Charles Flanagan
Question:77 Mr. Flanagan asked the Tánaiste and Minister for Enterprise, Trade and Employment the main skills shortage affecting economic output; and her plans to deal with the matter. [28907/01]
Priority Questions. - Skill Shortages.
Bernard J. Durkan
Question:175 Mr. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment if adequate skills are available to meet industrial requirements; the future projections in this regard; and if she will make a statement on the matter. [28994/01]
I propose to take Questions Nos. 77 and 175 together.
Sustained growth in the economy over a number of years has created a tight labour market. Consequently, a range of skills and labour shortages have emerged. However, current turbulence in the global economic environment is having an effect on economic output and the openness of our economy means that effect will have domestic repercussions. Our longer term economic growth will continue to be dependent on the level of skills available in the workforce.
In its recently published third report the expert group on future skills needs highlighted a range of skills needs and projections in IT, construction and the life sciences. In consultation with my colleague, the Minister for Education and Science, Deputy Woods, I have recently reconstituted this group and mandated it to continue to work on these and other skills issues over the next three years. In addition to the areas addressed by the group's third report, priority areas I am highlighting are the following: basic skills, with particular emphasis on literacy, numeracy and communications skills, which are the building blocks of lifelong learning; crafts skills and construction skills in particular, which are fundamental to meeting infrastructural needs; workplace skills and enterprise-led training, which is critical to the competitiveness of firms.
Addressing these skills needs requires concerted effort and collaboration between education and training. I have just appointed the national training advisory committee, which comprises business and employee representatives, to provide me with high level strategic advice in regard to national training policy and on the priorities to be addressed under the national training fund.
The advice and recommendations of these bodies will constitute a valuable input into the development of skills policy and build on the achievements of recent years while forming the basis of a response to emerging challenges and projected needs.
I thank the Tánaiste for her reply and establishing the national training unit which is of particular relevance in view of the economic downturn. Over 14,000 people have received redundancy notices since January this year. October this year has the worst record of job losses of that month for almost a decade. I put it to the Tánaiste that the most important aspects of her policy must be upskilling and retraining. Other than appointing boards and instituting reviews what practical steps are envisaged? Will she consider allowing some form of tax credit to business for research and development and to employers in respect of further training?
I was going to remind the Deputy of the one minute limit, but that does not apply to priority questions.
One minute—
As it does not apply during priority questions, the Deputy is in order.
Pardon me?
The one minute limit applies to non-priority questions.
What is the limit for priority questions?
As we are on priority questions, the Deputy is not subject to the one minute limit.
I am not interested in a limit for non-priority questions if I am on priority questions.
That is right.
It is one of the daftest rules we ever inflicted on ourselves.
The Chair just implements the rules.
Will the Tánaiste outline practical steps to be taken, other than the appointment of further review bodies, in view of the fact that many people face redundancy before Christmas? These are people who because of the skills gap do not have the alternative employment we would wish to be available to them.
We have provided £75 million for an extra 5,400 IT related third level places. An additional 1,500 postgraduate conversion places in IT are being made available. There will be additional training of 700 persons in IT skills through FÁS. The total funding approved was £84.2 million.
We have introduced a retail traineeship in FÁS and there has been a significant increase in the number of apprenticeships in the construction trades. An additional £5 million for new courses was allocated for this year and the number of apprenticeship places being provided by FÁS and the institutes of technology is at an all-time high. There are a number of other initiatives such as Skill Nets, which have developed a network of upskilling at regional and sectoral level. This has been highly successful.
I agree very much with Deputy Flanagan about the need to upskill the workforce. Of the £650 million FÁS budget – with the exception of community employment which consumes just over half the budget – the bulk of the money is going to upskill people in employment. It is the training of the employed. Notwithstanding what we must do and are doing in relation to upskilling the labour force, there is going to be a fall-off in its growth rate, from 27,000 last year to 12,000 for each of the next few years. In the light of this we are going to have skills shortages that will have to be met from outside the country.
The latest ERSI report predicts that unemployment will double in the next while. I put it to the Tánaiste that one of the greatest disincentives to the provision of further training and employment in the area of research and development is the abolition of the ceiling on PRSI for employers. What are the Tánaiste's views on whether this is, in effect, an employment disincentive?
Deputy Flanagan should be aware that we have to be conscious of the cost of employment when companies are assessing their competitiveness. It is by this that they determine whether they are competitive in one location as against another.
We are currently preparing for the fifth budget of this Government, which will be announced a fortnight from tomorrow. The Deputy is conscious that, in every budget we have introduced so far, we have been seeking to give people an incentive to work, reducing substantially the burden of tax on work, and making sure that people who work for a living are appropriately remunerated. That will continue to be the strategy in so far as resources allow it in the coming budget.