COMMITTEE of PUBLIC ACCOUNTS debate -
Tuesday, 5 Feb 2002

Vol. 4 No. 5

FÁS (Foras Áiseanna Saothair) - Financial Statements 1999.

Mr. R. Molloy (Director General, Foras Áiseanna Saothair) called and examined.

Chairman

Witnesses should be made aware that they do not enjoy absolute privilege and apprised as follows: members and witnesses' attention is drawn to the fact that, as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, grants certain rights to persons identified in the course of the committee's proceedings. Members are also reminded of the provisions within Standing Order 149 that the committee shall refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policy or policies.

I welcome Mr. Rody Molloy and his officials to the meeting. I ask Mr. Molloy to please introduce his officials?

Mr. Molloy

Thank you, Chairman. I am accompanied by Mr. Gerry Pyke, company secretary and assistant director general responsible for corporate services in the organisation; Ms Patricia Curtin, assistant director general, human resources development and finance; Mr. Gerry Gasparro, financial controller; Mr. Brendan Byrne, financial controller, FÁS International Consulting Limited, which you mentioned in your summons you may wish to discuss. I am also accompanied by Mr. Martin Lynch, assistant director general for the regions.

Chairman

Will the officials from the Department of Enterprise, Trade and Employment, please, introduce themselves?

Mr. Seán Gorman

I am assistant secretary and I am accompanied by Mr. Eugene Forde, principal officer, labour market policy section.

Chairman

Will Mr. Purcell, please, introduce the accounts?

Mr. Purcell

The 1999 accounts for FÁS are before the committee for its consideration. The accounts were given a clear audit report as nothing came to light during that year's audit which needed to be given a public airing.

The committee will note from the accounts that expenditure during the year amounted to some £527 million, with some £315 million going on community employment, £39 million on continuing training for the unemployed and almost £32 million on initial education and training including apprenticeship. Staff costs in the year totalled more than £60 million while £25 million went on overheads. The Exchequer was the main source of funding, with 80% of the agency's income coming from it. Some 17% was provided by the European Social Fund.

It is perhaps interesting for the committee to note the change in the main source of funding in the past five years or so. Back in 1996 the European Union contributed £68 million whereas in the year 2000 its contribution was a mere £12 million. During the same period the Exchequer provision went from £359 million to £553 million. That is a stark illustration of how the funding environment in which FÁS operates has changed in a relatively short period.

The changed economic and employment picture during the period would also have had an impact on the mandate of FÁS. I am sure the chief executive will be able to elaborate on the resultant changes in strategy and so on for the committee.

The FÁS accounts for the year 2000 were certified by me last November. The accounts for the year 2000 of its subsidiary, FÁS International Consulting Limited, have not yet been certified. I expect them to be shortly. In any case, the net outturn of the subsidiary is shown as a note in the main accounts.

Chairman

Mr. Molloy, we do not have an opening statement from you. Does you have one?

Mr. Molloy

With your approval, Chairman, I have a brief——

Chairman

I hope it is brief because it is the usual procedure that we circulate such statements in advance to the committee.

Mr. Molloy

If you wish, we can omit the statement and circulate a short note.

Chairman

We can scan it in if you give a copy to us. With the permission of the committee, we will publish the document.

Mr. Molloy

Do you want me to run through it briefly?

Chairman

Yes, please, if you would.

Mr. Molloy

We redefined our role recently through a strategy process and now see it as increasing the employability skills and mobility of job seekers and employees to meet labour market needs, thereby promoting competitiveness and social inclusion. We are trying to capture the notion that we have, on the one hand, an economic obligation and, on the other, a social obligation.

During 2001, the most recent and most relevant year, we held training courses for unemployed persons and job seekers. Some 21,800 went through these courses, 80% of whom are in employment. Apprentice numbers have risen from around 11,000 or 12,000 a few years ago to more than 25,800 at present. Thirty three thousand six hundred were involved in employment schemes at the end of the year.

We held large-scale training courses for persons in employment during the year. We trained 10,000 retail workers in preparation for the euro launch, while 10,000 construction workers have obtained the safe pass which places an obligation on the construction industry in terms of health and safety in the workplace. That is an activity in which we will invest even more resources this year.

We have a range of training services for people with disabilities, and almost 2,000 people went through the system last year. We have put a lot of effort into increasing female participation in our programmes. Some 42,000 women began FÁS programmes in 2001 while some 56% of our non-employer sponsored FÁS trainees were women. Again in 2002, a new childcare allowance was introduced for eligible FÁS trainees which will help the process of involving women in our training programmes and, by extension, the workplace.

Training and employment support for early school leavers is another activity in which we had more than 5,000 starters last year. An activity for which we received a great deal of publicity last year in the context of major redundancies was a package we put together for interacting with people about to lose their jobs. Where we know a major redundancy package is coming, we try to ensure, where possible, we find the employees concerned alternative employment or identify the skills they might require rather than wait until they actually become unemployed. We do this in consultation with the trade unions and management on site.

We have held a targeted overseas recruitment campaign with a large one up to the first quarter of last year. Since then, recognising the changing economic circumstances, we have rolled back on it, but still have a great deal of activity with EU partners' employment services across the Union.

A major activity in conjunction with the Department of Social, Community and Family Affairs is the employment action programme. The work we have done together has resulted in a huge number of people leaving the live register, even without a major intervention on our part.

There has been a significant increase in e-learning activity through our newly established FÁS Net College. We now have 2,500 people learning over the Internet, a service we hope to develop. Our budget last year was €830 million and will be in the order of €887 million this year.

I mentioned that, because of the changing labour market mentioned by the Comptroller and Auditor General, we spent most of last year re-examining our role, the consequence of which was a new statement of strategy for the organisation. I will not bore members with the detail, but for anyone who is interested, copies are available.

A major element of the strategy is promoting investment in the training of people in employment. This relates to the need to ensure people in employment are upskilled to recognise the changing nature of employment and also to capture a group sucked out of the school system by the offer of what appeared to be very attractive salaries at the time. As we all know, they would be the first to lose their jobs in the downturn.

A recent survey of training in the economy suggested about 2.5% of payroll on average is spent by Irish companies on training. The general view is that best practice suggests it should be between 3% and 5%. There is a reality behind the 2.5% figure which suggests that indigenous companies are probably the poorest in terms of investing in training. The higher end would tend to be the multinational companies located here whose investment in training would tend to be in the 3% to 5% bracket.

Deputy M. Ahern

I join the Chairm an in welcoming Mr. Molloy and his colleagues to the meeting. He has just answered my first question. The 1999 accounts were given a clean bill of health and, as they are out of date, I will not deal with them.

You said the expenditure figure for this year was €830 million, or about £650 million, compared with roughly €670 million in 1999. Would one of the reasons for a reduction in expenditure be the transfer of responsibility for the community employment schemes in schools from FÁS to the Department of Education and Science? If so, what are your views and those of FÁS on this? It was the subject of much comment by teachers and schools management. You mentioned the payment of levies by employers - 2.5% of payroll against best practice of 3% to 5%. How does one ensure that all employers pay the levy?

With regard to social inclusion, some married women who do not have PRSI contributions are not accepted onto schemes. Are there plans to include these women in CE schemes in the future, particularly as some schemes are difficult to fill?

Mr. Molloy

First, with regard to community employment, the reduction in funding has to do with the reduction in the numbers of people on the schemes. CE would have gone through more than 40,000 people at a time when unemployment was very high. As unemployment decreased, community employment was reduced as a consequence. Our target for the end of this year is to have 25,000 people on community employment schemes. At the moment we have about 30,000 people on CE.

