Priority Questions

Job Creation Issues

Willie O'Dea

Question:

55. Deputy Willie O'Dea asked the Minister for Social Protection the reason certain companies have been removed from the possible internship options on the JobBridge programme; if she will publish a list of these companies; and if she will make a statement on the matter. [33273/13]

The aim of JobBridge is to assist individuals to bridge the gap between unemployment and the world of work. JobBridge has made very significant progress since it came into operation in July 2011. As of 27 June 2013, 18,587 internship placements had commenced, with 5,934 participants in active internships and 1,936 internship posts advertised and available on the JobBridge website. The independent evaluation conducted by Indecon Economic Consultants which I published recently has found that 61% of interns who finish placements secure employment within five months. These progression outcomes are exceptionally positive and compare very favourably with European averages for internships.

We believe these outcomes are due, at least in part, to the voluntary nature of the relationship between the host organisation and the intern and to the careful design and active management of JobBridge by the Department. One of the strong features of internships is that part of the intern experience is in interns applying for and succeeding in getting an internship place. The internship is designed to stay as close to the acquisition of a permanent job as possible. For example, as part of this design, we ask host organisations to provide meaningful work for interns, to commit to a standard agreement detailing expected learning outcomes for the intern, to provide mentoring for each intern and assign a mentor to the intern for this purpose, to submit monthly reports to the Department and, at the end of the internship, to complete an end of evaluation questionnaire and provide each intern with a reference.

In asking host organisations to observe best practice guidelines, we are requesting them to invest considerable time and effort in the intern. This investment pays dividends by increasing the value of the internship and is a major factor in the high rate of progression of interns into employment.

We have carried out 2,200 on-site monitoring visits, arising from which 23 organisations have been excluded from JobBridge.

Additional information not given on the floor of the House

Given the importance attached to the quality of the internship experience, the Department actively monitors internships to check whether host organisations are conforming with its specification of best practice. In cases in which it is deemed that an organisation is not offering an internship of sufficient quality the Department reserves the right to exclude that organisation from further access to JobBridge and, in some cases, to terminate existing internships. However, it is important to highlight that the overwhelming majority of organisations are operating in conformance with the scheme design. In fact, more than 7,500 host organisations have participated in the scheme and, as outlined above, just 23 organisations have been excluded from further access to the scheme.

I do not deny that the JobBridge programme has enjoyed some success or that the vast majority of hosts have behaved in a responsible manner. That is what they are supposed to do. However, my question was tabled to find out about the minority who have sought to abuse a Government scheme funded by taxpayers' money and designed to give young people a start in life. That sort of conduct is despicable. The Minister has not answered my questions regarding what these organisations did to precipitate their removal from the scheme and whether she plans to name them.

We have carried out 2,200 on-site monitoring visits out of 7,500 host organisations that have participated in the programme. That is a high number of visits compared to the total number of organisations. Reasons for excluding organisations include a failure to complete or adhere to the standard agreement, which requires that a high-quality experience and a reference be provided to the intern and includes reporting, evaluation and monitoring provisions; a failure to provide evidence of the provision of mentoring and development to the intern; a failure to complete monthly updates; the use of interns to undertake duties of displaced staff; and a failure to provide a reference to the intern. The host organisations are getting the value of the qualifications, experience, creativity and energy of the interns and, in return, they are asked to offer a high-quality experience and fulfil certain conditions. If they do not, we will withdraw their sanction. However, 23 out of 7,500 organisations represents a low rate of failure.

I accept that, but it does not justify abuse of the scheme. When a host puts itself into the market to accept interns, it must sign up to a certain agreement. The 23 organisations that have been identified thus far clearly did not adhere to the terms of that agreement. Does the Minister propose to name those organisations? I tabled a question to that effect previously and was told that she was not prepared to name them because, for some obscure reason, it might affect employment levels and the economy. She will be aware that if an organisation or individual is in default with the Revenue Commissioners, it suffers two punishments. First, it is subject to savage penalties and interest, and second, it is named and shamed. The latter is regarded as part of the punitive process. The organisations we are discussing suffered no punitive process other than being deprived of the opportunity to continue abusing the JobBridge scheme. They have not been named and shamed, which is the only possible punishment I regard as appropriate. Why is that the case? A number of those who have been subject to Revenue Commissioners audits and penalties are also employers. That did not stop them from being named.

