Vol. 735 No. 1
6 Deputy Michael Moynihan asked the Minister for Jobs, Enterprise and Innovation the way he envisages the local collective agreement alternative to joint labour committees will operate in practice; his definition of collective agreement; if he intends to enshrine this definition in law; his views on who might be competent on the employee side to reach such an agreement; and if he will make a statement on the matter. [14632/11]
30 Deputy Niall Collins asked the Minister for Jobs, Enterprise and Innovation his plans to implement the commitment in the programme for Government to bring the law on employees’ right to engage in collective bargaining into line with recent judgements of the European Court of Human Rights; his plans to introduce this change alongside his proposals to change the joint labour committee process; his views on the implications of his proposals to change the JLC process; his views on his proposals for the existing collective bargaining process; the implications of the Duffy Walsh proposals, if adopted, for the collective bargaining process; and if he will make a statement on the matter. [14633/11]
I propose to take Questions Nos. 6 and 30 together.
There is a commitment in the programme for Government to ensure that Irish law on employees' right to engage in collective bargaining is consistent with recent judgments of the European Court of Human Rights. This process will require consultation with stakeholders, including employer and worker representatives, and a review of the experience of the operation of the existing legislative framework as put in place under the Industrial Relations Acts of 2001 and 2004 and the consequences of the litigation that has arisen in the course of the operation of these Acts.
The report of the independent review of employment regulation orders and registered employment agreement wage setting mechanisms noted that the principle that the JLC system should only operate where, for whatever reason, collective bargaining does not take place already is recognised by the provision at section 46 of the Industrial Relations Act 1990. This section provides that the Labour Court may exclude from the scope of a JLC an employment to which a registered employment agreement, REA, applies. This provision has been availed of by a number of enterprises in recent years, especially in the mushroom growing sector.
However, under existing legislation, such exclusion can only apply where the remuneration and conditions of employment provided for by the REA are not less favourable than those provided for by the relevant employment regulation order, ERO. The review concluded that this qualification limits the capacity of parties to conclude agreements which may be more suited to the circumstances of individual employments but which may be regarded as less favourable than the ERO in some particulars. In this context, the report recommended that the legislation be amended to provide that the court may exclude an undertaking from the scope of a JLC through a collective agreement, negotiated at enterprise, group or sub-sector level, that is registered with the Labour Court.
I endorse the review's acknowledgment of the primacy of collective bargaining. How this recommendation can be progressed will, like other recommendations in the report, be considered in the context of the action plan for the implementation of all proposals dealt with in the report as well as other issues raised by the report which I intend to bring to Government shortly.
As the Minister has said, the JLC system was put in place to cover situations where collective bargaining was not possible for one reason or another, for example, in areas where there was no union representation. How does the Minister envisage a system will work if JLCs are replaced with this principle of collective bargaining? Who will be doing the bargaining on behalf of the workers? How will that be determined and who will decide whether the workers are properly represented and whether this is proper collective bargaining?
I note a commitment in the programme for Government to reform the current law on employees' right to engage in collective bargaining which is at present contained in the Industrial Relations (Amendment) Act 2001, to ensure compliance by the State with recent judgments of the European Court of Human Rights. Will the Minister give an indication what this means? What is his understanding of the conclusions reached by the European Court of Human Rights on the meaning of the term "collective bargaining"?
On the first question, the present system already allows a registered employment agreement to replace a JLC. The form of collective bargaining envisaged is clearly a trade union bargaining with employers. This is the current definition. The issue of whether that would go further is contentious and on which there are different views between the social partners. It will require to be considered when drafting final proposals. As Deputy O'Dea rightly remarked, many of the JLCs are in areas where either employer recognition of unions is low or trade union organisation is low, but it is not a case of straightforward agreement and it will require a bit of thought before we reach a conclusion.
The compliance with the European Court of Human Rights judgment arose out of a judgment in the United Kingdom where, to paraphrase, a court judged that employers were giving priority to people who were not members of a trade union and in certain circumstances were deemed to have been victimising those who opted to join a trade union. The court found that the British law in that case was in contravention of human rights. The issue has arisen to proof our legislation against any similar frailty. This is my understanding of the matter.
I understand the point the Minister is making. It would appear to me that the judgments to which he refers and in accordance with which he intends to change Irish law mean that collective bargaining will henceforth be defined as representation by an official trade union.
There is no such proposal. This change in respect of the ILO refers to a very narrow set of circumstances which involved victimisation of workers. It is not reversing the entire edifice of existing Irish law; this is a fairly narrow flaw which was exposed. There needs to be consultation to ensure our legislation is not equally frail on that subject.
