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Dáil Éireann debate -
Tuesday, 2 Feb 2010

Vol. 700 No. 4

Adjournment Debate.

Semi-State Sector.

I thank the Ceann Comhairle for allowing me to raise the matter of the level of remuneration of chief executive officers in the commercial semi-State sector. It is a matter that has been well ventilated in the media at a time when so many have lost their jobs or are coping with significantly reduced incomes as we attempt to work our way through the current economic recession. I have no doubt that those who occupy chief executive officer positions in commercial semi-State bodies are people of integrity and ability, who work hard and fulfil their functions competently. The concerns I express do not relate to any specific personalities; I am not acquainted with any of the individuals involved. Moreover, I accept that these responsible positions should be well remunerated.

The question to consider is what constitutes an appropriate level of remuneration. The reality is that some of the packages currently enjoyed by the holders of these positions are grossly excessive. It is high time for the Government to intervene given the failure of the boards of these companies, which are generally responsible for setting the remuneration of their chief executive officers, to act responsibly in this regard. The remuneration assigned by the board generally requires the consent of the relevant line Minister who would normally give that consent with the approval of the Minister for Finance.

In recent weeks I tabled several parliamentary questions which sought to discover the details of the remuneration packages being paid in recent years at the various commercial semi-State bodies. Not all the information I received was up-to-date but it was indicative of what has been happening. For example, in 2007 the chief executive officer of An Post had an overall remuneration package of €523,000, reduced in 2008 to €493,000. Also in 2007 the chief executive officer of ESB had an overall package of €654,000, reduced in 2008 to €535,000. In 2008 the chief executive officer of Coillte received a remuneration package of €489,000, including a bonus payment of €74,000, reduced in 2009 to a total package of €414,000. These levels of remuneration are not acceptable. According to media reports — I did not receive this information by way of parliamentary reply — the chief executive officer of the Dublin Airport Authority enjoyed an overall remuneration package of €698,000 in 2007. This is the company which admitted some months ago that it had insufficient cash to run the business according to the existing model and was obliged to undertake a major redundancy and cost-cutting programme.

How did the boards of these commercial semi-State companies approve such ridiculously excessive levels of remuneration for their chief executive officers? There is a distinct lack of consistency across the sector, with some chief executive officers paid in the region of €150,000 to €200,000 while others enjoy packages up to and in excess of €500,000. According to media reports, the chief executive officer of the IDA had a salary of some €200,000 in 2007. The function of that office is to secure inward investment which will lead directly to the creation of jobs. I cannot understand how the person responsible for running the three State airports, although that is also an important job, could be paid up to €700,000 while his or her counterpart in the IDA, who has a key position in terms of our efforts to secure economic renewal, is paid only €200,000.

How then do we place a value on the respective roles of chief executive officers in the commercial semi-State sector? It has been argued in some quarters that benchmarking their remuneration against that of private sector counterparts suggests their pay is not excessive. I dispute that analysis because it takes no account of the radically changed environment in the private sector in the last two years. Moreover, commercial semi-State companies operate within the broader public sector family even though they have a commercial mandate. As such, many of their senior executives enjoy security of employment and the other entitlements of public sector employment but have not, despite their generous pension arrangements, been subjected to the pension levy. These companies are not floated and are not therefore subject to stock market disciplines. The Government is the only shareholder and in many cases a dividend is not required to be paid. In addition, many of them also function as monopolies within their sector.

The Government should consider the possibility of introducing a cap on remuneration in the semi-State sector. The high salaries being paid to chief executive officers and other senior managers are feeding into an environment of high energy, transport and compliance costs and so on, making our economy less competitive. I acknowledge that many of these people have taken a 10% pay reduction in response to the call by the Minister for Finance. Notwithstanding that, I urge the Government to establish a review body to update the 2007 Hay Group report in order to set more realistic remuneration levels for chief executive officers in the commercial semi-State sector in order to reflect the changed economic situation. Remuneration should be based strictly on performance.

I am taking this matter on behalf of my colleague, the Minister for Finance, Deputy Brian Lenihan. I thank Deputy Michael McGrath for his contribution to this debate.There is considerable variation in the size and capacity of State commercial companies. They include large companies such as ESB, CIE, the Dublin Airport Authority and Bord na Móna which play a critical role in national productivity. State commercial companies have been central to the development and modernisation of our economy. They also provide many of our essential infrastructural needs.

