JOINT COMMITTEE ON ENTERPRISE AND SMALL BUSINESS debate -
Wednesday, 20 Oct 2004

National Employment Action Plan 2004: Presentation.

Chairman

Item No. 3 on our agenda is a presentation by European Anti-Poverty Network Ireland. I welcome the representatives of the network, who include Mr. Brian Carty of European Anti-Poverty Network Ireland, Ms Brid O'Brien of Pavee Point, Ms Orla O'Connor of the National Women's Council of Ireland, and Mr. Philip O'Connor of the Dublin Employment Pact. Mr. Eric Conroy, General Secretary of the Irish National Organisation of the Unemployed, apologises for being unable to attend as his organisation is hosting a conference on the national employment action plan. The conference is being addressed by the Minister for Enterprise, Trade and Employment, Deputy Martin.

I apologise for delaying the presentation. The committee had a few housekeeping matters to attend to before starting in public session. I remind the visitors that, while the comments of the members of the committee are protected by parliamentary privilege, unfortunately those of visitors are not so protected. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person outside the House, or an official, by name or in such a way as to make him or her identifiable.

I understand that Mr. Carty will make the introduction and that both Mr. Philip O'Connor and Ms Orla O'Connor will deliver the presentation. I hope the presentation will not exceed ten minutes because members want time to ask questions before the Orders of Business, which will start in both Houses at 10.30 a.m. Furthermore, a delegation from the Irish Wheelchair Association has to make a presentation thereafter.

Mr. Brian Carty

We will be brief because we are aware of the value of members' time. I thank the committee for giving us the opportunity to raise some of our concerns. Approximately a year ago, European Anti-Poverty Network Ireland took the initiative to bring together a group of organisations dealing with employment issues to scrutinise the developments under the national employment action plan and to bring the plan a little more into the public domain rather than it being dealt with by Department officials and other organisations on a selective basis. Our meeting with the committee is part of that process and I hope members will play an important role in discussing the important area of employment policy and this country's obligations under European employment guidelines and the national employment action plan. I will introduce Mr. Philip O'Connor from Dublin Employment Pact first who will be followed by Ms Orla O'Connor. The rest of us are here to answer members' questions.

Mr. Philip O’Connor

The employment action plan is an enormous document which takes in any activity vaguely associated with employment which is undertaken by the State, including enterprise issues and the work of the IDA. The action plan is a mechanism of reporting to Europe. There are European guidelines which each member state is supposed to try to follow in terms of making it easier for women to get back into work or how people are dealt with on labour market programmes such as CE schemes and so on. The European Commission makes comments on the national plans where it feels they are deficient. The Commission made three points about the Irish action plan.

It stated that Ireland was still weak and more work needed to be done on active labour market programmes such as community employment which, contrary popular belief, the Commission considered was not accessible enough. It felt that not enough people who are outside the labour market are getting access to labour market programmes and that they needed to be strengthened. The Commission also referred to the need to strengthen the incentives of making work pay. This has to do with the transition from unemployment benefit to employment for many groups of people who are in a benefit trap. It also commented on the totally unacceptable level of availability and affordability of child care, of which members will be aware. Furthermore, the Commission underlined the lack of a coherent lifelong learning strategy, particularly for the lower skilled.

I will refer to the active labour market programmes and lifelong learning and Ms O'Connor from the National Women's Council will comment on child care and the gender pay gap. As members know, the Department of Enterprise, Trade and Employment intends to reform the CE system. It is discussing the elimination of the jobs initiative and social employment programmes in order to concentrate on CE as a single measure. We have problems with this proposal because the use of CE purely as a labour market programme, through which to move people onto the labour market in a year, will fail to reach many people for whom CE has been a bridge to the labour market, particularly lone parents and other groups.

Moreover, as Deputies are aware, if CE is removed the provision of many services at community level will collapse. We must separate the labour market programmes and targeted training from the delivery of community services. We also recommend that Government and Opposition parties seriously consider separating them in terms of their lead Departments and that a new scheme, incorporating the old jobs initiative or the social employment scheme should not be delivered through the Department of Enterprise, Trade and Employment but through the Department of Community, Rural and Gaeltacht Affairs because it would be a much more sensible home for that type of activity.

The CE scheme also needs to be extended beyond the totally unrealistic one year framework. There will always be groups of people who will not be able to enter the CE system and come straight onto the labour market in one year. We must continue to have some version of the jobs initiative programme. I appeal to Deputies to read that section of the submission in particular.