The Minister could be forgiven for not reading that in the programme for Government.
7 Deputy Pearse Doherty asked the Minister for Jobs, Enterprise and Innovation if he is committing any funding to the European space programme; and the cost of such funding to the State per year since such funding commenced. [14246/11]
A table outlining the expenditure since 1975 is available with this reply. Ireland became a member of the European Space Agency in 1975. The purpose of Ireland's membership of the ESA is to participate in the European space programme, thereby facilitating innovative Irish companies to develop leading edge space technologies and to commercially exploit their ESA participation. A total of €14.029 million has been committed in 2011 in respect of Ireland's subscription to the European space programme. The focus of the Irish ESA industrial strategy is to build scale in participating Irish companies by supporting technology and product development that can be exploited in both the commercial space and other non-space markets.
Ireland's ESA membership has contributed to the development of a highly knowledge-intensive industry sector with in excess of 70 Irish technology companies having secured ESA contracts since 2000. ESA participation has a demonstrated direct effect on the participating companies' ability to generate commercial export sales in the supply of products in the commercial space and non-space market. An analysis of Ireland's ESA membership in 2008 concluded that Irish ESA contractors generated a total turnover of €136 million in 2007. A recent survey by Enterprise Ireland of the top 19 Irish companies representing over 60% of activities in the space sector projects an increased growth in ESA-derived sales from €35 million in 2010 to €96 million by 2014. Employment in these companies is projected to almost double from 865 in 2008 to more than 1,600 in 2014 and 65% of these jobs are at graduate and postgraduate level. Irish Public Spending on ESA Space Programmes 1977-2010
|
Year |
MAU* |
Year |
MAU* |
Year |
M€ |
|
1977 |
0.16 |
1989 |
3.2 |
1999 |
5.5 |
|
1978 |
0.17 |
1990 |
4.4 |
2000 |
7.2 |
|
1979 |
0.21 |
1991 |
5.0 |
2001 |
8.0 |
|
1980 |
0.30 |
1992 |
5.9 |
2002 |
9.3 |
|
1981 |
0.90 |
1993 |
5.1 |
2003 |
10.9 |
|
1982 |
0.90 |
1994 |
4.3 |
2004 |
10.8 |
|
1983 |
1.1 |
1995 |
4.6 |
2005 |
11.6 |
|
1984 |
1.2 |
1996 |
5.4 |
2006 |
12.3 |
|
1985 |
1.7 |
1997 |
5.7 |
2007 |
13.2 |
|
1986 |
2.1 |
1998 |
5.6 |
2008 |
13.5 |
|
1987 |
2.7 |
2009 |
14.5 |
||
|
1988 |
2.4 |
2010 |
14.4 |
*The figures for the period 1977 to 1999 are in MAU (Millions Unit of Account), which was in use at the time. The European Currency Unit ECU was a basket of the currencies of the European Community member states, used as the unit of account (AU) of the European Community before being replaced by the euro on 1 January 1999, at parity.
I thank the Minister of State for his reply which has covered most of the information I requested. Given the Minister of State's new-found insight into the problems the country is experiencing, has he considered using the services provided by the European Space Agency?
If the Deputy will forgive me, I did not quite understand his question.
Is the Minister of State travelling somewhere?
Not quite but I can tell the Deputy that in my own constituency of Cork East, which is also the constituency of his colleague, Deputy Sandra McLellan, we have Elfordstown which is doing a lot of work on commercial satellite technology and also research on space. I do not believe we should close our minds on this issue but rather have open minds and if commercial benefit can be derived from it, then we should take it. As to whether I am going to inhabit that medium, the jury is out on that one.
8 Deputy Willie O’Dea asked the Minister for Jobs, Enterprise and Innovation the division of responsibilities between his Department and the Department of Foreign Affairs and Trade in relation to trade and if the appropriate arrangements have been carried out to bring this into effect. [14622/11]
At the Government meeting on 24 May 2011 an order was made to transfer part of the trade function from the Minister for Enterprise, Trade and Innovation, now the Minister for Jobs, Enterprise and Innovation, to the Minister for Foreign Affairs, now the Minister for Foreign Affairs and Trade. The order came into effect on 1 June 2011 and it has strengthened the role of the Department of Foreign Affairs and Trade in trade promotion by specifically transferring responsibility to that Department for the management and chairing of key trade promotion functions, specifically the Trade Council, as well as responsibility for joint economic commissions.