In the past, recommendations regarding the remuneration of chief executive officers of commercial State bodies came within the remit of the Review Body on Higher Remuneration in the Public Sector. Following recommendations by the review body in 1996, the Government adopted new arrangements for the system of determining the remuneration of these chief executive officers. Under this system, management consultants review the pay of these posts from time to time based on comparison with posts in the private sector.

Pay ranges recommended through this system were approved by the Government in 1999 and 2007. Currently, the remuneration of chief executive officers of commercial State bodies is set within the range of 80% to 100% of the median of private sector rates. In addition, chief executive officers are eligible to take part in performance-related pay schemes which, since 2008, provide for a possible annual performance bonus of up to 35% of salary, 10% of which must be based on achieving rigorous measurable targets at the end of three to four-year periods.

The Financial Emergency Measures in the Public Interest (No. 2) Act 2009 provides for reductions in the pay of public servants including staff of non-commercial State-sponsored bodies. The Act does not, however, cover commercial State-sponsored bodies. As the Minister explained during the debate on this legislation, pay cuts in commercial State-sponsored bodies such as Bord Gáis and the ESB would have no impact on the public service pay bill because the pay of the employees of those bodies is funded through their own commercial efforts. Historically, these bodies have not been covered by the public service element of pay rounds and have taken an independent approach to controlling their pay bills. RTE, for example, achieved voluntary pay reductions in recent months by agreement of its staff. Similarly, there have been a number of voluntary redundancy schemes in the ESB. While these companies must be allowed to act commercially and in accordance with the normal industrial relations process, the Government believes they should be subject to pay restraint in the interests of fulfilling the long-term national goal of ensuring competitive pricing for energy and other goods. The Minister for Finance has indicated that he is concerned about top-level pay across the economy. He has said he will bring proposals to the Government to review the arrangements governing the pay of chief executives of commercial State-sponsored bodies. Accordingly, the issue under debate is being addressed. The nature and extent of the proposed review is under consideration by the Minister for Finance. I can confirm that the Minister will bring proposals to the Government shortly.

Suicide Incidence.

I thank the Ceann Comhairle for allowing me to raise this matter. I thank the Minister of State with responsibility for mental health and suicide, Deputy Moloney, for coming to the Chamber to respond to this debate.

The Government must address the emergency that has arisen following the announcement of an increase in suicide rates in the first half of 2009. The latest figures from the Central Statistics Office show the number of deaths by suicide increased by 35% in the first half of 2009, when compared to the same period in 2008. Some 228 people took their own lives in the first six months of last year, compared to 169 in the first six months of 2008. The Government must pay heed to the link between unemployment and suicide. It is alarming that figures for births, marriages and deaths also show an increase in the number of people dying by suicide. Those figures show that 77% of deaths by suicide are among men and 40% of those who take their own lives are under the age of 35. The Government should regard the 35% increase in the incidence of suicide as warranting an emergency response. Instead, it has been ignoring its duty to respond to the mental health crisis brought about by these times of recession.

The link between suicide and financial disaster is well established. Unemployment, insecure employment, threat to or loss of home and restricted access to credit take a heavy psychological toll on public health. There is a reduction in mental well-being and an increase in mental health problems, substance misuse, relationship breakdown and divorce. In recessionary times, there is a sudden gap between material needs and resources. Frustration increases during economic downturns, as an increasing proportion of people cannot realise their financial goals. This can increase aggression, including suicide. Research published in 1967 found that the absolute value of change in the stock market prices was associated with an increase in male suicide rates during 1929 to 1940. This confirmed the thesis that downward economic change in the business cycle increases suicide. The rate of unemployment emerged in earlier studies as the leading predictor of suicide rates. There have been numerous studies of this type over the years, most of which continue to illustrate a clear link between unemployment and suicide rates. This is especially true for males.

