Pearse Doherty (Donegal South West, Sinn Fein)
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54. To ask the Tánaiste and Minister for Social Protection her plans to increase current funding levels awarded to service providers under the community services programme as a result of the increases to the minimum wage, which is to come into effect from 1 January 2016; if she is aware of the need for additional funding to be made available under the programme in order for service providers to cover the cost of this increase in staff wages; if a failure to increase funding in line with increased staff payments will place additional financial pressures on already struggling service providers; and if she will make a statement on the matter. [45898/15]

Kevin Humphreys (Dublin South East, Labour)
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The Department of Social Protection supports service provision through a number of programmes and schemes. The Community Services Programme (CSP) supports community companies that operate on a community business or social enterprise model. Companies supported by the CSP generate and use income from the services they provide to pay staff, meet overhead costs and to contribute to future development. The CSP provides a contribution to the wage cost on the basis that the services are not fully self-financing or the cost of provision would be prohibitive on users.

Currently, there are 398 active contracts in place with community companies at a cost of €42 million per annum. The Programme directly supports 2,110 full-time positions. Of these positions, a financial contribution of €32,000 per annum is made to support the employment of managers, of which there are 312 currently. Funds are also provided as a contribution to the cost of employing people in some 1,800 full-time equivalent positions. The Department estimates that some 2,800 people are employed across these companies with direct CSP support. Another 1,100 people are employed in these companies without public funding support. Additionally, the companies provide some 1,500 work placements through CE, the Rural Social Scheme and Tús. These companies are valuable to the social fabric of the country and provide very good quality services, particularly in poorer urban areas and rural villages where services are not widely available.

Since the CSP became operational in 2006, it has helped companies to move from a situation where the minimum wage was paid to a position today where 60% of employees are paid above this level. The Department is committed to working with the remaining companies to work towards paying a reasonable wage. The resurgent economy will support this move. A core requirement of the Programme is that service providers generate non-public revenues from their operations by the sale of goods, charging fees for services delivered or fundraising.

Companies in contract with CSP must be not-for-profit, social enterprise or community business in nature. This does not mean that they should not aspire to make reasonable returns from their activities that allow for a good wage to be paid. The CSP operates very clearly on the basis that it provides a “contribution only” to offset the wage costs of service provision. However, it is entirely a matter for each service provider to set their own wage levels.

The Deputies should note that some 45% of non-management staff are paid the minimum wage in companies in contract to the CSP, contrary to the requirements of the programme to pay the local pay rate. Ten percent were paid above the proposed living wage of €11.50 per hour and the remaining 45% are paid between these ranges. The development of the Programme and the companies in recent years has ensured that the majority of companies do not continue to operate with a low pay model.

The Department is working with Pobal to put in place arrangements that will allow companies to apply in a structured manner to access short-term financial support, if that is needed to deal with the issues identified. The arrangements which are being prepared will be notified to companies early in the New Year.