Seanad debates

Wednesday, 9 October 2013

Adjournment Matters

Job Creation

1:45 pm

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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I welcome the Minister of State to the House. I tabled this motion last week and, unfortunately, since then we had bad news in Waterford city of 74 job losses at Honeywell. I am sure the Minister of State joins me in offering support to the families of the people who lost their jobs. It is always a difficult time. A sour taste was left in the mouths of the workers due to the way in which people found out. Some found out in the media, others by text message. It is an appalling way to treat workers. Unfortunately, 74 jobs were lost at the plant, which is a blow for Waterford city and the south east.

It is important to have a regional focus and a clear focus on the south east from enterprise agencies. A number of weeks ago, the Joint Committee on Jobs, Enterprise and Innovation published an economic development strategy for the south east, setting out more than 100 proposals for the Government and agencies to give the south-east region a lift. Primarily, it had ten key objectives and proposals, a number of which centred on the enterprise agencies and IDA Ireland. I appeal to the Minister of State and the Minister for Jobs, Enterprise and Innovation to recognise the high level of unemployment in the south east and the need for a regional plan that joins up the work of all stakeholders, such as the enterprise agencies, education providers and local authorities.

With regard to enterprise agencies and the IDA, it is a problem that we do not have a regional IDA office, director or support staff. This means we do not have a regional IDA focus. We have seen that in recent times with regard to site visits. The number of site visits has improved this year, but previous years saw decreases. Without a regional focus, we will not be able to deal with the challenges the region has. The IDA will not be able to meet the challenges without a clear focus. I ask the Minister of State to respond to these points.

The regional aid guidelines are up for negotiation at European level. In 2014 there will be a new regional aid map, and the percentage of grant aid that can be made available to foreign direct investment companies will be reviewed. It is important that the south east is at least on a par with the BMW region. This is an issue to do with harmonisation. We must move upwards so that the south east has the same attractive rates as the BMW region rather than a decreased rate. It is important that the south east operates on a level playing field. We need a regional focus and a regional plan from the enterprise agencies so that we are on a level playing field in terms of grant aid and infrastructure.

Progress on the technological university for the south east is also important. It is a priority for the Government, but two and half years into its term of office there is no indication when it will be delivered. I ask the Minister to outline the Government's initiative for the south east, the IDA's plans and focus and those of Enterprise Ireland. There is a clear view in the south east that not enough is being done. Much more needs to be done to give the south east the lift its needs to create jobs for people in the region.

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)
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I thank Senator Cullinane for raising this important issue. There has been a long-standing unemployment problem in Waterford and in the region. The structural challenges that the region faces have built up over many years and could not be reversed with a simple set of actions. When TalkTalk announced job losses in Waterford in 2011, the Minister decided to take a very focused approach to tackling the causes of unemployment in the region, which appeared to be unique to the south east. The specific recommendations contained in the South East Employment Action Plan, produced by Forfás, are being progressed by a forum representing the agencies and key stakeholders in the region. There has been good progress since the plan was published, including several significant jobs announcements - notably, several hundred jobs were created at the Eishtec call centre in Waterford city and 65 Enterprise-Ireland-supported jobs and new jobs were created by Dawn Meats. There has been a tripling of the number of site visits by IDA Ireland.

This welcome trend has continued. On 28 March, the Minister participated in an announcement by Nypro Healthcare of an additional state-of-the-art medical device manufacturing facility in Waterford. This newly established facility will result in the creation of over 200 new high-quality jobs in phase 1, which is expected to increase in subsequent years. In addition, a major investment by Glanbia in Belview on the Kilkenny-Waterford border will provide 1,600 direct and indirect jobs, as well as an additional 450 jobs during the construction phase. It will contribute an estimated €400 million every year to the economy, with particular benefit to farm families and rural communities. Last May, the Irish software company FeedHenry announced that it would create up to 100 jobs over the next two years as part of a €7 million investment by the Enterprise-Ireland-supported firm. The jobs will be located in its Waterford and Dublin offices, bringing the number employed by the company to 140. To date in 2013 there have been 13 IDA site visits to Waterford, one visit to Wexford, two visits to Kilkenny and one visit to Carlow. Senator Cullinane will appreciate that while the IDA makes strenuous efforts to attract multinational companies to specific regions, whether companies choose to visit and, if so, whether they subsequently choose to locate in the region concerned, is entirely a matter for the companies themselves.