If the Minister does not have this information, perhaps she will undertake to give it to me, but has any of those organisations been involved in the transgression of either labour or industrial relations law in any other context?

The comparison with Revenue is not appropriate. People are bound by law to pay their taxes. The internship JobBridge scheme is a voluntary arrangement on the part of both the intern and the host organisation. As we have gone along, we have refined and improved the scheme. We have broadened it and introduced further specifications over time. In the beginning, offers were posted which were not internships and this was a frequent complaint initially. This was because we were launching a brand new scheme, unseen previously in Ireland. We have been learning constantly since.

The intern is important and it is important he or she has a good experience. Interns communicate with us monthly and we are focused on them and their experience, along with the benefit to the host organisation, because we want them to be able to move on to further employment, either with the host or someone else. They communicate with us monthly and also have access to Department staff who will visit the host organisation and conduct a monitoring visit. Where there is a complaint, we investigate it speedily and examine the cause of the complaint. As a consequence, the volume of complaints is very small.

In addition, there is a very active community in the various social media who voluntarily monitor closely every aspect of JobBridge and advise the Department. We take all of the observations made to us and reflect them in the subsequent development of the scheme. An offence or failure on the part of companies taking on interns cannot be compared to a Revenue offence, as by law, one must pay one's taxes. What companies must do with this scheme is to give interns a quality experience and a proper internship. A Revenue offence belongs to a different category. Most of the firms offering internships are voluntary members of the scheme. Where an intern has a problem, we will withdraw that intern if the host organisation is at fault and will find another placement for him or her.

Jobs Initiative

Aengus Ó Snodaigh

Question:

56. Deputy Aengus Ó Snodaigh asked the Minister for Social Protection her proposals to subsidise employers who take on persons who are long-term unemployed; and if her attention has been drawn to the dangers of subsidising private businesses to this extent. [33543/13]

I was delighted to launch JobsPlus yesterday in Waterford with the Taoiseach, the Tánaiste and the Minister for Jobs, Enterprise and Innovation, Deputy Bruton. The new scheme, JobsPlus, is a simplified scheme. It is as easy as I could make it for employers and applications are made online. The scheme replaces the employer job PRSI exemption scheme, which started in June 2010, and the Revenue job assist scheme which began in 1998. Employers had said to me that while these schemes were very good, they were very clunky and the numbers of people applying for them were very small. I went around the country and talked to employers and the result is that this new scheme is as simple as I can make it.

There is an immediate financial incentive to employers. The incentive is payable on a monthly cash-back basis over a two-year period while the employee is retained in full-time employment of over 30 hours per week. In respect of recruits who are more than 12 months unemployed, but less than 24 months, the incentive is €7,500. This amounts to over €300 per month. For somebody who has been unemployed for two years or more, the incentive is €10,000 over two years. This is worth approximately €400 per month. This is a cash-back or wage subsidy scheme paid directly to the employer in respect of a qualifying employee taken on.

I travelled around the country and listened to employers in this regard. Approximately 2,500 employers attended the nine or ten road shows I conducted around the country.

Most people said they had never heard of the schemes or that they were very awkward to implement. This one is simple and, hopefully, it will be a help to the long-term unemployed, who now constitute a significant number of those unemployed in this country, and will also be a cash-back wage subsidy to employers who take on people.

Additional information not given on the floor of the House

While conducting employer road shows throughout the country last year, I listened to the views of employers who perceived the old schemes as being complicated and burdensome. The low take-up of the old schemes endorses these views, and that is why I have introduced a simple, easily understood and attractive scheme to encourage employers to recruit from the longer-term unemployed.

The State offers supports to private business through a number of Departments and agencies, the objective being to attract and retain investment and nurture indigenous industries to create employment and contribute to the Irish economy. JobsPlus aims to alert employers to the talented pool of workers on the live register and encourage them to offer this group an employment opportunity. The structure of JobsPlus, which biases the incentive in favour of employers who recruit long-term unemployed people, lessens the likelihood of economic deadweight associated with interventions of this nature. While unemployment has stabilised recently, persons on the live register for a year or more now account for about 45.5% of all persons on the live register and this rate has been increasing slowly in recent months.

