Thursday, 29 May 2014
Industrial Development (Forfás Dissolution) Bill 2013: Second Stage
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.
I welcome the Minister to the House for this debate on the Industrial Development (Forfás Dissolution) Bill 2013. Drawing on the Minister's speech, I note that Forfás has become increasingly involved over the past three years in the central policy-making process in the Department of Jobs, Enterprise and Innovation, 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 significant backdrop of significant reductions in staffing levels arising from the need to reduce the public sector people.
I wish to put on record both the steady decline in the number of people who are unemployed and the Minister's contribution as the driver in this regard. There is no question about that and one must admit it. I formally congratulate the Minister and to be honest, it is quite unbelievable as I never thought the rate would come down so quickly. However, the number of people who are unemployed remains high, with a particularly high rate of youth unemployment and a huge emigration problem. According to a report released by the CSO in August 2013, emigration levels rose from 49,000 to 89,000 people between 2007 and 2013. Complacency on matters such as this must never be an option and as I have noted many times previously when speaking of my own personal experience, the transformation in a human being when he or she got a job, be it a man, a woman, a young person, a boy or a girl, must be seen to be believed. As I have stated numerous times previously, if people can hold down a job it is not just about the money but also is about the social intercourse and collegiality of people in the workforce, which gives a person a sense of belonging. Consequently it is fundamental that as many people as possible should be returned to employment. The driving force and the mission of the country must be to get people back into employment.
Another issue that must be addressed is the reason that so many people who have jobs are leaving. On the new role for Forfás, from personal experience I think there is a distinct difference of culture between the private sector and the public sector. I have been involved in both and consequently can speak from experience. I believe we need both to be on par and driving on a trajectory of the same passion. I believe there is still a challenge for young people and those who are new to the public service, in that there should be management and their aspirations should be addressed. I refer to what they wish to do with their lives and having someone to identify their potential because in a private company, one must have everyone operating as his or her optimal level of efficiency. I believe a problem still exists in this regard for young people. This has been evident within the Garda in respect of the young people entering it and all the awful recent happenings. While thousands of people wish to work in the Garda, there appears to be a lack of management or the absence of a mission to make them feel involved and that they are serving and protecting the country. A serious challenge exists within the public sector whereby people enter the sector delighted with their job but then, from my experience and observations, there still is a distinct lack of involving them in the job they are doing, if the Minister follows my point, that is, in engendering passion for what they do.
From my own experience, I am familiar with the IDA in Padraic White's time. Incidentally, I am delighted that Frank Ryan, the former chief executive officer of Enterprise Ireland, has become chairman of the IDA. That is a brilliant move because I know from my own experience that Frank Ryan is like a missionary who, in my husband's time as head of the IDA, would go through steel to get a project for Ireland. I believe we must get the same patriotic culture that was and which continues to be within the IDA. Moreover, an important point in this regard is that the IDA has been beyond criticism. There never has been negative criticism of it, such as like what happened in FÁS and so on, and the people are very professional and dedicated. However, in the context of the amalgamation of Forfás with the Department, were I the Minister I would be addressing the needs of the people in the Department. I would be getting them to buy into this important job they are doing for the country with regard to job creation and economic policy in order that they also can become passionate about the job. I hope I am conveying my point to the Minister. Why should there be a different culture in the private sector to that of the public sector? The public sector can be as entrepreneurial as the private sector when the job's mission is to try to save our country and bring it back to full economic recovery.
On the subject of SMEs, I have dealt with the important issue of rates as it pertains to medium retail companies, as opposed to the multinational retail companies. One particular project with which I am dealing concerns Ms Breda Cahill of the Centra in Ballinteer. She has no appeal against the rates and believes the local authority, Dún Laoghaire-Rathdown County Council, is draining her to keep its own organisation going. She has three shops in the area in which she employs approximately 80 people. As she has told me many times, it is not merely about trying to keep her own business going but many of the young people who work part time in the stores are educating themselves in university. It is important not just to the owner of the retail outlets but also to the families in the areas that the children and young teenagers are getting employment to pay their way through university. All the issues like this really must be dealt with. I acknowledge the issue of rates appears to go on and on and one gets nowhere with it. However, it is not simply a technical issue but must be considered more broadly, that is, from the perspective of how these rates are preventing retailers from growing and surviving.