With regard to education, these people were working part-time in the schools and being funded by community employment. We take the view that if there is a real job it would be better that they are in permanent employment in the school system. That was one of the issues driving the decision to transfer responsibility to the Department of Education and Science. That said, we had an interest, obviously, in the people who are actually on the CE programmes and we had a working party set up with the Department of Education and Science to ensure the transfer was managed as well as possible. There is a difficulty because of the different way we fund the CE schemes. We fund a sponsor directly and we pay the allowances to the individuals through the sponsor whereas the Department of Education and Science funds schools on a per capita basis, based on the numbers in the schools. That is causing a little difficulty in some areas in terms of whether they can retain CE workers because they may not have enough funding through the per capita system, at least not the same amount of funding as they would have been getting through our system. However, we have an arrangement in place that anybody who is on a community employment scheme in a school will be retained on the scheme until their normal time span ends. In other words, nobody will be pushed out of the system. Through the Department of Education and Science we are encouraging schools, where at all possible when jobs are being converted from CE to permanent jobs, to give every chance to the CE participants to be seriously considered for them.

In relation to 2.5%, we may be misunderstanding each other. I meant that 2.5% of payroll is what companies spend on training their staff. We see ourselves as having a role in encouraging companies to increase that figure because of the importance we attach to training. The old levy and grant system has gone and has been replaced by the national training fund where there is a standard levy on all employees - I think it is 0.7%. That training fund is administered by the Department but part of our activities is funded from it.

I know there was a problem with regard to women on CE schemes. There is now some possibility for special arrangements for some women. Clearly, this is limited because our target group is people who are unemployed and on the unemployment register. Even in terms of Exchequer spend, if there is no set-off the cost to the Exchequer is much higher if someone is going on CE. We also have an arrangement where women are eligible if their husbands are entitled to unemployment benefit or unemployment assistance.

Deputy M. Ahern

I have had complaints from constituents that apprentices, especially in the construction area, are not receiving their full statutory entitlements. I followed up the complaints and the entitlements were granted. Does FÁS check that apprentices are getting their entitlements?

Mr. Molloy We have a monitoring system in place. We monitor apprentices and ensure that they are released at appropriate times to go on training programmes. There is a line between where we police and where employers have a statutory responsibility. We are not in the business of going to every individual employee and checking but if an individual apprentice feels he is not being treated properly or makes representation then, through our normal monitoring process, we would take that up with the employer.

Deputy M. Ahern

So it is up to the apprentices to complain if they feel they are being badly done by.

I commend FÁS on the retraining programme. When ISPAT closed down in my constituency the former workers who were looked after by FÁS were very happy and got jobs after training. An excellent job was done there. My own experiences with FÁS over the years have always proved to be fruitful. The organisation has always been very helpful. I congratulate Mr. Molloy on the excellent work done by FÁS on behalf of its clients. I wish him and his colleagues continued success.

Chairman

How many times a year would a training adviser visit an apprentice in order to determine his training conditions?

Mr. Molloy I do not have an answer to that off the top of my head, Chairman, but I can check for you and communicate directly about it.

Chairman

One of your officials surely knows that. It is a very important point, in view of the high number of apprentices.

Mr. Molloy

I am told we monitor the employer twice a year in terms of visits to the site, but not each individual apprentice. It would be the employer who would be monitored.

Chairman

According to the report which Deputy Ahern referred to, about 47% of apprentices were not receiving the correct take-home pay. I am at an advantage in this regard because I worked with AnCO for ten years a long time ago when the emphasis was very much on visiting apprentices. I can assure you one would not have waited for a survey to find out that 47% of apprentices were not receiving the correct take-home pay because in evaluating their training one would hear their other concerns very rapidly.

Mr. Molloy

As I understand the position, we see our role in terms of monitoring the training and ensuring the individual apprentice gets the appropriate training during the course of his apprenticeship. The apprentice is an employee and the arrangement between an employee and an employer is not one in which we can directly insist on what the employer does so long as he fulfils his obligation to release the apprentice for the appropriate courses in phases 2, 4 and 6.

Chairman

In monitoring the training of the employee you have stated that you are monitoring the employers. You are not physically monitoring the trainee in that situation if you are monitoring the employers because you are depending on the employers to tell you whether they are training or not.

Mr. Molloy

We have a register of apprentices and clearly we would have tracked the apprentices in terms of when they are due to be released for various training programmes. A huge part of the operation - I am sure this was true in the days of AnCO——

Chairman

We all understand the block release component. I am talking about the physical site situation with regard to monitoring training and its effectiveness. You have stated that you monitor through employers and that the advisers do not actually check with the apprentices. There is a gap there if you are not checking with apprentices. Years ago apprentices had a log book which was scrutinised when they were visited and they were tracked down with regard to the type of training.

Mr. Molloy

Yes, but we have 25,000 individual apprentices in the system. Presumably the employer still has to retain his log books and has to show what type of training he is doing with the individual. We get feedback from trainees; for example, in phase 2, instructors would know fairly quickly if people were getting on-the-job training.

Chairman

The report shows that 30% had not completed their on-the-job assessments during phases 3 and 5 of their apprenticeship which are governed by statutory regulations. The report found deficiencies in the current apprenticeship system.

Mr. Molloy

That particular report which was published recently was based on a survey carried out in 1999. At that time the apprenticeship system was beginning to grow substantially, and it has grown very substantially in the past year or year and a half. It has been a struggle for us as an organisation to provide the resources to respond to that. My people would question some of the methodology used in drawing up the report. There is a view that while the survey was around employers, apprentices and what employers should or should not do, the recommendations related to what we should do in response to that. There is a strong feeling that while the report itself gives us something to examine - it was discussed briefly at our last board meeting - it is an issue on which we are working internally in terms of looking at the issues raised to see whether there is anything we can do to improve the monitoring of the apprenticeship system. However, we have some concerns about the methodology used in drawing up the report and the conclusions arrived at.

We have asked that the report be brought to the attention of the National Apprenticeship Advisory Committee, which comprises all the social partners, to determine where responsibility lies in regard to particular deficiencies identified in the apprenticeship system.

Chairman

While the question of methodology may arise, I am sure all the facts in the report were not incorrect. Surely FÁS must learn lessons from the report.

Mr. Molloy

Regardless of the methodology, issues raised in any such report must be treated seriously by an organisation such as FÁS. We must examine the issues raised and continue to try to improve our work.

Deputy M. Ahern

I was at the other side of the table when the Chairman used to call to builders and AnCO members who were just interested in having the subs paid. As that was 25 years ago all those involved have since retired.

As people who go on block release do not qualify for contributions, they are generally short of contributions to qualify for any subsequent treatment benefits they may seek. Is there any discussion on whether they should receive remuneration when on block release given that PRSI is not deducted?

Mr. Molloy

As I understand it, they get class A credits while on block release.

Deputy M. Ahern

That must be a new development.

Chairman

Were you in trouble in relation to contributions?

Mr. Molloy

No, that is a different issue. We were not really in trouble, a particular spin was put on the matter.

Chairman

Is there a liability to the State as a result of the error?

Mr. Molloy

There could be a contingent liability in regard to the issue raised by the Chairman. Our view and that of the Department of Social, Community and Family Affairs is that it is an extremely small one. It was with the agreement of the Department that we as an organisation charged the class J rate rather than the class A rate of a particular group of skilled people brought on to some of our CYTP programmes. We have been in continuous discussions with the Department of Social, Community and Family Affairs in terms of how to resolve the issue. It is a different issue from that raised by Deputy Ahern.

Chairman

It has not yet been quantified.

Mr. Molloy

It has not been quantified. However, our view and that of the Department of Social, Community and Family Affairs is that it is not a substantial issue. We have rectified the matter and those people are now going on to class A payments.

Deputy M. Ahern

What about the apprentices?

Mr. Molloy

The apprentices get class A credits. The issue raised by the Chairman triggered us into considering other consequences for apprentices. We pay an allowance for apprentices which recognises that they do not make these contributions. The question is - if we must extract those contributions from them, will we have to increase the allowance? We have been in discussions with both the Revenue Commissioners and the Department of Social, Community and Family Affairs to consider the consequences. I understand that both organisations are happy with the existing system.

Deputy M. Ahern

How long has that system operated?

