Priority Questions

Action Plan for Jobs

Dara Calleary

Question:

1. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation the date on which the next action plan on jobs will be published; if it will align job creation targets with each initiative for each Department; and if he will make a statement on the matter. [9430/13]

In recent months, I have been working with my colleagues in government on compiling the 2013 action plan for jobs. The plan has been approved by the Government and will be launched in the coming days. I should point out that the current plan was introduced against a background of an average of 90,000 jobs being lost in the economy per year.

The challenge is to facilitate a transition from an economy built on unsustainable pillars of property and debt to one built on enterprise, innovation and exports. It has always been made clear that this will not mean a fixed number of new jobs in each of the years of the plan. Too many elements of the economy need to be fixed in this early period to undo the damage caused.

Some measures in the action plan for jobs will include specific job creation targets whereas others will contribute to improving the operating environment, which will support the creation of jobs by the enterprise sector. The objective of the action plan for jobs process is to create a supportive environment for businesses so that they can retain existing jobs and create new ones. We are transforming our economy step by step by taking measures across all Departments and many State agencies to remove administrative burdens on businesses, improve their access to finance, further improve our export performance and support the development of key growth sectors.

One of the significant benefits of the approach taken in the plan is that it has required agencies and Departments across government to put forward measures that are making it easier for enterprises to develop opportunities and create employment. However, most of these actions are not of a character where Departments would have a specific job target.

I thank the Minister for his answer. He stated that the action plan for jobs was a series of broad measures without specific targets, but the difficulty lies in the fact that he and his colleagues in government made a commitment in the programme for Government to create 100,000 new jobs by 2016. The live register figures are not moving. The 400,000 or so people who are on the live register are looking to the action plan to see whether it contains some sort of pathway for them.

I gather that the 2013 edition is being launched tomorrow. There will be great fanfare and great talk, but what specific provisions can be shown to the person on the live register who wants to work to give him or her hope? Tomorrow's launch and fanfare will clash with the medium-term fiscal strategy, which seems to take a more sober assessment of net job creation in 2013. Is the Government's target still 100,000 net jobs created by 2016?

The action plan for jobs contains concrete measures that show improvement. Consider the economy's overall employment performance. When we entered into government, the average figure for job losses in the private sector was 90,000 per year. In the past 12 months, private sector employment has expanded by 12,000. This expansion is being driven by the export-oriented sectors on which we have placed our main emphasis in the plan, for example, ICT, pharmaceuticals and digital gaming. We have targeted growth in these sectors and they are performing well. We need to build upon this expansion. That Irish exporting companies added more than 3,000 jobs in 2012 is a turnaround.

There are pathways for individuals. We also have a "pathways for work" approach, in which the Ministers, Deputies Quinn and Burton, are providing JobBridge, the new Momentum scheme and the Springboard scheme. These initiatives are aimed at assisting people who are out of work to access the areas of employment that we are opening up through our enterprise approach. There is a clear momentum and route. People can see that the plan is working.

We continue to have the ambition of creating 100,000 jobs. We know that we must do better and continue to build. However, turning around a situation in which 90,000 jobs were being lost per year to one in which jobs are being added in the private sector is a significant change.

The live register figures are stuck at where they were two years ago despite all of the Minister's talk of job creation. I welcome JobBridge and the other initiatives, but the CSO's end-of-year figures show that just over 5,000 new places were created in 2012 whereas 300,000 people were seeking places on those schemes. This is not a political charge, but a systemic one. What elements does the action plan for jobs contain to bring the Departments of the three Ministers - Deputies Bruton, Burton and Quinn - together, to get them to set their divisions aside and to put a proper activation system in place?

A proper activation system is not 5,000 extra places when we have 400,000 people on the live register.

A significant number of training places are available. FÁS provides 90,000 and the VECs provide more than 100,000. SOLAS, which comes under the remit of the Minister of State at the Department of Education and Skills, Deputy Cannon, will bring a new strategic focus to the delivery of training that is relevant to emerging job opportunities. Much change is ongoing to deliver a more effective service to those who are out of work. The Deputy should table his questions to the Ministers who are driving the reform.