Every new full-time job supported under JobsPlus not only reduces social welfare payments made by the State but, critically, reduces the payments made to longer-term unemployed people, who evidence suggests are more likely to become long-term dependants of welfare. In addition, these new full-time workers will now contribute to the Exchequer by paying tax and PRSI.

The introduction of JobsPlus is closely aligned with Government policy on job creation, which is central to overall Government policy, particularly in times of high unemployment. The Government’s activation strategy as presented in Pathways to Work outlines the overarching objective of the strategy, which is to maximise the number of new jobs to be filled by the unemployed. This investment in jobs creates an additional stimulus, having a multiplier effect on the domestic economy and domestic demand which, as the Deputy knows, is crucial to our recovery.

I welcome JobsPlus. The question is not meant as a criticism but simply as an expression of concern. We must ensure that, as in other schemes, we do not end up with job displacement and abuse by employers. The question focuses on what type of monitoring will be put in place to ensure there is no displacement and that it is not an incentive to employers to lay off a person and take on somebody who is long-term unemployed, which would defeat the purpose. What steps will be taken to ensure businesses do not become dependent on this scheme? Obviously, they will employ somebody for the two years and will receive a benefit, but they may then employ somebody else. While this is obviously an emergency measure to reduce the number of long-term unemployed, which is welcome, there are concerns. I ask what steps will be taken to deal with these issues.

I welcome Deputy Ó Snodaigh's support for JobsPlus as well as Deputy O'Dea's support for JobBridge. With these schemes we are following Lord Keynes' advice that, at a time of depression and recession, the critical thing is to get more money circulating in the economy, and one of the best ways of doing that is to get as many of our people as possible back to work.

Deputy Ó Snodaigh knows as well as I do the number of people who used to be up at 6 a.m. on a lovely day like today, out working on construction sites and finishing only when the light went down. In the period after the Anglo Irish Bank bailout and the bank guarantee, this country lost 250,000 jobs. We fell off a cliff as regards employment. Quite a number of those people are still out of employment because they were in construction. They need to transfer, so this is an opportunity for them.

One of my concerns is that when an employer looks at somebody's CV, if the person has been out of work for one, two or three years, the employer will wonder about the gap. We try to fill that gap through education, training, community employment, job placement and JobBridge. As service under any of those schemes is included in the calculation of one or two years out of employment, employers will be getting people who will potentially have a lot of experience in different areas.

We will monitor the scheme by having employers apply online. Obviously, if an employer has just had redundancies and reductions in its labour force, this is the kind of development that would perhaps indicate an attempt at displacement, and we would seek to exclude such employers.

As I said, I wish the scheme well. I am interested in the uptake because I believe some businesses are in a position to employ additional people. It will be interesting to see how the Minister's budget will cope if there is an intake, because I presume money has to be set aside to pay the approximately €300 or €400 a month the businesses will receive. I have a concern in that, while we understand the benefits to the local economy and to the people who will take up positions, we do not want to end up with a tier of businesses that are dependent on a subsidy from the State to employ people on a continuous basis. At some stage, somebody will have to make an assessment that such businesses need to break that dependency. While they are not dependent as yet, it is something to watch for in the future.

I thank the Deputy. As I said, this is a type of wage subsidy. Many economists who believe in expansion and a Keynesian stimulus would agree with this, and both major parties in Germany agree with the use of wage subsidies. Whether positions are taken up depends to some degree on the calibre of the people who apply, because an employer is not going to make a hiring decision based only on the wage subsidy element.

Nevertheless, the scheme does offer a good cash-back incentive for employers. If they take on a person who has been on the register for one year or more, that subsidy will be €312 per month. Where the individual has been out of work for two years or more, the subsidy payable is more than €400 per month. Employers, for their part, must offer the employee at least 30 hours work per week and must abide by the minimum wage requirement and other aspects of labour relations law.