The Trade Council, now to be chaired by the Minister for Foreign Affairs and Trade, oversees the implementation of the recommendations in Trading and Investing in a Smart Economy, which was launched in September last. This strategy has brought together of the relevant agencies and Departments involved in promoting overseas trade, tourism and investment, with an integrated approach.
Responsibility for the organisation and management of joint economic commissions and for setting up any new joint economic commissions is now also a matter for the Department of Foreign Affairs and Trade. Joint economic commissions are formal intergovernmental bodies in specific high-growth markets.
While the Department of Foreign Affairs and Trade now has a very visible and tangible role in trade promotion, my Department retains lead responsibility for trade policy, including within the framework of EU common commercial policy and the World Trade Organisation. These discussions are directly linked to the sectoral enterprise and investment policies which are being developed by my Department and agencies and it is essential we maintain a coherent approach between export and investment policies. In addition, export control licensing for the export of military or dual use goods will remain in my Department. There are strong links between the licensing and control of export function and my Department's enterprise development role. My Department will continue to manage the compilation of detailed trade statistics covering exports and imports.
I will work closely with the Tánaiste and Minister for Foreign Affairs and Trade in planning trade mission programmes for the months ahead. Our intention is to maximise the potential of these trade missions to bring Irish businesses from trade, investment and tourism sectors into direct contact with business opportunities abroad by targeting sectors and countries where there is significant potential.
I tabled the question to ascertain exactly how the scheme will work in practice. I am not being contentious, but from the Minister's reply my understanding is that the only involvement of the Department of Foreign Affairs and Trade will be organising foreign trips, trade missions and conferences. Have any civil servants been transferred from the Department of Jobs, Enterprise and Innovation to the Department of Foreign Affairs and Trade to deal with the Tánaiste's new responsibilities?
Staff have been transferred. Some three posts are to transfer to the Department of Foreign Affairs and Trade from the Department of Jobs, Enterprise and Innovation, comprising one principal officer, one higher education officer and one clerical officer. They are currently working in the bilateral trade unit of my Department and it is expected that their transfer to the other Department will be affected by mid-June.
Enterprise Ireland does a lot of the background work in terms of planning trade missions and drawing together the companies involved. It makes the connections. It is a very valid aim of the Tánaiste that we use the muscle power of our diplomatic service to drive the trade agenda and use it as an outreach system. Enterprise Ireland does not have bases in many countries where we have diplomatic representation. It represents the best use of resources for what is our priority, namely, driving exports.
There are commitments in the programme for Government to set up an export trade council and a home to export programme. There is also a commitment to strengthen relations with emerging countries and perhaps the prospect of setting up some sort of scholarship scheme. Who will be responsible for those initiatives and when can we expect to see them?
There will be combined responsibility. The export council will be chaired by the Tánaiste and Minister for Foreign Affairs and Trade. It was previously chaired by a Minister of State. The strategy that was drawn together was largely about how we get the resources we have in the field to work more effectively together. It will now be driven at a much higher level. No criticism is intended of the previous Minister but it will be driven by the Tánaiste.
There will be a very strong focus. I visited India recently which offers opportunities in the education sector. It had not had a visit from an Irish Minister for many years. We are already focusing on growth opportunities and there are many exciting opportunities for Irish companies in growing markets. We need to spend time and it will take time to build a base.
With regard to efficiencies, one of the major elements of the programme for Government is to build all-Ireland economic opportunities where they can be beneficial to both sides of the island. Invest NI officers are based around the world, as are those from Enterprise Ireland and the IDA. Is it the objective of the Government to amalgamate if possible with our Northern partners the facilities that are available around the world for the use of all the people on the island?
I do not imagine that the diplomatic service will be amalgamated.
We could amalgamate with Invest NI offices at least.
There are protocols of co-operation and both bodies involved are involved in InterTradeIreland, which is a joint body working on innovation and trade promotion and supports those. The Deputies question goes beyond the one I was asked and I would have to get more information to outline what level of co-operation is now occurring. Clearly there are a lot of very good relations and joint projects. Even last week members of the Oireachtas participated in an exercise in Stormont where we were celebrating the success of companies who had been supported by InterTradeIreland to develop new markets. There is a strong degree of co-operation already. I will endeavour to get a more detailed response for the Deputy.