I congratulate the Minister again on the unemployment figures, as I believe the rate has reduced to approximately 12%. However, there is an issue in respect of why people are leaving the country and going abroad. That is my bottom line. I worked the public sector myself and there was no management whatsoever therein. I acknowledge that was a good while ago but I think there is an inherent issue. I include the Garda in this regard as well and a friend who I got to know in recent years, assistant commissioner Martin Donlon, told me there is absolutely no middle management in the Garda whatsoever. There is no coterie of outstanding management-trained sergeants who can tell the young recruits or gardaí what they actually should be doing when going out on the job. I am advocating helping people in the public sector to develop their careers and in so doing ensuring that the job is exciting and that it includes a passion for our country. It is beyond me why that cannot happen.
I welcome this legislation, which will integrate the policy research functions of Forfás into the Department of Jobs, Enterprise and Innovation. This integration will lead to the creation of a strategic policy division in the Department, of which former Forfás staff will form the core. I join the Minister in praising the flexibility of the workers involved in these reforms. Forfás has become increasingly involved in the central policy making process in the Department, with the agency playing a leading role in the development of the Action Plan for Jobs. This move is part of a broader reform programme the Minister has undertaken across his Department and departmental agencies, which also includes: the merger of the National Consumer Agency and the Competition Authority; the reform of the five workplace relations bodies into two organisations; the restructuring of the enterprise support model for micro and small business; the dissolution of the 35 former county enterprise boards and the opening of new local enterprise offices; and the restructuring of the transport and enterprise development bodies in the Shannon region. This House has previously considered Bills on these matters.
We are seeing major progress in the economy, with 1,200 additional jobs being created per week in the private sector over the past year and record breaking job creation levels in multinational and indigenous companies. This is to be welcomed. However, I have just learned that we will experience the loss of 200 jobs in my city of Waterford. This is a devastating blow to the workers and their families, and to a city that is on its knees at this point in time. Unemployment levels in Waterford are the highest in the country. There has been good news in recent times, with job announcements in EirGen Pharma and Nypro, and investments by Genzyme and Glanbia, but it is not enough. Waterford has suffered more than most. The construction industry was obviously a key factor in this. NAMA is currently seeking developers to develop a site on Michael Street, which would potentially provide over 1,000 jobs in the construction sector. That project should receive immediate attention from the Government in the context of creating jobs in Waterford. An advance factory is also currently under construction. Immediately on its completion we need to bring a company into it that will create jobs. We have had a myriad of reports from committees and everybody else. We have seen action on some of those reports but we need a major task force in Waterford on jobs because, at this stage, it is a calamitous situation for everybody involved. More focus is needed on the regions and the areas which need employment. I recognise that nobody, whether Forfás, the IDA or Enterprise Ireland, can tell companies to go to Waterford or anywhere else but we certainly can create a better climate for companies in areas like Waterford.
I make no apology for speaking about Waterford in particular. It is the city where I was born and bred and I know what it is like to be made redundant. I worked for a company that went into liquidation, and I faced the same situation these people are now facing. We must give every assistance to those who will be put on the dole. We must put all of the organs of the State at their disposal so they can get their entitlements and, if necessary, further training, but we also need more jobs in Waterford. The Minister, Deputy Bruton, happened to be in the House to deal with this Bill when I learned of the job losses. I am angry and frustrated about the issue. We must make more efforts on behalf of Waterford and the south east. I acknowledge the Minister is working hard in that regard and that he is acting on the reports that he has received. I appeal to him to give urgent and undivided attention to bringing employment to Waterford and the south east. I apologise for straying from the subject matter of the Bill, which I believe will reform the system. The Minister has been reforming in his current position. However, I had to refer to this announcement.