While every effort is being made to attract foreign investments to the south east, final decisions are made by the corporate entities. I regret this week's announcement of 74 job losses in Honeywell in Waterford city, but the company has stated it hopes many of these losses will be voluntary. It is gratifying that it will still retain a significant workforce.

The Senator also raised the issue of having a stronger IDA Ireland presence in the region. During 2010, in order to maximise resources, a business transformation process was carried out which examined every position in the organisation. The outcome provided opportunities to free up staff resources for core business generation activities and to ensure IDA Ireland met its job targets. It should be appreciated that the Department and its agencies operate under a very stringent regime in regard to staffing levels, with significant cuts imposed in many bodies within the Department's remit. However, I am pleased to say the agency has been largely protected from cuts under the employment control framework for the past three years.

I also acknowledge the recent report, South East Economic Development Strategy 2013-2023, which the Senator prepared for the Joint Committee on Jobs, Enterprise and Innovation. The report represents a comprehensive and detailed assessment of a wide range of factors that can contribute to the overall economic development of the south-east region. My Department is considering the contents of the report and assessing the merits and practicality of its recommendations. Many of the suggested actions relate to matters which come within the remit of other Departments or bodies and some of the recommendations could have significant financial implications which would be a challenge in the current financial climate. The report contains a number of very worthwhile and relevant recommendations for developing the south-east region which would serve to add to the ongoing work of the south-east forum. I will ask the forum for its considered views on the report. In due course I will be happy to discuss its findings with the committee in the context of our ongoing constructive dialogue.

I am aware that Waterford city and county councils have recently produced a report on the south east which also contains several positive proposals for enterprise development in the region. It is heartening that a significant effort is being put into seeking solutions to the economic problems of the south east and I look forward to improvements in the months and years ahead.

The Minister extends his apologies to the House as he was unavoidably detained at a meeting. He is dealing comprehensively and in a focused way with the south-east region.

1:55 pm

Photo of David CullinaneDavid Cullinane (Sinn Fein)
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This detailed report was published by the Joint Committee on Jobs, Enterprise and Innovation following a year-long series of consultations with enterprise agencies, education and training providers, local authorities and community and voluntary groups. Its recommendations are practical, credible, realistic and can be delivered on. I refer also to the report published by Waterford city and county councils which was cited by the Minister of State. Many of its recommendations are very similar. The problem is that these are reports and they need to be implemented. It is great to have all them, but the people of the south east want to see real action.

The Minister of State referred to IDA Ireland, the chief executive of which tells us all the time that the agency's job is to bring jobs to Ireland as a whole and that it cannot direct companies to lcoate in any particular region. There must be a regional plan. If companies are not coming to the south east, IDA Ireland has a responsibility to look at the reasons they are not coming and to address them. We cannot just wash our hands of the issue and give the excuse that they will not come because they make the choice as to where they will locate. That is not the case; very often companies gravitate to where the infrastructure is in place, where a university is located, a region that has strengths in certain areas such as the south east has in the areas of manufacturing, the life sciences and food production. These strengths can attract foreign direct investment to the south east. The problem is that there is there is no over-arching plan or strategy for the south east. In my view, the region is not getting enough from the enterprise agencies. It can be very frustrating to hear IDA Ireland state it cannot bring jobs directly to the region. That might be true to an extent, but it needs to look at why the companies are not coming to the south east and then address these reasons in a comprehensive way.

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)
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I reiterate that implementation of the south-east action plan is proceeding well. The Minister, Deputy Richard Bruton, also established the south-east forum which comprises all of the State stakeholders in the region. The Senator cannot say there is no plan. The aim of the forum is to oversee implementation of the action plan. It is the first such mechanism for the representatives concerned to formally work together. The Minister has also met the forum on several occasions. I, therefore, ask the Senator to agree that there has been good progress since the plan was published in December 2011, including several significant jobs announcements. Companies supported by IDA Ireland operating in the south-east region now employ over 12,000 people. IDA Ireland has submitted a planning application to Waterford County Council for the development of new offices totalling 25,000 sq. ft. This new development will be situated in the IDA Ireland business and technology park in Butlerstown, County Waterford.