9 Deputy Micheál Martin asked the Minister for Jobs, Enterprise and Innovation if he consulted with the Department of the Taoiseach on his proposals on wage reform before they were presented to the social partners. [14526/11]
15 Deputy Barry Cowen asked the Minister for Jobs, Enterprise and Innovation if he accepts the key findings of the Duffy Walsh report. [14630/11]
16 Deputy Sandra McLellan asked the Minister for Jobs, Enterprise and Innovation if his discussions with the social partners on the joint labour committee and registered employment agreements reform will include consideration of the Duffy Walsh report. [14714/11]
17 Deputy Richard Boyd Barrett asked the Minister for Jobs, Enterprise and Innovation in view of the current review of the joint labour committee and registered employment agreements, his views on the statement by the Employment Research Centre in Trinity College Dublin that the JLC system has kept more workers employed because they effectively outlaw zero hour contracts; if he will give a commitment not to reduce the time and a third payments for anti social hours; if he will ensure that an inability to pay clause will not be abused by employers; and if he will make a statement on the matter. [14730/11]
18 Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation the estimated fall in spending power due to the reduced demand as a result of the proposed reduction in the pay rates of the joint labour committee. [14711/11]
23 Deputy Gerry Adams asked the Minister for Jobs, Enterprise and Innovation the status of the review of the statutory wage-setting mechanism such as registered employment agreements and employment regulation orders. [11383/11]
24 Deputy Sandra McLellan asked the Minister for Jobs, Enterprise and Innovation if his proposals for reform of the joint labour committees and registered employment agreements were subject to an equality impact assessment before being released to the social partners. [14715/11]
31 Deputy Pádraig Mac Lochlainn asked the Minister for Jobs, Enterprise and Innovation the estimated increase or decrease in the numbers of jobs within the economy as a result of the proposed reduction in the pay rates of the joint labour committee. [14713/11]
34 Deputy Timmy Dooley asked the Minister for Jobs, Enterprise and Innovation his understanding of France’s position on Ireland’s corporation tax. [14629/11]
35 Deputy Peadar Tóibín asked the Minister for Jobs, Enterprise and Innovation the cost to the State in terms of the reduction of taxation received and the increase of outgoing welfare payments as a result of the proposed reduction in the pay rates of the joint labour committee. [14710/11]
40 Deputy Mary Lou McDonald asked the Minister for Jobs, Enterprise and Innovation if any final proposals for joint labour commission and registered employment agreements reform require the approval of the EU, ECB and-or IMF before being enacted. [14717/11]
I propose to take Questions Nos. 9, 15 to 18, inclusive, 23, 24, 31, 34, 35 and 40 together.
I have already dealt comprehensively with the issues raised in this series of questions in my earlier reply to the Priority Questions on the issue of the review of employment regulations orders and registered employment agreement wage setting mechanisms. However, I would like to reiterate the main issues. The report's overall finding is that the basic framework of the current JLC-REA regulatory system requires radical overhaul so as to make it fairer and more responsive to changing economic circumstances and labour market conditions.
The report of the independent review does not recommend, nor have I proposed, specific adjustments in wage rates for the sectors covered by JLCs and REAs. Together with the decision to restore the national minimum wage to €8.65 per hour, the decision to reform the joint labour committee structure represents a significant commitment by the Government to the lowest paid and most vulnerable workers in the economy. However, we need to ensure that statutory wage fixing mechanisms work effectively and efficiently and that they do not have a negative impact on economic performance and employment levels.
Radical reform is required in order to protect existing jobs in these vulnerable sectors of the economy and to increase the likelihood of employment in these sectors and to restore competitiveness in key sectors of the economy, including the hospitality sector which is crucial to our tourism offering. I am anxious to pursue the agenda for radical overhaul of the ERO-REA system as a matter of urgency, including proposals dealt with in the report and other issues raised by the report. In this context, it is my intention to complete discussion with relevant stakeholders in the coming days with a view to submitting a final action plan for consideration by Government before the end of the month.
I thank the Minister for the extra information. My question asked whether he consulted with the Department of the Taoiseach on his proposals before he presented them to the social partners. I would like an answer to that. There is no reference in the Minister's proposals to a number of the more minor recommendations of the Duffy-Walsh committee, namely recommendation No. 5 in regard to the reform and modernisation of the contract cleaning business, recommendation No. 15 on the electrical contracting REA and recommendation No. 19 to move compliance away from the criminal domain and make it a civil matter as an alternative to the current situation. Is the Minister committed to those proposals?
I held consultations and all Ministers were aware that I would be introducing a wider range of recommendations to my discussions with the social partners. No one Minister was involved. In our discussions with the social partners we focused on key recommendations. The recommendations to which the Deputy referred have not been excluded and are receiving due consideration. Many of them are simply improvements in the effectiveness of operation. They were not included because they did not represent contentious issues. All of the recommendations will be given due consideration before the final paper is brought to Government for a decision.