Mr. Molloy

Since the beginning of the new standards based system four or five years ago. We will look into individual cases.

Deputy Durkan

You have approximately 25,800 apprentices?

Mr. Molloy

Yes.

Deputy Durkan

I note these are registered apprentices; there are also unregistered apprentices.

Mr. Molloy

If they are not registered, we would not consider them to be apprentices.

Deputy Durkan

Are you are not aware of them?

Mr. Molloy

The only people to whom we issue certification at the end of the training period are those who come through the system and have been registered with us.

Deputy Durkan

There is a welcome increase in the number of registered apprentices. Is there any difficulty finding places for some phases of academic training? I have come across a couple of such cases and I was surprised to find that some apprentices might have to wait for a place, particularly in regard to phase 6.

Mr. Molloy

There was a difficulty early last year because of the huge increase in numbers. The third level institutes which provide phase 4 and phase 6 training did not have the places available, therefore there was a difficulty in the system for a couple of months. However, there was a substantial investment by the Department of Education and Science in facilities in the institutes of technology and, as of now, the difficulties which existed early last year have been resolved. We are happy that there are now sufficient places in the system. Occasionally there will be delays for some individuals on particular programmes because we must try to match the numbers with the spaces but, by and large, there are no significant delays in the system.

Deputy Durkan

Would it be possible that some might be a year behind in regard to placement, for example, a student seeking a place last September might have to wait until next September?

Mr. Molloy

No, it would be very unusual if that were the case. By and large, places have been made available and nobody should have to wait for that length of time.

Deputy Durkan

They should be able to avail of their place——

Mr. Molloy

Pretty close to the time they are due their training.

Deputy Durkan

In areas where there have been large scale redundancies and where there is a need for retraining - I am thinking of a number of locations throughout the country where there have been substantial redundancies - to what extent have you been successful in retraining and retaining jobs within the community in general? I note that 80% of skills training course participants were in employment 15 to 18 months after completing the course.

Mr. Molloy

On the specific issue of major redundancies and the larger cases in which we were involved last year - our success is consequent on what is happening in the larger labour market - we have been very successful. Deputy Ahern mentioned ISPAT in Cork where most of the people who were retrained got employment within their local community. In the case of Gateway in north Dublin, virtually all those people who were made redundant had offers of alternative employment. Some people who received basic training from us were also able to get access to employment. What struck us with regard to General Semi-Conductors in Macroom, County Cork, was the obvious difference between unskilled people and those who have recognised skills. The latter were being snapped up pretty quickly by other companies in the area. The problem was with those who had little or no certified skills, which is why we are trying to change the emphasis in the organisation to get those people into employment with certified skills. In each of those major redundancy cases we have been trying to do so. At the moment we are looking at the situation in Aer Lingus so we can go in at an early stage with a training team from our employment services and work on site with both management and unions. We will work out a programme to assist people either by providing relevant training or identifying alternative jobs for them. We have been successful in that today, but we are dependent on jobs being available in the wider economy. We are confident that, up to now, there are still a substantial number of unfilled vacancies within the labour force. We know from the weekend opportunities show at the RDS, where companies were interviewing to fill 20,000 jobs, that a substantial number of jobs is still available within the economy.

Deputy Durkan

Did that show demonstrate an increase or decrease in the jobs available in previous years?

Mr. Molloy

We did not take that approach. In previous years we saw it more as an information activity whereas this year, because of the publicity about the downturn in the economy, we forced companies into identifying real jobs and putting them on offer at the opportunities show.

Deputy Durkan

Was there not some reference to the number of jobs available in a previous year being significantly higher?

Mr. Molloy

That was more a general question about the growth of jobs in the economy. I am talking specifically in the context of the job opportunities show at the weekend, where rather than just allowing companies to set up a stand we specifically asked them to identify precise jobs.

Deputy Durkan

Can you identify the number of uptakes on the 20,000 jobs?

Mr. Molloy

The show only finished yesterday evening.

Deputy Durkan

I know, but is there an indication?

Mr. Molloy

Certainly, all the major employers there expressed themselves as being extremely happy with the weekend. A few major employers said that, as far as they were concerned, they now had sufficient data on applicants and would not need to do any more advertising for the rest of this year.

Deputy Durkan

What about places like Fruit of the Loom in Donegal and other areas that may be affected by relocation to low-wage economies? How has FÁS succeeded in identifying present skills and retraining for future operations?

Mr. Molloy

Specifically in relation to Fruit of the Loom, we did a lot of work with the employees there. It was a particular problem in Donegal in the sense that a lot of the people working in Fruit of the Loom had no certified skills. They had acquired skills on the job in Fruit of the Loom but many of them had been sucked out of the school system at an early age and, therefore, posed a problem in terms of other employees coming in. We put a lot of investment into training those people. At the same time we worked with the Industrial Development Authority in attracting other industries to the area and providing training specifically for those industries. For example, the IDA located a major insurance company in Letterkenny last year. Our people had been in the United States with the HR people in that company, identifying their training needs and coming back and delivering that training to people who were losing their jobs in Fruit of the Loom and the like, so they were able to take up employment in that company.

Deputy Durkan

Given current trends and expectations, how does FÁS see itself coping with the situation as it unfolds now? There could be more or less redundancies, but I want to find out the degree to which FÁS has flexibility in dealing with the situation, be it great or large, in the course of this year.

Mr. Molloy

Last Friday's figures talked about 4.2% unemployment and our assessment is that it will probably climb to 5% or slightly over 5% at the end of this year, and may climb further again in 2003 and into the middle of 2004. Then the unemployment rate will begin to decline again, moving back down to 4% pretty quickly. That is our view which is broadly in line with the view of the Economic and Social Research Institute. Essentially, we see ourselves as having a short-term problem.

In terms of our response, all the effort that went into this document on internal strategy was about building the capability within the organisation to respond quickly to whatever is happening in the labour market. A major part of this strategy is establishing a role for the organisation in terms of policy input to Government and the political system on the needs of the labour market, with a view to publishing an annual report on what is happening in the labour market and what kind of responses are needed.

In meetings with our own staff and externally, I have repeated hundreds of times during the past year that while we are now talking about 4% unemployment going to 5%, or even 7%, over the next three or four years, it cannot be seen as a major failure. I sat in this room ten years ago, and if it had been foretold then that unemployment would fall to 4%, or even 7%, it would have been seen as a major achievement. Our view of success and failure has changed dramatically over the last six or seven years in terms of employment and unemployment.

Notwithstanding the hiccups of last year, we still have the lowest unemployment rate in the European Union, with the possible exception of Luxembourg which, due to the nature of the country, will always have low unemployment.

Deputy Durkan

Has FÁS identified particular current skills shortages or surpluses?

Mr. Molloy

There are particular skills shortages. Last year, we had many problems with the ICT companies in seeking skilled workers. That was one of the drivers of the Jobs Ireland campaign overseas, whereby we tried to attract people with particular skills. We know there are shortages in the biotechnology area at the moment. We are working, for example, with Wyeth on the new project they are building in Clondalkin in order to see what we can do to assist it.

There is an expert skills group of which we are members along with Forfás. It is chaired by Dr. Danny O'Hare, the former president of Dublin City University. That group examined the skills issue and still points to skills shortages. Skills shortages tend to lead to the employment of people at the high-tech end of the market, but there are also shortages in the hotel and catering industry, as well as the health sector. The Department of Health and Children is setting up a group specifically to examine the skills issue in that area to see what contribution FÁS and others can make in order to address it. The answer to the Deputy's question is "Yes", there are still skills shortages in the economy.

Deputy Durkan

To what extent can FÁS put in place measures, or what steps can it take, to provide for those shortages in the longer term? The day the shortage appears on the computer screen is not the day to start resolving the problem.

Mr. Molloy

If shortages are going to occur in mechanical engineering, one cannot produce mechanical engineers overnight, so long-term planning is required within the educational system. That is one of the reasons for the existence of the expert skills group on shortages. As regards technical activity, we can run sharp courses pretty quickly to get people up to a required standard to work at a technical level in a lot of companies.