In the situation in which we found ourselves, much work was involved in fixing the banks. Credit had collapsed for SMEs. We had the second highest refusal rate throughout Europe. A considerable amount of work was required to fix what was broken in the crash we inherited. That is why one cannot have a neat calculus and say that so many actions will generate so many jobs. Much work remains to be done to fix what was damaged. The work is being done and we are seeing the success of the plan in the figures in employment. The IDA has had its best year in a decade. Enterprise Ireland has had its best year in five years. Exports are reaching record levels. There is double-digit growth in exports by indigenous companies. Those are a measure of the changing performance.

Jobs Data

Brian Stanley

Question:

2. Deputy Brian Stanley asked the Minister for Jobs, Enterprise and Innovation the number of jobs created and the number of jobs lost in Industrial Development Agency Ireland and Enterprise Ireland supported companies in counties Laois and Offaly for the year 2012. [9407/13]

Employment in agency-supported companies in Laois and Offaly have been very severely affected by the economic crisis. In the three years 2008 to 2011, the net loss in employment in these companies was 1,247, representing a 21% loss in employment in this group of companies. In 2012, net job loss in agency companies was 64. While this is still disappointing, it represents a substantial improvement in the trend. It comprised 54 gross jobs created and 24 job losses in IDA companies and 215 gross jobs created and 309 job losses in Enterprise Ireland, EI, companies.

The two counties have a small base of foreign-owned companies, employing fewer than 1,000 in total, mainly concentrated in engineering and mixed manufacturing. In recent years, it has proved challenging to maintain and attract overseas manufacturing companies into these counties as much of this investment globally is going to low-cost destinations such as eastern and central Europe and China. As a result of the locational shift in global manufacturing, both Laois and Offaly have seen a number of closures within the multinational sector. In order to re-position the counties to a more knowledge-based economy, IDA Ireland is marketing Portlaoise as a key location for investment in the globally traded services sector and Tullamore as a key location for investment in the medical technologies sector, where Ireland has the capacity to win new investment.

Irish-owned companies represent almost 80% of the exporting base of the two counties and have been more resilient in the face of the economic crisis. EI has been actively working with its base of 136 companies in Laois and Offaly, assisting their transition to specialise, innovate, develop skills and value and scale up, including through the launch of the new potential exporters division, the lean business offer which enables manufacturing clients to increase productivity and competitiveness, and the launch of a new development capital scheme aimed at addressing a funding gap for mid-sized, high growth indigenous companies. In the last quarter of 2012, EI launched a €200,000 competitive feasibility fund in the midland region aimed at sustaining start-ups in the area.

The reason I tabled the question is because of figures I received a month ago on the number of jobs created and lost in Laois and Offaly. I did not believe the figures when I first saw them. The Minister outlined that two new jobs were created in Laois in IDA-supported companies while 23 jobs were lost. Enterprise Ireland created 76 jobs in Laois while 138 jobs were lost. There have been significant job losses in County Laois. In Offaly 31 new jobs were created and one job was lost. County Offaly has fared slightly better than County Laois. A total of 139 jobs were created in Enterprise Ireland-supported companies while, unfortunately, 171 jobs were lost. The net loss in Offaly was two jobs but Laois has been more badly affected.

In November I inquired how many visits the IDA had made. I was informed that not one single visit had been made to IDA client companies in Laois in the first 11 months of the year. The agencies have lost jobs in spite of the significant resources available to them. In the case of the IDA, its budget in 2012 was more than €80 million.

The Minister outlined the figures for the three years, 2008 to 2011, which are bad. It is not as if we have had good years. The latest figures come on top of a series of bad years. The number of net jobs created in Cork, for example, was 1,833. In the case of Dublin it was 4,012 jobs. A two-tier system appears to be in operation. Since the Government came to power, 3,100 net jobs have been lost in the midland region and 3,700 have left the labour market in the four midland counties, mainly due to emigration. The unemployment level in the region is at the incredibly high level of 17.4%. The situation is serious and we are most concerned about it.

