JOINT COMMITTEE ON ENTERPRISE, TRADE AND EMPLOYMENT debate -
Thursday, 4 Sep 2008

Live Register: Discussion.

Chairman

I draw attention to the fact that while members of the joint committee have absolute privilege, the same privilege does not apply to witnesses appearing before the committee. While it is generally accepted that witnesses have qualified privilege, the committee cannot guarantee any level of privilege to witnesses appearing before it. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable. This caveat is entered before every meeting of the committee to ensure proper decorum is observed.

I welcome Mr. Frank Ryan, chief executive officer of Enterprise Ireland; Mr. Rody Molloy, director general of FÁS, Mr. Barry O'Leary, chief executive officer of IDA Ireland; and Mr. John Stewart, co-ordinator with the Irish National Organisation of the Unemployed. I invite Mr. Ryan to make a short presentation for approximately four minutes.

Mr. Frank Ryan

I thank the Co-Chairman and members for the opportunity to meet them today. In the past four or five years there has been a substantial sea change in the fortunes of indigenous industry. In the 2003-04 period total exports from the indigenous sector were worth approximately €10 billion, whereas last year the figure was €13.18 billion. The extent of the contribution of indigenous industry to the performance of the economy is somewhat misunderstood on a national level. Enterprise Ireland believes the future performance of indigenous industry will be much more important to the performance of the economy, especially in the next two to three years.

In many ways we are the architects of our own future and Irish companies are increasingly showing the way and gaining market share in overseas markets. To reflect on the strong contribution of Irish companies to the economy; Irish manufacturing and internationally traded services companies spend more than €16.5 billion annually on payroll and Irish sourced goods and services. Irish manufacturing and internationally traded services companies employ more than 150,000 people in Ireland. They make a serious impact on the growth of the economy and on employment. Enterprise Ireland supported companies can be found in every part of every county. In our portfolio of companies we have a wide distribution of client companies. We have set ourselves ambitious targets for the 2008 to 2010 period, including a target of €4 billion in new export sales.

Underlying the growth strategy are two important initiatives. First, we fundamentally believe there is an opportunity for Irish companies to increase their level of innovation. We have set out specific targets to judge our progress against that objective. There is also an opportunity to increase the competitiveness of companies. We are under pressure and Irish companies are feeling the heat of international competition, reduced world growth and currency exchange variations they have not experienced in many years. Thankfully, the value of the dollar yesterday was approximately $1.44 to the euro, which has brought some relief to dollar-denominated contracts on an international basis. However, sterling was £0.82 to the euro yesterday and it is heading in the wrong direction in terms of our competitiveness. Taking all these factors into account, Irish companies can do only two things; innovate by bringing new products and services to the marketplace or increase their competitiveness.

In terms of innovation, we recently introduced a completely revised research and development programme spanning innovation vouchers of up to €5,000 per company to get small companies that have never journeyed down that road involved in research and development. That is supported with start-up research and development funding, technology transfer support and support for assistance with commercialisation for research and development carried out at third level - including institutes of technology, assistance with the registration of patents, and substantial funding towards major research and development centres. A growing number of Irish companies are now collaborating nationally and internationally on research.

Increasing competitiveness is at the core of earning our way out of the position we are currently in. We have a successful growth fund that makes funds available to companies that wish to re-establish their competitiveness and successful position in overseas markets and grow their business.

We are pleased to be before the committee but it is probably in the interests of the operation of the committee that I stop at this point.

Mr. Rody Molloy

We have circulated what we hope is a detailed submission that captures all the committee may require without making it too tedious. I will pick some of the salient points and if I miss something the committee members can remind me later.

The live register is not designed to measure unemployment but it is an indicator of it. The live register includes much more information than that. Our unemployment rate is still less than 7%, at 5.2%, and remains below the EU average of 6.8%. In terms of our unemployment rate we are still fairly strong. We have an employment rate of 68% which is above the EU average of 66%, so there are some positives. There is a figure on the second page of the statement of 73,000 which should read 77,000. We spotted the "typo" on the way to the committee.

On the FÁS response, we work closely with the Department of Social and Family Affairs to ensure there is a clear understanding between us as to how our different measures operate. I met the Minister for Social and Family Affairs shortly after she took office and we discussed precisely the issues we are discussing today. Our foremost response is the national employment action plan, whereby everybody on the live register for three months is referred to us by the Department of Social and Family Affairs. We engage with these people to see if there is something we can do by way of training, placement or whatever to get them back into employment. At present, the numbers coming to us are increasing and we must adjust our services to deal with that increased flow of people coming to us from the Department of Social and Family Affairs.