The Commission comments on lifelong learning targets, early school leaving and the level of participation in training, particularly among lower skilled people and older workers which is where the problem lies. Mid-ranking civil servants, officials and people working in private industry as well as other professionals and skilled people are now participating in endless courses to upskill themselves — there is no shortage of lifelong learning opportunities for them. However, the problem in Ireland is with lower skilled and unskilled workers, many of who left school early and have poor educational qualifications.

Given demographic trends, most of the people who will be in the labour force in 2015 are already in it. Therefore, training and education must be targeted more at people already in employment. We have a problem with people who are just hanging on with no leaving certificate. More than 40% of the workforce never completed a leaving certificate, which may surprise people. Such people have relatively low paid and low skilled jobs and their access to better their position is very limited. The Commission focused on this issue in respect of which something must be done. A great deal has been done about lifelong learning and I commend the Government on the FETAC system and the national training fund, which have come on in leaps and bounds. However, to date this has still not been targeted at the low skilled, which is the crucial movement we need to see.

Ms Orla O’Connor

I will address the issues of child care and the gender pay gap. The Commission has recommended that Ireland give immediate priority to increasing the supply and affordability of child care facilities and take urgent action to tackle the causes of the gender pay gap. While we can see that the Government has made repeated commitments in the national anti-poverty strategy, its programme for Government and at a European level, for example, at the Barcelona Council, there has been limited action to address the barriers to women wishing to return to work and to facilitate women already in paid employment.

The current policies ignore the reality of women's participation in the labour market. In particular, they fail to support and increase the quality of both part-time work, atypical work and other forms of employment where women are concentrated. The impact of these policies is guaranteeing a higher than average likelihood that women will live in poverty, work for low pay or will be unemployed.

The gender pay gap is estimated at approximately 13.5% in Ireland. Care work must also be recognised and valued as work. We must increase the incomes for those working on low pay and achieve a greater work-life balance and a greater sharing of care work between women and men. We need to increase the supply of affordable quality child care and increase the number of women in senior management positions. Each of these factors relates to the gender pay gap.

Child care remains the single most significant barrier to women's equal participation to men in all aspects of society but particularly in regard to employment. The arrival of children means that by the age of 47, a woman typically has nine years less experience than a father with identical qualifications and expertise. The absence of adequate child care and elderly care provision makes it difficult for many women to access full-time employment or training. The lack of State subsidisation is pushing child care costs out of the reach of parents. For example, costs are ranging from between €145 to €180 per week for a full-time child care place. The inadequacy of the State's support for child care is emphasised in a number of reports but particularly in the new OECD report on early childhood education and care.

We need urgent action on child care. We need to see it as a right in the same way as we view education. A state subsidised child care system needs to be delivered which incorporates a mixed delivery of child care, both public and private, and we need to have child care costs that are based on sliding scales and are directly related to parents' ability to pay.

Chairman

How does children's allowance in Ireland compare to rates in other EU member states? Is it among the top three or the middle?

Ms O’Connor

Our child benefit payment is comparable to European levels but our child dependent allowances for social welfare recipients are low by comparison.

Chairman

Have children's allowances not trebled in the past few years?

Ms O’Connor

Children's allowance or child benefit in Ireland is focused on child poverty. Other European countries have child income related payments but there is a very different system for child care. On the other hand, in Ireland we are trying to cover everything under the one umbrella and that is not possible. We have a high child poverty rate and very low subsidisation of child care.

Chairman

Is the children's allowance in Ireland higher or lower than that in the UK?

Ms O’Connor

I do not know if child benefit is higher in Ireland than in England.

Chairman

I understand it is much higher.

Ms O’Connor

However, in England, local child care facilities are provided so the benefit is not trying to cover the same things and that is the important issue. Child benefit is a payment which we would regard as being about child poverty not about child care.

Chairman

I take exception to the word "poverty". I think it is used and misused by various organisations. What is the delegation saying to this committee? We are in the run-up to the budget. What is the difference between child care benefit in the UK and child care benefit in Ireland? That is what I am trying to find out. The delegation seems to think that the child care benefit in the UK is much higher than in Ireland. Is that what the delegation wishes to say?

Ms O’Connor

No. The UK has a child care system that is provided in different ways. For example, local authorities have child care facilities for which parents on low incomes pay nothing. It is a very different system. There is not a separate payment for child care; it is a different system. It is a case that subsidisation is through the supply.

Chairman

Is that information contained in the document presented to the committee?

Ms O’Connor

Not in relation to the UK.

