I take this opportunity to thank the many people who were involved in the preliminary work that led to the establishment of the local employment service. The National Economic and Social Forum produced a report in June 1994 on which the task force worked and produced a report about ten days ago. That work has proved immensely valuable in achieving a consensus on proposals to try to tackle long term unemployment. The work many people put into this is worthwhile and I hope we can make a mark with this new service.
Unemployment is the major problem facing the European Union where the average unemployment rate is nearly 11 per cent. Unemployment in Ireland is now running at over 15 per cent with only Spain showing higher unemployment rates. What is depressing about the analysis of unemployment is that in spite of economic growth, the prospect of significantly reducing unemployment in the short term is slight. A recent report from the European Union Commission concluded:
The clear lesson of the past 20 years is that no member state has succeeded in reducing unemployment significantly and keeping it at a low level for a sustained period, except in Luxembourg. The chances of this happening in the future without a significant change in policy or without a radically different set of circumstances are remote.
That warning from the European Union is timely and it is appropriate that we take a radical look at our approach to unemployment.
In Ireland the rate of unemployment rose in each business cycle since the early 1970s, increasing after the two oil shocks but with the upturn in the business cycle there was no comparable recovery in employment numbers. Unemployment in Ireland is characterised by a very high number of people who are long term unemployed. The recently published document, Employment in Europe shows that Ireland has the highest proportion of long term unemployment taking the total number unemployed. In the period they reviewed, 1985-92 while other countries succeeded in reducing the proportion of long term unemployed, we did not have quite the same success. Long-term unemployment has continued to grow in spite of the strong economic growth in the past two years. The impact of recovery is not trickling down to the long term unemployed. Ten per cent of the total labour force is long term unemployed, but as a percentage of the unemployed, 35 per cent were long term unemployed in 1980 and this has grown to nearly 49 per cent in 1994.
The figures for male long term unemployment are even worse with an increase from 39 per cent in 1980 to 54 per cent in 1994. This increase occurred despite the growth in numbers of long term unemployed persons being engaged on Government programmes. Thus long term unemployment is a major economic and social issue facing this country. In spite of an optimistic medium-term outlook for economic development and employment the expectations for long term unemployment are that it will be no lower at the end of the decade than it is now. That is highlighted by some of the figures produced in the National Economic and Social Forum report which showed in a survey of recruitment that of the jobs being filled only 6 per cent of vacancies were filled by persons who were long term unemployed, that the bulk of new vacancies are filled by those who are better equipped or more mobile.
Clearly economic recovery will not lift the boats of the long term unemployed. It was against this background that the NESF addressed the issue of long term unemployment. I was pleased to be a member of the forum and I believe the consensus reached, which spanned the business community, trade unions and all the political parties — the third strand as they are now called — was unique. It was a major contribution to the formulation of Government policy.
The forum produced a very good report. It pointed out that the rate of long term unemployment in Ireland is greater than the total unemployment rate in many OECD countries; the longer a person is long term unemployed the more difficult it becomes to find employment and those unemployed for two years have a 74 per cent chance of being unemployed a year later. The ESRI carried out a study which showed that at the end of the first year one has a 66 per cent chance of getting work, at the end of the second year it is 32 per cent and there is only a 20 per cent chance of getting a job after three years unemployment. The longer a person is unemployed the less attractive they are to employers. The forum found that the long term unemployed are concentrated in the prime age group, 25 to 44 years, and have relatively low education and skill level. Half have no formal educational qualifications.
It produced figures estimating the cost of unemployment which amounted to 7 per cent of GDP. In other words, there was a lost opportunity equivalent to 7 per cent of our GDP compared with the rest of Europe where it is only 4 per cent. The NESF identified the cases of long term unemployment — low levels of skills and education. For example, 48 per cent of long term unemployed persons have no educational qualifications, that is over three times the percentage for those at work. There are far more people with intermediate certificate or group certificate-qualification among the long term unemployed than there are with the Leaving Certificate or a third level qualification compared with the rest of the labour force. There are barriers facing the long term unemployed in finding jobs such as recruitment practices, employer reluctance and unemployment traps. There are persistent factors, including loss of skills and the lack of influence of the long term unemployed in the labour market. Other factors mentioned included the impact of employment protection legislation and unemployment benefit systems and the extent to which labour market policy is "active" or "passive". These issues have an influence on the level of long term unemployment.