In recent times we have developed programmes to deal with people with particular problems such as the high support process, the pathways programme and a technical employment support grant. This is spelt out in the document. We have also expanded the national employment action plan process to lone parents and people with disabilities and we are developing specific programmes for 18 and 19 year old people who are unemployed. We are doing this in co-operation with the Department of Social and Family Affairs.

I outlined in some detail the last time I was before this committee the work we do to deal with large scale redundancies and I referred to this again in the statement today. We engage with people who are about to be made redundant to assist them through the process of becoming redundant and then returning to the workforce. Our previous discussion centred on the construction sector and my statement updates some of the issues we discussed on that occasion, including apprenticeship numbers, proposals we are developing to handle the situation of apprentices made redundant and especially the issue of pre-apprenticeship programmes - I understand the Chairman is particularly interested in this matter. I have provided some figures on the numbers of people going through the apprenticeship programmes and the kind of success rates from them.

Another initiative in its final stages of preparation is the centre of excellence in Mount Lucas in County Offaly for training people in the construction industry. We hope this will be up and running within the next month and we believe it will be a valuable contribution to training in the construction industry. Given the comments from people outside the country who have examined the facility we are confident it will make a major contribution. The other issue we touched on at the last meeting is the matter of job fairs, where we assist non-national people who lose their jobs here and help them find employment either back in their own countries or elsewhere within the European Union. That was a successful event for us and we will run one again shortly in Cork in the coming weeks.

On the non-construction side we have developed a range of certified, short, flexible modular programmes designed to quickly give people skills to add to their existing skills, which may allow them take employment in sectors other than those in which they have been employed. We are continuing with the competency development programme which is a major intervention for low-skilled people in employment. We all know that when low-skilled people lose their jobs they are the ones who find it most difficult to get back into the workforce. This programme attempts to increase efficiency within the company by having better skilled people and by ensuring those people, if they lose their jobs, have the necessary skills to get alternative employment. I would be happy to engage with the committee on any of these issues.

Mr. Barry O’Leary

I thank the Chairman for the invitation to address the committee. I would like to put foreign direct investment in Ireland into context and talk about some of the initiatives we are undertaking to grow the volume of foreign direct investment. In 2007 Ireland secured 114 investments from foreign companies. They involved a commitment to provide approximately €2.3 billion in capital expenditure. Approximately 60% of the salary levels exceed €40,000 per annum. In 2007, 9,000 jobs were created by the multinational community in Ireland. The United States is by far and above the most important source of foreign direct investment in Ireland, accounting for two thirds. On the contribution of mobile foreign direct investment in the economy, it employs 152,000, accounts for 85% of all manufacturing exports out of Ireland, and spends €16 billion in the economy, €6.7 billion in terms of payroll, and in excess of €3 billion in corporation tax.

Since the sub-prime crisis hit in September 2007, there has been much discussion about whether Ireland can continue to win foreign direct investment. The flow of foreign direct investment into Ireland is stronger than it was at this time last year. I will give a couple of practical examples. Since the sub-prime crisis hit, Microsoft announced a €375 million investment in a data centre in Grange Castle in Dublin. In Carlow, Merck acquired a 65 acre site for a global supply facility for vaccines with a $200 million initial investment. Zimmer, the number two orthopaedics company in the world with no connection with Ireland, located a 250 person manufacturing project at Shannon. Coca-Cola is planning to spend €190 million on a new facility in Wexford on an IDA site of 41 acres. Baxter Healthcare in Castlebar is spending €80 million on a major technology uplift that will help secure 1,000 jobs in Castlebar. Pfizer, although its traditional business is under pressure, has chosen Ireland for a €190 million investment in bio-pharmaceuticals. Within the past 12 months Abiomed, Kinetics Concepts Medical and Teleflex Medical have committed to creating 600 jobs in three projects in Athlone. In Waterford, Genzyme and Tava have created approximately 300 jobs between them. In Dungarvan, GSK and Lancaster Laboratories have made significant investments. Although financial services are under pressure globally, Citibank recently announced a €34 million research and development centre in Dublin. Northern Trust Corporation added approximately 100 jobs in Limerick in the past eight months. Sitco committed to 150 people in Cork in January, while UNAM, a US insurance company, set up a 200 person software company in Carlow.

