Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I apologise for the delay. We have just had an unfortunate announcement in respect of jobs, on which we are working.

I welcome the opportunity to present the Industrial Development (Forfás Dissolution) Bill, 2013 to the Seanad. The Bill was published on 23 December last and passed by the Dáil on 9 April 2014. The purpose of the Bill is to give effect to the decision to integrate the research and policy advisory functions of Forfás into the Department.

As part of the public service reform plan, I undertook to review how the functions currently carried out by Forfás might be integrated with the resources of my Department in order to further enhance the formulation and implementation of national enterprise policy. Following consideration of the matter and engagement with the Board of Forfás, I decided, in May 2012, to proceed with the proposed integration. This move forms part of a broader reform programme which we have been progressing across the Department and its agencies, including the merger of the National Consumer Agency and the Competition Authority, the reform of the five workplace relations bodies into two organisations, restructuring the enterprise support model for micro and small businesses, including the dissolution of the 35 CEBs and the creation of the new local enterprise offices within the local authorities, and the restructuring of transport and enterprise development bodies in the Shannon region.

The overarching objective of integrating Forfás into the Department is to strengthen our capacity to develop and implement enterprise policy. We envisage improved outcomes in terms of enhancing the operating environment for enterprise and contributing to economic growth and job creation. A key objective is to ensure that the distinct strengths and experience of the Department's staff, and those of Forfás, are maximised to place the Department at the centre of driving economic recovery.
Since its establishment in 1994, Forfás has played a significant role in providing independent policy advice and research analysis to the Minister and the Department. It has played a key role in progressing the enterprise agenda and facilitating the development of our modern economy.
Over the past three years, Forfás has become increasingly involved in the central policy-making process in the Department, with the agency playing a leading role in the preparation of the annual Action Plan for Jobs. At this juncture, it is considered that combining the resources of Forfás and the Department represents the optimum use of scarce resources, particularly against a backdrop of significant reductions in staffing levels arising from the need to reduce the public sector pay bill.
Forfás was established in 1994, under the Industrial Development Act 1993, as an agency of the then Department of Enterprise, Trade and Employment. The agency's core functions are as follows: to advise the Minister on matters relating to the development of industry in the State; to encourage the development of industry and technology in the State; to advise on the development and co-ordination of policies across the agencies supporting enterprise; to provide independent research in the areas of enterprise and science policy; to evaluate enterprise policy interventions; and to provide research and administrative support to a number of independent advisory groups, including the National Competitiveness Council, the Expert Group on Future Skills and the Advisory Council for Science, Technology and Innovation.
Under the Industrial Development Act 1993, and related legislation, Forfás is statutorily the employer of staff in IDA Ireland, Enterprise Ireland, Science Foundation Ireland and some staff in the National Standards Authority of Ireland. Forfás also has responsibility for pensions of the Department of enterprise agency staff and staff of a number of former agencies, including the Industrial Development Authority, Eolas, the National Board for Science and Technology, the Irish Goods Council and An Bord Tráchtála.
Forfás also carries out a range of shared services on behalf of the IDA, Enterprise Ireland and SFI in particular, including the administration of pensions, property management and other central functions. The Irish National Accreditation Board, INAB, operates as a committee of Forfás and is supported by Forfás staff.
It is proposed that the core policy advisory and research functions of Forfás will be incorporated into a new strategic policy division to be established within the Department. The new policy division will be tasked with a significant range of policy evaluation, co-ordination and planning activities on behalf of the Minister and for the Department's agencies. The key elements of the role of the new policy division will be in the areas of enterprise policy, competitiveness, horizon scanning, tax policy, the Action Plan for Jobs, trade and innovation policies, education, skills and labour market analysis, and key policy surveys and research. The staff of Forfás who are currently engaged in delivering these functions will transfer into the division within the Department, together with relevant support staff from the agency.
The capacity to bring forward independent, evidence-based, policy recommendations to Ministers and Government is an essential requirement for economic development. Since its establishment, Forfás has provided robust and independent analysis and advice that has greatly assisted the Department and others to formulate policy positions. The Department remains committed, through the new strategic policy division, to ensuring that policy advice to Ministers is informed by a robust evidence base and through consultation with relevant stakeholders.
Forfás provides research and administrative support to a number of independent advisory groups, including the National Competitiveness Council and the Expert Group on Future Skills Needs. As these groups are an integral component of the overall enterprise agenda, the strategic policy division will continue to provide support and secretariat services to those bodies.