The main recommendation put forward by the forum to address the long term unemployment problem was the establishment of an employment service. That service will be responsible for implementing strategies of preventing long term unemployment and reintegrating the long term unemployed into the work force. It will provide a guidance and placement service for the unemployed and be a gateway to all employment and training programmes. The important feature of the service was that it was to change to being a client driven service, in other words, it was to start with a portfolio of so many persons who were long term unemployed and see what was the best programme to get those people back to work. That concept is different from what we had in the past. State agencies have concerned themselves with running courses or community employment programmes but without the persistent progression which allowed people to get a foothold in one scheme and make progress towards getting back to work ultimately. The service has turned things around and asks how it will improve the life chances of the people on their list. Much of the criticism in the past centred on the fact that, having completed courses, many people found themselves back on the live register.
The factors which were pointed out as critical to the success of the service included the active involvement and support of employers and trade unions locally and the possibility of developing different models in each locality which would be attuned to local opportunities and resources. It is crucial that the local employment service would have autonomy to carry out its functions with the eventual transfer of budgets in respect of programmes for the unemployed.
The concept advanced by the NESF was modelled largely on the "Contact Point" initiative developed by the north side partnership in Coolock which is in my constituency. I brought together employers, unions and State agencies as well as community groups and allowed them develop a coherent response to unemployment. They were able to demonstrate to local employers that if long term unemployed people were placed in local companies they would provide the best service and standard of work. They have demonstrated clearly what can be done. Since its inception in Coolock, 600 people who were long term unemployed have been successful in getting gainful employment with local employers. We hope to learn from this model in extending the service to the partnership areas.
The Government established a taskforce to examine the forum's report and make proposals for better targeted and more effective services for the long term unemployed. The report was published last week. The key recommendation is the establishment of a nationwide local employment service to meet the needs of the long term unemployed. It will provide a gateway or access point to the full range of options that should be available to this group. It endorsed the recommendations of the NESF regarding the need to put in place a comprehensive guidance, counselling and placement service. The Government has accepted the central recommendation of the taskforce and decided to assign overall responsibility for the delivery of the service to my Department and to me as Minister.
In order to ensure that the new service is up and running as quickly as possible, I have established a new policy unit on long term unemployment in my Department. The overall aim of the unit is to reduce the number of people who are long term unemployed. This will not be a simple task but unless, as a society, we seriously attempt to reduce the number of those who are long term unemployed not only are we failing in our duty to these people but we are guilty of crass negligence. All the figures show that the children of long term unemployed people tend to slide into a similar position so if we do no deal with the problem it will remain with us for many years.
The immediate task of the new unit will be to oversee the putting in place of the local employment service as recommended by the task force. This will be done in consultation and co-operation with the area partnership companies and with the assistance of FÁS and the other State bodies providing services to the long term unemployed. In addition, the unit will bring forward policy proposals for dealing with long term unemployment and for the better co-ordination of the delivery of State services to the unemployed. Already the core staff of the new unit are in place and the first moves towards establishing the new local employment service are being made. The new unit will have the benefit of the advice of an advisory group representative of the Departments of the Taoiseach, Enterprise and Employment, Social Welfare, Education, Environment and Finance; the office of the Tánaiste, FÁS and ADM Ltd. Not only the co-operation but the wholehearted commitment of these different agencies is crucial to the success of this local employment service. It has been a conscious decision of all Government Ministers to give that commitment to the provision of this service. To be a success, this local employment service must be in a position to book places and to get the requisite resources to meet their planned targets. There is no point in setting up this service if they cannot guarantee that the programme they put in place can be delivered on the ground. The service must not lose credibility with the people it is endeavouring to help and it is crucial that we do not have bureaucratic obstacles to delivering the service. We have secured from all Government Departments a commitment to deliver the local employment service when an agreed programme of work has been drawn up. That is copper-fastened by this advisory group which will ensure that continuing commitment on the part of a wide range of Departments, so important in making this service a success.