The two existing schemes were very well intentioned but did not have a very good take-up. If we succeed in getting, say, 2,500 people off the live register and into employment under the scheme, the cost will be more than €20 million. At the same time, however, we will save on social welfare payments, which are a minimum of €188 per week per individual. If we do the maths we see that everybody can be a winner, including the individual who has not been in work, the employer who receives a wage subsidy, and the Department of Social Protection. I will be much better thought of by the Minister for Finance as a consequence.

Community Employment Drug Rehabilitation Projects

Maureen O'Sullivan

Question:

57. Deputy Maureen O'Sullivan asked the Minister for Social Protection the numbers availing of community employment drug rehabilitation schemes in the Dublin areas; if there is an increase or decrease from previous years; and if she will outline the progress that has been made in ensuring the sustainability and development of these programmes. [33426/13]

As at June 2013 there were 664 participants in drug rehabilitation projects in the three Dublin divisions, comprising 338 participants in Dublin Central, 130 in Dublin North and 196 in Dublin South. This represented an increase of 12% compared with the figure for June 2012, when there was 595 participants in drug rehabilitation projects in those divisions. Progress has been made in a number of areas in ensuring the sustainability and development of drug rehabilitation projects operated under the community employment scheme. This is in accordance with a commitment I gave when I took over the management of the scheme.

An improved vacancy notification system for drug rehabilitation places is now in place and has been advised to all scheme sponsors. This aims to improve the spread of draw-down of places within Dublin and across the country and increase awareness of these opportunities. Priority was given in the application of the additional 2,000 places provided by the Department in this year's budget. If Deputies have ideas on innovative means of providing additional places, I and my officials would be pleased to hear them.

A referral process has been introduced to ensure appropriate referrals to the rehabilitation places. The Department's referral protocol has been agreed with the National Drugs Rehabilitation Implementation Committee, NDRIC, and links with the emerging care and case management framework designed to promote an inter-agency response to the needs of people working towards rehabilitation. Earlier this year a stakeholders group for drug rehabilitation schemes was established by the community employment policy unit within the Department. This group acts as a consultative mechanism to assist the Department in identifying improvements to the current community employment drugs programme and advising on how we can attain efficiencies and value for money in the delivery of the programme.

As part of this development, a drugs awareness briefing workshop was held recently for officers within the Department who are working with the drug rehabilitation schemes. The workshop was delivered by key stakeholders from the statutory and community sectors, including scheme participants.

Additional information not given on the floor of the House

The objective was to inform and advise officers on developments in regard to drugs rehabilitation scheme places and to enhance their skills in working with the operators of the schemes.

My Department is a member of the Oversight Forum on Drugs, the Department of Health's drug advisory group and NDRIC, and supports drug task force activities. I am confident that all of these improvements and better local engagement will lead to the delivery of a better programme.

I acknowledge that there is much that is positive in the Minister's reply. The financial review undertaken by her Department last October recognised the important role of the drug rehabilitation programme and recommended that it be a dedicated strand of the community employment scheme. It further advised that there should be a more coherent framework to ensure sustainability and development. I understand progress is being made in that regard, but will the Minister indicate how much consultation there has been with local bodies? I am very familiar with these schemes in the inner city, the people who participate in them and the vital role they play in individuals' recovery.

They offer substantial learning paths but they are in disarray because of the changes to FÁS, FETAC, VECs and the NQAI. Previously accepted programmes are now not getting project accreditation and are unable to register. Can the process be speeded up so that they can register and get the accreditation they had in the past?

I acknowledge Deputy Maureen O'Sullivan's knowledge and expertise in the area and the expertise of other spokespersons on other parts of Dublin city and other parts of the country. We took over community employment in January one year ago. Traditionally, drug rehabilitation places are difficult to fill, and it is often difficult to fill even 1,000 places. If Deputy O'Sullivan or other spokespersons have ideas about Dublin or other towns and cities where there are problems, I am open to discussing it.

We set up a stakeholder-and-forum approach and we are seeking to educate the officials dealing with case management of individuals. If someone has had serious drug addiction and a problem from a young age, the path to rehabilitation can be slow and lengthy. We have provided for that. For many people, the high point will be returning to education - and not simply to work - so that they can develop themselves over an extended period of time. Now that the schemes are in the Department, there is greater capacity for progression up to a five-year period so that people can free themselves, their families and their communities from being dominated and ravaged by drugs and can move into education and getting qualifications.