The NCC reports to the Minister on key competitiveness issues facing the Irish economy and offers recommendations on policy actions required to enhance Ireland's competitive position. The council is supported in its work by Forfás who monitors Ireland's competitiveness on an ongoing basis. The role of the NCC in the context of the Forfás integration has been carefully considered. The membership of the NCC has been expanded to incorporate the industry partners appointed to assist with disruptive reforms, under the Action Plan for Jobs, and to broaden the range of Departments attending NCC meetings in an advisory capacity. The Government has approved revised terms of reference for the NCC to give the council greater flexibility to prepare and publish reports on issues it considers important, thereby copper-fastening its independence within the new organisational structure. The revised terms of reference also provide for a specific role for the council in respect of preparation of the competitiveness chapter of the Action Plan for Jobs.
The Expert Group on Future Skills Needs reports jointly to myself, as Minister, and the Minister for Education and Skills. It will continue to prepare policy papers independently on skill needs and labour market issues that impact on Ireland's enterprise and employment growth. It will be serviced by the strategic policy division.
The current membership of the Advisory Council for Science, Technology and Innovation has been stood down with effect from 25 September 2013, pending the finalisation of the Forfás integration process and overall policy on public service reform. This does not rule out the option of establishing an advisory council of a similar nature, on an alternative footing, if this is deemed appropriate at some stage in the future.
In addition, Forfás undertakes a number of surveys. They include the annual employment survey which tracks employment in enterprise agency supported companies. Also included is the annual survey of business impacts which measures expenditure by agency-supported companies in the Irish economy. These surveys play an important role in helping to evaluate the performance of the enterprise agencies and will continue as part of the work of the strategic policy division.
Forfás inherited a range of functions and powers on its establishment, originating in the Industrial Research and Standards Act 1961, the Industrial Development Act 1986 and the Science and Technology Act 1987. The establishing legislation mandated Forfás to assign these powers to Enterprise Ireland and IDA Ireland. These powers will now be vested directly in these agencies.
The current Bill, at section 37, also makes an amendment to the IDA's existing functions. Section 8(d) of the Industrial Development Act 1993 makes provision for IDA to administer schemes requiring the disbursement exclusively of EU funds. It is proposed to amend the section to give the IDA the same power as was provided to Enterprise Ireland by section 7(i)of the Industrial Development Act 1998 allows Enterprise Ireland, "to administer such schemes, grants and other financial facilities requiring the disbursement of European Union funds and such other funds as may from time to time be authorised by the Minister with the concurrence of the Minister for Finance."
The provision in the 1993 Act is considered to be restrictive on the IDA. The amendment will allow the IDA to administer schemes, which includes the disbursement of Exchequer funds, as may be authorised by the Minister with the concurrence of the Minister responsible for public expenditure. Previously the IDA would not have been in a position to administer schemes. For example, the employment subsidy scheme that was managed exclusively by Enterprise Ireland even though the scheme was open to IDA client companies.
The non-policy functions which Forfás carries out, on behalf of other agencies, will be transferred into the Department or to other agencies under the remit of the Department, as appropriate, together with the relevant staff resources. The property management function of Forfás and associated staff have already transferred to IDA Ireland since July 2013.
The legislation that we are introducing provides for Enterprise Ireland, IDA Ireland and Science Foundation Ireland to become employers in their own right and for each agency to establish a superannuation scheme for its employees. At present, Forfás is the legal employer of all staff working in Enterprise Ireland, IDA Ireland and SFI. The staff are seconded from Forfás to their respective agencies. This legislation provides for staff seconded from Forfás to become the staff of their respective agencies. Forfás is also the legal employer of a number of staff working in the National Standards Authority of Ireland. The legislation provides for these staff to become staff of NSAI.
Employees of each of the agencies will become members of their agency's superannuation scheme, as appropriate. The legislation provides for the responsibility for all existing pensioners, and those with deferred benefits for whom Forfás currently has responsibility, to transfer to my Department.
The Irish National Accreditation Board is the national body with responsibility for the accreditation of laboratories, certification bodies and inspection bodies. Accreditation is the procedure by which an authoritative body gives formal recognition that a body or person is competent to carry out specific tasks. EU member states have established a network of national accreditation bodies to ensure that the competence of all laboratories, inspection and certification bodies are assessed against the same principles. Accreditation plays an important role in guaranteeing the access of Irish products and services to both EU and worldwide markets. The demand for accreditation has increased significantly in recent times as national regulators continue to rely on conformity assessment as a mechanism to support the implementation of legislation and assure competence.
Responsibility for accreditation in Ireland is currently vested in Forfás. In practice, the accreditation function is delegated to the INAB which is a committee of Forfás and supported by Forfás staff in the administration of its functions.