The local employment service will be introduced on a phased basis. Initially the service will be set up in the Twelve established area based partnerships companies and in two non-partnership areas. As suggested by the task force, the experience gained in setting up the service in these areas will inform us on the process to be adopted in other areas. The population in the Twelve partnership areas is over 500,000, with unemployment running at 26 per cent. It is clear that the new service has a formidable challenge ahead. The fundamental basis of the local employment service will be the local area action plan for tackling unemployment. This will be part of the plan drawn up by the area partnerships, in areas designated as disadvantaged under the Operational Programme for Local Development. A similar plan would be drawn up by the local management committee to be put in place in non-designated areas. My Department has already commenced discussions with the Twelve Area Partnerships to ensure that the local area action plans are drawn up as speedily as possible. I would like to see them in place within the next two or three months at the outside. The availability of well thoughtout plans at an early date will demonstrate our urgency in moving to address long term unemployment. It will also mean that immediate action can be taken to tackle the many and complex facets of the problem.
The local plans will detail the objectives and strategy for the local employment service, addressing the specific needs an opportunities of the local area, together with measures to obtain maximum benefit from existing State supports and services. This includes: target groups — including profile and numbers — for the service in the area and expected take-up of the service over time; local development context, in which the needs of these target groups are to be addressed, including planned growth in employment or self-employment in the private, community or statutory sectors; resources available to meet those needs, including resources in local community-based job centres for the unemployed, partnerships, FÁS, the Department of Social Welfare and educational centres; identifying the full range of outlets in the area at which the different elements of the service could be provided; detailing local available training, education and work experience places and financial supports for taking up a job or self-employment; links with employers and employment and self-employment opportunities anticipated in the area in the plan period; identifying any gaps between resources needed to provide an integrated local employment service, which will amount to identifying the personnel needs, locations, training places, contacts that need to be established with employers and, finally how the services provided by the local employment centres, the enhanced core services of FÁS and the services of the other agencies can be effectively linked operationally.
This plan will be at the core of the success of this initiative, the key requirement being that they assess the people they have to help, identify gaps in the resources available and work to decide what new, strategic interventions they must bring on stream. The detailed plan will indicate how resources, both statutory and community-based, are to be deployed within the area to provide a comprehensive, integrated service to the long term unemployed. The emphasis in the plan will be on making maximum and most effective use of existing resources. Where it is considered necessary to make a case for additional resources, this will have to be clearly justified by reference to the plan and demonstrably cost-effective.
The new service will be established in a way that ensures access for the long-term unemployed. Ensuring easy access will involve creating physical access so that the long-term unemployed feel welcome and compatible in the surroundings; using buildings which are compatible and user-friendly for the provision of counselling; developing outreach services to the communities being served so that they do not have to travel long distances; inserting guidance modules into employment programmes for the long-term unemployed, such as community employment scheme, to ensure access by bringing guidance services to participants rather than assuming they can avail of services provided outside of these programmes; drawing up directories and guides to counselling provision in each area so that clients can be easily referred or can find out for themselves exactly what is on offer, where and from whom; creating a central point in a community or town where accurate information about which counselling service is most appropriate to the individual's needs can be given; and producing and distributing clear information about what the client may expect from a counselling service.
The task force recommended that funding for the service should be put on a firm footing to ensure that all participants in the delivery of the service are able to plan strategically in the interests of the unemployed. The service should, as far as possible, draw on existing resources, including the additional funds which will flow to areas designated as disadvantaged under the local development programme.