I commend the Minister on his energy and the reforms he has pursued. He is the Minister who is most regularly in contact with Senators regarding announcements and news on policy developments. I welcome that contact and wish him success in his efforts. I agree with Senator Cummins about his native city. We need his kind of local patriotism and it is sad when certain cities do not prosper.
The Minister stated:
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.He also complimented people on the negotiations that have now been resolved. I support the principle of bringing policy making into the Department and I will be supporting the Bill but I hope we will be able to quantify the savings. The explanatory memorandum states there are no costs to the Exchequer arising from these proposals. While I commend the Minister on the 70,000 extra jobs being created per annum, there are still between 200,000 and 250,000 fewer people at work compared to when this crisis started. The crisis arose as a result of the conduct of the banks, the Central Bank, the higher bureaucracy, the accountancy profession and the builder and developer sector. However, the aforementioned have largely escaped the reforming zeal of the Government and the new Senators and Deputies who were elected three years ago. We have to deal with the sectors which caused the devastation.
This Bill makes an important contribution to bringing policy making into the Department. I hope it is not smothered by the culture of obfuscation and secrecy that surrounded the Department of Finance on the night of the bailout, which was epitomised by the non-answers of the Financial Regulator. Our culture of public administration has caused a major part of the difficulties faced by the unsheltered sectors of the economy but it is not being reformed. One of the regrets held by those of us who entered the Oireachtas three years ago is that the permanent Government has not been reformed. This Bill represents an effort at reform but it may not be nearly radical enough. I refer to the culture of not answering questions, of not engaging in analysis and of incrementalism.
The culture of incrementalism means nothing ever gets shut down, even though the economy is in serious difficulty and is still borrowing too much money. Unless we reform the public sector we will all get the kind of answers we got last Friday, that the adjustment takes place at the expense of people with medical cards, at the expense of carers. We have a bloated bureaucracy which is not serving the country. When it comes up to our Houses of Parliament its performances are appalling. I refer to what we heard yesterday, what is in the Guerin report and in the Smithwick report, what was in the Morris report before that. The job of the Civil Service is to serve and it cannot isolate itself from what is happening to people in the estates and on the streets. Public sector reform has been going at far too slow a pace. I do not know if in the remaining period of time of this Oireachtas we will be able to make up for the pace that has been lost. I never hear Ministers saying, "What did an bord snip nua say about my Department and what will I do to sort out those issues?" We keep doing the same things and we add a bit more. That kind of incrementalism cannot work in a society that needs radical reform.
However, the Minister is an exception because of his energy and commitment but if he had heard the performance in this House on the water issue I am not surprised that it came unstuck last Friday. Every single amendment proposed in this House which would have been most helpful to the Government and was put forward in that spirit, was rejected. These amendments were about the price, the generous free allowance, about having the consumer body represented on the National Consumer Agency, giving local authorities some say as they have been running the business up to now, having its investment proposals supervised by the Department of Public Expenditure and Reform and the Department of Finance. The Government would not accept anything.
The Wright report investigated the Department of Finance and found that 93% of its staff were not qualified at master's level or above in economics. Mr. Wright came from Canada where the corresponding figure is 60% qualified staff. We need an openness and an ability to engage and an ability to admit mistakes but which we are not getting from the senior civil servants in this country. They have a lot to answer for. I hope their conduct will change when they come here, otherwise, there will be a repeat of what happened last Friday and in the last general election. If the elected government will not hold the permanent government to account the elected government will be dismissed by the electorate at the first available opportunity because there is no other way that they can make their views known about the bankers, about the way the Central Bank conducted itself, about the way the Department of Finance conducted itself, losing all the notes; we had to rely on the bankers themselves to supply the notes. That is not a competent way for organisations charged with the expenditure of vast sums of public money to conduct themselves.
The Minister tried, with our support, to develop the unsheltered sectors of the economy which do not have those kinds of powers. That they have to get up and get out every day to compete on world markets while carrying the kind of burden of the way this country has been run by the permanent government, is not acceptable and we have to make that point as strongly as possible because we cannot be treated as Parliament has been treated in recent times.
