asked the Minister for Labour, resulting from the ESRI findings on the employment incentive scheme, if he has any plans to review the operation of the scheme.
32.
Ceisteanna—Questions. Oral Answers. - Employment Incentive Scheme.
7.
asked the Minister for Labour the changes, if any, which the Government intend to make in the operation of the employment incentive scheme in the light of the recent ESRI report which showed that the scheme had not had a significant effect on increasing employment or improving the position of the long-term unemployed; and if he will make a statement on the matter.
I propose to take Questions Nos. 7 and 32 together.
I have already decided to (i) increase the number of workers an employer may recruit under the employment incentive scheme from four to eight and (ii) in the case of employers who had previously participated in the scheme to use an employment base level obtaining three years prior to the date of application. Both these changes are now in force.
The major conclusion of the ESRI was that the scheme had not a significant job creation effect. The survey did, however, indicate that the scheme was cost effective and it did direct some hirings by employers towards workers in the target groups. The target groups were at the time of the survey the long and short term registered unemployed and young people including school leavers.
I am now considering what changes should be made in the scheme in the light of the ESRI report.
Has the Minister made provision for extra resources to become available to finance the changes he announced here today?
Not yet. We have plans. As the Deputy knows, the uptake in the scheme has not been the greatest. It was never considered it would be a major determinant of job creation but it has been significant, particularly for target groups. I have brought in two changes and we are looking at others to see if we can make the scheme more attractive.
The problem with regard to uptake relates to the way FÁS are operating the scheme, and the disadvantages and discouragement many employers are confronted with by FÁS interviewees and officials are a major problem. Is the Minister aware of that problem? If he is, has he any proposals to alter that bottleneck in the system that currently exists?
Is the Deputy referring to difficulties that arose because of the base line figure?
No. Some employers virtually had to give their fingertips in order to get qualification certificates to qualify to take on people.
I was not aware of that but I am aware of the difficulty with the base line figures. The two changes I have made are an attempt to make that easier. Until now they had to go back to the 1984 base line figures; now it goes back to the 1986 figures. Also they can now take on eight workers instead of four, but in the review, the suggestions and recommendations of the ESRI report, the aim is to take as much bureaucracy as we possibly can out of the system and make it easier.
There is an awful lot left behind.
In the old system quite a number of employers played ducks and drakes with the figures. There has to be control.
Do the proposals for change the Minister indicated he is introducing arise from the ESRI review or are they amendments to the scheme he intended to introduce in any event? Has he yet met with the ICTU to discuss the conclusions of the report, as it would appear these changes do not address the fundamental problems highlighted by the report?
I have had no meeting with ICTU on this report. Some of the findings and recommendations for changes we are looking at are in the ESRI report which was commissioned by the Department of Labour in the first place. Others have come through the system through FÁS.
Would the Minister agree that the scheme as operated at present, in particular in view of the reduced level of payment on the scheme from its original £70 basic, is acting as a definite disadvantage for married people? In relation to the changes he proposes, does he propose any incentive which will encourage married men, particularly with young families, to become involved in this scheme?
The Deputy may be referring to a different scheme from the social employment scheme. On this one, the issue of the rates paid is a matter of consideration.
The Minister is concentrating on the cost effectiveness of the scheme today as a source of cheap labour and he must re-establish primary importance of the scheme as a device to employ those who might otherwise not be considered for employment, such as the long-term unemployed and those coming from socially disadvantaged categories. The reliance on cost effectiveness is an argument that one could keep people off the dole for very little.
I would not over-emphasise that. The report said it was a fairly cost effective scheme, but the one advantage was that, while employers in 90 per cent or 92 per cent of cases showed they would have taken on employees anyway, the report showed that because of the scheme they took on people from the categories it was focussed on, the long-term unemployed. In my view the conclusions of the report, and perhaps the presentation of it, should have given more credit to that point. All the comments on it were to the effect that the scheme was taking on people who would have been taken on anyway. They should have been to the effect that the scheme was taking on people who would not have got a job but for the presence of this scheme.
No. 9 please.