Those of us who try to project the midlands in a positive way and to get things moving there are discouraged by the figures. The situation looks bad. I have discussed the issue with the Minister in the past. At local level, people are doing their best, yet there is an unemployment rate of 17.4% in the four midland counties. The negative IDA and Enterprise Ireland figures do not follow on from a number of good years. They continue the trend of the appalling statistics from recent years due to the crash. We must get on top of the situation. Could the Minister indicate whether a two-tier system is in operation by IDA and Enterprise Ireland?

As Deputy Stanley is aware, at the request of Deputy Charles Flanagan I arranged a delegation involving himself, other Deputies and local authorities to meet the IDA and discuss the challenges. IDA Ireland has a clear strategy. It has invested €3.2 million in the business park in Portlaoise. It is targeting the location on the basis of the scope it has to deliver in the internationally traded services sector. That is its offer. It also has a significant flagship business park in Tullamore and it has required planning permission for three 10,000 sq. ft. advance technology units. It is positioning Laois and Offaly to be competitive.

It is not IDA Ireland, however, that decides where companies locate. Companies make decisions on the basis of many criteria. Often they are looking for the best fit with their sector. We must build a competitive advantage in the various regions to exploit the areas of opportunity. There is strength in Laois and Offaly in indigenous companies in the food sector, which is doing exceptionally well and has good prospects for growth. It is not always a case of looking to the IDA. It is also important to build on sectors where we have inherent strengths. Engineering is a strong sector, as are forestry and food. There are opportunities to build on them. We are seeking to make Laois and Offaly competitive and to market them effectively. I do not have the figures on visits but I think there were three visits to Laois and Offaly last year.

There were no visits to Laois.

Is that the case? I do not have the figures to hand.

On the three units-----

Could the Minister inform me of the location of the three proposed new IDA units? There is a target of 50% foreign direct investment to be located outside of Dublin and Cork. Currently, the level is 35% nationally but Laois and Offaly are much lower than that.

I am sorry, Deputy, but the time is up. We must move on to the next question from Deputy Healy.

Industrial Development

Seamus Healy

Question:

3. Deputy Seamus Healy asked the Minister for Jobs, Enterprise and Innovation the number of visits by industrialists to south Tipperary in 2012 facilitated by his Department and the various job development agencies; the number of visits specifically targeted at vacant advance factories and vacant private facilities in 2012 and 2013; and if he will make a statement on the matter. [9406/13]

I am informed by IDA Ireland that during 2012, there were five site visits by potential investors from overseas to south Tipperary. Also during 2012, Enterprise Ireland, whose focus is on assisting indigenous companies, dealt with 77 client companies in south Tipperary which employ 2,151 people.

South Tipperary forms part of IDA Ireland’s south-east region along with counties Carlow, Kilkenny, Wexford and Waterford. In south Tipperary there are eight IDA Ireland supported companies employing 3,400 people. The key industry sector for south Tipperary is life sciences, which accounts for almost 90% of employment. The largest employers are Abbott and Boston Scientific, followed by MSD, Pinewood Laboratories and Suir Pharma.

As part of its offering to potential clients, the IDA has invested in the provision of an extensive portfolio of property solutions countrywide. In Tipperary, the availability of the former J&J Cordis facility is an important offering which the IDA is actively promoting. In addition, the ongoing development of the 300 acre park at Ballingarrane in Clonmel is an important asset.

As the Deputy is aware, I established a South East Forum, following the publication of the South East Action Plan in December 2011. That action plan was initiated following the TalkTalk job losses in Waterford and in recognition of the serious unemployment situation in the south-east region generally. Part of the remit of the forum, comprising representatives of relevant agencies and stakeholders, was to examine ways of ensuring better synchronisation of effort in order to avoid duplication and produce synergies that would lead to job creation. The action plan has a number of recommendations which the agencies and stakeholders are charged with implementing. I am satisfied that all these key players in the region have been working together, from within existing budgets, to pursue the plan’s recommendations.

Our first thoughts this evening are with the 245 staff in Abbott in Clonmel who have just heard the devastating news of job losses this afternoon. I ask the Minister to intervene personally to ensure the staff affected get a good financial package, the required training and upskilling to enable them to take up future employment, to intervene with the company - which is a large one that has a large number of workers remaining on the site - to ensure its continued commitment to the site and to replace the jobs that are being lost with new initiatives and developments at the site. As the Minister will know, Abbott is a significant employer and flagship industry for the country and beyond it.