The transfer of water to the central government from the local authorities has been badly handled. I hear complaints about the driving licences, about SUSI and of course, about the medical cards. I do not know what is the problem. I have participated as best I can and I am always willing to assist in the public administration attempts to reform our permanent government. There are many talented young people in public service. It is a question of how to turn enthusiastic, young, well-educated people who joined the Garda Síochána into the kind of people who represent An Garda Síochána when they come to this House. We have a lot to answer for in public administration. How did so much youthful enthusiasm become so cynical and so obfuscatory?
There is a problem in most countries that bureaucracy expands its own budget, it never wants to evaluate its outputs, it does not care if there are any outputs. Sir Humphrey was meant to be in a comedy programme but it has become a tragedy in this country; people have referred to the kind of Sir Humphreys that have come up here.
Besides the problem of incrementalism there is the problem of the interface between lobbyists which is a major problem which I hope the Minister, Deputy Howlin, will address. I refer to regulatory capture of Departments by interest groups. The reform of our public administration which is at the core of this Bill - I support the Minister - and it has a very long way to go and I regret that it has not made sufficient progress and that there are not enough reforming colleagues like the Minister, Deputy Bruton, doing that job because the country is paying for it and those with medical cards are paying for it. We need a far better performance.
I refer to the aviation sector as an example. There is not much difference now between the number of staff employed in Ryanair and the old Aer Lingus except the old Aer Lingus used to carry about 3 million passengers while Ryanair carries 85 million. I demand that the public sector produces the same kind of productivity improvements and that we get those measured and put before the House. At the moment we seem to be just changing bodies around and not achieving any savings. The Minister has acknowledged this in his contribution, that it will be the same staff under different labels. We need productivity increases and we need to know what they are because that is what we are required to vote on.
The problem the Minister addresses was one we found in the Culliton report, that agencies were too powerful, the Department was too weak and it was necessary to retrieve policy-making. The Minister is a policy-maker, as was his brother, the former Taoiseach. It is important that elected people take control of policy and oppose some of the things that have happened in recent times. I refer to the way the regulator gave evidence and the way the Department of Finance lost the records of the night and the way the Garda Síochána has been behaving and the way it takes 15 days or more for a letter to get through the bureaucracy to reach the Minister to whom it was addressed. A lot of reforms are needed but this Bill is a small step and I will support it.
I welcome the Minister to the House. We have all been on the hustings for the past three weeks. The Minister's name came up in my town because in the mid-1990s he announced and brought to the town the last major industry in Carrick-on-Suir, SRAM bicycle components. We accorded the Minister a civic reception at the time and it was a very good day. We have not had good days since then. I worked in Waterford city for 13 years. It is a little known fact that Waterford is known as the Déise but the Déise actually runs up to the mountain of Sliabh na mBan which is 15 miles from the city. I live in the Déise area.
I endorse every word of what Senator Cummins said about Waterford city because when Waterford city is down, the surrounding areas are down. Many people from my town are working in Bausch and Lomb and many of them will lose their jobs. Like Senator Cummins I only heard about this just before we started this session and I am in shock because I know many people who are working there. I fear for those people but we have to look forward and that is what we will do. This Government is looking forward. Looking forward means carrying out reform such as the Minister has proposed in this Bill, which is to integrate the research and policy advisory functions of FÁS into the Department of Jobs, Enterprise and Innovation. As the Minister said, why would one use a nettle instead of using ivy but when one goes to pull something from the ground, there is a lot underneath. I do not under-estimate the task.
Every time I stand up to speak in this House I defend public sector workers because they are the most maligned and disrespected group of workers in this country. However, in three weeks' time the second most senior official in Tipperary County Council will retire after almost 40 years of service in the public sector. I have telephoned him on Saturdays, Sundays, at seven o'clock in the morning and at midnight and he has never failed to answer me and to get responses to my difficulties. That is public sector and public service. Those people who criticise them are wrong.
I agree with Senator Barrett on one point he made in regard to the public sector. What we need above all in the public sector are capable senior managers because no matter what job one does, whether selling chips in a chipper or running a Department, one will take guidance from the person above one, who manages one's work and what one has to do on a daily basis. Senior management level is the difficulty.