In regard to the Minister's previous answers on the same issue, I ask him to justify what I believe is a completely false connection that he is making between job losses in the construction and retail sectors and those sectors which coincide with the JLCs and REAs. He seems to suggest that there is some connection between the two and that it justifies a review of the JLCs and REAs which will produce more jobs.
I put it to the Minister that there is no connection between job losses and the operation of joint labour committees and employment regulation orders in construction, retail and other sectors. Jobs have been lost as a result of the greed of bankers and developers and the failure of Governments to control it. These factors crashed the relevant economic sectors and crashed demand in the economy. That is the reason companies are going out of business. It is false to suggest the problem is one of competitiveness or that wages must be levelled downwards by attacking pay and conditions via the JLCs and EROs. The Minister is wrong to suggest that eliminating premium payments will create more jobs. I ask him to respond to the argument that if one makes a bad situation worse if one takes money out of the pockets of low paid workers because it reduces demand and spending in precisely the businesses and shops he has in mind.
The Deputy asked a large number of questions.
I have not made a false connection. The review group recommended that the joint labour committee and employment regulation order system be radically reformed to restore competitiveness. Its report sets out inflexibilities in the system which make it difficult to respond to the changed economic circumstances. I am not making anything up. We have lost substantial numbers of jobs. Job creation is the priority for the Government but there will be no return to building more and more houses in the construction sector. We must create jobs in tourism and other export sectors in which we can build sustainable markets.
The report recommends that we must change the current system to enable employers, many of whom are hanging on by their fingernails, to avail of growing opportunities in sectors such as tourism. We must recognise that every business in the leisure and tourism sector is being compelled to change its offering by taking initiatives such as cutting rates, offering early bird deals and trying to reopen on Sundays to serve tourists who expect a seven day service. Many opportunities are developing and the report has told us that the structure we have imposed on certain segments of the retail and catering sectors is inflexible and will prevent such opportunities from being exploited. We are seeking to reform the system because jobs are our top priority. We must make choices and maximise opportunities.
If jobs were the top priority, there would be empirical evidence to show the Minister's proposal would create jobs. The report states there is no empirical evidence to show there will be a net increase in jobs as a result of some of the Government's proposals. On the other hand, the Minister has admitted the policies the Government will implement will result in a reduction in wages. What we will have, therefore, is a policy defined on a hunch rather than empirical evidence, which will definitely reduce wages while failing to create jobs. Have other issues such as the Croke Park agreement been put on the table to placate Labour Party Deputies with regard to negotiations with the social partners on the joint labour committees?
I ask Deputy Tóibín to read the report. It did not produce any empirical evidence to suggest some of the proposals we are taking——
It stated there is no proof the proposals would create jobs.
It made one statement about employment, namely, that reducing the JLC rates to the national minimum wage rates would not have a substantial impact on employment. The Government has not made any proposal to reduce the JLC rates to the national minimum wage. The report used analysis that examines minimum wage systems across a range of countries in normal circumstances. It did not consider specific reforms in an inflexible system which are targeted at trying to make it easier to create employment in an economy that has suffered a collapse in employment and to avail of opportunities, wherever they can be found, to create jobs. That is the context. Time and again, the report states we must address the way in which the current arrangements are undermining competitiveness in the economy. This is not some sort of conspiracy but a question of how we can make certain sectors sufficiently flexible to respond to opportunities.
The Government is not abandoning the joint labour committee system, as many people have advocated. On the contrary, we recognise that it provides important protection to workers but this protection must be balanced with the need to create employment opportunities.
Does the Minister agree that the issue is one of income and demand rather than the wage levels in sectors governed by joint labour committees and employment regulation orders? There is no demand for restaurant and hotel services because people do not have money. For this reason, reducing overtime and Sunday rates, as has been proposed, will not have an impact on the hospitality industry. Does the Minister agree that people working in the sectors covered by the JLCs and EROs need their current income if they are to sustain their current living standards and feed their children?
While I recognise that there has been collapse in demand in the economy, the volume of demand is not invariable but changes as businesses adapt to different circumstances. For example, some businesses will open on Sundays to win more opportunities to trade and create employment. They will adapt to respond to opportunities in the tourism sector. The Government has set a target of attracting an additional 1 million tourists and has abolished the travel tax, cut the VAT rate and reduced the lower rate of employer PRSI. In doing so, it will make the relevant sectors more competitive and create opportunities for further employment.
We are told by an expert group that the JLC and ERO agreements are creating an inflexibility that is undermining competitiveness and our ability to respond to opportunities. We are seeking to reform these agreements to ensure the relevant sectors can respond to opportunities. While I do not pretend there is not a problem with demand, we must try to create employment within a demand constrained economy. This requires flexibility and competitiveness to win new markets and attract tourists.