In view of the closure of Kickham Barracks, St. Michael's psychiatric unit, other closures in the area and these job losses announced this afternoon, I ask the Minister to establish a task force to prioritise employment for the south Tipperary area. As the Minister will be aware, the area has been hit by significant levels of unemployment during the years, with the number unemployed rising from 3,524 in 2008 to 9,173 today, almost a trebling of the figures. I hope the Minister will intervene in respect of the job losses at Abbott, as I have requested, and establish a task force to prioritise employment for the county as a result of this news this afternoon.

I thank the Deputy for raising this matter. I absolutely agree that our first thoughts must be with the workers. This is a really tough day for them. I have spoken to the company and I am reassured that it will give full support both in terms of the package of support and assistance in terms of retraining. I am also heartened that the company is absolutely committed to this site. As the Deputy will know, it is also making significant investments in the site to develop it further and it has been an award winning site both within the company and externally. The company is absolutely fully committed to it. It is making investments that will see the quality of production in this site improve and grow more competitive for the long-term future.

As the Deputy said, the company is very committed not only to Clonmel but nationally. It employs 3,200 nationally across 11 sites. Although it is a sad day for the 200 affected, I am reassured of the company's full commitment.

In terms of the south east, I have established a South East Action Plan, I have all the agencies working together to promote the south east, which includes south Tipperary, and I am heartened by the progress that is being made. I can assure the Deputy that I will continue to have a focus both on south Tipperary and the wider south-east region because, as the Deputy said, it is one that has been particularly badly affected in recent years and needs the spotlight upon it, as we have given it in the South East Action Plan.

I reiterate the need for a task force for south Tipperary. Unemployment figures for the county are significant and have almost trebled in recent years. The number unemployed in Clonmel has increased from 1,068 to 2,907. In Carrick-on-Suir, which has a population of approximately 6,000, there are 2,007 unemployed. The number unemployed in Tipperary town, which is a similar size, has increased to 1,732, the number unemployed in Cahir is 1,331-----

I must ask the Deputy to leave it as that as the time allocated for this question has expired.

-----and the number unemployed in Cashel is 1,196. In view of those figures, today's job losses in Abbott, the closure of Kickham Barracks and other closures, I ask the Minister to consider establishing a task force for the area.

Credit Guarantee Scheme Applications

Dara Calleary

Question:

4. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation the progress made regarding the uptake of the credit guarantee scheme and the microfinance scheme; his views on whether the pricing of both schemes is appropriate to the current economic conditions; and if he will make a statement on the matter. [9431/13]

The Deputy will be aware that both Microfinance Ireland, MFI, and the credit guarantee scheme began operating in October 2012. It is my intention that progress reports on the microenterprise loan fund will be published via the MFI website microfinanceireland.ie and updates on both schemes will be published on my Department’s website, enterprise.gov.ie, on a quarterly basis. Over 100 loan applications have been received by MFI, with 27 loans approved to date to the value of €427,000 supporting 68 jobs. MFI is currently actively promoting the availability of its loan fund and is focusing on a media campaign to raise awareness of the scheme across the country. Other options for promoting the fund are also being examined.

MFI was established as a private limited company with a board of directors. The directors have set the interest rate to be charged on loans under the scheme at 8.8%, taking into account a number of factors including prevailing market interest rates, the economic environment and specific risk factors.

The Deputy will know that lending to microenterprises is high risk due to the high failure rates with business start-ups, little or no track record, the fact that they were refused by banks previously, and no security available. Pricing of loans, therefore, tends to strike a balance between the support of new start-ups and the rapid erosion of the taxpayers' equity put into the scheme.

With regard to the credit guarantee scheme, there are currently 14 approved guaranteed loans resulting in €1.5 million of additional lending being provided to viable companies as of close of business on 15 February 2013. As a result of the sanctioned lending it is expected that there will be 113 new jobs created and 19 jobs will be maintained.