I welcome this and believe it is a good move but the heartbeat of this country is the SME sector and we must place more focus on SMEs and what they do. I tabled a Private Members' motion more than a year ago on retailing in rural Ireland. When I say "rural Ireland" I mean outside Dublin but including Waterford city, the main streets of which have been decimated. The main streets of my town and every other town have been decimated also. We still have not seen progress on stemming that difficulty. Small retailers or SMEs need help but they are not getting it.
I know the Minister is doing this for all the right reasons. I had a conversation with Senator Barrett before we started this debate. The administration of water, medical cards and education grants has been centralised. Probably less important, the administration of driver licences has been centralised in the sense that it has been taken from the local authorities. All of that has failed miserably. Irish Water is only in place a couple of weeks and last week, for the first time in 15 years, the area in which I live was put on a boil water notice. As a Senator and as a public representative for more than 25 years in the area, I was not informed that the house in which I live and the 2,000 houses around mine were on boil water notices. I spent 45 minutes on the telephone to Irish Water but I could not get a response. I got back on to it the next day and spent another 30 minutes on the telephone. I eventually got a response through the Minister, Deputy Hogan, as a result of his intervention. If that is the way these services are going to go, they should never have been taken from those running them previously. That is just one example.
I think the Minister will detect a certain amount of frustration in the Chamber. Senator Cummins expressed it in regard to jobs in Waterford. There is frustration about many things but we must keep the focus on getting people back to work. I hope this Bill and what the Minister intends to do with it will ensure that. However, I want him to reassure me that this process will keep the focus on what is important, do research on what is important and, most important, create jobs as a result of implementation of that research.
All of the people who have worked in these organisations have worked to their capacity but I question the guidance they got along the way. I fear repeating myself but as a member of a local authority for almost one quarter of a century, as was Senator Cummins and many other Senators in the Chamber, the actions and the functions of the IDA were probably the most bewildering of all the bodies we dealt with. All of these organisations are intrinsically linked. The Minister is bringing this back into the Department and it is important that he, and not a senior person in the Department, oversees it and ensures it works.
I am sick to the teeth of the removal of services from local level in the name of reform as well as the abolition of the town councils in the name of reform. It is actually reductionism and not reform. Reform is when one makes something better by taking an action. This actually removes a service. I ask the Minister to prove me wrong on this one and I am confident that he can do that.
Cuirim céad mile fáilte roimh an Aire. It would be remiss of me not to share the concerns of Senators on the job losses in Waterford. It is a very dark day for that city, for all those involved and for the families which will be affected by that decision. I believe my colleague, Senator Cullinane, was on his way there when he heard the news. He asked me to contribute to this debate in his stead. One of the issues which appears to have arisen there was that the unions were not consulted in advance of the decision being made, which is not a good way to conduct industrial relations. The unions and the staff should not hear rumours in the media, etc., about this type of thing.
When the technical nature of this Bill was being outlined, an important point was made that these proposals cannot be seen in isolation but as part of a broad range of policy development initiatives. There is no doubt the Department of Jobs, Enterprise and Innovation has a significant job to do in terms of bringing forward legislation. My colleagues discussed some of this workload during the question and answer session with the Minister of State in regard to collective bargaining, workplace relations and the ongoing delays in that regard. While Sinn Féin does not oppose the Bill in principle, we look forward to examining its provision, some of which are very technical in nature, in more detail on Committee Stage.
The Bill proposes to dissolve Forfás and assign powers to agencies, such as Enterprise Ireland, IDA Ireland, Science Foundation Ireland and the Irish National Accreditation Board, to function as employers in their own right, including, for example, the capacity to establish superannuation schemes. As it stands, Forfás is the statutory employer. In this context, we welcome the commitment that the terms and conditions of employment will transfer over which is reassuring for personnel within the organisation. The question of the functions of Forfás is something Sinn Féin intends to examine in detail on Committee Stage.
