on behalf of Enterprise Ireland; and for the amendment of section 10 of the Industrial Development Act 1995 by deleting the words "subject to the prior consent of the Minister" because Enterprise Ireland already has the enabling powers specified.
Section 7 provides for all land and other property, including assets, previously vested in county enterprise boards to be transferred to Enterprise Ireland. It provides for all rights, powers and privileges relating to or connected with such lands to be vested in Enterprise Ireland without the need for a conveyance or assignment. Section 8 provides for the transfer of rights and liabilities of a county enterprise board to Enterprise Ireland. It also provides that in the event of an action to sue, recover or enforce, Enterprise Ireland may do so in its own name without the need to give notice of the transfer to the person whose right or liability is transferred. Finally, it provides that any lease, licence, wayleave or permission granted by a county enterprise board shall continue in force as if granted by Enterprise Ireland.
Section 9 will allow any claim in respect of loss or injury alleged to have been suffered during the performance of county enterprise board functions to now lie against Enterprise Ireland. It allows Enterprise Ireland to take the place of a county enterprise board in any legal proceedings to which that board is a party immediately prior to the transfer. Section 10 ensures that anything commenced by a CEB, for example, loan agreements, grants, equity investments, etc., do not fall on the transfer to Enterprise Ireland of the functions, assets and liabilities of the county enterprise boards.
Section 11 empowers the Minister to designate staff of a county enterprise board to Forfás, Enterprise Ireland or a local authority. Section 12 provides for Forfás, Enterprise Ireland or a local authority to accept staff into their employment who were previously employed by a county enterprise board on terms and conditions no less favourable in respect of remuneration. This section also amends the Second Schedule to the Industrial Development Act 1993 in respect of the secondment of staff. Section 13 sets down the provisions relating to the preparation and submission by Enterprise Ireland of final accounts and reports of the county enterprise boards. Section 14 provides for the Short Title, County Enterprise Boards (Dissolution) Bill 2013, and commencement.
I emphasise that these reforms are about delivering improved supports at local level to more businesses and ultimately about creating more jobs. Micro and small enterprises are a central part of our economy and their ability to succeed and grow underpins our future potential for jobs, growth and prosperity. Fully 98.5% of all firms are small. They employ over 650,000 people throughout the country. It is vital, therefore, that we continue to focus on delivering a practical programme of actions and enhanced supports that can achieve positive improvements to the operating environment for micro and small businesses.