Joan Burton (Dublin West, Labour) | Oireachtas source

I thank the Cathaoirleach and Seanad for inviting me before it today. I will start by giving a brief overview of the Government's strategy to tackle the pressing issue of youth unemployment.

Research evidence shows that early and prolonged periods of unemployment during a person's lifetime can have a permanent scarring effect on his or her capacity to improve his or her standard of living. This is a particular problem during an economic downturn, as young people tend to be hit by the impact of job losses more than others because they tend to be the most junior employees in an organisation and they also tend to work in sectors, such as retail and services, which feel the brunt of any reduction in demand. Hence, it is crucial that an effective strategy is in place to tackle youth unemployment before it becomes prolonged and systemic.

In the first instance, the Government's primary medium-term strategy to tackle youth unemployment is to create the environment for a strong economic recovery by promoting competitiveness and productivity. Economic recovery will underpin jobs growth. Past experience suggests that youth unemployment, which tends to rise relatively rapidly in a downturn, can be expected to fall relatively rapidly during the recovery. There is evidence to indicate this is already occurring. The official labour market figures published by the CSO earlier this week show that the youth unemployment rate has fallen from 30% in quarter 1 of 2012 to 25% in quarter 1 of 2014, while the number of young unemployed has fallen by 16,500 from 64,000 to 47,500 over the same period. My firm belief is that this improvement in youth unemployment trends will continue. However, the Government recognises that even as the economy enters a recovery phase, the number of young jobseekers will exceed the supply of job opportunities available to them. Hence, in addition to promoting medium-term economic recovery, the Government recognises the need to ensure these job gains for young people continue, and for interim measures to support the young unemployed and keep young jobseekers close to the labour market.

Key to this will be the implementation in Ireland of the European Council recommendation for a youth guarantee. The objective of this guarantee is to ensure that young people receive a quality offer of employment, training, work experience or further education within four months of becoming unemployed. This is a very ambitious target and, accordingly, in agreeing the recommendation, the European Council noted that the guarantee should be implemented on a phased basis in those countries, such as Ireland, facing very significant fiscal constraints. None the less, while financial constraints remain a reality in terms of roll-out, Ireland will be implementing the guarantee from a very advantageous position, as recognised by both the EU and OECD. Many of the elements that will make up the guarantee at EU level are already in place in Ireland, thanks in large part to the Pathways to Work strategy that has been rolled out by this Government and which is being led by my Department. We do not intend to reinvent the wheel where it is not necessary to do so.

The features of the youth guarantee which are already in place include: Intreo, the transformative new employment service helping people back to work; JobBridge, the national internship scheme; JobsPlus, the wage subsidy scheme for employers; community-based employment options such as TUS and Gateway; and further education and training programmes such as Momentum and VTOS. In implementing the guarantee, we will build on these important initiatives and expand them as necessary. A key part of our challenge will be to increase the impact of these schemes in supporting young unemployed people. Accordingly, the guarantee approved by the Government and commended by the European Commission, involves the following: modifying the Intreo process to ensure more intensive engagement with young people; increasing the number of places on schemes available to young people; and earmarking a quota of opportunities on existing schemes for young people, including, in addition to Department of Social Protection schemes, opportunities for accessing entrepreneurship funds via Micro Finance Ireland and training and further education opportunities through the Department of Education and Skills and its agencies. We will also introduce a developmental internship programme for the most disadvantaged young people who have been identified as having significant barriers to gaining employment. Under this programme employers will be asked to make work experience places available for young people with low levels of educational attainment, long periods of unemployment and other social barriers to employment. It is proposed that, at any one time, 1,500 young people will participate in this programme.

The youth guarantee includes improving the JobsPlus subsidy arrangements for employing young people by reducing the qualifying period for those aged under 25 from 12 months to four months in respect of young people who are assessed as having a low to medium probability of leaving the live register. This is line with recommendations from the OECD. These are young people who have never worked or are early school leavers with relatively few qualifications to offer an employer. The aim is to introduce, in line with recommendations from the EU on the promotion of intra-EU labour mobility, an international mobility and language skills development programme for young people to expand the number of opportunities currently availed of by young people in the form of further education and training, internships, subsidised private sector recruitment and supports for self-employment.

I will describe the timing of the roll-out of the youth guarantee. By the end of 2014, we will have progressively rolled out processes and programmes to ensure that all those young unemployed people who most need support will receive a youth guarantee offer within four months. In this way, we will ensure our resources are prioritised to help those who are most in need. In 2012, some 56,000 young people joined the live register as wholly unemployed, and some 35,000 or 63% of these remained unemployed for four months or more. The target of the guarantee approach is to reduce over time this level of persistent unemployment among young people. As part of the implementation of the youth guarantee it is proposed, subject to labour market and economic developments, to review the targeted nature of the youth guarantee offer before the end of 2015.