The Minister of State referred previously to the importance of retaining the capacity for independent critical analysis, which the agency provided. Now that it is being subsumed into the Department and coming under the remit of the Minister, some non-policy functions will transfer to other agencies but, in the main, it will be amalgamated into the Department. It is very important that the independent character of its operations is maintained. We must avoid a situation where a group think mentality prevails. I am confident that the Minister will do everything from a personal and political point of view to ensure this does not happen.
The Bill provides for a strategic policy division within the Department to take over Forfás's role in providing independent research and analysis. Will this division have the power to set out its own research programme? Will all of the reports coming from the unit be made public or will they be for the Minister's eyes only, with publication taking place at his discretion? As the Minister knows from his time in opposition, in order for Opposition Deputies to fulfil their role in holding the Government to account, providing critical analysis of policy when such is required and acknowledging when good work is being done, it is important they have access to all the available information and the latest research findings. I seek an assurance that there will be no question of reports which are critical of Government policy being shelved by the Department. My concern in this regard is not specific to the current Government but applies irrespective of which parties are in government and whoever the Minister might be. After all, the Minister will have ultimate control over the strategic policy division. It is all well and good for the Minister to assure us that Forfás's function of providing independent critical analysis is safeguarded but that might not always be the case. We do not know who will be in the Minister's chair in five or ten years' time.
The opening sections of the Bill give powers to agencies such as Enterprise Ireland and IDA Ireland to become employers in their own right, including the capacity to hire staff. These provisions will be subject to approval by the Minister for Public Expenditure and Reform, which is reasonable. However, the Minister knows as well as I do the realities of the current economic situation. He indicated in his opening contribution that these proposals do not represent cost saving measure and I accept his word in that regard. He indicated that there would be savings in the long-term, which is welcome. However, reforms of this type should never be initiated merely on the basis of potential cost savings. With that proviso in mind, I accept the Minister's position that these proposals represent a policy decision to develop efforts in regard to job creation. We have seen leaked reports from Enterprise Ireland on the impact of reductions in staffing levels on its ability to carry out its functions. IDA Ireland had a good year in 2013, for which it should be commended. It did not, however, achieve all of its targets, including the undertaking to ensure 50% of investment would go outside the main urban areas of Cork and Dublin. Will the Minister confirm that the failure to meet the particular target was not down to a resourcing issue?
There is no point in legislation which gives organisations such as Enterprise Ireland, the capacity to become employers in their own right if the Minister for Public Expenditure and Reform is not prepared to loosen the purse strings to accommodate that. If additional recruitment is needed to allow organisations such as Enterprise Ireland and IDA Ireland to work at the optimal level, then the Department of Public Expenditure and Reform must be open to it.
I presume that the Minister has been lobbying the Minister for Public Expenditure and Reform on these issues. This Bill contains good proposals which we intend to support. We might bring forward amendments to it on Committee Stage. We look forward to examining some of its provisions in more detail, particularly in respect of the strategic policy division and how it will work in practice. It sounds good in theory but we need to go through the nuts and bolts of what is proposed to see how it will work in reality.
I thank the Senators who contributed to the debate. I acknowledge Senator White’s encouragement in the progress we are making. She rightly highlights emigration as a continuing challenge. The figures show that for the past couple of years net migration, which is a fairer measure, has been approximately 34,000. The trend is predominantly Irish net migration now whereas in the earlier phases many who came in here in the boom time left. If we can maintain employment creation at the level of approximately 70,000 since the last quarter of 2012, which is double the net migration number, there will be employment opportunities. We are beginning to see options for people who previously had no option but to emigrate.
The Senator rightly remarks that some people who have jobs go. Having met many people on trade missions overseas, one wonders why they do. Many of them are given responsibility at an earlier age when they go abroad. There is a pull factor in being able to assume responsibility at an early age. There are different forces exercising others, who have been forced out particularly by the collapse of the construction industry.
Senator White also made interesting points about the need to create an entrepreneurial environment in the public service. That is a real challenge. We are heading in that direction. In my area we have tried to create, through the Action Plan for Jobs, a recognition of success. Every quarter we report on what has been delivered. The staff do not earn a profit as a result but those who deliver change and achieve targets are recognised within the system. We need to celebrate that success and measure it, as Senator Barrett says, and use it to deliver real reform. It is changing the way business is done.