There has also been progress on regional infrastructure priorities, including broadband services and the road infrastructure investments under way on the N11 Dublin-Wexford road. Enterprise Ireland has continued its other enterprise support measures, including launching a pilot competitive feasibility fund for new start-ups in the south east. Over 40 applications were received, with 14 high-quality projects being approved for funding.

The Government is completely committed to the south east. Since 2007 Enterprise Ireland has approved a total of 707 innovation vouchers to companies in the south east, with 287 approved to Waterford-based companies as of March this year. Waterford has the fourth highest number of vouchers approved since 2007. In addition, the Waterford County and Waterford City Enterprise Boards have continued to use the funding available from the European globalisation fund and my Department to provide supports for micro-enterprises within the county. A range of projects have been supported by them. I, therefore, ask the Senator to give credit where it is due. Waterford is not doing too badly in the current economic climate.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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The Minister of State has answered very strongly on behalf of the senior Minister. Senator David Cullinane is not entirely happy, but there is nothing I can do anything about that. I thank the Minister of State.

Photo of Lorraine HigginsLorraine Higgins (Labour)
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I hope there is similar good news for County Galway and, in particular, the eastern part of the county.

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)
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I cannot guarantee that.

Photo of Lorraine HigginsLorraine Higgins (Labour)
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The matter I wish to raise relates to the difficult situation in Loughrea, County Galway as a consequence of a number of lay-offs in recent times. The Minister of State is from the west and will know that County Galway, in particular, has been very badly hit by the recession, through the closure of various businesses and other facilities which were treasured and cherished by the local community. Loughrea, in particular, has had to contend with job losses as a result of the downturn in the international economy because a multinational company took a hit. Small businesses, pubs and restaurants have also suffered greatly from the spin-off effects of reduced spending in the town.

The unemployment register shows that 2,262 people are unemployed in the town and something needs to be done now. While many Government economic policies are aimed at enterprise and employment creation, they do not have enough of a rural focus. Employment creation and enterprise in rural areas need to be given a higher place on the policy agenda in the Department. The key stakeholders in Galway East need to be brought together with a view to creating jobs and promoting economic development in the area. Any job that can be created in Galway East is to be welcomed in the light of the high levels of unemployment being experienced. We must manage and address the unemployment crisis in the county. Currently, the level of unemployment stands at more than 22,000. I am sure the Minister of State will agree that this figure is unacceptable. It is dangerous to have such a high level in small rural towns.

The east of the county and Loughrea, in particular, need a coherent, long-term strategy which would align all of the relevant stakeholders and agencies in order to address the needs of the area and the region in general. If the Department is minded to set up a task force, it must take into account the needs of the area, the people of which must take advantage of its key strengths which include tourism, the arts, culture, agribusiness, food production, technology, engineering and the green sector economy. The crucial components are the enterprise agencies which must play a leading role and have the teeth to address the problem of large-scale unemployment in the county.

We must join forces with national, local and regional bodies to ensure those with responsibility for delivering on economic development and job creation will deliver for east Galway.

I will be pressing the Minister to set up a task force for the area and if one is created, targeted assistance should be allocated for small businesses in particular and job activation measures. My own town of Athenry and Portumna have suffered greatly as a result of the recession. In Athenry over 35 commercial retail units are vacant in the centre, and Portumna shares a similar story, which is most regrettable. If a task force is set up in the east of the county, it would go some way towards highlighting the issues affecting the county, and it is only with such action that we can address the problem.

I look forward to any response in this regard and I hope it will be as favourable as that afforded to Senator Cullinane. There is much focus on Waterford and the south east and I hope County Galway, and east Galway in particular, will not be overlooked.

2:05 pm

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)
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I thank Senator Higgins for raising this very important issue. I apologise for the absence of the Minister, Deputy Bruton.

I share the Senator's concern about the loss of up to 30 jobs at ALS Minerals in Loughrea. In 2011, ALS Limited acquired the Stewart Group, a UK-based mineral testing services company which owned OMAC Laboratories in Loughrea. Following discussions with IDA Ireland, a grant package was approved in May 2012 to support the designation of OMAC as the hub laboratory for the Europe, Middle East and north Africa region, and for the creation of new jobs in Loughrea. OMAC has recently moved from its 8,000 sq. ft. facility in the town into the IDA-owned former Cigna building, following extensive updating and modification.