All studies indicate higher rates of psychological and physical ill health among men and women who are in insecure work or are unemployed. A protracted period of unemployment at a young age seems to have a particularly deleterious effect on the mental health of young men, regardless of their social background. Unemployment has a profound effect on people, especially the young and those in middle age. Irish society awards status and prestige in accordance with a person's position and contribution to work. Unemployment is associated with loss of face and prestige. Those who are unemployed are six times more likely to suffer from a psychiatric disorder than those who are in employment. The unemployed are between four and six times more likely to take their own lives than the general population. The high rate and threat of home foreclosures is of concern. Homes are the primary investment of most Irish people. I have been warning the Government about this trend for some time. Just under €4 million has been allocated to the National Office for Suicide Prevention. I suggest to the Government that a modest €10 million be allocated.

I would like to conclude by congratulating the Minister of State on his contribution to last Sunday's "Marian Finucane" radio programme, to which I listened. Some of my colleagues at the Irish Association of Suicidology, including the other directors, asked me to convey their congratulations to the Minister of State on his excellent and brave remarks.

I thank those who prepared my script for this debate. As it deals mostly with specific numbers, I wish to depart from it in my response to Deputy Neville. I am not responding directly to his concluding remarks when I say that over the 20 months I have spent travelling the country and meeting groups, I have always found that the Deputy presents these issues in a genuine manner. The manner in which he has soldiered on with regard to this issue, over so many years, proves his commitment. I have heard his arguments and I fully accept the point he made about funding. I assure Deputies that the necessary commitment exists in the Vision for Change document. While money is an issue, all the funding in the world will not make that much difference if people are not aware of the services that are available and if the issue is not destigmatised. Rather than speaking about the targets that have been set, I would like to say that when I was appointed to this job 20 months ago, I gave a clear commitment that I would produce a capital programme by March 2010. I intended to do that at Farmleigh House on 1 March next. I fully accept Deputy Neville's point that this is not all about new buildings or new structures. At the same time, the old structures that served us well in the past century have passed their sell-by dates. We must assure service users that we intend to meet our commitment to ring-fence the fund for the capital programme. The programme must have a specific timeframe and price tag. I will outline my proposals in that regard on 1 March next.

I would like to respond specifically to Deputy Neville's comments. Regardless of the commitments I have mentioned, our major challenge is to make people understand that mental health should be treated the same as physical health. In the past 20 months, I have brought together people from different walks of life to deal specifically with the stigma that attaches to mental health. As I have always believed that one cannot talk about such matters forever, I intend to produce a national programme, See Change, in April or May of this year. I have asked Mr. John Saunders, the former director of Schizophrenia Ireland, to lead the national programme. We have met once a month in recent months to do a great deal of valuable work. I recognise the huge commitment of Mr. Geoff Day of the National Office for Suicide Prevention. I would also like to mention people in the Department like the new director, Mr. Martin Rogan, as well as Barbara, Dora and Joan. I am not getting carried away with a Barack Obama-style motivational policy. However, it is important to organise and provide funding for town hall meetings that are attended by professionals, and at which we will encourage people to talk about the issue of mental well-being. I have talked about this for a long time, but the time for action is around the corner. It will come in April or May, as I have said.

I am not approaching this issue from a professional background. As a funeral undertaker, however, over the years I have seen the difficulty and distress of families bereaved by suicide. The real challenge is to get people to understand that nothing should be hidden in this area. I have always believed that while national campaigns can be very successful, targeted local campaigns are also needed. Local radio stations will be involved in the upcoming campaign, as part of an attempt to encourage people to come forward. The theme of each week's meeting will be "well-being and mental health". I am looking forward to getting five or six local personalities, for example from sport, politics or the arts, to speak each week to show what Vision for Change is all about. I refer to the recovery model and to be able to confirm locally that services exist. It is up to the Government to provide such services and it must live up to that commitment. This is part of A Vision for Change, which has been running for four years and has a further five years to go and now is the time to try to encourage belief.

I accept fully that the figures referred to by Deputy Neville give great cause for concern. I will not pretend for a second that the economic decline means this trend will be only temporary. I also believe in the importance of awareness among all accident and emergency units. I have invited accident and emergency personnel to Dublin to try to encourage them to conform with a uniform policy of spotting self-harming and tendencies towards depression to ensure that follow-ups take place in this regard.