Over the years I have seen many very ambitious reports or plans published but with no real accountability when things went wrong. This time we are at least making every agency accountable for its piece of the jigsaw, measuring its success and questioning why it fails. It may not always be a case of someone not making the best effort he or she could. That is an answer to the criticism that Senator Barrett outlined of a public service that does not answer or analyse, or makes adjustments only at the margins. That is changing but it will not change overnight.
In my area of clear vision, the Action Plan for Jobs, and the process of quarterly reports, does change the environment within which people work. I recognise that there is frustration among public servants. There has been little recruitment in the public service for many years. Opportunities for progression have been limited. One of the casualties of the recession has been the lack of new blood coming in, which has been affected by the sort of changes we have had to make. We need to address that over time.
In response to Senator Ó Clochartaigh, to be fair to the Department of Public Expenditure and Reform, it has in the past 12 months approved our putting new feet on the ground for the Industrial Development Authority, IDA, in specific overseas markets, in the same way it has allowed us send front-line people overseas for Enterprise Ireland. It has also agreed to allow us have graduate recruitment in local enterprise offices. Some flexibility is emerging, which has been hard won but it makes it possible to be more innovative. We all abuse the Department of Public Expenditure and Reform, but it is trying to achieve things.
That brings me to Senator Landy’s point about centralisation, which is a tricky one. The notion of centralisation is the concept of shared services. It should be easier to deliver a high quality service in one location than to have it administered separately in different areas. He rightly says the principle might have been good but sometimes the practice has not been as good as we would like. To be fair to Student Universal Support Ireland, SUSI, I have not heard anything like as many complaints this year as there were in year one. Some of these matters are a learning curve. I can understand his points on medical cards because local discretion was a factor. People knew the families and that made a difference. It is harder to do that when there is a shared service in one location. That is a real challenge. The Government does need to examine that system.
Senators Landy and Barrett were very critical of Irish Water. It is genuine reform. They might not like it but creating a State agency that has the capacity to raise its own money because it has a revenue stream is genuine reform. We can invest in a water system we are unable to invest in at the moment because of the constraints on public borrowing. If we create a commercial State body that considers the whole water infrastructure as a single unit, can borrow independently, and be accountable to this House to show that it is delivering and meeting its targets, that is logical good reform and accountability. It will have to be accountable to Senators and committees. It will face challenges in showing that it can deliver. The system has not been delivering.
Senators Cummins and Landy rightly raised the situation of Bausch and Lomb. It is a very tough day for the workers affected. The company was acquired at the end of last year and has been restructuring in its US plant and is now restructuring in the Irish plant. It is working to a different cost model, seeking to build its market. It believes that it has identified a significant cost disparity between the operations in Waterford, in the US and elsewhere in Ireland. It says that cost differential must be dealt with in order for it to invest. That is the company’s decision and it means some job losses and negotiations to bring down costs. That will be difficult to do. I hope both sides can engage constructively to save the maximum number of jobs. Government stands ready to invest in a future development bringing in new production lines, processes and research capability. We have been working with the company over months to try to get the very best outcome we can for the plant and for Waterford. I hope we can achieve a good outcome there despite the grim news today.
On the wider issue of Waterford, I recognise what Senators Cummins and Landy have said. The south east generally has been a real problem area. After the closure of TalkTalk we created a south east action group. We have worked relentlessly and I have focused the work of the IDA and Enterprise Ireland on the area. We have had some significant successes with investments. There is a pipeline of projects we are trying to get across the line. No action is being spared. For the first time in many years there is an advanced facility being built in Waterford, as well as those in Letterkenny and Athlone. We recognise that we need to do different things in the regions to get the sort of spread we need.
We have put a big effort into getting the local enterprise offices embedded in local authorities, which are the most powerful regional tools. Senator Landy recognised that they are the most powerful regional organisations that we have and it is correct to embed the enterprise process within them. I know there has been criticism of that but if we can get the powerful resource of local authorities behind enterprise development, we can maximise the potential impact on the retail and other sectors.