Significant progress has been made since the youth guarantee implementation plan was published in January. The plan provides for more than 28,000 programme opportunities for unemployed young people in 2014, as set out in the table being circulated with this statement. This figure excludes some 24,000 places provided for young people through post-leaving certificate courses and apprenticeships. These latter places, together with the wide range of vocational third level courses provided for the young, although not reserved for the unemployed, nevertheless contribute to the spirit of the guarantee.

Of the approximately 28,000 places for unemployed young people, approximately 5,000 of these were taken up in the first four months of the year. This is broadly in line with expectations, as some programmes such as the vocational training and opportunities scheme and the back to education allowance have intakes in September as per the academic calendar. A new intake of young people to the MOMENTUM programme for the long-term unemployed is also scheduled for later in the year. The MOMENTUM programme has been very popular with unemployed people. In addition, some of the initiatives planned under the guarantee require primary legislation to allow positive discrimination on age grounds in the provision of employment services and supports. This legislation will enable us to take steps to discriminate positively in favour of disadvantaged young people in accordance with the provisions of the EU equality directive. It will be enacted as part of the spring social welfare Bill due before the Oireachtas in June. Two employment schemes in particular, the developmental internship and JobsPlus, are dependent on this legislation being passed. The JobsPlus variant will be available as soon as possible after the relevant legislation has been cleared. The developmental internship, which will include a pre-internship training period, will be in place not later than the autumn. Passage of this legislation will also permit the introduction of earlier and more intensive engagement by Intreo with young unemployed people.

The cost of the programmes contributing to the youth guarantee will be significant. It is being funded, in the first instance, by the Irish Exchequer. However, it is expected that a number of these youth programmes will meet European Social Fund eligibility criteria and will be included in the youth employment initiative application for Ireland. This will permit EU funding to be drawn down in respect of expenditure in 2014 and 2015 to a level that should enable the full youth employment initiative allocation for Ireland of €68.1 million in current prices to be taken up over those two years, with a further similar amount in ESF funding. Given the way the funding is structured, to recoup these amounts from the EU in due course it will be necessary that we spend, in the first instance, close to €100 million on relevant programmes each year, or close to €200 million in 2014 to 2015 overall. It is anticipated that actual expenditure will be significantly in excess of that amount over the period concerned. Taking existing and planned provision together, the current estimate of programme uptake by young people in 2014 of approximately 28,000 will involve associated programme costs of €336 million. If all post-leaving certificate course and apprenticeship provision is included, the total programme uptake of approximately 52,000 has associated annual programme costs of €528 million. The expenditure by the Exchequer from taxpayers' funding is very significant.

The Department of Social Protection, in conjunction with local groups, has also secured EU funding of €250,000, the maximum amount available, to pilot a youth guarantee scheme in Ballymun. The Ballymun pilot project is developing an activation approach tailored to the needs of young people, guaranteeing access to career guidance and assistance leading to identification of an individual career plan for the young unemployed person with follow-through to training, education, work experience, or full-time employment. A particular focus of the pilot is to involve and build links with employers in the locality and the immediate hinterland to ensure the guidance and training elements of the youth guarantee are tailored to the needs of the local labour market and also to generate work placement experience opportunities for the participants. Only last week, the Ballymun pilot was visited by Commissioner Laszlo Andor, the European Commissioner for Employment, Social Affairs and Inclusion, who has overall responsibility for the youth guarantee at EU level. Commissioner Andor was extremely impressed with the progress to date in the Ballymun pilot. Feedback from the Ballymun pilot will be taken into account in finalising the ongoing implementation plan of the guarantee in other areas of the country. I spoke to a room full of young people involved in the Ballymun pilot project. One young man said there was so much positivity in the room because they were getting an opportunity to get work experience and to develop skills. Many of the young people spoke about what they were doing as opposed to simply being unemployed. The adrenaline and the positivity in that room last week was really striking.

I wish to assure the House that the issue of youth unemployment will continue to be a major priority for the Government. While youth unemployment has been falling recently, I recognise that an insufficient supply of job opportunities is the reality that continues to face many young people leaving our education system. Aside from the obvious negative financial, social and emotional impact, youth unemployment also results in a waste of the skills acquired in schools and colleges and an under-utilisation of the obvious talent and creativity of the youth population. As Minister I am determined to ensure the implementation of the youth guarantee scheme in Ireland makes a real difference to the many young people who, as a consequence of the recession triggered by the collapse of the banking system and the bust in construction, are exasperated by the lack of opportunities to match their ambition and their talents. I am confident the youth guarantee, which I championed and navigated through the EU decision-making process during the Irish Presidency of the EU Council, will play a key role in ensuring that this need not be the case over the next few years. It is a guarantee of which I am proud and one which I commend to the House.

I will now speak about the rent supplement scheme.