A premium rate of 2% is payable by the borrower. A rate of this nature had to be set to ensure the scheme complied with EU state aid rules and it was set at the lower end of the potential pricing spectrum, to which the Minister, Deputy Bruton, agreed.

In consideration of these categories, and recognising the current situation of the SME lending market in Ireland in the current economic conditions, it would be difficult to justify making the case for a premium rate any lower than 2% for a guarantee of this nature.

I will meet the board of Microfinance Ireland in the next two weeks on the microfinance fund. Also in the next two weeks I will meet representatives of Bank of Ireland, Ulster Bank and AIB who are managing the partial loan guarantee scheme for an update on that.

There are four minutes overall for the questions and answers.

I thank the Acting Chairman. That was a nicely done Dublin South turnaround in the Chair.

I raise a couple of issues. The 100 applications to the microfinance scheme is a healthy sign that is to be welcomed but when only 14 have been approved under the credit guarantee scheme it points to a serious problem in terms of awareness of it. When the Minister of State meets representatives of the banks he must bring it home to them that they must do a great deal more in raising awareness of that.

I am aware that in recent years the Minister of State has undertaken tours of the country with chambers of commerce and local business groups on access to finance issues. Would he consider doing that again? He has these two solutions in place but people simply are not aware of them. There is a common problem about awareness across the Department.

The poster boys for the Department, the exporters, are dissatisfied. A survey of exporters last year found that 51% were dissatisfied with the information provided on the application process for five schemes. There is no sense in putting so much work into putting those schemes in place if there is a general lack of awareness about them.

The Minister of State spoke about businesses that were previously refused by the banks and that used to be an acceptable excuse but given the level of refusals by banks, with many solid and healthy businesses being refused credit, it is unfair to price in a premium because a bank previously refused a business.

The most important point is that we need to build a greater awareness of these schemes.

I thank Deputy Calleary for raising these very important points about point of sale and engagement. As Deputy Bruton has stated recently, we are totally unhappy with the level of lending by banks, especially given that they have been recapitalised by the taxpayer.

On the issue of the micro-finance fund, there is a very active board in place. It has a charitable company status and is working very proactively with the enterprise offices in every county. I agree with the Deputy that is important to get out on the ground and encourage people to engage with the scheme. People must engage with the enterprise offices in places like Mayo, Sligo and Roscommon to even hear of this scheme.

Bank of Ireland, Allied Irish Banks and Ulster Bank have been guaranteed by this State and I am very disappointed that there has not been more proactive engagement on their part. I will deal directly with the banks to determine why the uptake of this scheme has been so slow. It is not good enough and we have been disappointed that there has not been a greater number of applications. I will certainly give the Deputy an update following the meeting with the banks. We will put an obligation on them to get involved and to give this money out to the business people who need it.

I absolutely agree with the Minister of State with regard to the banks. In fact, I tabled a question asking for his opinion on the banks which was disallowed so I thank him for giving his opinion here that the banks are not lending enough. The two pillar banks have been recapitalised and given targets. The Minister of State is meeting business people every day and is in touch with what is happening on the ground and he can see what is happening. The Department of Jobs, Enterprise and Innovation must tell the Department of Finance to put the pressure on and to put the boot in because this is costing jobs. There is no sense in having all of these schemes and fancy plans if, at the end of the day, profitable and healthy businesses cannot get access to finance.

The Minister, Deputy Bruton, is actively engaging with the banks. The banks are now focused on domestic lending and they also need successful businesses. The onus is now on the banks to step up to the mark, especially in the context of the State guarantee. We expect a lot more tangible results from the banks and proof that they are actively engaging with business people. We have given them taxpayers' money. We want to create jobs and we can have all the plans in the world to do that but if people cannot get the necessary funding for vibrant businesses then jobs will not be created.

Enterprise Support Services Provision

Brian Stanley

Question:

5. Deputy Brian Stanley asked the Minister for Jobs, Enterprise and Innovation his views on whether local government or existing enterprise agencies are best placed to promote local economic development. [9408/13]

The micro and small business sector is central to Ireland’s overall economic recovery. The purpose of restructuring the current model for the delivery of State supports to that sector is to rejuvenate and enhance the national model. The new model is designed to harness the best elements of local government and the enterprise agencies to support local business and contribute to local development.