It comes back to viable projects that have a good reputation and that are working with people in recovery. They are being slowed down in the registration and accreditation process. Community employment schemes are countrywide but I must make a point in respect of Dublin Central, which has twice the national average of lone parents and pockets of which have unemployment rates of 60% and higher. Community employment schemes are vital. Double payments is another issue. In grappling with the issues facing us, some further incentives are needed to get people onto the schemes. As well as what the schemes are doing, we must also consider the services they are providing, particularly child care. Community employment schemes can provide training in child care, as well as the service, but they also provide employment in preschools and crèches. There will be a need for more people with FETAC qualifications. There is a real gap that could be addressed.

If the Deputy has queries about specific schemes, perhaps she can bring them to my attention. If there are specific issues, I will examine them. With regard to child care, we are working on the idea that all child care places availed of lead to a FETAC level 5 or 6 qualification. Getting to level 5 is a serious qualification in terms of the attractiveness of an individual for the employment opportunities available. Our hope is for a progressive structure with social contact and rehabilitation experience. The HSE can provide therapeutic input, which is separate to what the Department of Social Protection does. There is also a movement into education, personal development and, ultimately, qualifications in areas in which employment is a possibility.

Job Initiatives

Willie O'Dea

Question:

58. Deputy Willie O'Dea asked the Minister for Social Protection if she is satisfied with the progress made in advancing the Pathways to Work scheme in view of reported recent criticism from the European Commission, ECB and IMF in their Cabinet memo; and if she will make a statement on the matter. [33274/13]

Pathways to Work represents the most significant ever change to the manner in which the State engages with and provides services for people who are unemployed. It delivers on the programme for Government commitment to create a co-ordinated employment and entitlements service and involves a multi-annual programme of complex legislative, organisational, process, people and work change which runs to the end of 2014. There are five strands to Pathways to Work, including engagement with people who are unemployed, the provision of activation places and opportunities, incentivisation to take up opportunities, work with employers and reform of institutions. I am satisfied that we are making good progress on all of these elements. Last year, for example, 68,600 clients participated in a group engagement process, while more than 40,000 clients have benefited from such engagements already in 2013. Similarly, the Department conducted 158,000 initial one-to-one guidance interviews with jobseekers last year. The target is to complete 185,000 initial interviews in 2013. Under the Intreo model being rolled out across the country, the process of engagement starts immediately when a client registers for a jobseeker's payment and is informed by a personal profile captured in respect of each individual. That happens for everybody who signs up.

I note that we are entirely dependent on the OPW for the update, refurbishment and supply of offices, where required. For example, the Waterford offices are expected to be completed by the end of the year, which is a positive development.

With regard to the provision of the one-stop-shop element of the service, the first 12 Intreo offices are now live. We are converting a further 31 offices to full Intreo service providers by the end of the year. Many of our offices are offering Intreo services while they wait for physical refurbishment to take place. We intend to complete the full roll-out to all 63 offices of the Department in 2014.

Additional information not given on the floor of the House

This element of the new service is dependent on the acquisition of new properties and the structural modification of existing properties and, therefore, has the longest lead time to completion. The implementation of more intensive and rigorous case management requires that additional resources be devoted to the activation process. In this regard, the implementation of the new Intreo process and the integration of previously separate functions in FÁS, the community welfare service and the Department of Social Protection are creating efficiencies that will enable staff to be redeployed to case management activities. It is expected that 300 staff will be redeployed to these activities by the end of the year, which will enable the Department to continue to resource its activation agenda. In parallel and in order to augment and complement this effort, the Department is considering greater use of contracted resources. Towards this end, it issued a prior information notice of a potential tender competition on 28 June 2013. Feedback on this notice will inform the further evaluation of the contracting option.

I am satisfied that the redeployment of staff, combined with potential use of contracted resources, will enable the Department to complete its roll-out of the Pathways to Work model on schedule. The particular concern expressed by the troika related to the first strand of the programme - the pace at which we are changing how we engage with people who are unemployed and the extent to which we can resource this new engagement model.