Over the past 12 to 18 months, the global mining exploration industry has experienced a sharp downturn and although this is not unusual given the cyclical nature of the industry, the downturn has resulted in a significant decline in samples available for testing at the recently completed geochemical laboratory in Loughrea. Against this backdrop, the local management has taken measures to reduce the cost base in an effort to preserve its core employment levels. As a result, it has entered into a 30-day consultation period with the work force and anticipates that this will result in the lay-off of up to 30 staff in Loughrea. Local ALS management has stressed to IDA Ireland that the company's strategy has not changed and that the Loughrea facility remains strongly positioned to take advantage of the next upturn in the global exploration industry, and that it remains committed to the region. IDA Ireland is continuing to engage with the company at local and corporate levels.

Notwithstanding the effects on the employees and their families of the job losses at ALS Minerals in Loughrea, I consider that it is neither practicable nor effective to establish jobs task forces or specific jobs plans around the country as a general mechanism to address such job losses, and to embark on such a course would involve diverting the various State agencies from their ongoing efforts to create jobs. A considerable administrative commitment is involved in servicing any additional committees and groups which may be set up and, given the constrained staff resources facing all public sector bodies at present, I am strongly of the opinion that establishing such additional groups, except in very exceptional circumstances, would not be in the best interests of using the State's resources effectively.

At local level, there is already an employment focus being taken by the enterprise agencies which continue to provide assistance and advice to start-up companies and entrepreneurs with business ideas that have a strong export and job creation potential. Examples include Galway County Enterprise Board, which to date this year approved funding for 17 new projects in the county to the value of €506,302 that will create 48 full-time jobs and sustain 56 jobs. Some 97 business people have already attended networking sessions run by Galway County Enterprise Board this year and in addition, the board will run a road show this month promoting local business start-ups in a number of towns, including Loughrea.

There are currently 59 IDA-supported companies in Galway city and county, employing 10,887 in permanent jobs and a further 2,009 in contract employment. The numbers employed in IDA-supported companies in Galway have increased every year since 2007 and the numbers currently employed are the highest in a decade. There has been development of IDA property solutions in the county, including business and technology parks in Galway city, Tuam, Ballinasloe and Loughrea. Galway is designated as a gateway city under the national spatial strategy and Loughrea is included in the Government's regional broadband programme. There is a clear focus on Galway city and its surrounding towns for investment and development.

Enterprise Ireland is working with the county development board, which comprises other State agencies in the enterprise sector such as Galway city and county enterprise board, Údaras na Gaeltachta and the Western Development Commission. There have been presentations to the board on a number of occasions with regard to the activities of Enterprise Ireland in the region. Enterprise Ireland is available to support anyone in Loughrea or Galway who wishes to establish a new business or, if they have a business idea, help take the idea to the next stage of development.

Employment in Enterprise Ireland client companies in County Galway over the past two years has shown solid growth, and there has been a 16.8% employment growth over the past two years when full and part-time jobs are considered. Many Enterprise Ireland client companies in Galway are continuing to recruit staff, particularly in the technology sector, and many have been growing their export markets in 2013. Enterprise Ireland is continuing to strongly support existing client companies in County Galway with €4 million in funding approved for Galway-based companies to date in 2013. I am confident there will continue to be ongoing co-operation between the enterprise agencies in the city of Galway and surrounding towns, and focusing on synergies between the agencies will lead to targeted growth and investment in the region.

Photo of Lorraine HigginsLorraine Higgins (Labour)
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I thank the Minister of State for his detailed response on the efforts being made by the Government and the Department in trying to improve job creation in County Galway, and I welcome the fact that ALS remains committed to the area. I hope that as a consequence of an expected upturn in the world economy, more job opportunities will be created in the town.

There is one caveat and we cannot put every egg in one basket. I accept that the macro picture is very important and I fully support what the Government is doing but perhaps more engagement is necessary on the ground. In particular, a number of good enterprise committees are operating, including the Loughrea enterprise committee, and they are seeking development opportunities around the area that will support further job creation measures. Perhaps we could see a scenario where Enterprise Ireland and the IDA could liaise with these people and move to the next level by bringing jobs to the people of east Galway and specifically Loughrea.