Let me explain the focus of what it is we are trying to target around the globe. In simple terms, there are three business models we target to attract foreign direct investment: research, development and innovation; global services, which include financial services; and high end manufacturing where manufacturing investments typically range from €100,000 per employee to €2 million, which is, therefore, capital intensive. Traditionally, there were four sectors: the life sciences, incorporating pharmaceuticals, bio-pharmaceuticals and medical technologies; the IT-information and communications technologies area; financial services; and globally traded businesses which would range from professional services to engineering to digital media. There are three new sectors that we are targeting: convergence, particularly convergence and technology between the life sciences and the IT sector, cleantech, environment, environmental services and goods, the green agenda and so on, and innovation and services. An important attraction in the multinationals is the work with the CSETS supported by Science Foundation Ireland.

There are some new initiatives that we are undertaking to drive further foreign direct investment. We are undertaking a 10% shift in resources from non-business generation to business generation. We are expanding by 20% the number of people in the United States market and opening new offices in Boston and southern California. We are also keen to diversify the source of foreign direct investment and recently set up a new office in Mumbai to target Indian investment. We are doing the same with global financial institutions in London and targeting three new sectors in convergence services innovation. The target this year was up 6% and we are currently on target to perform better than we did last year.

Mr. John Stewart

The Irish National Organisation of the Unemployed welcomes this opportunity to address the Joint Committee on Enterprise, Trade and Employment and looks forward to discussing the issues with representatives from FÁS, Enterprise Ireland and the Joint Committee on Social and Family Affairs.

The increase in the live register in the past year has been significant, particularly since the beginning of the year. In recent years the figure was relatively static, hovering between 150,00 and 160,000. However, the number currently signing on the live register is 240,000, or 235,000 when the figure is seasonally adjusted, according to statistics released in the last few days. A total of 73,000 more were signing on in August 2008 than in August 2007, an increase of 42%.

I accept the point made earlier that the live register is not an entirely accurate measurement of unemployment, but we know from other statistics released, particularly from the quarterly national household survey, that the figure is on an upward curve. The number of people losing their jobs as a result of redundancy has also increased dramatically and is heading towards an unprecedented level this year. Currently, redundancies are running at over 650 a week. The most recent redundancy statistics show that 23,545 people have been made redundant. It is important to note that these are people who qualified for redundancy payments, rather than people who simply lost their jobs. We believe a significantly greater number of people have lost their jobs than the number given in the redundancy statistics.

We appreciate that the number in employment remains high, at over 2.1 million. There is no doubt, however, that the country faces considerable challenges. How do we re-skill and upskill those who have lost their jobs in a rapidly changing labour market? How do we persuade a critical mass of employers, employees and potential employees of the need to pursue lifelong learning? How do we ensure persons who are long-term unemployed will have access to work or quality education and training options? Innovative and creative approaches are required to ensure those currently unemployed and others facing that prospect are given long-term sustainable options. It is vital that emigration does not again become an Irish solution to an Irish problem and that we do not return to the economic fatalism of the 1980s that nothing could be done about unemployment. We must draw on our recent experience of achievement and success and retain the belief that we can effectively tackle rising unemployment.

The INOU believes it is important that Ireland responds as quickly as possible to these changes. To do this, it is crucial that the relevant actors work together to maximise the resources available and to secure the best outcome. I will outline some of the steps the INOU wishes to see taken. Given our drive to become a knowledge based economy, adequate resources must be allocated to training and education provision to ensure this goal can be achieved. The work of the expert working group on future skills needs has an important role to play in this regard. To ensure this labour market approach is accessible to all and does not exacerbate social and economic exclusion, greater flexibility and innovation in providing and delivering education and training opportunities are essential. There must be greater sophistication in matching skills to jobs to ensure unemployed persons have opportunities to apply for jobs, especially in sectors in which there are vacancies. There are still vacancies in the economy.

The development of an early warning system for redundancies is crucial. This longer lead-in time could be used to attract alternative investment and re-skill those who are losing their jobs. Enhanced inter-agency co-operation to provide replacement jobs would also add value to this development.