Start-ups are the driver of growth. In the most difficult period between 2006 and 2011, when the rest of the economy shed 400,000 jobs, start-ups created 100,000 jobs. In the face of a blizzard, so to speak, many people started businesses and created those 100,000 jobs. How much better could we perform in a much more benign environment if we get it right? We are seeking to do that through the local enterprise offices, and regional aid has been recently reinstated. Having been under European Commission pressure to dilute regional aid, we have been able to hang on to it as a powerful tool for regional development. I share the view of Senators, including Senator Ó Clochartaigh, that we must focus on regional development in a well thought out manner. It will be a really important debate.
Senator Barrett asked why we are not quantifying savings. There has been a reduction in all our staffing, which has impacted on Forfás and the Department. Many of the potential savings have been taken out through attrition, essentially, and in a period of diminishing resources we are trying to align those resources to have the maximum impact on the challenge of employment. That is why I have always believed we need a stronger policy capability with the Department and the relationship with our agencies should be one of greater equality of strength. We can achieve that by bringing Forfás within the Department. In doing so we can hold our agencies to account, develop policy with a broader perspective and do everything mentioned by the Senator.
I give Senator Ó Clochartaigh an assurance that I am absolutely determined that independence will be maintained and research will be independently published. That tradition has existed in various evaluation bodies within the Department but we have also strengthened the National Competitiveness Council, which has an independent right of publication and audience to the Cabinet committee. It is a strengthened body which will act as a guarantor, meaning it has a role in ensuring the Government is accountable.
It is disappointing that IDA Ireland has not been able to hit investment targets but that has not come from a lack of resources. It is the one body we have protected in this period and there has been no diminution in its resources. There is the issue of locating mobile investment and why there is a focus on certain locations, and it is a complex matter. IDA Ireland is evaluating foreign direct investment strategy for the future and it is considering whether there are sectors other than those which are internationally mobile and which drive towards big urban centres. Unfortunately, those are the types of projects which are mobile and they are in information and communications sectors and seek deep labour pools. The older manufacturing types of projects which were more regionally dispersed are fewer, which presents a real challenge. It is a question of whether we can identify sectors with a potentially better regional spread, as well as seeking to win other projects.
I assure Senators that we are going to align resources to deliver maximum impact, and that is what we have been trying to do. Senator Landy touched on this issue. Nobody gets recognition for some feats but, for example, the Companies Registration Office has halved the time it takes to start a company. Much change in how it did its work was needed to achieve this. We have more than halved the time taken to issue a work permit, and by implementing the provisions in the companies Bill, we will make it much easier to set up and manage a company. We are continuously driving public service reform that makes it easier for enterprises to thrive and jobs to be created. We are determined to do that and we seek to ensure the quality of the research, as the Senators rightly demand, as well as the quality of the implementation we deliver.
On Committee Stage we can go through the provisions of the Bill but they are not particularly controversial and I am delighted that Senators are broadly supporting the principles. I hope it will help us to confront the regional and national challenges we face.
Senator White raised the issue of rates. Senators Cummins and Landy may be able to provide a briefing on this, as the revaluation in Waterford has caused as much trouble as it has brought benefits. Valuations from the 1980s are being updated to what is being regarded as a modern standard. There have often been winners but there have also been losers, who have been inconsolable. It is a tricky matter. Senator White's idea is to move to some other type of incentivised structure within the rates base, which is interesting, although it may be a debate for another day.
It is important that the CEDRE report is taken seriously and there should be an integrated approach, with bodies such as the local enterprise offices working together for the even development of the country. There are 40% of people in the rural part of the Ireland.
We are seeking to put together a regional enterprise framework to integrate the Enterprise Ireland plan for regions and local enterprise offices. We are seeking to get local stakeholders behind a combined strategy, identifying where the competitive strengths of the region are and looking to build on them. That conversation is important and now that we have local enterprise offices embedded in the local authorities under service level agreements with Enterprise Ireland, we have a much better framework within which to have that important debate.