Deputy Durkan

Over what period?

Mr. Molloy

It depends on the nature of the skills. Some of them would be 12-month courses, for example, in electronics activity. That would produce people much faster than the standard educational system. We and others have to watch that issue carefully: it is a much bigger issue than FÁS itself in terms of identifying the skills we need. A problem is emerging at the moment concerning children studying science subjects. Part of the emphasis at the opportunities show at the weekend was promoting the notion of science and relating it directly to particular careers. We put a lot of effort into making it interesting for teenagers to understand the value of studying science. That is why we had the astronauts involved in the skills activity at the weekend. We wanted to demonstrate that there were real jobs at the end of it. It is not just about getting a degree, but about getting a real job in the economy. That goes back to the changing nature of our economy in terms of moving up the value chain, the type of employment we have and recognising that we are no longer a low wage economy. If we are to keep up, we must turn out people with higher skills. That not only means people with PhDs, but people at technician level in companies. We still need large numbers of them, but they must be of a higher skills order than they would have been ten, 15 or 20 years ago.

Deputy Durkan

As regards encouraging students into the science areas, at what stage does FÁS intervene? Did FÁS intervene four or five years ago or does it intervene after the event? The lack of interest in the sciences has become apparent, particularly in the past two to three years. Does FÁS intervene in the workplace or does it intervene at the earlier stages in the educational system?

Mr. Molloy

Our direct intervention is clearly in the workplace in terms of sitting down with the companies and seeing if we can structure training programmes specific to their needs. We try to do that as much as we can with individual companies although it is not always the case that we deliver the training. We often point people in the direction of training that can be delivered elsewhere. As regards the bigger picture, that is a question for the Department of Education and Science. However, as far as we have a role in it, we provide an input through groups on which we are represented with the Department of Education and Science or through the expert skills group.

Deputy Durkan

FÁS would be in a better position to identify the immediate changes and trends before they emerge and to liaise with the educational services at that stage with a view to flagging the areas in which there appear to be opportunities. Not every student will go in the same direction, but FÁS should encourage an even spread across the various disciplines.

Mr. Molloy

That is a valid comment. We do that through a lot of interaction with the Department of Education and Science. The principal officer of the Department of Education and Science is on the board of FÁS, so the Department has direct access to all our activities. Perhaps society needs to give more thought to this area. That is one of the reasons we have begun the process of setting up a better resourced in-house research activity to try to get a better handle on the type of questions raised. In this way, we can better inform Government on what is happening in the labour market. We hope to publish our first annual labour market report, which will take account of that, sometime towards the middle of this year.

Deputy Durkan

Labour market and other reports do not always agree, as the committee knows from past experience. Is it possible for FÁS to liaise with the second and third level institutions in regional or local areas with a view to identifying the potential skills or lack thereof and to steering students in a particular direction? Can FÁS do that now or must it wait until after the leaving certificate or other examination when a decrease in the numbers taking the sciences, for example, is highlighted?

Mr. Molloy

No. The points the Deputy made are valid, but it is not an exact science in terms of trying to determine future needs. We are not the only players in this area. As regards intervening at an earlier age in the school system, we are a big player. However, we work closely with Forfás and with the Department of Education and Science to address the issue the Deputy raised. We also have close interaction with organisations, such as partnership companies, county development boards and county enterprise boards. We receive feedback from them which they get from their client groups.

Deputy Durkan

Has FÁS ever tried, for example, to visit a number of second level institutions to talk to third or fifth year students and to exchange views with them, rather than getting its information from other sources?

Mr. Molloy

Many of our people in the regions have close contact with secondary schools. Most secondary schools organise careers activities and we are always involved in these. I have a lot of interaction with Seán Ashe in Maynooth in terms of trying to identify what we could do as an organisation to make children aware of apprenticeship programmes. That is repeated throughout the country. We have also formed a relationship with the Institute of Guidance Counsellors. We work closely with it and try to assist it in its job with children in secondary schools.

Deputy Durkan

Our increased standard of living means there will be areas where it will be difficult to provide apprentices or employees. Unfortunately, the most serious deficiencies are in the lower skilled areas. The economy must employ people in all areas. Mr. Molloy mentioned overseas recruitment. How much more of that does he expect FÁS will need to do to meet the economy's needs based on the experience of recent years? There appear to be personnel deficiencies in a number of areas in the services sector.

Mr. Molloy

We are of the view that the labour force will grow by 200,000 people between 2002 and 2007, which is a substantial growth. We will not be able to meet that growth, given our demographics and resources. We must be careful in terms of how we attract people from overseas to work in the economy. In response to a particular problem, we ran a major campaign, the Jobs Ireland campaign. However, before the fall-off which took place in the latter part of last year, we had decided the Jobs Ireland campaign was not the most appropriate way to attract workers here because it created too high an expectation in the countries we visited. We could not take in all the people who queued up. We were as surprised as anyone else at the interest in those campaigns.

Chairman

FÁS was not surprised by the interest in places such as Johannesburg and Cape Town.

Mr. Molloy

We recognised that there would be an interest and we targeted places such as South Africa because it is English speaking. Many people from there may hold Irish passports and that makes life a lot easier. We were all taken aback when we saw queues two and three miles around the building at nine o'clock in the morning. We underestimated the pent-up demand to exit places such as South Africa and started to look at a more sophisticated approach in terms of identifying specific jobs here. We worked with employment services in other European Union countries to identify unemployed people with those skills and to set up the interview process rather than having an open jobs fair approach where everyone came in off the streets. Many of those people were not of interest to employers who had to deal with a couple of thousand people to get ten.

As a once-off, it was a successful measure to deal with a high level of shortage at a particular time. Our work since then has involved identifying real jobs and taking a targeted approach, particularly to markets. We must always remind ourselves that our first responsibility is to our citizens and to ensure that when we attract people from overseas, we do not deprive some of our own citizens of employment. We have a secondary responsibility to other European Union and EEA countries before we go to the wider world to attract people. It is a question of identifying real skills shortages and filling them in a targeted way.

Deputy Durkan

In ensuring that we are not seen to be replacing our own people with people from overseas, does FÁS educate the public that someone coming into the country is not necessarily a threat to someone else's job? Given the numbers coming here in recent years, it is necessary to emphasise that. For 150 years we emigrated to all corners of the world and it would be a sad reflection of us if, in the reverse situation, we did not accept people from other economies or jurisdictions.

Mr. Molloy

Our clear view on that is anyone who enters this country legally to take employment should be treated equally with Irish citizens and we try to ensure that is the case. We have specific programmes for overseas people who have language problems. When the Minister for Justice, Equality and Law Reform legalised a number of asylum seekers in recent years, we provided special training for them in Blanchardstown and Tallaght and delivered sophisticated programmes to them which we are now mainstreaming to all our offices. We are using the lessons of that experience to provide every assistance to those who are living and working here legally to integrate them into Irish society. There was 75% placement for the people trained in Blanchardstown and Tallaght.

Deputy Bell

I regret the change in apprenticeships, as we had to fight even at ICTU level for them. Once, apprentices were taken in and trained by AnCO for a year and then placed by the officials who monitored their progress. That was changed so that only those sponsored by a company could get apprenticeships which led to two disasters, namely, an all time low in the number of apprentices being trained and the advantage being given to large companies over smaller ones which could not afford to sponsor apprentices. What is Mr. Molloy's view on that?

How does FÁS co-operate with REHAB, which I believed was the main trainer of people with disabilities? What is the difference between training with FÁS and with REHAB? Are you dealing with the same or different categories of training?

Are people who come from outside the EU to take up employment monitored? They may claim to be carpenters or bricklayers but have no apprenticeship or qualifications. Is FÁS consulted about granting permits to such people, or even to those from within the EU? Does FÁS check their qualifications, especially in the building sector?

