Wednesday, 23 November 2016
Local Employment Service
I thank the Minister for coming to the House to talk about this very important issue.
I speak today in the context of the figures released that 52% of the total number of people unemployed are long-term unemployed and that 82,000 are participating in jobs schemes. I am deeply concerned about the involvement of foreign private contractors delivering similar services to that already provided by the local employment services in an effort to reduce the number on the live register. The basic requirement even to be considered eligible to bid was that a company had a minimum turnover of €20 million per year, which excluded many local Irish companies from the scheme.
I am concerned that the local employment services and other such groups are competing with international companies whose very design is to generate huge profits. With these companies driven by profit and wanting to ensure the full payment can be drawn down, there is a danger that the long-term harder to reach unemployed are overlooked in favour of those who are more ready to slip back into certain employment sectors. These companies are paid by results within timelines, in contrast with the LES. For example, mediators use guidance counsellor principles to assist clients as part of the planning process. In many cases this can be extremely labour intensive in supporting individuals to the next step in their progression. This can be especially intensive with those most distant from the labour market or individuals with issues around alcohol, substance misuse or mild depression. Is it not true that if a client has mental health issues or any kind of disability, he or she is referred back to the Department?
I am also concerned that outlying rural areas will be abandoned in the drive for profit maximisation and in the name of efficiency, effectiveness and value for money. The 2016 LES contracts reduced mediator caseloads to 120 activation clients for the first time as part of the Pathways to Work initiative, ensuring activation clients are met and supported on a monthly basis. I am concerned that this reduction is part of the Department's obligations to ensure JobPath contractors have sufficient client referrals to comply with the contractual agreement with the Department. Will the Minister explain why the Government thought it necessary to privatise these services, displacing existing services and engaging British companies when there was no legal obligation to put such services out to tender?
JobPath in Mayo commenced at a time when the economy was starting to improve. It would appear that the JobPath contract came too late and at the taxpayers' expense. Did the Department consider reviewing the LES contracts at the time to deal with the demand generated by the recession?
There is also the issue of those selected for JobPath. They are being forced to travel miles to access services that are provided in the local LES offices. This does not make sense. For instance, we are spending money on taxis to take people from one end of the county to the other when they are passing by their LES office where they could be supported into employment and receive exactly the same, if not better, supports as they would from JobPath.
People are being told to attend the information days and are required to register with, for instance, Seetec in Mayo and the west. If they do not, their social welfare payment will be cut.Once registered, they are no longer eligible for a community employment scheme for up to a year. Again, that makes no sense whatsoever. Additional travel and child care costs are pushing those participating in JobPath into further poverty. Many of those people feel intimidated and live in fear of losing their benefit. An additional payment needs to be considered by the Department. My experience is that clients are not being provided for adequately through the benefits system.
In light of the planned review by the Department of Social Protection of employment services, including JobPath, Jobs Clubs and local employment services, how much has the programme cost to date, that is, the entire tendering process and use of economic research specialists? How much will the programme cost the taxpayer by the end of the four to five year cycle? Are there any break or penalty clauses if the Government decides to pull out early? How can we expect the local employment services to compete with companies that are for profit and are being widely promoted to third parties by Government and the Department of Social Protection?
I thank Senator Conway-Walsh for raising this matter and apologise on behalf of my colleague, the Minister for Social Protection, Deputy Leo Varadkar, who could not be here as he had a previous engagement.
Ireland’s public employment service is managed by the Department of Social Protection and delivered directly by its own Intreo service as well as by contracted private companies, namely, the JobPath companies, the local employment service, LES, and Jobs Clubs.
The JobPath service is a new approach to the provision of employment supports to jobseekers who are long-term unemployed. An open public procurement process was conducted in accordance with European Union and Irish procurement rules. Two companies, Turas Nua and Seetec, were selected to deliver the JobPath service.