The accreditation functions of Forfás will be transferred to the Health and Safety Authority with INAB to be established as a committee of the authority. This mirrors the current arrangements that apply to INAB within Forfás. The Bill provides for the transfer of Forfás's accreditation functions and associated staff to the Health and Safety Authority by amendment of the Safety, Health and Welfare at Work Act 2005.

As I have outlined, the purpose of integrating Forfás into the Department is to strengthen the Department's capacity to develop and implement enterprise policy. The proposal is not driven by the objective of finding cost savings, although some savings may arise in due course if synergies between the two organisations are identified.

It is not envisaged that any reduction in staff numbers will arise as a result of the integration. There may be some costs associated with, for example, the reconciliation of IT systems arising from these proposals. However, any such costs will be met from existing resources. Overall, the integration of Forfás into the Department of Jobs, Enterprise and Innovation will facilitate improvements in the use and effectiveness of existing resources.

I will outline briefly the main provisions of the Bill which is mainly of a technical nature. If any of the Members require further clarification of any aspect of the Bill I will be happy to provide same.

Section 1 sets out the Short Title and empowers the Minister to appoint, by ministerial order, a date on which the sections of the Bill will commence. This Act, other than Part 7, shall be included in the collective citation of the Industrial Development Acts 1986 to 2013. Part 7 relates to the transfer of INAB and its accreditation functions to the Health and Safety Authority. The Bill provides that Part 7 and the Safety, Health and Welfare at Work Acts 2005 to 2010 may be cited together as the Safety, Health and Welfare at Work Acts 2005 to 2013.

Section 2 sets out a number of definitions relating to specific terms. Section 3 provides that any expenses incurred in the administration of the Act shall be paid out of moneys provided by the Oireachtas.

Section 4 sets out the Acts or part of Acts to be repealed on the enactment of the Bill. There are a number of other repeals relating to commencement orders in earlier Acts, which are included in Parts 2 to 5, inclusive, of this Bill under the provisions relating to staff of the various agencies.

On Part 2, staff of Enterprise Ireland, section 5 provides for Enterprise Ireland and its subsidiaries to employ staff subject to the consent of the Minister and the approval of the Minister for Public Expenditure and Reform. Section 6 provides for the transfer to Enterprise Ireland of staff currently seconded from Forfás on terms and conditions of service relating to remuneration which are no less favourable than those applying before the transfer. I wish to advise Members that it is my intention to introduce an amendment on Committee Stage which will broaden the terms and conditions of service under which staff will transfer beyond that of remuneration. This amendment will be replicated for all Forfás staff transferring to other agencies or into my Department under Parts 3 to 7, inclusive, of the Bill. Section 7 provides for Enterprise Ireland to establish a superannuation scheme in respect of persons referred to in section 6.

On Part 3, sections 8 to 10, inclusive, replicate the provisions of sections 5, 6 and 7 in respect of staff of IDA Ireland. Part 4 deals with Science Foundation Ireland. It replicates the sections 5, 6 and 7 provisions in respect of Science Foundation Ireland.

On Part 5, section 14 provides for Forfás staff seconded to, or working under the direction of, the NSAI to transfer to the NSAI on terms and conditions of service relating to remuneration and superannuation no less favourable than those applying before the transfer.

Part 6 provides for the dissolution of Forfás on a day to be appointed by the Minister. Section 17 provides that references in any enactment to Enterprise Ireland, EI, IDA Ireland or SFI as an agency of Forfás shall be construed as a reference to those bodies, as appropriate. Section 18 provides for the transfer of functions currently vested in Forfás to be transferred to Enterprise Ireland and IDA Ireland, as appropriate, in accordance with the Schedule to the Bill. Section 19 provides for the transfer of functions currently vested in Forfás other than those referred to in sections 18 and 28 to be transferred to the Minister for Jobs, Enterprise and Innovation.

Section 24 provides that the staff of Forfás, other than those who are transferring to become employees of Enterprise Ireland, IDA Ireland, SFI, NSAI or the HSA, will be appointed to an unestablished position in the Civil Service on terms and conditions of service relating to remuneration and superannuation no less favourable than those applying before the transfer. These staff will subsequently be designated as established civil servants.