Mr. Molloy

I know that much negotiation involving all of the social partners went into designing the new apprenticeship system. A difficulty with the old system was a view that employers left responsibility for apprentices to the State. The number of apprentices is not low as we have the highest number ever, even given the rigidities of the system. We hope to re-open the debate about extending the types of apprenticeships into other areas and getting a system enabling older people to get recognition for skills acquired on the job. There are other issues about the timing of apprenticeships. We attempted to move to a standards based system. We have a standards based system with a four year time frame. I believe that we must examine that. Do we need four years in every trade? The timing should be related to the actual time it takes to acquire the skills and achieve the standard, which is what is important.

We have no role in vetting people coming here from overseas: employers presumably do that themselves. They would discover quickly if a person did not have the required skills and take appropriate action.

Deputy Bell

I was specifically referring to where these craftsmen are recruited by agencies which are paid per worker per hour. They do not vet the skills.

Mr. Molloy

There are many such agencies and they are not all ethical in their practices. However, at the end of the day the employer must take responsibility as he pays the agency and wages to those he engages. He would quickly learn not to re-engage that agency nor to tolerate in employment someone without the skills.

We have arrangements with most EU countries to recognise skills levels and we co-operate specifically with the German apprenticeship agency. Some apprentices come here from Germany to train and vice versa. We chose Germany as it is recognised as having one of the better vocational training systems in the world.

We were given responsibility to mainstream the training of people with disabilities last July and are putting systems in place to deliver that. This was in response to demands from organisations representing people with disability which argued that training would be of better value to them if it was delivered in a mainstream environment rather in a system just for people with disabilities. We still use the NTDI to deliver specific training as there are those who need some assistance before they can go into the mainstream in the sense of just going into a training centre and sitting through a training programme. We still work with people like that and it is something we are gearing up for over the last eight to ten months. There has been a change in the system where the old NRB was split and we assumed responsibility for vocational training. The other health issues went to the Department of Health and Children and the health boards.

Deputy C. Lenihan

At the beginning of this Government there was massive pressure to produce computer programmers and clearly there is not the same pressure for that occupation or skill now. Do we now have a surplus of these people and do we need to retrain those who were crash-programmed in computer programming?

Mr. Molloy

Regarding people with particular skills in the ICT industry, most of the ICT companies in Ireland have stopped recruiting over the last six or seven months, so clearly there is an issue there. I take the view, which is shared by most other development agencies, that ICT skills will continue to be in demand and not just from ICT companies but virtually every organisation, including our own and the committee's.

Deputy C. Lenihan

Is the delegation seeing a phenomenon where people who were trained or crash-programmed in the early period of this Government's lifespan are now showing up at its offices seeking reskilling or retraining in other skills?

Mr. Molloy

I am not aware of any significant numbers of people. There is an issue within that industry regarding the need for continuous training because the technology is changing all the time. It is not a major issue in that there is still a demand for people with those skills. Intel, Microsoft and the major companies have stopped recruiting in the last couple of months but people are still in demand in other companies.

Deputy C. Lenihan

My point is that even with the technology setback or collapse there is very little sign of the people——

Mr. Molloy

I would go further and say that ICT skills are as necessary as being able to read and write 30 years ago. They have become part of the educational needs of anyone moving into the labour market.

Deputy C. Lenihan

That is interesting because at a broader economic level people have spoken of the exaggerated nature of the impact of the technology setback on the economy. You seem to be reaffirming that.

Mr. Molloy

Different types of skills are emerging - new programming languages, web page design and so on - compared to five or six years ago but people in that industry have or are becoming accustomed to the fact that they have to continue upgrading their skills. That is one of the reasons we are trying to develop and have the FÁSNet college up and running, which we hope to launch formally. That is a means of delivering specific training over the Internet. We hope in the roll-out of that to work with employers in terms of allowing employees time on-site to access the Internet to get the skills they require. To return to the apprenticeship issue, we are even looking at the possibility of introducing this into the apprenticeship programme - at least the ECDL qualification - so that every craftsperson who comes through our system will have a basic understanding of computer systems and how they operate.

Deputy C. Lenihan

Regarding skills shortages, you said your exhibition last weekend had 20,000 jobs on offer. What kinds of jobs and employers are we talking about? You talked about biotechnology, health, catering and hotel work but what types of jobs are part of the skills shortages?

Mr. Molloy

It covers the whole range of activity. EBS Building Society had the major stand but Allianz insurance company and Dell were present, as was Kerry Foods which was trying to bring in people with different kinds of qualifications for their industry, from sausage makers to very sophisticated scientists. Huge numbers are also needed for the hotel and catering industries.

Deputy C. Lenihan

Is Mr. Molloy referring to waiters, chefs, etc?

Mr. Molloy

Everything in that industry - waiters, service people, managers, etc.

Deputy C. Lenihan

Can you provide any breakdown of those 20,000 jobs in terms of type - office employment, manufacturing - or category?

Mr. Molloy

Not off the top of my head but we are still doing an analysis of the outcome and it only finished yesterday evening. When we have completed that I can communicate it to the committee.

Deputy C. Lenihan

You do not know at this stage whether the 20,000 jobs were filled.

Mr. Molloy

My understanding from feedback from the companies is that they were extremely happy with the outcome to the extent that in addition to filling their short-term needs they felt they had built a database of people for any future vacancies that might arise in their companies.

Deputy C. Lenihan

How many people came through the doors of the RDS?

Mr. Molloy

It is hard to reckon but our best reckoning is that it was of the order of 120,000 people. We had a situation yesterday morning at one stage where we and the RDS authorities felt we might have to close the doors because the building was at capacity.

Deputy C. Lenihan

Which is indicative of people hungry for work in Ireland.

Mr. Molloy

It is fair to remember that the show is not just about offering jobs to people. It is an opportunity to give people in secondary schools a chance to understand the kinds of careers that are available to them. We had a major skills village to demonstrate the apprenticeships and traineeship activity. The education system had stands for the various degree courses on offer and many of the people coming through are schoolchildren making decisions as to what careers they want. That is part of our public service activity, assisting people in choosing a career.

Deputy C. Lenihan

I note some of your predictions in terms of unemployment are in line with the ESRI. Can you recap those figures? Were they 4%, 5% and 7%? Are those short-term figures?

Mr. Molloy

That is short-term.

Deputy C. Lenihan

Is it 4% for this year?

Mr. Molloy

Maybe moving to 5% at the end of this year and early next year and then moving up again to 6%, 6.5% or 7% over the following 18 months——

Deputy C. Lenihan

The 18 months——

Mr. Molloy

The 18 months following 2002 and then the view is it will dip down pretty rapidly again to 4.6% by 2004 or 2005. I do not have my figures expert here.

Deputy C. Lenihan

What is the reason for the 18 months spike in unemployment? It spikes up significantly from 5% to 7%. We are talking about 2003-4.

Mr. Molloy

It is a reduction in economic growth. Our economic growth has been phenomenal over the last number of years and is certainly not sustainable. We are probably now back down to more understandable rates of growth. This year it is 2% or so and there is a carry through from the slowdown last year as a result of what happened in the US economy. We are talking about that filtering through and the period before people start reinvesting again to start growth.

Deputy C. Lenihan

The filter through you are talking about is 2003. That is when the US downturn will have the biggest impact.

Mr. Molloy

That is the best assessment. We do not do this on our own. We do it with other authorities. Before I came in I saw a report from Forfás the gist of which was notwithstanding the pretty horrific happening in the US last year, in terms of going into depression and the other events we have come through pretty well.

Deputy C. Lenihan

Do you have figures on the level of investment by Irish companies in training and how that compares with the European or world picture?

Mr. Molloy

According to the survey we have just completed, which I mentioned at the start, approximately 2.5% of payroll is spent on training. We say that people should be up in the 3.5% bracket.

Deputy C. Lenihan

How does that compare with the rest of Europe?