The Minister stated it is not part of the Government's proposal to reduce pay rates in the relevant sectors. Does he not accept that if his proposals are accepted, wage reductions will be inevitable across these sectors? I have read the Duffy-Walsh report in detail and it clearly concludes there is only a marginal difference in wage rates between those employed in the JLC sector and comparable employments. For example, the chapter dealing with nominal wage rigidity and so forth does not suggest there is anything exceptional about the JLC sector that is giving rise to job losses or preventing employers from taking on more staff. This section of the report is detailed. Does the Minister hold to his statement at the weekend that current employees will not be affected by the proposals, which will affect only those who are recruited after they become law?
Existing employees are protected by their existing contracts of employment which would have to be renegotiated if there were to be any change. The changes would provide that a different regime could apply to new recruits. This offers flexibility. The report does not recommend — nor does the Government advocate — cutting JLC rates across the board or reducing them from their current levels to €8.65, the level to which the minimum wage is to be restored. That is the context within which they examined the impact, but that is not what is being proposed. They found that people working in JLC sectors, even with the same mix of education and experience, are not earning much more than in other sectors. Equally, however, they found that the systems in these sectors are hampering the ability to compete in areas where we need to create employment. We did not need a report like this to tell us that temporary retail workers, such as younger people and students who may have high qualifications, are not highly paid compared to where many of them may end up later. That finding is valid, but it does not invalidate the finding that these systems are undermining competitiveness and need to be reformed.
With regard to the current negotiations with the social partners, is the Minister's previous strongly held antipathy to the Croke Park agreement — as well as other issues affecting wages rates, pay and working conditions — on the negotiating table with regard to the JLCs?
Where is the evidence that lowering the income of the lowest paid workers — even by a marginal degree in terms of Sunday and other premium payments — will create extra jobs? There is no evidence to back it up. The Minister is cutting off his nose to spite his face because he will further constrict demand in the economy. There is an alternative proposal, however. Instead of trying to create jobs by taking from the earnings of the lowest paid, why not do something about differential rates? In that case, struggling small businesses would pay lower rates, which would be compensated for by the bigger and more profitable business chains paying higher rates. Would that not do a hell of a lot more to stimulate job creation, rather than taking earnings from low-paid workers who spend their money in those same shops and businesses?
I absolutely agree that we need to reform many areas in order to create employment. The Government is committed to reforming the legal system and introducing legislation on upward-only rent reviews. We have already cut employers' PRSI and VAT. In addition, we are committed to many other reforms that will facilitate employers to create jobs. We need to examine rates and the previous Government's study indicated that costs can be taken out of the local authority system, which can be used to bring down rates. We have to become more competitive as a community. However, the Deputy seems to overlook the fact that experts in this field, such as Mr. Kevin Duffy and Professor Frank Walsh, have reviewed this system and found it is undermining our competitiveness in these areas. There is evidence that if one can reduce labour costs and be more flexible in responding to opportunity, one can create employment. They have singled out areas where there are difficulties in this system, including where compliance is too high and they are too inflexible to changing circumstances, or are based on an antiquated view of the working week. They have identified many areas where this system is not serving the need to create employment. That is what we have set as our priority and there is ample evidence in that regard.
This has got nothing to do with the Croke Park agreement, so I do not know where that question came from. The Government is examining the delivery of the Croke Park agreement and there will be a report on that matter from the Minister for Public Expenditure and Reform. Under the IMF-EU memorandum of understanding there is action which the Government needs to take to deliver certain cost commitments. They are part of the Croke Park agreement and the Minister will be returning to Government to say how much has been achieved in that area. That is clear.
Were they were part of the negotiations, though?
No. I have not mentioned the words "Croke Park agreement" in that context.
10 Deputy Brendan Smith asked the Minister for Jobs, Enterprise and Innovation when the proposed 25% reduction in the administration burden in business will be achieved. [14627/11]
The previous Government committed in 2008 to reducing administrative burdens by 25% by 2012. The work to reduce administrative burdens on business in Ireland is being progressed on two fronts. The High Level Group on Business Regulation works to fast-track simplifications to specific red-tape issues identified by business. In addition, an interdepartmental group of officials from all Departments, having regulation affecting business, co-ordinates the measurement and reduction of administrative burdens in a systematic manner, based on the internationally recognised standard cost model.
The high level group is chaired by my colleague the Minister of State for Small Business, Deputy John Perry. To date, the group has processed 48 specific red-tape issues brought to its attention by business, and continues to drive progress on a further 20 items.