I heard what Deputy Neville said and respect him for his comments and I have taken up this matter since the time I chaired the Joint Committee on Health and Children. While it is important for the Government to set targets, I also believe that one must put together the principles. Rather than simply reading out that funding has been spent or that commitments are in place, it is more important that they should come with that national programme. While I am tempted to ask the Government to nominate 2010 to be mental health year, I do not wish to do so until specific proposals are in place that can be delivered, lest it is again perceived as an attempt at pretence. However, a commitment will be made in March in respect of the capital programme for A Vision for Change and the focus in April will be on stigma eradication. I hope that all Members can get behind this initiative to try to deal with the huge difficulties that exist on this island.

Social Insurance.

I thank the Minister of State for taking this Adjournment matter. I wish to raise the issue of the abolition of the PRSI scheme for dental and optical services for people throughout this State. I wish to put on record that my party and I are more than disappointed by the scrapping in the recent budget of essential services for which people pay. I believe the full impact and implications of this course have not yet been realised by the public at large. However, people will realise this as the year progresses. They will make appointments to have their regular checkups, to have their teeth cleaned or to undergo the usual treatments they have come to expect under the PRSI scheme, only to find they are no longer available to them. First, I wish to stress that the treatments that were available for dental and optical services under the PRSI scheme were not free, as they were paid for through the PRSI scheme. People pay PRSI from their pay-cheques to participate in and avail of these highly successful schemes. For example, the optical scheme was introduced well over 40 years ago, I believe by a Fine Gael-led Government. Negotiations took place at which it was agreed that basic needs of ordinary people would be covered by this scheme into which people paid and made a contribution.

It is fair to state that both the optical and dental schemes have played a highly significant role in improving the health of ordinary people nationwide. They have ensured that the optical and dental well-being of people has improved greatly and has been transformed over the past two decades. It is lamentable that the Government can be so short-sighted, if Members will pardon the pun, to eliminate such services almost completely for such short-term financial gains. Moreover, the Minister of State should not attempt to dress this up as these schemes have been virtually completely wiped out in the recent budget.

To put this in context, the optical scheme is very interesting. Approximately 200,000 people benefited from the scheme on an annual basis at a cost of just €15 million to the Exchequer. Consequently, no major saving is involved. It is a minor and unnecessary saving in the grand scheme of things, when one considers the type of savings that were being found in the most recent budget. Similarly, with regard to the dental scheme, it is estimated that in 2008, 400,000 patients presented under the PRSI scheme for approximately 1.5 million dental treatments at an estimated cost of approximately €100 million. Consequently, in the grand scheme of things, the savings achieved are extremely small when compared with the benefit that was derived from the operation of such schemes.

It is no exaggeration to state this will do untold damage to the nation's health because the early detection that resulted on foot of the provision under both schemes of checkups, in particular, will be a significant loss and will lead to a deterioration in the nation's health. I also believe it will cost more to the Exchequer in the long term to try to repair the damage that is being done by unravelling the scheme. From a business perspective, I know of opticians who have invested significant sums of money in new equipment to be able to compete in the world of Specsavers and similar chainstore opticians. Although such people raised their game to meet this challenge, they were given only three weeks notice of the abolition of a scheme that had existed for more than four decades. Moreover, even their contracts with the State stipulated that they should have been given three months notice. Although there is a question as to whether a breach of contract took place, perhaps that is a discussion for another day. I will conclude by referring to a cliché that has been bandied about but that also is a fact. The Government was happy to bail out bankers when the time came and was happy to underwrite the debts incurred voluntarily by reckless developers. However, it also is happy to sacrifice the health of the nation to make minuscule savings. People are beginning to wake up and realise what has happened in the most recent budget. By the end of the year, the Government will be faced by hundreds of thousands of angry people who are being denied essential services by the State.

I wish to respond on behalf of the Minister by stating that treatment benefits are paid to insured persons from the social insurance fund, SIF. Although the SIF has operated a surplus since 1996, this position began to change in 2008, when expenditure had to be partially funded from the accumulated surplus. Expenditure continued to exceed PRSI and investment income to the fund in 2009 and it is expected that the accumulated surplus will be completely exhausted in the first half of 2010.

It is further estimated that the Exchequer will be required to subvent the fund by more than €1 billion this year. The McCarthy report of the special group on public service numbers and expenditure programmes advised the Government that, given the other pressures on the social insurance fund, continuation of the treatment benefit scheme was no longer affordable. It is against this backdrop that the Government took the difficult decision to reduce expenditure on the scheme and changes were announced in budget 2010.

