Mr. Gorman's statement dealt with the Department of Enterprise, Trade and Innovation's perspective in regard to the FÁS 2009 accounts. Obviously, that function has since transferred to our Department.
The year 2009 was a significant one for FÁS in terms of change. Utilising total State funding in 2009 of €1.01 billion, FÁS responded to the significant shift in Ireland's labour market conditions by changing its programmes to focus to a greater extent on the needs of the unemployed. This meant that the agency significantly increased the numbers of unemployed for which it provided job search supports, training and work experience.
As regards job search supports, FÁS and the local employment service increased their capacity under the national employment action plan from 86,000 people in 2008 to 127,000 in 2009. As regards training, provision for the unemployed almost doubled to 120,000 in 2009. This was achieved through changes in the delivery of training courses with innovative formats, such as online blended learning and night courses. As regard work experience, community employment, job initiative and the new work placement programme gave valued work experience to more than 24,000 unemployed.
As regards departmental oversight of FÁS activities, my responsibility is - it was Mr. Gorman's responsibility when he was Accounting Officer - to satisfy myself that the requirements of the code of practice on the governance of State bodies is being implemented and, if reports indicate that problems exist, to ensure that appropriate action is taken as soon as possible. These requirements were met in 2009 and that the chairman of FÁS has met the additional requirements under the code of practice.
I welcome, in particular, the measures taken in response to the Department's request to FÁS to indicate how it will ensure that some of the irregularities which occurred in the past will not recur. These measures include tightening the financial control environment processes and procedures as well as the risk management and internal audit enhancements which are outlined in the statement of internal financial control as set out in the FÁS 2009 report. During 2009 the Department also enhanced its oversight arrangements of FÁS to ensure moneys are spent in accordance with the purposes for which they are allocated and that value for money is achieved.
In line with other public service organisations, we have, in recent years, been increasing our emphasis on outputs, performance indicators and value for money. This emphasis includes the laying of output statements for the Department before the Oireachtas. The oversight of FÁS programmes now includes specific performance indicators in regard to budget and the numbers of profiles of those to be trained.
The year 2009 was also a year of significant change for FÁS in terms of its governance. The principal changes were made under the Labour Services (Amendment) Act 2009 which implemented many of the recommendations of this committee's fourth interim report published in February 2009. Specific to the 2009 Act, changes were made to the structure, size and composition of the board and on foot of this, a new board was announced in January this year. It removed the barrier to a FÁS board director reporting issues to the Minister. It made the FÁS director general clearly accountable to the Oireachtas, including this committee and other committees. It required the disclosure of conflicts of interest by FÁS directors and staff and prohibited their involvement in matters where such a conflict existed and it provided for the protection of whistleblowing FÁS staff members reporting serious wrongdoing in the organisation. Taken together, these changes have significantly strengthened governance and accountability in FÁS. In addition, the new director general of FÁS was appointed in 2009.
Mr. Gorman provided the committee with a note on the European Social Fund as requested at the hearing of 11 November 2010. As regards 2009, the key point is that it was decided to remove all FÁS expenditure from the ESF claim to the European Commission until the issues the Commission raised had been addressed to its satisfaction. The key issue of concern to the Commission related to the inclusion in the FÁS claim of projected rather than actual training costs. There was no allegation of fraud in this case. It is my understanding that the Commission has indicated that once a new IT system is in place, it will address the main Commission concerns. It is expected that the new IT system will be in place early next year. The Department of Education and Skills will then in a position to reintroduce FÁS expenditure in future ESF claims. While no ESF moneys have been lost by Ireland, this course of action has meant that the €45 million that would otherwise have been drawn down in 2009-10 will now be drawn down in 2011. Mr. Gorman also responded to the committee on some internal departmental correspondence submitted to the committee.
I will update the committee, from my own perspective, if you like, on the transfer of departmental responsibility for FÁS as part of the restructuring of departmental responsibilities.
In March of this year the Taoiseach announced the transfer of responsibility for skills and training policy to the Department of Education and Skills and the transfer of responsibility for FÁS employment services and employment programmes to the Department of Social Protection.
This means that the training part of FÁS will be re-mandated as a new training and skills agency under the aegis of the Department of Education and Skills. FÁS employment programmes such as community employment and job initiative and FÁS job search services will transfer to the Department of Social Protection and the relevant FÁS staff will be integrated in to that Department.
The Employment Programmes and Services and Skills Training (Transfer of Departmental Administration and Ministerial Functions) Order of 2010, which came into force on 1 May 2010, provided for the reallocation of responsibility for FÁS as an agency and its related funding from the Department of Enterprise, Trade and Innovation to the Department of Education and Skills. The relevant staff from the Department of Enterprise, Trade and Innovation transferred to the Department of Education and Skills at that time and expenditure since that date is accounted for under my Department's Vote.
The transfer of responsibility for skills and training to the Department of Education and Skills provides an opportunity to co-ordinate the training activities in FÁS with the further education and training activities of VECs, the institutes of technology and other education provision. It should facilitate the creation of synergies in this sector and allow us to eliminate duplication where it exists. Our focus is on restructuring and re-mandating FÁS in its skills and training role. The goal is to create an agency that will provide high quality vocational training so as to deliver a workforce that has the practical skills needed by the economy. The newly mandated and reformed training agency will need to work with the VECs and other actors in order to deliver the Government's agenda in the skills and further education field.
The transfer of functions to the Department of Social Protection required legislation. That Department will, following the commencement of the relevant sections of the Social Welfare (Miscellaneous Provisions) Act 2010, assume funding and overall responsibility for FÁS employment services and employment programmes. This is now planned to take effect from 1 January 2011. Accordingly, in the 2011 Estimates the Department of Social Protection will have responsibility for the policy and funding of employment programmes and employment services.
The Social Welfare (Miscellaneous Provisions) Bill, which has just been published and to which the Chairman referred, provides for the full transfer of FÁS employment services and employment programmes to the Department of Social Protection and this would include the transfer of relevant FÁS staff, property, land as well as certain rights and responsibilities to that Department. This will amend the Labour Services Act 1987. The implementation of this transfer is a significant project and will take a period to implement fully.
In the meantime, a service level agreement will be in place between the Department of Social Protection and FÁS. This will come into force in January 2011. Responsibility for FÁS as a State body and overall governance issues during this implementation period will be the responsibility of the Department of Education and Skills.
Officials from my Department, FÁS and the Department of Social Protection are working closely together to ensure the smooth transition of FÁS employment services and employment programmes to the Department of Social Protection. I would be glad to answer any questions the committee may have.