The companies deliver services directly and also engage with a range of local subcontractors, including training and employment service providers. JobPath is an addition to, not a substitute for, the services already provided by the Department and the LES. JobPath is thereby increasing the Department’s overall capacity to engage with, support and assist jobseekers to get sustained employment.
JobPath is a payment by results model and all initial costs are borne by the companies. JobPath is so structured that the companies are not able to fully recover their costs until they successfully place sufficient numbers of jobseekers into sustained paid employment. Participants on JobPath receive intensive individual support to help them address barriers to employment and to assist them in finding full-time sustainable jobs. Each person is assigned to a personal adviser who assesses a person’s skills, experience, challenges and work goals. The personal adviser works with the jobseeker to agree a personal progression plan that includes a schedule of activities, actions and job focused targets. Jobseekers are also provided with a range of training and development supports, including online modules, career advice, curriculum vitae preparation and interview skills. They spend a year on JobPath and if they are placed into a job, they will continue to receive support for at least three months and up to 12 months while in employment. During their time on JobPath, they may also be referred for further education and training opportunities.
In 2016, the Department agreed contracts with the LES to provide a more intensive level of engagement with jobseekers. In order to assist the LES to undertake a more intensive level of engagement, the number of jobseeker referrals was correspondingly reduced. This would not have been possible without the benefit of JobPath. JobPath is thus assisting the LES to deliver a better service for jobseekers and also assisting jobseekers directly via its own range of services and supports.
Rather than being anti-competitive, the JobPath initiative has brought additional providers into the Irish employment services market and is thus providing jobseekers with a wider range of services.
I thank the Minister for the response. In the first instance, in the European Union procurement rules there was no obligation on the Irish Government to privatise these services. I believe it is the wrong direction in which to go.
The Minister said this was additionality in terms of the LES and the services already in place. I disagree fundamentally with that because if it quacks like a duck and walks like a duck, it generally is a duck, especially in this case.
To go back to my original questions which were not answered, and I understand this is not the Minister's portfolio, how much has the programme cost to date in terms of the tendering process and the use of economic research specialists? How much will the programme cost the taxpayer by the end of the four to five year cycle? Are there any break or penalty clauses if the Government decides to pull out early? Those are my fundamental questions and I would appreciate answers to them.
I will ask the Department of Social Protection to communicate directly with the Senator but my understanding is that for commercial sensitivity reasons, it is not appropriate to publish the public procurement cost figure.
As late as yesterday, the published figures on long-term unemployment show that we were making significant progress. As the Senator said, if it quacks like a duck and walks like a duck, it is a duck. Whatever it is, it is working. We have a huge target in respect of long-term unemployed people who for many reasons, including the length of time they have been out of work, the fact that they require upskilling, etc., are the most difficult cohort on the live register in terms of moving them into gainful employment. Bearing in mind the costs, it is appropriate that there is a focus on that cohort.
The Senator made reference to the fact that the companies had the capacity to skim and take on those with whom they could work most appropriately. That is not the case. They have no role in respect of the random selection of people who are long-term unemployed. That is a function of the Department, which gives the clientele base to the company. They do not pick Mr. X or Miss Y who looks like somebody-----
It is a random selection process, and their payment is based on a results model. It incentivises both the company and the individual through the programme they deliver. It incentivises both to achieve sustainable employment. These are not job placements in schemes. This is sustainable employment. This is the most challenging cohort on the live register to deal with, and it comes at a cost. I do not have the figures, and I understand the reason it might not be appropriate to publish them.
In terms of the procurement of services, if we look at the service delivery model in Mayo, and I know it is the case in my constituency and in many other parts of the country, I have no doubt that many of the services are already contracted out to private service operators who run the local social welfare offices. I am sure the Senator is not saying that they do not do as good a job in Mayo as they do in Cork. That is also a service that is contracted out.
I appreciate the Senator raising this issue. I will ask the Department of Social Protection to communicate on some of the issues she raised. Progress is being made but much more needs to be done in respect of addressing that cohort on the live register.