To that effect we have decided to dissolve the current 35 separate board structures and create a first-stop-shop at local level for small and micro business. We will bring local enterprise support into an integrated national network of local enterprise offices, LEOs, offering progression to the existing national programmes run by Enterprise Ireland. The plan is to combine enterprise support for small business at local level with the business support service from local authorities into a single LEO and locate this office within local authorities, but operating under a service level agreement with Enterprise Ireland. We will enlist the support of local authorities in creating the best possible environment for small business in their area and benchmark the progress being made. Furthermore, we will work with local business and the wider community to create a supportive network for entrepreneurship.

While I am aware that there are some reservations about bringing the current county enterprise boards within the umbrella of the local authorities, I believe local authorities have great potential to be a vibrant partner for the development of small business. Many local authorities have been very innovative in providing space for start-ups, opening up procurement opportunities, supporting the marketing of local producers, offering incentives, streamlining access to planning and licensing and so forth. However, this is a challenge for the local authorities to do more and to bring the culture of “think small business first” into their work.

The Minister, Deputy Bruton, and I have consulted widely in the context of this proposed reform. On foot of a consultation paper we published at the end of last year setting out the road map for the implementation of the reform process, more than 80 submissions were received. Many of the submissions make positive suggestions on how the reform could be rolled out effectively across a range of issues. These responses are currently being examined and will be factored into shaping the operational scope of the LEOs.

Both the Minister and I view the reform as an important opportunity to get a combined effort in behind start-ups and small business and we shall vigorously work to harness the potential of the new model.

I thank the Minister of State for his reply. The changeover from the county enterprise boards system is a substantial move. I agree that some local authorities, including my own in County Laois, have been very active in the areas of job creation and assisting small employment projects through the development of enterprise centres and other supports. The concern is that there seems to be some opposition to this proposal from the SME sector and from ISME and the SFA in particular. They have publicly opposed this and expressed their belief that there is not the expertise within local authorities to propel economic development. They have also expressed a concern about political interference with business supports.

There has been a consultation process but that is now over. Is there a turf war going on and is that causing problems? Has enough work been done with the small business sector to get the message across that this proposal will actually work?

This must work because the whole economy depends on the "think small first" principle and the role of small business in every economy is absolutely critical. Intensive consultation is ongoing with all of the vested interests. I have chaired the advisory group on the role of small business in the economy and genuinely believe that all of the expertise in the 35 enterprise boards will be retained, which is critically important. There is much expertise within local authorities in terms of business evaluation and so forth. I know some are concerned about involving local government in this but I think it makes huge sense. We are talking about putting all of the services together in a one-stop-shop facility. That will involve local evaluation of the projects and the expertise of the county and city enterprise boards will still be there.

Change is not a bad thing in itself. When one looks at the service level agreement with Enterprise Ireland one sees that rather than having separate autonomy in every county, there will be joined-up thinking and the best practices within the local authorities will be front of house. If somebody in Laois wants a service, he or she can go to the local enterprise office and get advice on starting a business, banking applications and so forth. The opportunities for business development are enormous, especially with the involvement and commitment of established business people. We fully realise that the backbone of the economy is small business. In the past there was a lacuna in terms of support for companies with over ten but less than 35 employees. That category of business will now be able to access the services. The high-potential start-ups will be very much encouraged by Enterprise Ireland. We must remember that Enterprise Ireland-supported companies employ 175,000 people.

I genuinely believe that we are integrating the knowledge into a one-stop-shop that can only benefit the development and roll-out of new companies as well as the expansion of existing companies.

The Minister for the Environment, Community and Local Government recently suggested that tensions exist between State agencies and Government Departments over this proposal. Is there tension and has it been resolved?

I can assure the Deputy that there is no tension whatsoever. All of us in government and in every State agency have one motivation - to get Ireland back working again. That has been my experience in my dealings with civil servants. They are totally committed to getting people back into business and I am very encouraged by that. What the Deputy is referring to is only hearsay. The best evidence of our commitment is that we plan to roll it out as quickly as possible. I look forward to going to County Laois myself to launch it.