The group continues to work with business interests to identify new opportunities for simplification. In addition, my Department is in the process of measuring other burden reductions achieved across Government. The results of this measurement exercise are expected to be available in the second half of 2011.
As far as quantification of the savings concerned, the CSO and my Department have done exercises to quantify the main burdens. My Department has already reduced measured burdens by 22%, or 90% of the target to be achieved, which is an annual saving of almost €187 million. I expect that I will be in a position to announce the initiatives that will make up the remaining 3% before the end of the year.
To give greater momentum to this process and to reiterate the importance of continuing action in this task to other Departments, I intend to initiate a project shortly to measure the burdens across all remaining Departments. This is expected to be completed in the first quarter of 2012. Each relevant Department will then prepare simplification plans detailing how they will meet any shortfall from the 25% target within their areas of responsibility.
The Minister indicated in his reply that 2012 is the target, although it was supposed to be 31 December 2011. Will the Minister indicate whether that target date will be met? If not, when does he expect the 25% reduction to be finally achieved? Has his Department any estimate as to the actual savings to small business when that reduction is achieved?
When I assumed office, I was surprised to find how few hard facts had been assembled by the previous Government concerning a programme that was well under way and had started in 2008. I recognise, however, that there has been progress. The Revenue on-line system has been significant, but there is not the basic measurement matrix across each Department that would allow me to answer that question. That is why I have moved to bring momentum to this, get a proper measurement and start to obtain a baseline as to how much has been achieved. Many Departments have achieved a lot, but others have scope to do an awful lot more. I am therefore trying to pick up the pieces and give more momentum to this process.
I am quoting figures from the previous Government. The overall figure is €500 million, which it is believed could be achieved. We have delivered €187 million in areas that bear directly on enterprise from my Department. We need to quantify how much has been achieved and what remains to be done. I want to give momentum to delivering on the target.
11 Deputy Catherine Murphy asked the Minister for Jobs, Enterprise and Innovation if he will provide a breakdown by county of the amount of funding supplied to each county enterprise board in 2009, 2010 and 2011; the county enterprise boards that have exhausted their annual funding for 2011 between January and May 2011; the county enterprise boards who have applied for additional funding during the course of each year to discharge their functions in 2009, 2010 and 2011; the county enterprise boards who did not fully use their funding in 2009 and 2010; and if he will make a statement on the matter. [14770/11]
13 Deputy Éamon Ó Cuív asked the Minister for Jobs, Enterprise and Innovation if he will give an assurance that the proceeds from the sale of State assets will be used to fund job creation measures. [14635/11]
I propose to take Questions Nos. 11 and 13 together.
An Exchequer allocation is provided each year under the Estimates process for the funding of the county and city enterprise boards, CEBs. Allocation of funding to individual CEBs is conducted each year by the central co-ordination unit, CCU, within Enterprise Ireland. In determining these allocations a systematic approach is adopted by the EI to ensure the maximum degree of objectivity and equity of treatment and clarity on the allocation of funding. This approach involves the provision of funding on the basis of a standard allocation to each CEB as well as an extra allocation that is determined mainly by population but which also takes account of issues such as local unemployment trends, capacity to spend, existing commitments and regional spread. The Exchequer allocation is made in the context of the overall public finances and in 2011 amounts to €27.242 million, of which €15 million in capital is available for direct grants and training, mentoring and advice services to micro-enterprise clients. The bulk of the current allocation to each CEB pays the salaries of the business advisers and other staff who provide direct advice and mentoring to client companies. This represents a strong investment in the micro-enterprise sector, notwithstanding the additional level of demand on CEB services generated in the current difficult economic climate.
None of the CEBs has exhausted their annual funding for this year. However, in regard to their capital allocations for 2011, the aggregate position of all 35 CEBs at the end of May is that grants approved to be drawn down by year end amount to 85% of the available Exchequer grants allocation moneys. Approvals in respect of soft supports such as training, mentoring and advice services to micro-enterprise clients amount to 74% of the available Exchequer grants allocation moneys. This represents the level of capital commitments at the end of May and the actual level of expenditure to arise will depend on the extent to which and the speed of the projects approved being finalised by the promoters. I point out that moneys committed to a project are open for 12 months, and that CEBs can carryover 50% of commitments into the following year. However, they are required to have a zero balance of funds at the end of each year.
