Wednesday, 2 October 2013
County Enterprise Boards (Dissolution) Bill 2013: Second Stage
It is my pleasure to welcome the Minister of State to the House and to speak to the County Enterprise Boards (Dissolution) Bill 2013. Altogether 98% of Irish enterprises are micro or small enterprises. They employ 622,000 people and contribute €10 billion to the Exchequer each year. Micro-enterprises are defined as enterprises with a turnover of under €2 million and fewer than ten employees. A small business is defined as employing ten to 49 employees with a turnover of €10 million. The County Enterprise Boards (Dissolution) Bill 2013 will dissolve the existing county and city enterprise board structure and transfer the functions, land assets and other property and liabilities to Enterprise Ireland. The Bill empowers the Minister to deploy existing staff of the enterprise boards to Forfás, Enterprise Ireland or a local authority. Staff will keep their jobs at their previous terms and conditions in one of these organisations. Local authorities will perform functions on behalf of Enterprise Ireland until the new local enterprise offices, which will be known as LEOs, emerge.
Fianna Fáil opposes the dissolution of the county and city enterprise boards and the subsuming of their role into local authorities. This decision by the Government is part of a pattern of Government decisions which has more to do with creating an illusion of reform rather than delivering real results. Local authorities do a good job within their currently defined role of housing, planning, recreational facilities, etc., but, by their nature, they are not entrepreneurial and do not have the experience that start-up companies need. There is a strong need to streamline and retain the existing structure with greater co-operation across city and county enterprise boards and to share best practice ideas while retaining the ability to response to specific local needs. Concerns relating to future funding have not been addressed and there is a strong likelihood that the change will lead to less money being available to support local enterprises.
I draw the attention of the Minister of State to the farce of the microfinance money that is available. The scheme is lauded by the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, relentlessly but he is talking through his hat as far as I am concerned. I express my disappointment at the early results of the Microfinance Ireland scheme. To date, one year after the scheme was launched, approval rates are at less than 45% and just over €1 million in loans have been granted to small business.
Moreover, a 9.5% fixed interest rate is charged on all loans with a three-year repayment term.
This provision of €1 million in the first year is far off the initial target of granting €90 million in loans over a ten-year period, which is highly unlikely to be met. While I am not accusing the Minister of State in this regard, this is spin on the part of the Minister, Deputy Bruton, along with the lies he is telling about the Seanad. For God's sake, 45% approval to help small business people start up is a farce. It is a camouflage for not doing anything while glossing over such a rate, as though something was happening on the ground when money is not available. In my experience, the county and city enterprise boards have been sadly neglected over the years by the Department of Jobs, Enterprise and Innovation. There was no overall strategic plan, some were better than others and there was no leadership from the Department. Again, there was what one might call a bureaucratic mishandling of the entire issue of the county and city enterprise boards. The McCarthy report of 2009 recommended that the functions of the enterprise boards be transferred completely to Enterprise Ireland. However, the report of the local government efficiency review group published in 2010 recommended, as was natural for it, that the county and city enterprise boards be merged with local authorities.
As for the model of the enterprise boards, more than 33,000 jobs nationwide have been created since 1993, as well as an average of 900 projects per annum and almost 25,000 training participants per annum. An examination of the projects assisted by enterprise boards throughout Ireland over the last year shows a wide breadth of new business activity. Most do not involve research and development or scientific innovation, which tend to get so much attention these days but they are highly effective at creating local sustainable employment. Oisin Geoghegan, chief executive officer of the Fingal County Enterprise Board, has commented that the vast majority of the projects it sees are ordinary rather than high-tech but they do provide employment. One good result, which was highlighted in The Irish Timesearlier this year, concerned Sandra Maguire, who was supported by her local enterprise board of Dún Laoghaire-Rathdown and who produced the education bills app, EduBills, for schools.
The county enterprise boards will be dissolved in their current legal format and as I indicated earlier, their functions, assets and liabilities will be transferred to Enterprise Ireland. Enterprise Ireland is being mandated to work with the local authorities to develop benchmarks for service delivery and enterprise supports, as well as appropriate structures and delivery models for each local enterprise office, LEO. As for Fianna Fáil's reasons for opposing the dissolution of the county enterprise boards, the measure smacks of reform for the sake of reform without a detailed plan for how the changes can be implemented. I reiterate the county and city enterprise boards have proven to be one of the one of the most effective supports provided to small local business. Importantly, the board members are drawn from the local authority, representatives of the trade union movement, local employers, State agencies, local businesses, local councillors and the county or city manager, as well as representatives of Enterprise Ireland, the Irish Congress of Trade Unions, ICTU, and IBEC, all of whom give their time voluntarily. One risks losing the breadth of experience provided by the 15 people who are members of these boards. They do this at their own expense and a discussion is required in this Chamber in the future about the amount of time-----