Chairman

What about other European countries?

Ms O’Connor

The women's council has a number of comparisons with other European countries and that information can be supplied to the committee.

Chairman

Perhaps the delegation could provide it.

Mr. Carty

That information is available. In France there are different systems of provision of municipal crèches which cost parents very little. Medical centres provide part-time child care arrangements for people who wish to study in the afternoons, for instance. The whole system is constructed differently and it is not always easy to compare like with like but we can certainly supply the committee with that information.

Deputy Howlin

I thank the delegation for attending and I apologise to the Chairman for delaying the meeting. The ongoing review of community employment is one of the priorities listed for the work of this committee. The enterprise strategy report was published recently. It recommended that for Ireland to keep its enterprise there should be a transformation of FÁS away from its work on community employment into a focus on training specifically. The delegation's presentation seems to mirror that report. I have great difficulty believing this will happen. So-called mainstreaming of CE has happened before in education but it did not work. The great volume of people providing important support work in education was not subsumed into the education system because a budget line was transferred into the Department.

The delegation recommends that social employment be recognised as a separate entity and that the illusion it is a jobs initiative or an active labour market initiative be abandoned. It recommends it should be regarded as a social issue under the Department of Community, Rural and Gaeltacht Affairs. Is the delegation recommending a budget line that would recognise a coterie of people who will never be mainstreamed in employment and therefore will be on a community employment scheme up to retirement age or pre-retirement benefit age? I am concerned that we may transform FÁS into a training agency, abandon community employment and those who are dependent upon it. By this I mean not only the workers but also the community work dependent on it, which will suffer if it is gone. How would that be best structured?

I am interested in the figures on child care provided by the delegation. It recommends that to establish pre-school child care for all would cost €190 million. Will the delegation give the committee a breakdown of how that can be provided because it seems a modest sum for providing universal pre-school child care? Is the figure predicated on using some existing capital buildings such as national schools and how would it be structured?

I wish to make an observation which dovetails with the Chairman's observation. We have a very different social model to that of the UK. Those of us who met the carers yesterday also met the carer's group from Glasgow. The city of Glasgow has nine municipally-funded carer centres to support individual carers in the home as well as the state support for carers. That interplay of locally funded social care does not exist in Ireland because our local authorities are relatively impoverished. It is a model of care that exists not only in the UK but across Europe. We have a much more centralised system of provision. I ask the delegation to make an observation on whether the committee should examine the role of local authorities in the provision of supports for vulnerable groups such as carers or single parents.

Deputy Callanan

Does Ireland lag far behind other European countries in the number of unemployed people participating in CE schemes or other training schemes? The goal stated by the delegation is for everybody on employment assistance or benefit to be on some type of training or CE scheme.

There are two ways of developing child care, either by means of a tax incentive or by State provision. Both methods would be costly. However, the problem exists for young working mothers. The increase in the numbers of women in the workplace leads to demand for child care.

The delegation noted that 40% of the workforce has not attained education to leaving certificate level. I am surprised by that statistic. Is lifelong learning desired by that cohort or are they happy with their present jobs? Many jobs do not require a leaving certificate education and one may be well educated through working in the job one holds.

Deputy Murphy

This time last year in the approach to the Estimates, there was some hope as the Minister of State, Deputy Fahey, recognised the need for a social employment scheme which should be totally separate from the CE scheme. Unfortunately whatever budget was available was hijacked by the Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cuív, into the rural scheme. There is now a need for a social employment scheme which should be separate from the community employment scheme. The social employment scheme can be nationally incorporated into the rural employment scheme because it would be serving the same purpose.

We are constantly told in answer to questions about the CE scheme that FÁS is reviewing it on an ongoing basis. FÁS is basically a training and employment agency and it should not be regarded as the expert on establishing either the rural or the social employment scheme. The community employment schemes, in my opinion, should continue to be training-based and work-experience based, to enable those who are capable of doing so to return to the workforce. There is a gaping need for a social employment scheme and rural employment scheme which will service the needs of communities by people who, for one reason or another, will not be back in mainstream employment. The sooner that is recognised, the sooner it can be clarified.

An entire system was established with community groups and supervisors for the community employment schemes. However, last year there was the ludicrous situation where one third of the supervisors in the schemes were made redundant while new supervisors were taken on to implement the rural employment schemes. This wastage of money through duplication is outrageous. It can be rectified if a new social employment scheme is incorporated and put back into the original structure. Opposition Members are in agreement that this is necessary. However, getting the Government to recognise this has been impossible.