Mr. Molloy

The survey was completed for our own market and other surveys are being done elsewhere. They will be brought together later this year. Looking back at the previous time this was done, we were substantially behind the front runners, namely, Germany, France and England which are at 3.5%. I also mentioned that that hides another problem in the Irish economy, which is that multinational companies here tend to spend very heavily on training and HR development, whereas indigenous companies are pretty poor and may be lower than 2.5%.

Deputy C. Lenihan

Do you have comparative figures for IDA backed companies versus indigenous or domestic companies?

Mr. Molloy

I have such figures but not off the top of my head. Given that the average is 2.5% we are talking about a much lower percentage for indigenous companies. A substantial number of small companies regard expenditure on training as a waste of time and money.

Deputy C. Lenihan

Large international companies are pulling up the average and could be on target.

Mr. Molloy

The large multinational companies are certainly on target. The message we preach to indigenous companies is that the reason those companies are so successful is because they invest large amounts of money in training and human resource development.

Deputy C. Lenihan

It is argued that they should get their act together on training. Is training seen as important in terms of staff retention or has there been any analysis of that? Typically, the attitude of many bosses in private sector companies is that training is a waste of resources because as soon as a person is trained, he or she goes off to the jobs fair and joins another company and the investment is lost. That is a predominant myth in the private sector.

Mr. Molloy

That is a myth in the private sector but successful companies would regard that as a dim view of the world. They would say that proper investment in training motivates people and enhances a company's chance of retaining them. From a FÁS perspective, there is another issue regarding training, namely that of certifiable skills. If people do not have certifiable skills, they do not have the ability to move and enhance their opportunities. This issue arose last year in regard to skills shortages; when some companies identified a need for a skilled person they tended to look outside the company to recruit. We often asked them if they already had good technicians who could acquire the necessary skills if the company invested some money in them. It is amazing how many came back to tell us that it worked out cheaper for them to acquire the skills by investing in training for their own people.

Deputy C. Lenihan

What active measures is FÁS taking on the issue of bringing retired people back into the workforce on a short-term or temporary basis? Many retired people feel they are not needed any more but they would be ideal for short-term employment in many service industries.

Mr. Molloy

We do not, to my knowledge, have specific programmes for bringing older workers back into the workforce but we are involved with a working group which is examining possible measures to attract older people back into the workforce.

Deputy C. Lenihan

Foreign visitors often remark how young are the staff in our retail sector because shop assistants in other countries are often semi-retired.

Mr. Molloy

In my view that has changed over the past few years and we now see older people at Tesco and Superquinn checkouts. It is an issue of which we are conscious but we have no specific programme to address it at the moment.

Deputy B. O’Keeffe

Two years ago I carried out an analysis of the amount of money spent on training the unemployed. I found that with an unemployment level of 4% the amount being spent was higher than when we had a 17% unemployment level. What are the figures for the amount spent on training of the unemployed over the past five years? Has there been any significant drop in the amount of money being spent on training given that unemployment dropped as low as 3%?

Mr. Molloy

I will have to research the specific figures. Is community employment to be included as a training activity or not?

Deputy B. O’Keeffe

No, I will come to that later.

Mr. Molloy

For 1995, expenditure on training was in the order of £68 million. In 1996, it was around £66 million and in 1997 it was about £67 million. I am deducting the apprenticeship training from a global figure here so my figures are approximate. In 1998, the figure was around £64 million, it went up to £78 million in 1999 and was about £96 million in 2000.

Deputy B. O’Keeffe

Unemployment levels in the year 2000 were at 3%, yet £96 million was spent on training unemployed people whereas the amount spent in 1995 was £68 million. Even though the numbers of unemployed people decreased rapidly, we seemed to spend more. Why is that?

Mr. Molloy

There is a series of answers to the Deputy's question. A major part of our training costs comprise allowances paid to people and those allowances increased over the years. In addition, although the number of unemployed declined, the number of people we were training did not. When unemployment was high our budget was restricted and we trained a smaller proportion of unemployed people. Even when unemployment decreased, there were still people for whom we were not able to provide training. The point is that the numbers going through our system did not fall when unemployment fell but we were able to offer training to a higher proportion of unemployed people.

Deputy B. O’Keeffe

What would be the figures for the number of people FÁS was able to train over the five years?

Mr. Molloy

The numbers of people that go through the training system would——

Deputy B. OKeeffe

I mean unemployed persons apart from community employment schemes and apprenticeships.

Mr. Molloy

Last year we had 21,800 on training courses. An addition to our costs for last year would be the 1,900 people with disabilities for whom we would not have had responsibility in previous years. Another issue which covers the employment service as well as the training side is that as the number of unemployed decreased, the people on our training programmes were people with whom it was more difficult to interact. As we did not have the same large pool of people to put through training, those on the programmes were at times seriously disadvantaged in that they perhaps lacked literacy and social skills. Our intervention was actually more expensive because we were reaching the core group of unemployed.

If we are serious about social inclusion, we should view this as an opportunity to do something for people with whom we never previously had the opportunity to interact. A further consequence of the employment action plan which we run with the Department of Social, Community and Family Affairs is the mechanism which ensures that people in receipt of unemployment benefit or unemployment assistance are actively seeking employment. These people are referred to us by the Department of Social, Community and Family Affairs and part of our obligation is to ensure that they receive training from us on referral.

Deputy B. O’Keeffe

Can you give us an idea of how many unemployed people went through the system in 1995 and 1996 compared to the 21,800 in 2001?

Mr. Molloy

The figure of 21,800 relates to those on specific training courses. We conduct other activities as well with unemployed people, for example, CTW activity. People engage with us in a range of activities. I will give you global numbers in terms of numbers including all of our——

Deputy B. O’Keeffe

Was 21,000 a global number?

Mr. Molloy

No. That was for specific six or 12 month training courses.

Deputy B. O’Keeffe

Are you in a position to give the number?

Mr. Molloy

I can give the Deputy the list and he can see for himself.

Deputy B. O’Keeffe

I am concerned at the multiplicity of groups delivering training. There is FÁS, NTDI, Youthreach, the YMCA and the partnerships within the cities. I wonder how effective this is and whether it is a waste of money. All these groups are maintaining their position and receiving the same amount of money today that they got over five years ago. I wonder about the integration of the training system.

Mr. Molloy

I would argue that there is still not enough training being provided in terms of up-skilling of people. There are still many people in employment and looking for employment who have very little or no skills and this is still of major concern. There is an issue about the multiplicity of training providers but many of those bodies mentioned are contracted by us to deliver training. We do not presume to deliver all training. We have an involvement in many of the Youthreach activities as a mechanism to access people who drop out from the school system. We suffer from a multiplicity of organisations because we are expected to service all these groups. We have limited resources and because these groups meet in the evenings, our staff are run ragged servicing them. There are groups to co-ordinate the groups and a group to co-ordinate the co-ordinators. If you can do something to resolve that situation, I would be very grateful.

Deputy B. O’Keeffe

You are proving my point. Obviously it should be examined. While people are doing outstanding work in terms of training, we should examine the overheads and figures relating to the administration of training.

Mr. Molloy

It is not just training; it is a broader issue to do with the remit of these groups and how they interact with each other. It is a governance issue in terms of local government. The servicing of these groups puts huge resource strains on my organisation and that is the case with the other development agencies also.

Deputy B. O’Keeffe

I wish to ask about the age profile in the organisation. We are talking about training for the unemployed but there is the question of training the trainers. Deputy Lenihan put his finger on it. The focus of training has changed very much since the early days. There has been a massive shift in position and therefore the up-skilling of staff is very necessary. How has this been achieved within the organisation or is the work being outsourced?

Mr. Molloy

We outsource much of our training activities because we are not in a position to deliver it ourselves. We have examined our strategy over the last year and that was a big issue in determining the kind of training we undertake. We hope to have a system in place which will give us a clear view of the type of training that needs to be provided. We want to provide the training that is required by industry and business rather than the training that we have in place to provide. That issue is not unique to FÁS; every training organisation and many educational institutions has to wrestle with this. The training personnel must be kept up to speed. We make a major investment in training activity for our staff. We offer them university courses for qualifications in employment and guidance counselling. We also offer leave so that personnel can upgrade their skills.