The Minister has stated this is a centrepiece of the programme for Government. It is in the interests of every person in the country, regardless of political affiliation, that it is a resounding success. The Minister stated she was satisfied with progress. The scheme has been the subject of a number of reports, almost all of which have been critical. The most recent has been the report of the European Commission which includes remarks to the effect that progress has not been sufficiently fast in the light of the urgency and scale of the problem; that the pace of reform and the resources mobilised are insufficient, given the scale and urgency of the problem; that the capacity to engage meaningfully with jobseekers remains short; that rapid decisions and actions on the possible outsourcing of some activation services are needed but that progress has also been slow; that special attention needs to be dedicated to reskilling, upskilling and training, in particular for the long-term unemployed and the youth; and that faster action is needed to reform employment support schemes to increase their effectiveness. Taken together with the other reports, this is a damning indictment of progress in what is, in essence, a good scheme. Is the Minister aware of these criticisms and how does she propose to respond to them?

Physical premises represent one of the most significant difficulties. The Deputy has visited a social welfare office operating the new scheme. The key to the new scheme is having sufficient space to carry out the group engagements, at which we outline to people initially the services, schemes and opportunities the Department is making available. We also set out for people in these engagements their obligation to co-operate with the Department to get back to work. One-on-one interviews are then required to take place. We have conducted large numbers of such interviews and more than met the targets set. We need from the OPW offices at which we can conduct this business. The new offices offer levels of privacy and provide for discreet appointments.

I am in constant touch with the OPW to ensure that it remains extremely supportive and on the case in providing us with the offices.

The troika has gone out to a number of the offices and has been very impressed. A critical issue for the troika is that if, for instance, there was more growth in the economy - I note that a number of the partners to the troika, such as the IMF, have admitted that they got some of the ambitions for Ireland wrong and underestimated the effect of deflation - that would have an impact on the numbers getting back to work. The troika arrived in town today and that discussion is ongoing with it.

In announcing the scheme, Government set out a number of objectives. One objective is that 75,000 persons would be taken off the live register during the lifetime of the Government and that the average waiting time on the live register would be reduced from 21 to 12 months. What progress has been made to date on these objectives and how optimistic is the Minister that they will be realised?

From what we were told on the last occasion, I realise that the outsourcing of some of this work to private contractors was happening to some extent even before the Government announcement. The Minister then stated that the Government was studying how to go about further outsourcing. What is the position in that regard?

Finally, one can take a person off the live register, not only to get a job but to be re-educated or re-skilled. Much of this re-education and re-skilling would take place in the fourth-level education sector where funding has been cut back and pupil-teacher ratios have increased. How does that gel with the Government's objectives in Pathways to Work?

The last part of the question probably has the makings of a proper study for the troika as it arrives in Dublin because it addresses that balance between maintaining employment and the flow of money in the economy that will help to boost consumer confidence and get consumers spending again.

On the services of the Department, we have approximately 85,000 engaged and participating in various options offered by the Department, most notably, 25,000 plus who are involved in going back to education. In the long run, when one is in a recession like we are, one of the best options is to educate people as well as possible. Finland and Sweden had bank crashes - it must be said, not as bad as ours but nonetheless - in the 1980s and 1990s and found investing in education most important, and my Department is doing that.

The second aspect involves expanding all of the different opportunities we have mentioned. We have also issued a prior information notice, PIN, which is, essentially, to invite expressions of interest from organisations around the country, whether in the community, voluntary, public or private sectors, which may be interested in helping in the job and, ultimately, tendering for some of the work to help to get people back to work. As I told the Deputy previously, we also have been studying what has been happening in other countries, such as the United Kingdom, but particularly Sweden and Finland which had their own bank crashes and deep recessions, to learn from those who brought themselves back from a difficult position to a prosperous position currently.

Departmental Banking

Thomas Pringle

Question:

59. Deputy Thomas Pringle asked the Minister for Social Protection her role in supporting the provision of the standard bank account through An Post for delivering social welfare payments through the post office network; and if she will make a statement on the matter. [33202/13]

I am pleased to advise the Deputy that An Post recently became the preferred bidder for the delivery of over-the-counter cash services to Department of Social Protection customers subject to contract agreement.