The CEB central co-ordination unit within Enterprise Ireland works closely with the CEBs throughout the year reviewing individual expenditures to ensure that the funding allocated to the CEBs is utilised to the maximum. Should it arise during the year that some boards are not in a position to spend all of their annual allocation — a point raised in the questions tabled — for example, where an approved grant is decommitted late in the year if the project has not started, it is reallocated to any boards that are in a position to spend additional funds within the year. Moneys identified under this process tend to arise late in the year, are not generally significant, and are allocated to other CEBs who have viable projects that can draw down the funding. However, the €3.3 million made available in the last quarter of 2010 was additional to the Exchequer funding originally made available to the CEBs for that year.
It is a matter in the first instance for individual CEBs to determine how they will use allocated funds in the most effective way. Some boards may choose to commit all of their available funding as projects present themselves, even if this means that their funding is committed relatively early in the year, while others may decide differently.
Substantial funds have been allocated to the CEBs this year having due regard to the pressures on Exchequer finances. While I accept that it is vital that CEBs continue to promote and support enterprise development, due to the finite nature of public finances, it is not always possible for a CEB to provide financial assistance to every eligible project that presents itself. This is an operating reality with which all CEBs are already familiar. Tables showing the relevant data have been supplied to the Deputy.
I thank the Minister of State for his comprehensive reply. My attention had been drawn to an inadequacy in this respect in Kildare and I note that there is a means whereby funds can be moved from one place to the another. It appears obvious that the success rate of start-ups is very much predicated on the amount of effort spent on business planning and feasibility studies before the enterprise is up and running. If we are to encourage people to move from welfare to self-employment — in the micro-enterprise sector an enterprise can have up to ten employees — it is essential to monitor the position to ensure there is sufficient funding and that such funding is stable at the very basic level. There is a saving on both sides if people can avail of the system and move from welfare to this sector and in many enterprises that is case. I will carefully study the content of the Minister of State's long reply.
I thank the Deputy for her question. The CEBs stimulate enterprise potential at local level and play a key role in creating jobs in the local economy. I fully respect where the Deputy is coming from, namely, that an allocation of funding to a enterprise board may have been spent. There is a system at the year end whereby there can be a reallocation of unspent funding. Much of the funding is in the form of repayable loans. Clearly, the mentoring, supports and entrepreneurial encouragement given by enterprise boards have been very effective. The case for the need for the continuation of such supports has been well made. The funding allocated by enterprise boards is only a small part of the supports given. There is also support given by the banks on foot of the investment in the two pillar banks. They will be very much focused on lending such support. Some €20 million will be made available to small companies over the next three years. Such companies will work with the enterprise boards. Enterprise Week is very much promoted by enterprise boards in local counties. Enterprise boards play a critical role in providing mentoring and assistance with the formulation of business plans. I agree with the Deputy that they have been successful. They have encouraged many successful businesses and when the plans are finally put together by the Government, I am sure they will provide a focused service with solution-centred desks for small companies in every region.
There is no doubt that enterprises that have business plans and research carried out at the very start of their experience are more likely to exist in five years time and their productivity is also much more likely to be higher. One of the major problems is at a time of the biggest jobs crisis in the State we have an infrastructure around the State, the county enterprise boards system, most of which have exhausted their grant funding for feasibility studies, etc. One woman——
A question, please, Deputy.
What will be done at this crisis time to ensure that people who have feasible business ideas that would create indigenous jobs will get the funding they need this year?
On that point, I draw the Deputy's attention to the level of soft supports given by enterprise boards. It is all about business plans and the formulation of them. The boards are certain that funding is only one part of the success of any company. The formulation of the business plan, meeting an enterprise officer, getting the mentoring support and the initial allocation of funding are important aspects. There are many ways to securing funding be it through the credit unions or the local banks. Clearly, the banks are now beginning to have a focus on small enterprise. The figures I have indicate that all the funding allocated has not been spent by the enterprise boards to date. That is a fact. They can carry forward unspent funds in their allocations to next year.
If the Deputy wants to forward me details of a particular case, I will be happy to examine it. The central co-ordination unit operated by Enterprise Ireland closely monitoring the allocation of funding and it has carried out a review. It has been effective and increased funding in the last allocation to enterprise boards. What is involved is not only about giving money, although it is a help. It is the level of the formulation of a business plan, which in many cases can be the difficulty in a business surviving, especially if it does not have the necessary feasibility study carried out and the concept of the business plan thought out. What is involved is not the matter of putting money into a business that is not viable — the viability of the project must be assured. It is not about giving out handy money to assure an entrepreneur that the level of support will meet the needs and survival of the project. It is about the overall due diligence required on the application. The Deputy can rest assured that within the Department such money is still available and can be reallocated from one country to another if the need arises.
Written Answers follow Adjournment Debate.