With regard to the ongoing development of ICT and physical infrastructure, the continued roll-out of the national development plan and fast-tracking broadband and ICT access are important. There should be an increased focus on creating jobs in areas with high potential, including agri-tourism and environmental projects, and an exploration of how these might be incentivised. We must increase the number of places in active labour market programmes, ALMP, including community employment, and reintroduce recruitment to the jobs initiative programme. This would be particularly important for the 32,700 people currently long-term unemployed, that is, those who have been unemployed for one year or more.

The INOU is conscious that in certain areas and for some communities access to the mainstream labour market is particularly challenging. This issue must be addressed through providing the resources to create alternative employment in enterprises through ALMP engagement, for example, and through activation measures encouraging a greater number of employers to employ people who are distant from the labour market. We want to see the eligibility criteria for both the back-to-work enterprise allowance and the back-to-work allowance reduced to 12 months. This is a particularly important initiative to ensure that the back-to-work enterprise allowance is available to help the unemployed start their own businesses. There is also a need to increase the availability of capital and low-interest loans for such enterprises. We want to ensure that investment in research and development matches European levels.

In the interests of social and economic inclusion we want to ensure that people who become unemployed have their claims processed as quickly as possible and that their payments are sufficient for people to live on.

We also welcome the increase in the number of jobs facilitators. We will continue to work to ensure that activation is as positive and constructive as possible.

Chairman

I thank Mr. Stewart. In the interest of fairness, notwithstanding Deputy Healy-Rae, we will ensure that the order of speakers alternates between the two committees because it is a joint session. We would appeal to members not to make long statements but to ask questions. This is an opportunity to question representatives from FÁS, the IDA, Enterprise Ireland and the INOU who have already presented statements. Rather than making long-winded statements of welcome, members can assume that myself and Deputy Healy-Rae on behalf of the committees have welcomed each and every participant here today. I am not in favour of that type of thing. I appeal for precise questions. You are all barristers here today and I appeal for questions. That is the way I and Deputy Healy-Rae will help get through the meeting. Deputy Shortall will be first, then Deputies Calleary, O'Connor and Morgan. Then I will indicate the subsequent order which will include Deputies Varadkar, Byrne and English.

Deputy Róisín Shortall

I thank the Chairman for arranging this meeting which I requested in July. It is unfortunate that there was a delay. It would have been better if we could have had this meeting before the end of July.

The request was made in the context of the figures published at that stage. Of course the past week has seen the publication of figures that are even worse. In the 12 months to August there has been a 42% increase in the number of people signing on, which is the highest annual increase on record.

I am particularly concerned about the regional variations in the numbers of people signing on and I ask the organisations to provide information on their regional responses. The live register shows, for example, that since the last general election there was an increase of more than 100% in the numbers of people signing on in the Clones, Portlaoise and Macroom social welfare offices. Other offices that stand out, where there was an increase of in excess of 90%, are those in Trim, Portarlington and Ballybofey. Of course there are high increases right across the board but those ones stand out, particularly where there is a doubling of the numbers signing on.

Recently I tabled a parliamentary question to the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, inquiring about the work of FÁS. I was quite taken aback by the figures thrown up by that reply on the success rate in terms of people who were referred from social welfare to FÁS and then, in turn, the subsection of those who were interviewed by FÁS with the intention of placement in jobs. Of those who interacted with FÁS and who were referred or interviewed, or both, in the first quarter of this year, 57% still remain unemployed. By any standard, that is a poor record.

Even looking back over recent years where the employment situation was much healthier, the record is still pretty bad. It is difficult to understand how in recent years we could have a situation where persons aged 18 and 19 were going on the dole. There is a strong argument for stopping that happening completely but given that school leavers aged 18 and 19 can sign on, what has FÁS been doing or why has FÁS not been more successful in placing those persons in education, training or employment? The figures in respect of early school leavers are very worrying. That is probably the most important area in which intervention is required to prevent people drifting into a life of dependency and on to the dole and not gaining employment for many years. Why is the success rate of FÁS so low in respect of school leavers in recent years? Where large scale redundancies are announced by a company, what services and supports are provided initially? Does FÁS provide a package of services irrespective of the location of the company? That is a critical issue. As well as preventing young people becoming unemployed in the first place, those who are unemployed through redundancy must not become the long-term unemployed for future years. What are the obstacles to an improved success rate in placing people? Are the numbers of training and education places an issue? Why has FÁS not been more successful? What can the organisation do to step up to the plate to tackle the problem of widespread unemployment?