When the committee discussed the EU initiative on women in the workplace, Department officials said they would get back to me with information. However, they have not done so. Child care facilities, established at enormous cost to the taxpayer, are now closing down because of inadequate day-to-day funding. Millions of euro have been paid for a child care infrastructure but no services are available.

Chairman

I remind members that this is not Second Stage of a Bill. I call on Senator Leyden.

Senator Leyden

I thank the various organisations for attending and putting forward their case. I attended, though for a short time, the successful conference yesterday at Croke Park. Example should be set by the Oireachtas, yet there are no crèche or pre-school facilities for Members or staff. That is a basic disadvantage——

Chairman

That is being addressed at present

Senator Leyden

Fine, but it would be a sign of leadership if such facilities were provided within——

Deputy Howlin

The Senator should raise it with his parliamentary party rather than the groups attending.

Senator Leyden

What is the best module in child care provision? In County Roscommon, fine crèches and pre-school facilities have been built in housing estates. While the Department of Justice, Equality and Law Reform provided grants for these, it is not well co-ordinated. Is the best location for child care provision near where the parents are working?

Mr. O’Connor

I will answer questions on the community employment schemes while Ms Orla O'Connor will answer questions on child care and the gender pay gap. When the social economy programme was launched in 1999, the Dublin Employment Pact and others made the criticism that it was trying to be two things at the one time. It was both a labour market programme to get the long-term unemployed back into work and a programme for establishing profitable community enterprises. It was an oxymoron as one cancelled the other and it was programmed to fail, which was recognised from the start. Furthermore, due to weakness of the local government system, many community level services such as child care are not provided. Community employment schemes were filling that gap in communities. An active labour market programme that is a successful bridge to the employment market and a system of social employment delivering community services in flexible hours and conditions is needed. The Commission pointed this out too.

On the question of how Ireland compares with other EU member states in this area, the community employment schemes were seen as weak in progressing participants to the labour market. However, its main weakness was that people on the unemployment register were availing of it. For example, the schemes suited lone parents because of the hours involved. Many will accept that FÁS has well managed the schemes as a bridge to the labour market. However, it breaks down in the attempts by FÁS to manage community services as if they are labour market programmes. Both Opposition and Government parities recognise this.

Deputy Howlin

It was designed when we were dependent on European money to pretend that there were labour market initiatives. However they were social employment schemes with the twin objective of taking people off the live register and providing useful work.

Chairman

All Governments maximised resources in that area.

Deputy Howlin

This was at a time when we had little money.

Mr. O’Connor

The idea of limiting to a one year intervention is unrealistic in terms of the people who will avail of it. A type of sheltered employment sector needs to be maintained for those who will not fit back into a free-for-all labour market. It is a small but significant group and it is better that there is a sheltered system rather than leaving people unemployed. A system of community service provision is needed.

The reason the figure for those without leaving certificates is 40%, and higher in Dublin, is it takes in all age groups from the 1960s. Many of those from the 1960s who are still active in the labour market would not have had a secondary education. However, approximately 20% of school leavers have no leaving certificate. Even basic warehousing jobs are not available to those who are not computer literate. So-called unskilled work is not available anymore. Getting people skilled needs to be the new target as ordinary workers now require digital, FETAC or leaving certificate skills. Since most people are in the workforce, it needs to be targeted at the low-skilled and low-earning group. This group is the potential long-term unemployed of the future unless given the skills to move on in the workplace.

Chairman

Are you basically talking about the 55 to 65 year age group? Free transport was not available when that group went to school.

Mr. O’Connor

I am partly referring to those in their 50s, who are the most vulnerable in the labour market. The slightest change and they lose their jobs. Getting back into employment without skills is virtually impossible. As the labour market is doing so well, many young people are leaving school early and getting jobs. However, when they reach their early 20s they realise they are stuck at a low skills levels at work with no available means of acquiring other skills. This is being pointed out as a threat to our system. I know we do not like the word "poverty" but there are people, despite having jobs, who have not been raised out of low income levels. It is not a partisan issue and it is a challenge for Government and Opposition to target the low-skilled who are currently in work.

Ms Brid O’Brien

Discrimination in the labour market is a significant factor for us and other groups working on issues such as disability. Schemes such as CE and others created access points and many people have secured employment in voluntary and community organisations which pay the wage or part of it through these schemes. The question of how to support that type of employment when few options are available needs to be addressed. That is also relevant in rural areas where often there is no employment into which people may progress.