Last year some 43.7 million payments, or 50% of all payments made by my Department, were issued in cash through An Post’s network of 1,152 post offices nationwide. I am very anxious to highlight the significance of the expenditure in local economies, in every town, city and village. Although negotiations remain to be concluded, An Post’s selection as preferred bidder for the new contract will continue to contribute to the vibrancy of both the rural and urban economies. However, at this juncture, An Post does not provide a standard bank account. The Department of Social Protection is a key player in the payment services sector, with over 87 million payments issued to customers in 2012. It envisages an environment in which social welfare payments delivered to customers will ultimately provide an electronic option for everyone. This goal is in line with wider Government policies.

It is noted in the strategy for financial inclusion report that the post office network has the potential to play a key role in the delivery of standard bank accounts. As the roll-out of the standard bank account is being driven by the Department of Finance, it will be a matter for that Department and my colleague, the Minister for Finance, Deputy Michael Noonan, to work with all potential providers, including An Post, in the coming months to optimise the nationwide availability of the standard bank account.

Additional information not given on the floor of the House

Supporting achievement of financial inclusion for customers is of fundamental importance to the Department. In this respect, it is working with the financial inclusion working group established by the Department of Finance to support access to the new standard bank account. The Department’s payment strategy is contingent on the roll-out of the standard bank account. The combination of the national payments plan, the standard bank account and the Department’s payment strategy can, as three interdependent initiatives, realise tangible benefits in delivering a more efficient payments landscape and grow opportunities and benefits for consumers and business alike in the medium term. My Department will continue to work with the Department of Finance and the financial inclusion working group to progress the roll-out of the standard bank account.

The point of my question is that 17% of people in the country do not have access to a bank account. Most of them are probably social welfare recipients who are the customers of the Minister's Department. While recognising the role of An Post in facilitating payments and its success in becoming the preferred bidder, I also know that the Department's preference is to move to electronic payments, with the aim of having only 3% payments made in cash by 2017. This will have very serious implications for the recipients of social welfare payments and also for An Post and the viability of its network. The basic payment account is very important for the recipients of social welfare payments who could continue to access their payments through the use of this account at the post office. The Department should have a role in the roll-out of the basic payment account to ensure post offices can provide that service for the Department's clients and that the system works. I ask the Minister to ensure the Department of Finance will make this happen.

The post office network has a very important role in the economic and social infrastructure of small towns and villages. However, An Post does not have the standard bank account facility which, perhaps, should have been developed a long time ago. It now has the opportunity possibly to work in conjunction with whoever might be its preferred partners.

I draw to the attention of the Deputy another element of An Post which is important to me. My Department asks all new jobseekers to collect their payments in person. This is of very significant assistance in deterring fraud. People have to show up and cannot have someone else collect payments for them. An Post potentially has an important role. For example, the postmaster or postmistress knows everyone in the local area. This knowledge provides a front-line of defence against fraud. This is a service which all providers cannot offer. The electronic fund transfers are significantly cheaper. I recently visited Milltown Malbay where I spoke to a number of postmasters and postmistresses. They told me that on Thursdays and Fridays, particularly in the winter months, there was very little activity, except for people coming to collect retirement pensions, for example, who then bought their groceries in the shops.

The Minister has outlined one of the reasons the post office network is so important. It is important from a social protection perspective to provide the basic payment account through the post office network. The recent pilot study carried out by the Department of Finance produced very disappointing results because An Post was not actually included in the pilot programme. There is great distrust of the banks. This has been very well rehearsed in the House and we know the reason. An Post would allow those with no bank accounts but who are clients of the Department of Social Protection to receive electronic payments. This would reduce the costs of the Department and retain an element of security in terms of identifying fraud.

By and large, those who do not have bank accounts tend to be those who are less well off or perhaps older people. Perhaps they include people who, wisely, learned not to trust banks too much. It is partly a cultural phenomenon.

In Africa, for instance, almost all banking is done by telephone. There has been an enormous change in how banking is carried out nowadays. If the basic bank account, as committed to by the Minister for Finance, is developed in conjunction with a countrywide operator such as An Post, the system will reach into every parish in the country. It affords an opportunity to be a social and economic vehicle in the way we just described. I hope the Minister for Finance takes this into account in the context of the deliberations of his Department. I do make my views known.