Vol. 444 No. 6
9 Mr. Molloy asked the Minister for Enterprise and Employment his views on whether delays have taken place in the processing of grant applications; the reasons for these delays; and the actions, if any, he proposes to take to rectify the situation.
58 Miss Quill asked the Minister for Enterprise and Employment his views on whether delays have taken place in the processing of grant applications; the reasons for these delays; and the actions, if any, he proposes to take to rectify the situation.
I propose to take Questions Nos. 9 and 58 together.
I assume that the Deputies are referring to the approval of grants from the county enterprise fund, which are approved by the county enterprise boards. County enterprise fund grant applications are, first, examined by the county enterprise officer and then, if suitable, submitted for assessment by the county enterprise board evaluation committee, which advises the board on commercial aspects of the proposal in relation to its decision as to whether to approve assistance. Under the interim arrangements currently in force, pending the establishment of the county enterprise boards as independent bodies, my Department's confirmation is required to validate a grant approved by a county enterprise board.
It is not possible to give a general indication of how long the county-level stages of this process takes, as this will vary from case to case, and to some extent from board to board. A proper evaluation of any project at this level would in any event appear likely to take some weeks. At the level of my Department, except in the small minority of cases where queries arise on an application, I have put in place a procedure which requires that responses normally issue to boards on foot of their county enterprise fund approvals, in the case of small grants, £10,000 or less, within four working days of receipt in my Department and, in the case of larger grants, within ten working days.
Clearly, any system of grant approvals involving the commitment of public moneys requires a certain amount of time for the evaluation of applications received, to ensure that the limited funds available are committed to projects which are viable, and which are consistent with the objectives of the county enterprise fund in promoting enterprise and employment creation at local level. In devising the evaluation structure of the county enterprise boards, I have endeavoured to balance this requirement with the objective of ensuring that the grant approval system operates with the greatest possible speed and simplicity, to the benefit of the small businesses which are the clients of those boards. While some lapse of time in obtaining approvals is inevitable, I, and my Department, are determined that unnecessary delay in the processing of county enterprise fund grant applications is avoided. In this connection, I should point out that the establishment of the boards as independent bodies, in obviating the need for departmental confirmation of individual grant approvals, will remove one minor element of delay in the process.
Is it the Minister's information that undue delays are encountered in processing grant applications submitted to a number of county enterprise boards and that as a result many worthwhile job generating projects are being held up? Is it the Minister's opinion that it should not be necessary to seek validation by officials of his Department of smaller grants of up to £50,000? In asking county enterprise boards to comply with this overbureaucratic requirement not alone are worthwhile projects being delayed but the spirit which underpinned the setting up of the county enterprise boards in the first instance, and the belief that they could respond quicker to good ideas to generate jobs, are being undermined. What is the Minister doing to free up the system and give county enterprise boards the discretion that we were led to believe they would have?
At present the legal format to enable the county enterprise boards to be established with a limited guarantee is being finalised. They will then have a degree of discretion which they do not currently have. While £50,000 may be considered to be a relatively small sum of money, it is taxpayer's money and the Secretary of my Department and I are ultimately accountable to the Committee of Public Accounts for money voted in this House.
The western development fund was the model used to get the boards up and running and that was the system of approval used. It has now been streamlined. With some exceptions, applications for grants of up to £10,000 are being processed within four working days and within ten working days in the case of grants above that figure. This is the rate at which applications for similar sums of money are processed in most finance houses, particularly in the case of a start-up business. On the question of delays, I share the Deputy's concern and he should bring any specific cases to my attention but I am not aware of any administrative delays.
I am disappointed that progress has been slow in establishing the boards on a legal basis. We have engaged in a consultation process. We forwarded the draft articles of association to each of the 35 boards for their comments as we wanted to allow them have an input. This has delayed the process. I hope the boards will be established on a legal basis in a matter of weeks. They will then have discretion not only to allocate loans in the manner I have outlined but to provide loans as distinct from grants and assistance.
The Minister has answered my question but I seek clarification. Will he confirm that when the boards are legally established his Department will have no further function and that the process will begin and end with the boards?
Apart from the normal safeguards relating to the distribution of public moneys, it is the intention that the boards will have discretion.
Will the Minister confirm that the authority of his Department will not be required by the county enterprise boards in processing grant applications from individual applicants?
That is the intention.
Even when they are legally incorporated, in respect of grants of up to £50,000, I did not appreciate that the boards will have discretion to make the decision and that the Minister's Department will comply with it.
The intention is that county enterprise boards will have maximum autonomy to make those decisions. They will obviously notify the Department once decisions have been made because there will have to be some accountancy procedure. The present system under which individual applications have to be validated by the Department will be replaced.
Is the Minister saying that the prior approval of the Department will not be required?
Under the guidelines which are broad, individual applications will be approved at local level and will not have to be cleared at national level as is the case under the present system.
I welcome the fact that in future the county enterprise boards will have autonomy. The teething problems have been eased. Will the Minister address the question of providing feasibility grants as opposed to capital grants? In launching this new venture is the Department concerned that the emphasis may be placed more on feasibility grants in connection with projects which may not lead to the creation of long term jobs? Will the Department set down specific guidelines to indicate to the county enterprise boards that a certain amount of money should be set aside for both feasibility and capital grants? There is a danger that if the emphasis is placed on feasibility grants we may end up with few jobs.
There is always a dilemma when a Government attempts to devolve decision-making and autonomy to local level because it must do so without any — or a minimum level — of interference. If, say, a sum of £500,000 is allocated to County Limerick, I presume the board which would have been carefully selected and, in some cases, nominated by the local community and local authority would have the good sense to ensure that 80 per cent of the money is not spent on feasibility studies. If guidelines are necessary, they can be made available. We had a series of consultative meetings with the chairpersons and chief executive officers of boards to answer various questions which arise from time to time. It is my instinct to allow common sense to prevail at local level which would mean a minimum of guidelines. However, I am concerned that there is not destructive duplication in terms of job displacement, wasteful expenditure of taxpayers' money, and that the money is used to create sustainable employment.
The Minister should follow his instinct.
I do not wish to labour this point, but I am sure the Minister will agree that in some cases speed is of the essence. Many prospective small enterprises are interested in the Minister's reply to this question. Is he saying that if county enterprise boards approve the maximum grant of £50,000 following due process of evaluation by the committee that the cheque will be in the post within a reasonable period and not second-guessed by the Department?
Because of the nature of the Deputy's question I want to give him an accurate answer, subject to confirmation in writing if necessary. Individual cheques will no longer be sent from the Department of Enterprise and Employment. It will submit a block allocation with guidelines as to how it should be spent and the normal safeguards attached to the spending of any such money will apply. A representative of the county council will be a member of the evaluation committee because of the experience such persons have in handling public moneys. Subject to finalisation in the articles of association for the boards, a project by project evaluation would not take place. For larger projects we would require notification after the event. It would defeat the object of the exercise to have people making decisions at local level and somebody second-guessing them de novo in Dublin. If that were the case one might as well dissolve the boards.
The Minister should not allow the Department of Finance to put him off that point.
That is why we must have the boards legally established and I regret it is taking longer than envisaged. It would be a matter for the board to obtain a block allocation as in the case of the IDA who, for projects above a certain figure, must get approval from Government, but that would be on a much larger scale. However, the principle is transportable when the scale of operation is changed.
The object of the exercise is to allow local decision-making to prevail with the minimum of interference from central Government, but with the maximum number of safeguards in respect of taxpayers' money.
