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Dáil Éireann debate -
Thursday, 26 Mar 1998

Vol. 489 No. 2

Other Questions. - Employment Support Services.

David Stanton

Question:

7 Mr. Stanton asked the Tánaiste and Minister for Enterprise, Trade and Employment the plans, if any, she has for supporting enterprises employing ten people or fewer after December 1999. [7658/98]

The primary responsibility of the 35 county and city enterprise boards, the first of which was established in October 1992 and which come under the aegis of our Department, is to support enterprises with ten employees or fewer. These are commonly known as micro enterprises. County and city enterprise boards are at present co-funded by the Irish Exchequer and by the EU under the operational programme for local urban and rural development, which is scheduled to end in December 1999.

I acknowledge the outstanding contribution of county and city enterprise boards to the development of micro enterprise and job creation since their establishment. The boards have assisted some 8,000 projects, which have created over 11,000 jobs up to December 1997.

Although the operational programme still has 21 months to run, our Department is already engaged in consultations with the enterprise boards to elicit their views on how the momentum of micro enterprise development and job creation can be sustained beyond 1999. These views will constitute a major input to our deliberations and conclusions on this matter.

I am happy to hear the Minister of State is having consultations. Does he have any plans to provide funding for these enterprise boards? They could be left stranded when the EU funding runs out and the Minister of State should start planning for that now.

In regard to the company development agency which the Minister of State is setting up, will he confirm the services to business element of FÁS is being removed from it? What will then be left for FÁS? Is there a danger this company development agency will become a super agency which would neglect small business? Will it be regionalised?

In regard to the long-term unemployed and the skills shortage, is the Tánaiste aware she said in a recent reply to me that only 21,000 unemployed people have been contacted or engaged by the local employment services? This is only scratching the surface. Does she have any plans to streamline this agency?

It is important to put the situation pertaining to the enterprise boards in context. It was my idea to establish them in 1992. They spent £75,000 in 1992 and £19.43 million in 1997. The State funded the boards from 1992 until 1994 when the operational programme came into being. They currently receive 25 per cent funding from the Exchequer and 75 per cent from the European Union. Prior to that, the old county development team system operated from 1965 and was totally funded by the State at a very low cost. The average cost between 1965 and 1992 was about £60,000 per annum. The State has got tremendous value for money from the boards.

As far as I am concerned, no other agency or organisation was prepared to deal with individuals with entrepreneurial flair and ideas who needed support. We created a structure whereby they could get technical assistance grants to explore an idea. If that proved positive they could then qualify for the various grants from the boards. The boards are here to stay, as far as I am concerned. They have a key role to play in local job creation and the development of enterprise from the lowest levels. They are very involved in creating an enterprise culture in secondary schools. The boards have the full support of the Government. They are in the proper place, with the other State agencies, in the Department of Enterprise, Trade and Employment, which is where we intend to keep them.

In regard to the new company agency, only 80 people will be transferred from FÁS which will still have in excess of 2,000 people involved in its operations. The services to industry section of FÁS, which has a staff of 80, is being transferred to the new organisation. FÁS will continue with all its other activities apart from that small unit.

I commented earlier on the Minister of State's ability as an historian. His place in history is secure as a result of his idea for the county enterprise boards which——

He never fails to remind us.

Yes. I have experience of the county enterprise system and the local partnership boards. Is it not very late in the day for the Minister and the Minister of State not to have any plans in place for the huge downturn in EU funding which will occur between 1999 and 2002? They should be urgently drawing up a White Paper on this area.

I support some of the comments made about the Dublin and Fingal enterprise boards, both of which had a pretty good impact on small business. However, there is deep uncertainty, and perhaps despondency, in those organisations and the partnership boards about their ultimate future. How will the Minister of State calm that, give them some hope for the future and ensure his invention, if that is what it was, continues to play a good role?

I hope Deputy Broughan understands I am not finished yet and that I hope to create further structures and systems as long as I get the opportunity.

The Tánaiste should watch out — he is after her job.

There is no threat in the world to the Tánaiste. I will do my best to serve any time I am privileged to so do. I cannot understand how Deputy Broughan could say——

We are awfully impressed.

I know that. Deputy Owen is a very impressive person herself. Her record will stand. People will refer to it in the future to see how they might conclude anything they are dealing with in confusion.

In regard to the point made by Deputy Broughan, there are still 21 months to run. The boards have a tremendous track record. We are consulting the people in the front line who are dealing with the public. I am quite confident they have the professionalism and the ability to make proposals which will ensure they will have a key role to play in industrial development and job creation in the years ahead. The operational programme only began in 1994 and still has almost two years to run. I am very confident we will come to a positive conclusion.

I congratulate the Minister of State on getting responsibility for the county enterprise boards. I do not know how he fits it in with all his other responsibilities but it was decent of the Tánaiste, to give it to him.

Yes, it was, but when one has a brain his size one has to get everything.

(Interruptions.)

In case anything I said earlier in the day might be misconstrued, I repeat she is a very decent woman. However, we are talking about competence here.

Does this mean the review has finished on whether the county enterprise boards should be continued or amalgamated with another industrial development body or whether we could do with fewer county enterprise boards? There is also the question of whether the policy of the Progressive Democrats, which is convergent with mine in this area, that we have too many industrial development bodies might be implemented. This form of enterprise development was open to patronage and local abuse.

I do not think it has turned out that way, but has that review been concluded? When the Minister of State says they are here to stay, is that Government policy?

As far as I am concerned, it is my policy as Minister of State acting on this situation. Deputy Rabbitte, as someone who has served in this office, should have full knowledge of the contribution made by the boards. They have been tremendously successful in his own area.

Is Deputy Rabbitte saying we should not have a local enterprise structure which involves public representatives, the community and the professional State agencies working together in the interest of local development? No other agency has the capacity to do that job at local level. Small local entrepreneurs and businesspersons with ideas can create up to ten jobs. As far as I am concerned, this structure will continue to work with local enterprise at that level, which is what I want to happen.

The 35 enterprise boards are doing fantastic work. With regard to the marginalisation and regionalisation of different boards will the Minister of State prioritise the boards which require specific needs? Will he look at the devolution aspect of regionalised boards in different counties along the western seaboard, especially with regard to cross-Border funding? For example, the Sligo Enterprise Board can avail of cross-Border funding, but to obtain maximum funding State and EU funding would have to be regarded as supplementary funding.

Will the Minister of State comment on the performance of the local employment service? Would he consider linking it with the enterprise boards? It would make sense to do this. Doubtless he is aware that the local employment service operates in only 18 centres throughout the country, yet there is long-term unemployment in many other areas.

That is not my area of responsibility, but in line with Deputy Rabbitte's remarks, the Minister and I are at one in ensuring that there is an efficient State system. The enterprise boards system should deal with the system outlined if it is best fitted to do so. It will be taken into account in the overall review.

With regard to Deputy Perry's question, State funding is always additional to INTERREG funding, the operational programme and so on. We cannot have duplication; there can be only co-funding. We have no intention of creating a regionalised board system. It is a matter for the boards to decide on their focus within their functional area. The Deputy's board is fortunate in that it has a number of lines of funding available.

We are looking at facilities whereby the board could have an ongoing financial mechanism available to it, not alone from the Exchequer in the normal statutory way, but in other ways — in the grants it gives and systems it creates. It may be able to create a revolving or cumulating fund, perhaps a loans fund, which would be constantly renewed and would be available to others as they come on stream with their ideas and projects. We are looking at that. I considered it in 1992 but I was not there to proceed with it. Some good work has been done in the meantime and if we find a solution we will implement it.

Written Answers follow Adjournment Debate.

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