Deputy B. O’Keeffe

Is there a high uptake?

Mr. Molloy

There is a very high uptake.

Deputy B. O’Keeffe

Is it compulsory?

Mr. Molloy

It is not compulsory but there is a very high uptake.

Deputy B. O’Keeffe

There are elements of FÁS training which are now redundant. There is now a difficulty with people who have traditional skills which are not suitable for modern needs.

Mr. Molloy

I do not fully agree. Some of our programmes have become defunct over time but we have a good record for closing down redundant programmes. We certainly have a good record for creating new programmes that are more relevant. We need to do more because we are not perfect. Our record stands in terms of our ability to produce new programmes that are relevant to the companies and the people we serve. I met people from the printing industry recently. We have a printing apprenticeship programme but that industry has moved over totally to computer use. We were delivering what was demanded of us by the social partners but what is demanded by the social partners is no longer necessarily relevant. We must examine the relevance of any training and upgrade the curricula of those programmes.

Deputy B. O’Keeffe

I have been a member of the Committee of Public Accounts for a few years and I have seen strategies from many organisations come and go. Is it fair to say that nobody seemed to reach out and pinpoint the needs that would occur in the areas of health and education? Jobs such as nurses' aides and home helps have developed without any training being provided for many of those people. Home help personnel lift the sick and the elderly without any training. I would expect FÁS to have built up a liaison with the health and education areas. People with a mental disability often have the assistance of another helper as well as a teacher and I do not see FÁS involved in that area. There is a major shortage of therapists in the health area. FÁS has never seemed to grasp or anticipate this problem. There has never been integration between Health and FÁS nor between Education and FÁS. The strategy for the future seems to have tunnel vision which will not fit the requirements of a modern society. There will be a need for more support systems for people with disabilities. The demands are focused on people with disabilities, either health or educational, and we are years behind in terms of providing training for this demand.

Mr. Molloy

The Deputy has raised a number of issues. Part of the problem relates to the fact that there has been a huge increase in demand in the health area for particular types of professional staff. That is a recent phenomenon.

Deputy B. O’Keeffe

We have had this problem for at least ten years.

Mr. Molloy

There are certain types of medical training which are not within our remit. We are really talking here about training the carers and we have done a lot of work in that area through the CE programme. This issue will arise in the context of transferring from CE to the health system. Equally, we have traineeships in personal assistance and child care in operation and we will deliver a lot of very specific training through community groups for carers in the health system. It is interesting that the Deputy mentioned this.

At a recent board meeting we discussed doing something more specific to identify more clearly what are the needs in the health sector in order to see what contribution we can make. A group is being set up involving ourselves, the Department of Health and Children and various other players in the area to take an in-depth look at the entire health area and what can be done to provide training therein. Our role will be very much at the carer-personal assistant end of the business in which we accept we have not done enough although we have tried over a number of years through the CE programme to do what we can. We have tried to recognise the fact that carers do a particular job by attempting to put in place proper certification so that there is an understanding of what skills a person has by virtue of the certification process.

Deputy B. O’Keeffe

I welcome that because I would equally question the Departments of Education and Science and Health and Children regarding what they have done in these areas. There has been a massive growth in the number of apprentices going through the system. We have all been to the trough but the construction industry absolutely refuses to take on apprentices. Does Mr. Molloy fear a return to a scenario where a lack of skills in the construction sector could beset the State? As he will be aware, the failure to take on apprentices is the first sign of a downturn in the construction sector. If there is a downturn, how can the skills programme ensure that we avoid having to import the necessary skills when there are many young people available who could easily take on such skills if the industry were willing to support them?

Mr. Molloy

That is a very real issue. We have seen a situation where, when demand increased, the construction industry was demanding carpenters, bricklayers and plasterers having refused to take on apprentices in the preceding years. The reality is that there is a training period of three to four years. If the industry does not take a more long-term view, then we will have a problem.

In our best assessment of what is happening, we do not see a major problem in the construction industry but this is an issue of which we are acutely aware and we have a group in-house examining the construction industry specifically, what would happen if there was a downturn and what responsibility we would have to people who are in apprenticeship in the industry. I do not have the answer to the Deputy's question. We recognise that this is an issue and are trying to put in place contingency plans but our view is that there will not be a problem in the short-term.

Deputy B. O’Keeffe

What are the consequences for various clubs around the country as a result of the cutbacks in community employment schemes?

Mr. Molloy

There is a clear consequence in that we must get the numbers down but there is another side to that coin.

Deputy B. O’Keeffe

How many people are currently on these schemes?

Mr. Molloy

There are approximately 30,000; our aim is to reduce the figure to 25,000 by the end of the year. It is a gradual winding down but there is also another issue which I have experienced in my own club. It is increasingly difficult to get people onto the schemes because they have alternative employment. There is an issue regarding the availability of people for community employment activity, not just in regard to cutting back on the schemes in some areas. There is a downside to community employment activity. There was a time we had no difficulty getting club members to voluntarily come up with their spades and shovels on a Saturday morning. Voluntarism seems to have gone out of the process largely because of community employment. People ask why should they do it and why can we not get the community employment guys to do it.

Deputy B. O’Keeffe

Does FÁS have a yardstick in terms of cutting back? The income generated by some clubs is as good as any vintner and many can afford to employ people to do the work. There are certain clubs in rural areas which cannot afford to pay people but large clubs in urban areas generate a decent turnover. What yardstick is being used in terms of cutting back?

Mr. Molloy

The yardstick for everything we do should be the employability of individuals, as it was in the process we have undergone. The first yardstick I would apply to any of our programmes is what is the possibility of the individuals who undertake them gaining full-time employment in the labour market. That would be the first criterion.

With regard to which areas we cut back, we give priority to areas of disadvantage in terms of whatever resources we have available. We give priority to disadvantaged groups and we try, although we will not always get it right, to ensure those who can afford to provide the services themselves do so. We try to retain our resources for any activities in areas where there is disadvantage. However, we will not get it 100% right. I have no doubt the Deputy and his colleagues will remind us of where we get it wrong.

Deputy B. O’Keeffe

How successful has FÁS been in luring women out of the home and back into the workplace?

Mr. Molloy

We have been pretty successful in the sense that we have substantial programmes in place to give people basic training to re-enter the workforce but participation by women in the labour force has increased dramatically over the part number of years. The figure is up to 51% or 52% while the equivalent figure for men is approximately 72%, which represents a significant narrowing of the gap and is above the European average in the 20-35 age group.

Chairman

I tabled parliamentary questions in the House a number of years ago regarding gender balance and apprenticeships and the number of women who were interested in taking up apprenticeships. I was informed that FÁS was making a significant attempt to achieve an improved gender balance. The Minister was asked a number of questions regarding the "wet" trades and I asked her whether she was aware of the weight of a concrete block etc. The headline in the following day's newspaper was "Deputy Drops a Tonne of Sexist Bricks" and I was accused of being chauvinistic. I checked the up to date figures for bricklayer apprenticeships and these showed that FÁS trains 1,289 males and zero females. I rest my case. I was correct in pointing out the reality at the time. FÁS has 583 male and two female plastering apprentices.

There is a very low take-up of construction apprenticeships among women. FÁS has 17,115 construction trade apprentices, of whom 65 are female. Overall FÁS has more than 25,000 apprentices of whom 116 are female, which is 0.5%. I presume this information can be published as it is of interest. I refer back to Deputy Bell's comments regarding the year off the job apprenticeship. A complement of apprentices was subsidised by employers during its first year off the job. FÁS took a percentage of these apprenticeships and had no problem placing them with suitable employers subsequently and these probably were not large employers. If apprenticeships are to be encouraged, an incentive must be provided. What will FÁS do to create incentives and interest to attract more females into apprenticeships? Plumbing is an attractive trade given that it is difficult enough to find a plumber when one wants one. The ratio of men to women in plumbing apprenticeships is 2,650 to zero. What is the deterrent in many of these trades?