In this regard the task force recommended that additional funding for the overhead costs of delivering the local service be provided in a new subhead of the Department assigned responsibility for the local employment service. However, it would only be drawn down on foot of a local plan agreed by the management committee that clearly identifies any resource gaps arising that cannot be met from existing resources. The overall allocation of funding between different areas would be subject to prior consultation with ADM Ltd. in designated areas of disadvantage. Funding should also be provided to the local management committees for a special local training and education fund for compensatory and innovative training measures to complement mainstream provision. An agreed amount should be set aside from the overall budget for the service for this purpose. The special contribution of centres for the unemployed and community-based services for the unemployed, that would be incorporated into the integrated service, should be recognised by the provision of core funding on a multi-annual basis. This should be agreed between the local management committees and the various funders of the service. A special unit should be established within FÁS to deal specifically with the needs of the long-term unemployed and to provide support, by way of staffing or other resources, to the integrated local employment service.
The FÁS unit would set standards for quality of service, provide accreditation and provide professional training and support to the guidance, counselling and active employment placement services available through the local employment service. The FÁS unit would also facilitate the establishment of a national profile of all unemployed clients.
In relation to 1995, the task force recommended that the Government allocate an additional £5 million to cover staffing and other resource gaps likely to arise in 1995 in the delivery of the local employment service — i.e. the provision of guidance and counselling services, active placements service, overhead costs — and an additional £1 million for a special local training and education fund.
As Deputies are aware, the Government has also accepted this recommendation and an additional amount of £6 million has been allocated to my Department for 1995.
In conclusion let me reiterate the central elements of the proposed approach as suggested by the task force: a clear planning framework and explicit local agreement for the delivery of the service at local level, indicating the extent of need for the service, how all available resources would be mustered to meet that need and performance indicators for measuring achievements of the programme as a whole and of the different agencies contributing to the programme; a recognition of the core functions of each statutory agency and their responsibility for the provision of specific services within the overall programme framework; a clear and unambiguous mandate to and responsibility on statutory agencies, from the government, to support and work in and through the local partnership structure to deliver an integrated package of services to the long term unemployed; and a commitment by Government and statutory agencies to build on the resources and strengths of local community-based services for the unemployed so as to create a service which is flexible, responsive to local need and acceptable to and identified with the local community.
Local employers must be actively involved in the design and delivery of the service and be encouraged to see that there are no inherent disadvantages, in social and economic terms, in employing unemployed people. The task force views employer involvement, through appropriate structures, as being essential to the successful placement of people in employment. Therefore effective links between the service and employers have to be established. The Northside Partnership in Coolock, to which I have already referred, has set a clear example of the way forward. The obvious value of the service to local employers and unemployed people must only encourage others to follow suit.
Clearly the success of the new local employment service will depend on co-operation at central and local level between the relevant Government Departments, State agencies, community groups, area partnerships, trade unions and employers.
The Government has directed all Ministers to ensure that their Departments and the agencies under their control work with, in and through the local management committees in accordance with the agreed local plan for the local employment service so that a coherent, co-ordinated service is provided to the long term unemployed.
What we are talking about is a bringing together of all interventions for the long term unemployed into a coherent policy of positive discrimination. Much of the information I have given is the dusty and arid detail of how this service will work and how we will bring this concept to fruition. In essence, what we are doing today is recognising that the issue of the long term unemployed will not be solved by conventional economic policies alone. The rate of economic growth will not unaided lift the boats of the long term unemployed. We must focus on the people who have become disadvantaged or are at risk of being marginalised and address their needs across a range of services. We must consider their needs in terms of improving their education, training opportunities and chances of placement in community employment. Essentially, our overall aim is to lift the life chances of people now on the fringe. That is what this local employment service is all about. It is based locally because we recognise that no one in Merrion Street or in Dáil Éireann will produce a blueprint for people in different localities. That must be done through the combined community effort of local employers, unions and members of the community along with our State agencies putting their shoulders to the wheel.
In some cases where this has been tried it has been successful. There is now in place an additional 14 pilot areas and we intend to expand this to a national basis quickly. Essentially, we must get results and I am determined that this effort will succeed. We have deployed our best people in this service and we will seek the co-operation of local people to make it successful. It is a new start to our approach to long term unemployment. I hope it will be a model of a successful approach to dealing with that difficult and intractable problem, a problem which poses the greatest challenge to all of us on both sides of the House who seek to address our critical employment priorities.