From 1 January 2010, people claiming under the optical and dental elements will receive a free examination. The medical appliances element of the scheme has not changed and hearing aids and contact lenses required for medical reasons will continue to be provided for on the same basis as before. This means that a grant of 50% of the purchase price, to a maximum of €760, is available towards the cost of an appliance or appliances under the scheme. People who, at 31 December 2009, were undergoing a course of dental or optical treatment or who had applied for approval to commence treatment, will have their applications processed under the rules which operated prior to 1 January 2010.

In the period between the budget announcement and the end of December 2009, more than 150,000 applications for approval in respect of dental treatments and more than 20,000 in respect of optical treatment were received from practitioners on behalf of the customers. These approval requests have been processed and notification issued to the dental and optical practices concerned. Treatments must commence within three months of approval being given and must be completed with six months of commencement.

Savings of €54 million were originally envisaged in 2010 and while the increased level of inquiries for treatment in the last few weeks of 2009 will have an impact on that figure, it still is anticipated that substantial savings will result in 2010. More than 2 million PRSI contributors still are eligible for the free dental and optical examination and medical appliance benefit in 2010. In 2009, more than 418,000 customers claimed a free dental examination at a cost of more than €14 million. In addition, 219,000 free eye examinations, at a cost of almost €5.5 million, also were provided. There also were 7,500 treatments under the medical appliance scheme, at a cost of more than €7.5 million. Similar level of applications can be expected this year. The continued provision of a free examination will allow people to continue to have regular optical and dental check-ups and help ensure the early detection of disease and other health issues.

The Department of Health and Children, under the medical card scheme, provides dental and optical services for customers on low incomes. The service is provided through the same group of contractors that supply services under the treatment benefit scheme. It should be noted that treatment benefits are just one of a range of pensions and benefits from which pay related social insurance, PRSI, contributors can benefit. Recent statements from some parties have suggested that employed people are paying up to €53 a week in social insurance and getting no benefit from it. On the contrary, the provision of a wide range of pensions, injury, unemployment and other benefits are and continue to be directly funded by PRSI contributions via the social insurance fund. The Government has indicated that it will review its decision on the treatments benefit scheme in advance of the next budget in the light of prevailing financial circumstances at that time.

The next election more like.

The Government is a bit long in the tooth for that.

There is still life in the old dog.

Third Level Courses.

Recently, there was serious concern among the staff of the carpentry and joinery section of the engineering department of the Institute of Technology Tralee when they were informed of a proposal to centralise apprenticeship education into two national centres which may not include the Institute of Technology Tralee.

Carpentry and joinery education has been catered for continuously in Kerry by Kerry VEC, Tralee VEC, Tralee RTC and the Institute of Technology Tralee, through peaks and troughs in the building industry and through every recession since the vocational system was established in 1930. Back then, the apprenticeship system was controlled and maintained by the Department of Education. In more recent times, FÁS was given central control of the apprenticeship scheme.

The Institute of Technology Tralee has catered for the needs of carpentry and joinery for the construction industry. It has been providing services in the south west region for all these years and has a strong connection with the construction industry and the public in general. The institute also runs the only agricultural mechanics course for apprentices in the country. It enforces the need to maintain the trade of carpentry and joinery as there is commonality of theoretical subjects such as mathematics and geometry.

The Institute of Technology Tralee has invested heavily in facilities to ensure that its apprentices are trained to the highest standards for current and future industrial requirements. Parallel to this, student numbers have grown to reach a peak of 1,628 three times a year. In the past, the institute has facilitated requests to run summer blocks to alleviate backlogs of student numbers up to and including the summer of 2009.

The institute was the only one in the country to maintain carpentry and joinery courses through the 1980s recession and has been a mainstay for the trade over the years. Some institutes have only returned to the trade in recent years and consequently lack the continuity of experience which the Institute of Technology Tralee offers. Initially, the institute catered for students from the catchment area of Kerry, north Cork and west Limerick but due to the boom in the construction industry students have been travelling to Tralee from all over the country. These increased numbers have been of huge economic benefit to the town of Tralee which has suffered considerably from a lack of industrial jobs over the past 20 years in particular.