Mr. Rody Molloy

I will address the regional issue first. We have offices in virtually every town in the country and we have training centres in every region. We try to tailor our responses to suit the needs of a particular region. We sometimes get into trouble for placing people in training centres outside their own region. We receive many representations about that but if the training is not available in a region, we will deliver it elsewhere.

I do not have the figures for referrals from the Department of Social and Family Affairs off the top of my head and I am not familiar with the parliamentary question and reply that was referenced but many of those referred to FÁS by the Department do not show up for whatever reason. One can make various suggestions about why people do not show. Of those who show, we endeavour to provide them with training places and so on. At the end of the day, we can offer services but we cannot force people to avail of them. We have between 30,000 and 40,000 training places but between community employment, training we do in the community and our normal training service, approximately 80,000 people go through our system every year. The system, therefore, provides a substantial number of places.

There is a particular problem with people aged 18 and 19, which is being exaggerated at the moment because of the fallout from the construction industry. People opted out of the education sector to take up what seemed like well paid employment in the construction industry and have suddenly found themselves without a job and with few skills. The easy option is to sign on the live register, to which the Deputy referred. Allowing people full access to social welfare payments at such a young age when alternative education and training opportunities are available to them is a major issue for us as a society.

Deputy Róisín Shortall

I believe that absolutely but if social welfare legislation was amended in respect of school leavers, would FÁS have the capacity to cater for them? Of the 12,000 people interviewed by the organisation in the first quarter of this year, only 21% were placed in a job or in training.

Mr. Rody Molloy

We make the offer and if people do not accept it, we cannot do anything about that. Perhaps times have changed but, during my period as director general, when we applied for resources for additional training places, we invariably secured them. We are in a changed environment and that may not continue to be the case but that is my experience. However, the response to this issue does not only involve FÁS. Many of the young people can be handled by the vocational education system or they can enter third level education. It is unreasonable to assume FÁS should provide the total response to the issue of the increasing number of 18 and 19 year olds who are unemployed.

Deputy Dara Calleary

What level of co-ordination is there between Enterprise Ireland, FÁS and the IDA? People who are referred to FÁS may have potential to make the high value start-ups of which Mr. Frank Ryan spoke. Is there co-ordination between FÁS and Enterprise Ireland in identifying people who might have a business idea and might benefit from Enterprise Ireland support? In their discussions with FÁS, do such people mention ideas which they might have and does FÁS have the capacity to refer them along? What co-ordination does FÁS have with the IDA in identifying skilled labour pools? This might be useful information for the IDA in locating and attracting industry.

The Irish National Organisation for the Unemployed is calling for an early warning redundancy system. I understand one is already in place in the IDA and that the authority has the capacity to identify companies where redundancies are imminent. Is a similar system in place in Enterprise Ireland? How does FÁS co-ordinate with those agencies in that regard?

I accept that the question of 18 and 19 year olds is not entirely a FÁS problem. It could be a problem for the vocational educational committees or for someone else. However, people are falling between the cracks. The one agency which is not present today is the Department itself. Could it not take charge of this very great problem? At a previous meeting I proposed that 18 and 19 year olds who have construction skills should be assigned to community employment schemes. I am not saying CE schemes are the solution to the entire problem. Nevertheless, 18 and 19 year olds have skills and two or three years' experience in the construction industry. They should be assigned to CE schemes rather than given a State payment each week for doing nothing. There is a demand for CE schemes.

Things seem to be going very well for the IDA. The organisation has changed its focus. Is there a change in the attitude to Ireland Inc. in the past year as our economy has changed? Is it too early to comment on this? Is there a change in the attitude to Ireland Inc. since last June, especially in light of the result of the Lisbon treaty referendum?

This is the first time these agencies have come together to meet the committees. I am concerned that there is insufficient co-ordination between them. Information is not being shared and this could be the solution to many of the problems identified in the past while.

Chairman

We invited both Ministers to this meeting but, unfortunately, they were not in a position to attend. We will pursue that matter. Mr. Molloy is first in line again.

Mr. Rody Molloy

Deputy Calleary's first question about co-ordination leads me back to a point made by Deputy Shortall, which I overlooked, about the service FÁS provides for redundant workers. This is a good example of where we work closely together. When there is a major redundancy we normally hear of it through the Department, the IDA, Enterprise Ireland or the company itself. We provide very basic services to people who have been made redundant. People are in shock in those circumstances. We inform them of their entitlements and how to engage with the system in their first week of unemployment. We also work with Enterprise Ireland to see if there are opportunities in the locality for people to start their own businesses. FÁS and Enterprise Ireland have a very close working relationship.