Section 25 provides that superannuation schemes administered by Forfás prior to dissolution shall continue in force as if made by the Minister. Section 26 provides for the administration of superannuation schemes or arrangements referred to in section 25 or those referred to in subsection (5)(c) of section 12 of the County Enterprise Boards (Dissolution) Act 2014 to be undertaken by a relevant body on behalf of the Minister and sets out arrangements to apply in regard to the administration of these schemes.

Forfás currently carries out the administration function for the superannuation schemes for which it has responsibility. Section 25 of the Bill provides for the Minister to become responsible for the existing superannuation schemes of the dissolved body. The Minister is also responsible for pension schemes arising under subsection (5)(c) of the County Enterprise Boards (Dissolution) Act 2014. It is proposed that when the Minister assumes responsibility for these schemes, the administration function will be devolved to a relevant body, an agency of the Department, as defined under the new section 26. This section provides for the Minister to require a relevant body to carry out such administration services on his behalf and sets out the arrangements to apply in this regard.

Section 27 provides for the preparation of final accounts for Forfás no later than one year after the dissolution date and for the preparation of a final annual report within six months of dissolution.

Part 7 deals with the INAB. The functions of accreditation are vested in Forfás and undertaken by the INAB, which, as I stated earlier, currently operates as a committee under Forfás. INAB accreditation functions and related staff will transfer from Forfás to the Health and Safety Authority, and this requires amendments to the Safety, Health and Welfare at Work Act 2005. Section 29 inserts a new section 33A into that Act, transferring the powers and functions of Forfás relating to accreditation to the Health and Safety Authority.

Section 31 provides for transfer of relevant Forfás staff to the HSA, by inserting a new section 54A after section 54 of the 2005 Act, on terms and conditions of service relating to remuneration and superannuation no less favourable than those applying before the transfer. Section 32 provides for an amendment to Part 5 of the Safety, Health and Welfare at Work Act 2005, by adding a new Chapter 3 and adding a number of new sections, sections 56(A) to 56(I). Section 56A provides for the committee established by the board of Forfás, known as INAB, to become a committee of the HSA and sets out operational procedures for INAB while the remaining sections deal with administrative arrangements to apply on transfer of functions. Section 56G provides for the HSA to establish an appeals board and related matters. Section 56H sets out the procedures in relation to the making of an appeal against a decision of the accreditation board, or the failure of the accreditation board to make a decision.

Section 36 inserts a new schedule into the Safety, Health and Welfare at Work Act 2005, providing for the INAB and associated procedural matters.

Part 8, sections 37 to 42, inclusive, identifies the consequential amendments to existing legislation arising as a result of the integration of Forfás into my Department.

I emphasise that the overarching objective of this Bill is to strengthen our capacity to develop and implement enterprise policy. The integration of Forfás into the Department of Jobs, Enterprise and Innovation will deliver greater outcomes in terms of improving the operating environment for enterprise and contributing to economic growth and job creation and will ensure that the distinct strengths and experience of the Department's staff, and those of Forfás, are maximised to place the Department at the centre of driving economic recovery.

By way of background, many Senators will be aware that the original establishment of Forfás followed a review of industrial policy, when IDA Ireland and Enterprise Ireland were separated and a body which was placed over them included FÁS membership on its board. The thinking behind this is that one needs the Department to have the capacity for policy making - a stronger policy-making unit within the Department rather than much of that outsourced to an agency that was at a remove from the Department and had close relations to the agencies. At the time the industrial review was done in the 1980s, they recommended that such policy-making capability should be in the Department, not in another body. I think they had it right and we are moving to the sort of structure that was originally envisaged.

Public service reform of this nature is painstaking and it requires a significant amount of co-operation from staff across of all of those agencies that I mentioned at the beginning. One of the great successes of the negotiations with public service employees over the past number of years is the flexibility that has been demonstrated in being willing to make changes and try to bring better structures and put them in place.

The Government has been very fortunate in having great co-operation in all those public service reform projects it has undertaken, including this one. It is a tribute to the staff and those who are working on this measure. I believe the value of having this capability to amplify what already is available within the Department already is proving its worth and I believe it is the correct move. However, as Members can discern from a casual reading of the Bill, such restructuring is akin to pulling an ivy root, in that there always are many pieces hanging out that must be restructured with it. It is by no means an easy process but is absolutely worthwhile in this case. I commend this Bill to the House.