The 12 members of staff have taken an active role in the development of the carpentry and joinery section, including syllabi feedback, student support and self study, writing texts for the trade, participation in assessment procedures and development of state of the art workshops. The institute has an impeccable record of health and safety in carpentry and joinery, due in part to the diligence of staff but also to the constant updating of modern machinery and facilities.

The provision of carpentry and joinery, if lost, could be very difficult to replace. Therefore, it is imperative that the Institute of Technology Tralee maintains a core student enrolment in carpentry and joinery throughout the downturn so as to enable the institute to cater for the future provision once the recession has passed.

The management of the Institute of Technology Tralee met with Higher Education Authority representatives in December 2009 to present them with the arguments to maintain this education service in the college. The future of carpentry and joinery education in the institute will be determined by the HEA in conjunction with the Minister for Education and Science, Deputy Batt O'Keeffe. The south west region has suffered loss of services in other areas such as health and transport so it is vital for the region that we do not suffer further losses in education. This is why it is critical that we preserve the provision of carpentry and joinery education at the Institute of Technology Tralee.

I thank Deputy Deenihan. I will respond on behalf of the Minister, Deputy Batt O'Keeffe, who cannot be here.

Apprenticeship is a blended training programme, with part of the training delivered by employers and part by FÁS and educational institutions. In most of the trades, FÁS apprentices undertake a seven phase training programme, with phases 4 and 6 provided by the education sector in institutes of technology and in two colleges of further education. The number of places provided for phase 4 and 6 apprentices is determined by the number of registered apprentices ready to progress to these phases. Accordingly, the number of places is determined by the level of demand in any given year.

As Deputy Deenihan is aware, the downturn in the construction sector has resulted in a significant fall-off in the numbers of apprentices being recruited nationally. The number of FÁS registered apprentices requiring education and training has declined from 8,300 in 2006 to 1,535 in 2009, a reduction of more than 80%. Construction related trades, including carpentry and joinery, have been particularly affected.

To plan for the reduced requirement for education and training provision in construction related trades, a group comprising representatives from the Department of Education and Science, the Department of Enterprise, Trade and Employment, the Higher Education Authority and FÁS was established to examine relevant data and forecast, in so far as it is possible, expected construction related recruitment levels over the next number of years. Based on the group's forecasts, the Higher Education Authority notified institutions of the reduced requirement for education provision and consulted with individual institutions to assess the impact of the forecast reduction in numbers on the education sector.

Having regard to the inputs received and to enable the necessary reduction in education provision for the construction and related trades to be implemented on an objective basis across the country, an independent evaluation panel was established to advise the HEA on the appropriate levels of provision required within the education sector to meet likely future demand. The independent panel evaluated submissions and presentations from 12 institutes of technology and two colleges of further education regarding future provision at reduced levels of demand and has made recommendations on the allocation of reductions in provision that take account of national and regional factors, funding and efficiency levels, as well as the impact of reductions on education providers. The recommendations provide for a phased reduction in the number of annual apprenticeship blocks from 655 in the 2008-09 academic year to 447 in 2014-15. The overall recommendations are made on the basis of rationalised distributed provision rather than concentrating courses in a small number of national centres.

On 20 January 2010 the institutions were notified of the provisional recommendations and given opportunities to make observations on them. While the panel has recommended a reduction in carpentry and joinery provision in Institute of Technology Tralee, education provision in that trade will continue to be provided by the institute at a reduced level. This is in line with reductions in other institutions and reflects the likely demand for provision in that trade in the south west. I understand that the HEA has arranged to meet the presidents of the affected institutes of technology later this month to discuss the general approach to the management of the reductions and will meet separately with each institute over the coming weeks to clarify the implications of the allocations.

The allocated reductions will not take place before the 2011 academic year because significant numbers of apprentices who commenced their apprenticeships before the downturn in recruitment continue to progress through the system. It is also proposed to keep the future demand for apprentice provision under a five-year rolling review.

I thank Deputy Deenihan again for raising this issue and providing me with an opportunity to outline the recent developments in apprenticeship education provision and to clarify the process used to enable the necessary reductions in provision to be implemented on an objective basis.

The Dáil adjourned at 9.10 p.m. until 10.30 a.m. on Wednesday, 3 February 2010.
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