We work closely with the IDA in the provision of training. For example, if a major project is coming into an area where the necessary skills might not be available, we work with the IDA and the incoming company to put training programmes in place. I think Mr. Barry O'Leary will agree that a good example of this co-ordination is provided by Pramerica in Letterkenny. As the skills required were not readily available in the area, we sent people to the US to train as trainers and, in turn, train staff in Letterkenny.

Deputy Róisín Shortall

My question was where people are made redundant and may not have the skills to apply for other available jobs, does FÁS have a package of retraining measures?

Mr. Rody Molloy

We have a training package. We try to identify job opportunities in other parts of the same region. If people have basic skills, we top up those skills. We have been quite successful in that with a number of large-scale redundancies where people were back in employment within 12 months of having lost their jobs through redundancy. On the co-ordination issue, while it may often seem that we do not interact with each other, we work very closely together. An example in this regard is that Mr. Barry O'Leary, Mr. Frank Ryan and I are all members of the board of Forfás which advises Government on policy in the enterprise area. We work together on the ground and are forced to work together in an informal way through our membership of the board of Forfás.

FÁS is informed by the Department of redundancies under the early warning system. Often we are informed of redundancies by companies, though on a confidential basis. A company that is planning major redundancies must protect itself and it takes a huge leap of faith on its part to trust a State agency to work with it in preparing for that situation. More often than people might believe companies engage with us well in advance of redundancies in trying to put together the appropriate training or other packages that may be necessary. As I stated earlier, it is with Enterprise Ireland we engage most in putting together the best type of response we can to deal with the problem on hand.

Mr. Barry O’Leary

There are many practical examples of the collaboration between the different agencies when a problem arises. An example is the closure of Motorola in Cork on which the IDA, Enterprise Ireland and FÁS worked closely and came up with a solution which resulted in almost all employees being placed.

In line with Ireland's biopharmaceutical strategy, the operative training centre in Carrigaline is a key part of the strategic plan we have for the biologic industry. Our property portfolio and our landbanks are extensive. We provide services to Enterprise Ireland clients and it in turn provides good technical services in the research and development area including in regard to technical assessors. A recent example in this regard is the solution to the problem at Iralco which came about through the IDA and Enterprise Ireland working closely together.

I would like to make one comment on the early warning system. While we do have an early warning system, it does not cater for everything. Very often decisions are made overnight based on cutbacks globally and so on. We have not noticed an attitude change to Ireland Inc. The downturn in the economy, in particular on the construction side, does not interest companies such as IBM, SAP or Merck and does not in any way factor into their decisions.

Chairman

I call Deputy Charlie O'Connor whom I know will not mention Tallaght in his contribution.

Deputy Charlie O’Connor

I bring to my politics my own life experiences. I live in Tallaght which is the third largest population centre in the country. I am sure all Deputies and Senators will make a case for their constituencies and I am not afraid to do likewise. I do not wish it to appear that I have had a sad life but I was made redundant three times and was forced to emigrate when very young and, for this reason, I understand some of the issues raised this morning.

Mr. Molloy mentioned we are in changed times. I am interested to know from the agencies present this morning what is their action plan to deal with this new situation. There is no point saying the situation this morning is the same as it has been. It is important we acknowledge that the presence of these organisations, in particular the INOU whom I am glad were allowed to attend this meeting--

Deputy Róisín Shortall

They were invited.

Deputy Charlie O’Connor

I apologise for my phraseology, I did not mean to say that. It is important the INOU is present today. We should, in partnership, acknowledge that we have problems and are facing challenging times. As clearly stated by the organisations earlier, Ireland is open for business. We, as members of the two committees, must know how the organisations will respond to this situation.

I agree with much of what my colleagues, Deputies Shortall and Calleary, have stated. On youth unemployment, bearing in mind almost an entire generation has not experienced real unemployment, it is important we put in place plans to address their issues.