Mr. Molloy

A bursary is in place to encourage women into apprenticeships. However, there is an issue with our apprenticeship system in that it is confined essentially to trades which are traditionally male dominated. Employers, especially in the construction industry, are reluctant to engage women as plasterers, bricklayers or whatever for both traditional and more obvious reasons.

We tend to be compared with countries such as Germany where the number of apprenticeships is much higher. I mentioned earlier the need to expand apprenticeships in this country beyond the 22 or 23 programmes we have at present into areas such as hairdressing, retail and pharmacy assistance and so on.

We have had difficulty in our negotiations with the social partners in extending apprenticeships into those areas where women are more likely to become involved. This is part of the reason we have developed a traineeship programme to capture that. It is one of the issues I have asked the apprenticeship advisory committee to examine. I have also asked it to re-open the debate on extending apprenticeships into those areas where women are more likely to take part. Bursaries aside, regardless of whatever we do in this area, there never will be huge numbers of women in bricklaying, plastering or whatever.

Some 56% of the participants in our non-apprenticeship programmes are women. The difficulty is with the apprenticeship system. Comparing us with Germany is like comparing apples with oranges. Their apprenticeship system is much more broadly based than ours and includes a much greater number of activities. It certainly includes activities in which women are dominant.

Chairman

Mr. Molloy gave an interview to The Sunday Tribune on 24 June last. I do not know how long he was with FÁS at that stage. It was probably around that time he joined.

Mr. Molloy

I am with FÁS for 15 months.

Chairman

You said at the time that the organisation had suffered from low morale because it did not know what it was about. Can you clarify whether morale has improved and if the organisation knows what it is about?

Mr. Molloy

Perhaps the Chairman should ask the people around me.

Chairman

You made the statement.

Mr. Molloy

The organisation began with a specific remit and other functions were added over time. There was a need to step back from that adding on of functions in response to various issues in the labour market and for us to define precisely the aims of the organisation, especially given the huge change which had taken place in the labour market. We underwent that process last year and it involved all staff throughout the organisation. I spent a huge amount of my time meeting staff, and the goals we devised came from staff. We interacted with our stakeholders, including the political parties, to ensure they were on side.

It is a process of defining for ourselves and for our stakeholders what exactly is our role and what role the political system expects us to play in society. We hope to be measured against that rather than against people's perceptions of what we do or do not do. We had a problem of being measured against perceptions of the organisation because there was no clear, precise definition of the role of FÁS. The Chairman mentioned his involvement with AnCO. Many people measured FÁS purely on the basis of what they perceived was the role of AnCO. Others who had more interaction with the employment service tended to compare us with the National Manpower Service. We suffered from that as an organisation.

This process is an attempt by us as an organisation to be clear ourselves and also to ensure our stakeholders are clear on what precisely we are about as an organisation. We are launching into a business planning process within the organisation which we hope will reflect the high level strategy we published in late December.

Chairman

You know what you are about.

Mr. Molloy

I hope so.

Chairman

In a similar article in June, Mr. Molloy's assistant director of corporate services, Mr. Pyke, mentioned the agency may have to change the name of FÁS and re-brand its image. What has happened to that or will we see FÁS in the future?

Mr. Molloy

I hope FÁS as an organisation is here for the future, but it is more in members' hands than mine.

Chairman

Both Mr. Molloy and Mr. Pyke had articles in the papers last June. He mentioned that the agency may have to change the name of FÁS and re-brand its image. Mr. Molloy has dealt with the re-branding of the agency's image. What other name is going to be used instead of FÁS?

Mr. Molloy

There is no question of changing the name. The name is in the legislation.

Chairman

I am reading from an article I looked at earlier.

Mr. Molloy

Maybe the journalist or individual in question used a bit of licence. It was not Mr. Pyke.

Chairman

He misquoted Mr. Molloy.

Mr. Molloy

No, it was not Mr. Pyke, but I think I know who it was.

Chairman

I have the article here. Mr. Pyke is mentioned.

Mr. Molloy

We are examining the branding image. One task we have set ourselves is to attract people into training and give credibility to the organisation. To do that we need to be regarded highly in the community. The best way we can do that is by delivering services to a high quality, but there is also another side to that coin of selling what one is about as an organisation.

Chairman

A point touched on earlier was people with disabilities. FÁS has a function regarding the disability side. It is a major disappointment that while the longstanding 3% target of employment of people with disabilities has been achieved by some local authorities, others such as the health boards have a very poor record. Is it the culture of their being too lazy to adapt the physical environment to make it accessible for wheelchairs and people with disabilities?

I remember raising this issue when I was a member of a health board. I was told they have a recruitment policy of hiring the right people for the job and of being fair to people by treating them all equally. I maintain that, other than in an ideal world, the application of that logic means a person with a disability will not get a fair crack of the whip.

Mr. Molloy

This is a major issue. In so far as it is an issue in the private sector, we have a number of measures in place to encourage employers to consider at least employing people with disabilities. We give them money to assist them in doing whatever they need to do in terms of access or whatever for people. We conduct some mentoring of people in employment in the private sector.

Whether the public sector, of which health boards and Departments form a part, delivers on its 3% objective is outside our remit. We have approached this in a different way with the private sector in terms of trying to promote the value of employing people with disabilities. When the labour market became very tight, employers were prepared to begin looking at people with disabilities and employing them. We have a great number of anecdotal examples of good experience on the part of employers who took the risk, as they saw it.

Chairman

Mr. Molloy said the numbers on community employment schemes had to be decreased to 25,000. The question has been asked in various consultants' reports if it is necessary in a time of high employment to have so many people on community employment.

I attended a function in a rural area last Sunday which was held in a community hall built exclusively by people on a community employment scheme. I contend that without the scheme, that community centre would not have been built. The scheme was an incentive. People on such schemes do invaluable work but they often find it difficult to get jobs in mainstream employment. How many people on community employment schemes obtain long-term sustainable jobs?

I often find that people one assists in filling in forms are illiterate. That is often a barrier to gaining employment. To what degree does FÁS try to improve the literacy skills of people on its training programmes? If people are trained to read and write, they will have the chance of gaining a long-term job.

Mr. Molloy

I agree with the Chairman's first comment. Community employment has made a huge contribution to the country and to community development at a reasonably low cost for what was achieved. I think the people involved deserve credit for that. In terms of the employability issue about which I spoke, my memory is that something over 50% of people who come through community employment - in terms of the last survey work we did - were getting into employment. That may have improved because of the tightness in the labour market. In a discussion earlier with Deputy O'Keeffe the issue of getting people onto community employment schemes arose. The other grievance we hear from sponsors is, "We can get people but they are not the people we want". This is really an issue around the tightening of the labour market.

In terms of the literacy issue, that is a problem for many people and that is why we have tried over the years to improve community employment by building into it a training module. That training module is geared towards the needs of the individuals rather than some specific training we might provide. Much of that training has related to literacy skills. There are other issues in regard to community employment in rural areas where there is not alternative employment. We have loosened our criteria there in the past couple of months to try to take account of this in parts of the country where there is not alternative employment.

Chairman

That concludes the session. I thank you, Mr. Molloy, and your officials for your forthright responses. We wish you well in your new appointment and wish FÁS well in the new challenges which lie ahead because after 2006 the same level of funding may not be in place and mechanisms will have to be devised to ensure and sustain the long-term viability of the organisation. I note the statements made.

The committee will meet again at 2 p.m. on 19 February 2002 when we will discuss the financial statements of the National Authority for Occupational Safety and Health. The meeting is now adjourned.

The witnesses withdrew.

The Committee adjourned at 4.05 p.m. until2 p.m. on Tuesday, 19 February 2002.