In any discussion of rent supplement, it is very important to be clear that the purpose of the scheme is to provide short-term income support to people living in private rented accommodation whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source. The overall aim is to provide short-term assistance and not to act as an alternative to the other social housing schemes operated by the Exchequer.
The Government has provided more than €344 million for the rent supplement scheme in 2014. There are currently approximately 77,000 rent supplement recipients, of which more than 50,000 have now been in payment for more than 18 months, representing more than 65% of the total. At the end of April 2014, approximately 33,150 rent recipients were on the live register - representing 8.5% of the total live register.
Rent supplement is subject to a limit on the amount of rent that an applicant may incur. Limits are set at levels that enable eligible households to secure basic suitable rented accommodation, having regard to the different rental market conditions that prevail in various parts of the State. Maximum rent limits are generally reviewed every 18 months. The most recent review was completed in June 2013 with revised rent limits introduced on 17 June 2013. Despite pressures on the social protection budget, the last review saw rent limits increase in line with market rents in some areas, including Dublin and Galway, with Dublin limits increasing by a weighted average of 9%. As people will appreciate, relative to inflation a 9% increase in the rent supplement in the Dublin area last year was a very significant increase.
A new rent limit review has commenced and will feed into the budgetary process. This review will involve a comprehensive analysis of information from a range of sources, including rental tenancies registered with the Private Residential Tenancies Board, the Central Statistics Office rental indices and websites advertising rental properties to ascertain both the costs and market trends for private rented accommodation. The Department will also seek the views of a number of stakeholders in this area, including the Department of the Environment, Community and Local Government, the Health Service Executive and other non-government organisations.
I am fully aware that in some areas, in particular Dublin, prospective tenants, including those seeking access to rent supplement, are finding it increasingly difficult to secure accommodation due to reduced availability of supply. I assure Senators that Department officials have considerable experience in dealing with customers of the scheme and continue to make every effort to ensure their accommodation needs are met.
Staff in the Department's community welfare service have discretionary powers to award a supplement for rental purposes in exceptional cases where it appears that the circumstances of the case so warrant, for example, when dealing with applicants who are homeless or who are at risk of losing their tenancy. Such cases are examined on a case-by-case basis, having regard to the situation presented.
It should be noted that approximately 77,000 people and families are currently in receipt of rent supplement. That proves that a significant number of landlords are accommodating applicants of the scheme and that rent supplement recipients are accessing accommodation. The Department also provides support to persons towards rent deposits under the exceptional needs payments. This form of assistance is very important to people on low incomes who rely on the private rented market to meet their housing needs. In 2013, some 4,300 people were assisted with rent deposits at a cost of €2.1 million.
The community welfare service, including through its work in the homeless persons unit and the asylum seekers and new communities unit, works closely with local authorities and other stakeholders to facilitate homeless people to access private rented accommodation. This ensures that, where possible, people are diverted away from homeless services and towards community-based supports.
In addition, and in view of the current supply difficulties, the Dublin local authorities, in conjunction with voluntary organisations, are finalising a protocol so that families at risk of losing existing private rented accommodation can have more timely and appropriate interventions made on their behalf. The necessary operational arrangements are currently being put in place and it is expected the initiative will be launched shortly. These cases will be assessed on an individual basis, having regard to the individual circumstances and families requiring additional support will receive the necessary assistance.
The Government effectively has two initiatives to deal with long-term reliance on rent supplement - the rental accommodation scheme, which is in operation since 2004, and the more recent housing assistance payment. Both initiatives give the local authorities specific responsibility for meeting the long-term housing needs of people receiving rent supplement. At the end of March 2014, local authorities had transferred almost 48,900 households from rent supplement. Of these, 28,900 were housed directly under RAS and a further 20,000 were accommodated under other social housing options.
The Department's strategic policy direction is to transfer responsibility for recipients of rent supplement with a long-term housing need to local authorities under HAP. Officials in the Department of Social Protection are working closely with those in the lead Department, the Department of the Environment, Community and Local Government, in piloting HAP on an administrative basis in Limerick City and County Council, with more than 50 cases having being transferred from rent supplement to date.
There will be further roll out of HAP to selected local authorities during the remainder of the year. Officials in the Department of Social Protection are working closely with those in the Department of the Environment, Community and Local Government to progress this transfer. One of the key benefits HAP will bring is the removal of barriers for people currently in receipt of rent supplement in returning to employment which is consistent with the Government's commitments under the Pathways to Work programme. Senators have mentioned previously that catch-22 where if one is on rent supplement and gets an offer of an entry level job, one may risk losing one's rent supplement as a result of going back to work. That is basically the wrong way round.
Rent supplement will continue to be paid to clients who are already in the private rented sector but who, generally because of a loss of income through unemployment, require short-term income support in order to pay their rent. Rent supplement will, therefore, over time, return to its original intention of being a short-term payment. I thank the Cathaoirleach and Members of the Seanad for inviting me today.