Photo of John PerryJohn Perry (Sligo-North Leitrim, Fine Gael)
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I fully appreciate the Senator's significant commitment to Loughrea and I fully understand her view. IDA Ireland is actively working with new and existing overseas companies in Galway to encourage them to grow and expand. The following are some recent significant investments in the area, and it is important to put them on the record.

On 17 May 2012, Merit Medical Systems Inc., a leading manufacturer and marketer of proprietary medical devices used primarily in cardiology, radiology and endoscopy, announced the creation of 200 new jobs over five years at the official opening of its new €20 million facility at the IDA business and technology park, Parkmore East, Galway. On 3 May 2012, SAP, the leading global software company, announced an investment of €110 million, creating 100 jobs at its Galway facility and 150 jobs at its Dublin facility. On 30 April 2012, Cisco, the world's largest supplier of networking products, announced an investment of €26 million at its Galway research and development facility over the next two years, with the creation of 115 jobs. On 18 April 2012, Mylan, a leading pharmaceutical company, announced 500 new positions across Irish operations in Galway and the Gerard Laboratories in Dublin over four years. On 11 April 2012, Medtronic announced the construction of a new customer innovation centre featuring state-of-the-art facilities, including a virtual lab and innovation suite, with over 70 jobs to be created during construction. As can be seen from these examples, Galway has an important medical technology cluster of IDA-supported companies.

There is also an expanding cluster of IDA supported ICT companies and there is a diverse range of FDI companies in international services and engineering.

Enterprise Ireland is continuing to strongly support the innovation ecosystem in Galway through investment of €2.6 million in 38 development projects at NUI Galway and GMIT this year. Some 29 small companies in Galway have been approved for €5,000 innovation vouchers each in 2013 to undertake an innovation in partnership with a third level-knowledge partner. As part of EI's support for early stage entrepreneurs, a series of calls for applications to the competitive start fund were launched in 2012 and two calls were announced to date in 2013. The purpose of the fund is to accelerate the growth of early stage start-up companies that have the capability to succeed in global markets. Under the terms of the fund, start-ups receive an equity investment of €50,000 and the services of an experienced business mentor. A number of west of Ireland early stage companies from Galway have been successful with the fund, including English Bubble Limited, Element Software and MDG Web. A €200,000 competitive feasibility fund for the west was launched in September 2012 by An Taoiseach and a total of 50 applications were received. A total of 13 entrepreneurs across the west were awarded funding under this scheme and they are developing business plans for their ideas.

Enterprise Ireland's national entrepreneur programme - the New Frontiers programme - was launched in 2012. The programme provides a generous package of supports to help accelerate the development of start-up businesses through GMIT in Galway and Castlebar which are delivering the programme on behalf of the agency. Some 14 participants were selected to participate on the 2012 programme. Phase 1 of the programme commenced this month in Castlebar and Galway. Under the community enterprise centre schemes, which is related to Loughrea, EI has approved support for community owned or led enterprise centres in 19 locations in the west, which is helping to provide workspace and incubate new projects and businesses. Under the Action Plan for Jobs 2012 the following community enterprise centres were approved funding under the community enterprise centre business development funding: IRD Kiltimagh Limited, Action Tuam Limited, IRD North Mayo-West Sligo Limited, Galway Technology Limited and Ballinasloe Area Community Development Limited, to a total of €221,400 in 2012. A further call for proposals for this scheme closed in April 2013 and applications are being processed.

I am confident that the work of the enterprise agencies, and the combined agency resources represented on the county development board, will continue to meet the growth and development needs of Galway city and county.

With the roll-out of the LEOs and enterprise supports, any time there is a meeting at Galway that all the agencies attend, I will be happy to attend. If the Senator wants to focus on Loughrea and she wants to facilitate a meeting with representatives of the IDA, EI and the country and city enterprise boards to review the east Galway region, I would be happy to attend, particularly if she feels this will refocus on her concerns.

2:15 pm

Photo of Lorraine HigginsLorraine Higgins (Labour)
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I thank the Minister of State.

The Seanad adjourned at 7.35 p.m. until 1 p.m. on Tuesday, 15 October 2013.