Wednesday, 2 October 2013
County Enterprise Boards (Dissolution) Bill 2013: Second Stage
I welcome the Minister of State to the House and warmly welcome the publication of this Bill which, as he will accept, is long overdue. I raised at the Joint Committee on Jobs, Enterprise and Innovations on several occasions the need for this legislation to be put in place as soon as possible. Obviously there was uncertainty around what was going to happen and the city and county enterprise boards wanted the issue progressed, as we all did, to make sure that the proper supports were there for entrepreneurs. I commend the Minister of State on bringing forward the Bill.
I do not share the concerns expressed by other Members regarding the role of local government. As someone who served on a local authority for seven years, was a member of the county development board of Waterford City Council and a member of the city enterprise board, I believe local government is clearly in tune with the needs of the economy generally and of enterprise development and entrepreneurs. Senator O'Neill pointed out the role local authorities play in supporting entrepreneurs once they establish businesses. We will see the marrying of these new socioeconomic committees with the local enterprise offices, LEOs, and local government playing a more practical role in supporting business, entrepreneurs and economic development generally in their local authority catchment area. I have every confidence in local government both in terms of the local elected representatives and local authority management in this transition period. It is the right step forward, a positive one, and one that I welcome.
I believe the Minister of State would also agree that this must be part of a holistic approach because practical supports for entrepreneurs at an early stage are important but there are other practical steps the Government can take such as addressing the issue of upward-only rents. Senator Quinn has a Bill dealing with that issue which will be debated this week or next week. A more progressive rates system dealing with the cost of doing business and the consideration of energy costs are issues that need to be part of the overall solution, the collective offering to support entrepreneurial activity and new business start-ups. A significant lift would be given in this area if we can get a lift in our domestic economy. If that happens, we would see much more come from the domestic sector and the small and medium enterprise, SME, sector.
Local enterprise development is the engine of our economy. Some 99% of all enterprises are in the small to medium-sized enterprise sector and 78% of all employment in this sector. That shows the importance of the SME sector. While the focus of public representatives can often be on foreign direct investment, which is also important, we need to put much more emphasis on supporting the SME sector, which is the bedrock of our national, regional and local economies.
The existing county enterprise boards have provided vital support and it should be noted that the average cost per job supported was €6,000, which is half the cost of Enterprise Ireland and IDA-supported jobs. That speaks for itself in terms of the record of enterprise boards in the past. The county and city enterprise boards have succeeded in supporting enterprises in areas where other State agencies have failed. I have seen that in my local area where many businesses would not have got support from Enterprise Ireland because perhaps they were too small or because they were able to get grants, be it feasibility grants or employment support grants, from the enterprise boards in the areas in which they wanted to set up and they are now viable businesses creating jobs. We should acknowledge all the good work that has been done by the city and county enterprise boards up to now.
However, local enterprise development could do more as part of a seamless State-wide approach to enterprise development. The use of local authorities as the delivery body makes sense in maintaining a local focus and accountability. The Bill envisages that the new LEOs will be scrutinised. Accountability in that respect is back to the manager and that makes some sense, but there must be democratic accountability also in terms of the local elected representatives.
The types of change envisaged in this Bill are not without their challenges. I hope the Minister of State can provide some clarity on a number of issues, especially the relationship between Enterprise Ireland and the new LEOs. As outlined, the LEOs will be accountable to Enterprise Ireland through a service level agreement. Will the Minister of State outline how the relationship will work between Enterprise Ireland and the new LEOs, how it will play out?
Senator O'Neill spoke about the limitations of the city and county enterprise boards in the past in terms of being only able to support companies which employ up to ten people. There is an opportunity to have a more seamless transition between Enterprise Ireland and the new LEOs. That will provide opportunities because there needs to be support from the initial business idea through the start-up process and growth to exports and through to the employment of in excess of ten people. The new LEOs and their relationship with Enterprise Ireland offers us opportunities to deal with some of the challenges the enterprise boards had in the past. What plan has the Minister of State to make that a reality? It is good to have it as an aspiration but how can we make it a reality? What links will there be between Enterprise Ireland supports and those available at the LEOs?
I referred to the relationship between the local authorities and the LEOs, the issue of accountability and the role local elected representatives have in making sure there is accountability. We are talking about taxpayers' money funding business through grant supports and so on and we need to make sure there is maximum accountability back to the taxpayer. Will each LEO produce an annual report benchmarked against its service level agreement? It would be important for scrutiny, oversight and accountability - which are buzz words that the Government uses - especially in the context of political reform, that we have maximum accountability. It would not be beyond the scope of the LEOs to produce annual reports that would benchmark what they have done against the service level agreements they have with Enterprise Ireland.
Regarding local authorities, a concern has been voiced regarding their capacity, focus on enterprise and reputation as being a cost centre for business. I do not agree with that and would ask the Minister of State to respond to some of the criticisms around the role of local government because that has to be challenged. I know there was a tug of war within Government between the Minister, Deputy Hogan, and the Minister, Deputy Bruton, regarding the place and the role of local government. I am pleased that the view of the Minister, Deputy Hogan, won out on this one. Concerns have been raised with me by some people, but I do not accept the proposition as put forward. It is important that the Minister of State clarifies the role and importance of local government here.
What step does the Minister of State intend to take to build the capacity of local authorities to develop an enterprise culture? Will local authorities be able to provide additional support to LEOs and access EU funding for enterprise development. This currently happens in the North, especially in Belfast, and we should examine best practice where we can. Would the Minister of State and the Government be open to considering the benefit of voluntary enterprise forums made up of representatives of local enterprises, support organisations and trade unions to assist the LEOs in their work and to develop an enterprise culture within local authorities? Such bodies would provide the types of skills and experience that existed on the previous county enterprise boards. When we have people willing to come forward and give their expertise on a voluntary basis, we should accept it.
One of the issues raised with me by a number of trade unions is one concerning the grants given to businesses. It is important that if a company receives a State grant it is in full compliance with labour laws and employment rights. In situations where companies are not in compliance, they should not get Government grants. If they are found to be in serious breach of employment laws, instances of which we have seen in past, the State should be able to claw back the funding that was given to those companies. We have to make sure that companies which avail of taxpayers' money are fully compliant with labour law and employment law in this State, which unfortunately has not always been the case.
This is one of the areas in which my party will table amendments if the Government does not see fit to include such provisions in the Bill.