Willie O'Dea (Limerick City, Fianna Fail)
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Question 56: To ask the Minister for Jobs, Enterprise and Innovation his views on the establishment of a money advice and budgeting service for small businesses. [25247/11]

Richard Bruton (Dublin North Central, Fine Gael)
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Suggestions have been made, including under the Credit Suggestions Initiative run by my colleague Minister Noonan in the Department of Finance, for the establishment of an independent body for Small Business, similar to the Money Advice and Budgeting Service (MABS), which would provide ongoing financial and budgeting advice to small and medium enterprises. MABS currently assists people who are over-indebted and need help and advice in coping with debt problems. The role of money advisers is to help clients to assess their financial situation, make a budget plan and deal with creditors.

While there is some attraction in the general idea of a MABS for small business, there is a need to fully consider precisely what role it would play and whether a new structure was needed to assist business people in effectively running their businesses. There are already a number of State agencies supporting the enterprise sector which provide, inter alia, advice in relation to general financing of a business and also cash-flow management. Business accountants and auditors also provide financial advice and input along with many other private sector specialists. In addition, business representative bodies provide assistance to their members in dealing with financial matters. To the extent that such advisory services are already available, it remains to be seen to what extent a MABS for Small Business would be necessary.

In the context of debt management for overly indebted businesses, the need is for such businesses to develop a recovery strategy and to negotiate a solution with creditors, including the banking sector. Opportunities exist for formal and informal debt restructuring arrangements. In the first instance, businesses in difficulty must recognise their difficulty, confront their problems and discuss their position frankly with their creditors. In the current climate, the most significant creditors would tend to be the banks.

I think the idea of a MABS for Small Business needs to be considered more fully in order to determine what interventions are needed by business and who is best equipped to provide those interventions. The current MABS initiative has a budget requirement in excess of €18m and is provided through 52 independent MABS companies operating local MABS services from 65 locations throughout the country. Any consideration would have to include an examination of existing supports, the demand for a new initiative, the resources, and a cost benefit analysis. In developing any proposal, there should be an involvement and contributions from all stakeholders in the process. I do not think that the State alone should be seen as the solution to the issue either in terms of service delivery or underwriting the cost of any initiative.