We are also interested in self-employment and are involved in a project run through the equal initiative and entrepreneur projects in Longford and in Leitrim. It is difficult for many marginalised communities or untypical entrepreneurs to gain access to supports for the development of self-employment options and small businesses. The committee could usefully look at the range of supports for enterprise development and how to make them more flexible and accessible to those who have this difficulty.

Chairman

How are the Longford and Leitrim projects progressing?

Ms O’Brien

The Longford project is considering women's involvement and the Leitrim one is researching crafts as a way to generate business and employment in a rural area. They are meeting blocks and barriers similar to those we meet in regard to access and support.

Chairman

It is in my constituency.

Ms O’Brien

The social economy programme tried to address some of the funding difficulties but fell between several stools. One difficulty is persuading people to buy into the concept of the social economy and see how it can be funded across a range of initiatives, programme activities and Departments. Unfortunately, it got boxed into a programme. I sit on the monitoring committee and know that the funding was increased but the demand was such that the budget could not meet the demand. It already funds 300 projects but there is not sufficient in the budget to sustain them. That is a risk in the child care area, about which Orla O'Connor will speak. We tend to respond to issues through programmes and do not look at how to develop them in the long term or how they could be sustained or mainstreamed, so we run into difficulties after a couple of years.

Ms O’Connor

In response to Deputy Howlin, the cost of pre-school child care is based on a one year pre-school place. The costs are based on the buildings that would be there at the end of the national development plan, that is the funding already in place for buildings. It is also based on existing infrastructure.

Deputy Howlin

Does that include existing national schools?

Ms O’Connor

No. It is existing infrastructure that would be there as part of the national development plan and new places that would have to be built.

Deputy Howlin

Does this apply to every child?

Ms O’Connor

I have a detailed costing which I can forward to the Deputy.

Chairman

The Deputy is surprised at the low cost, as we all are. Could Ms O'Connor circulate that to us, please?

Ms O’Connor

We do not support a tax incentive model as a way forward on child care because people who are not paying tax will not benefit, including women on low pay or the minimum wage, or parents in education and training.

Deputy Howlin

There is a model from which they could benefit — a refundable tax credit. That is a tax credit for those who are paying tax, and cash to the same value for those who are not.

Ms O’Connor

A totally refundable payment would work. However, we prefer a state-subsidised model which subsidises supply. That is the model in Holland, whereby even those on a high income receive state subsidisation and one pays only a portion of the fee but those on low incomes do not pay. This is linked to the question of what is the best model. It is not possible to say one model is wrong and one right but research on children's needs suggests that community-based neighbourhood child care facilities are the preferred model.

There has been a limited injection of capital funding but covering the running costs has been a problem. It will be a greater problem at the end of the national development plan because these places do not know from where the money will come. It is a real problem caused by inadequate funding.

Chairman

I thank Mr. Carty and his delegation for speaking to us this morning. I apologise again for the delay. We would like to exchange views with these groups again during the lifetime of the Government. These people are at the cutting edge and we want to be the conduit for their views to Government. We heard one or two very good proposals this morning and we want to secure the funding for them. We will contact the delegation at another time when we can pursue this at greater length.

Mr. Carty

We thank the Chairman and committee for inviting us. We are more than willing to come back and go into more detail on some of the issues raised. The recommendations from the commission on the national employment action plan deal with the issues we addressed this morning. The plan does not deal with those issues. The committee could consider this because the appointment of a new Minister might bring new energy into this area and make it possible to move on those issues, otherwise the commission may return with the same recommendations and criticisms. It should be examined when the joint employment report is issued at European level to the March spring council. The committee could consider the employment action plan, the commission recommendations and perhaps start contributing to the 2005 action plan rather than comment on something cooked up in the Department of Enterprise, Trade and Employment.

Chairman

We are allowing the Minister time to read into his brief. We expect him to be here in two or three weeks. If the delegation wants to highlight any pressing proposals emerging from this meeting we will be delighted to seek his views on them, or ask him to bring them back to his Department and return to us. The Minister comes before the committee at least twice a year. We will do everything we can to assist in any way.

Child care is a great challenge especially given the shortage of labour. We are mindful of that. The CE schemes are the unsung heroes for what they achieved when we were at our lowest ebb in the mid-1980s. They gave people a sense of purpose and pride in their work. We want to ensure that people who are available for work, whether they are aged 55, 57 or 58 years, will continue to be appreciated and given the opportunity to work. We thank the delegation for being with us.