Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

Senator Ó Clochartaigh trots out the mantra that we will close down this or that. That is not the case. Of the approximately 1,900 people employed in the local development companies, around 1,650 are Exchequer funded. I provided €47 million for the sector in 2014, the same level of funding I provided in 2013. This sum will fund 1,650 positions on the same basis next year as this year. It is a matter for the local development companies to decide on employment levels but that is the current employment figure in the companies.

Approximately 250 people are employed under the rural development programme, that is, the Leader partnership. I will not know if the funding available for this purpose will decline until negotiations conclude with the Minister for Agriculture, Food and the Marine and Government. At that point, we will know what level of staffing or structures are required to deliver the programme. There is no reason the local development companies will have insufficient resources to continue the good work they do in 2014. They currently employ 1,650 people, excluding those employed under the rural development programme.

The local development companies are private companies which receive money as part of a contract to deliver programmes on behalf of the State. We do not have contracts to deliver programmes with the organisations the Senator suggested have been excluded from the Schedule. They do not feature in the Schedule because we do not have contracts with them.

The local government system will need partners to deliver programmes in the same way as the State needs partners through the local development companies. The arrangements for this type of partnership have not yet been finalised as they form part of the current negotiations. We cannot anticipate the preferential partnerships or bidding process there will be for various communities to deliver programmes on behalf of the local community development companies. The discussions are ongoing and I do not know what will be their outcome.

There has been an uneven pattern in respect of administration costs in local development companies. While the rural development programme allowed for 20% administration costs, the administrative costs of many local development companies reached 35%, which is far in excess of what they should have been. Clearly, this has an impact as projects do not proceed where money is spent on administration. In the past 18 months, we have tried, with some success, to reduce the cost of administration to ensure more money becomes available for front-line services. I assure the Senator that the audits Pobal has done in some companies are disturbing and he would be surprised to learn where these companies are located. Pobal was established to ensure good corporate governance and management practices are in place and administration costs are kept down in the interests of having projects proceed in communities. The organisation does a good job.

The notion that there will be a disconnect between the community sector and local government arising from these decisions is nonsense. The local community development committees will focus strongly on securing partnership arrangements with the community to deliver programmes based on their local economic and community plan.