I am also anxious that in their response to the current crisis the organisations should not forget the long-term unemployed who could easily fall through the cracks. This is a particular challenge. I do not want to create any more trouble for Mr. Molloy than he has already, but I wish to acknowledge that in my dealings with his office about different matters, his office takes responsibility for those issues. I hope that will continue. However, FÁS is in the firing line and people will continue to knock on its door. Enterprise Ireland and the IDA have a different and more corporate remit, but FÁS is in the firing line and in the trenches with us. It is important FÁS understands this point. I will call up to the centre in Cookstown at every opportunity, but it is important that FÁS understands we expect it to respond to the current situation.

I agree with Deputy Calleary that it is important the IDA emphasises the fact that Ireland is still open for business. It is important also that it continues doing all it can to encourage new business and ignores the bullets and bombs flying all around it; it must remain focused on its job. Enterprise Ireland has a role to play in that regard. While not wishing to be parochial, my constituency, like others, has a number of enterprise centres where good jobs have been developed over the years. I hope those important initiatives will continue. While we must read the newspapers and be aware of the bad news, we hope the agencies will remain focused and continue to deliver for Ireland.

I ask the Co-Chairmen, Deputies Penrose and Healy-Rae, to advise us on the process they will consider to ensure the relevant Ministers attend the committee. I understand there were issues preventing their attendance today, but they must be made aware of what has arisen in our discussion.

Chairman

We sought another meeting on 17 September, but a Cabinet meeting takes place on that day. We are pursuing the issue diligently.

Mr. Frank Ryan

In terms of indigenous companies, no matter what region or part of a region one considers, there are only two main considerations, namely, the existing companies in operation and the level of business start-up that can be got going. These are the two sources of economic development and future job creation. I will not comment on the established and existing companies because I already commented on research and development and growth funds earlier. However, I will refer to how we are working to encourage people to start up their companies. This brings us back to Deputy Calleary's question on co-operation among the various agencies.

Increasingly, we run what we call enterprise-start programmes. These are attended by Enterprise Ireland, FÁS and by the city and county enterprise boards in the relevant area. The idea is to ensure that nothing slips between the cracks and that anybody who wants to start up a business is assisted. People starting up businesses are at different stages of the development process with their plans. Some people are quite advanced and ready to take on the business world, to export their product and so on, and these people deal with Enterprise Ireland through our high potential start-up companies programme. Other people want to supply the local and domestic marketplace first and the county enterprise boards, CEBs, work with them. Then there are those who want to find out what is involved in starting up a business or company. FÁS has a "start your own business" programme which is available to these people. Therefore, we give the important attention required to ensuring there are opportunities for people to develop new businesses.

We also have a strong and growing infrastructure in place. We have incubator units for people to establish companies set up in every university and regional institute of technology in the State and these are up and running. In addition, we have a very active community enterprise centre programme in which, to date, we have invested €51 million. Some 105 such centres have been established throughout the State, in every county and region.

Those centres currently have 955 companies established in them and employ more than 5,000 people with an occupancy rate of 86%. We are in the second module of a three-module commitment regarding the expansion of those centres. The calls for applications for the establishment or expansion of new community enterprise centres closed on 29 August. We have received 56 applications, more than twice the number of applications we received in the first call for proposals. We look forward to making announcements about those. It needs to be a two-pronged process. There needs to be the infrastructure which entrepreneurs can occupy to get their businesses going. We need a continued integrated approach among the development agencies and the county and city enterprise boards. On this occasion I compliment the county and city enterprise boards on what they are doing to create employment locally.

Mr. John Stewart

I will comment on youth unemployment, long-term unemployment and the current interagency work. Clearly youth unemployment is of major concern. The increase in youth unemployment should be of concern to all of us particularly as it affects young people who may not have the level of education or training to move away from their previous employments in construction and so forth. Entitlements to social welfare payments are of concern to us. As young people in employment are paying PRSI and tax, there should not be a question over any right or entitlement they might have to a social welfare payment while they are unemployed. Obviously it is very important that initiatives and incentives are introduced to ensure that people, particularly young people, do not remain unemployed and certainly should not become long-term unemployed. There is a need to consider what we are doing in the area of apprenticeship training. Apprenticeships do not seem to be in vogue anymore. People do not see them as being particularly useful. We need to review that.

Regarding long-term unemployment, one concern of the INOU is that when the economy picks up and the labour market improves, the likelihood is that although those who are most recently unemployed will be able to avail of the jobs coming on stream, this will push people who are long-term unemployed further down the line. Therefore we are calling for the opening up of recruitment onto what we saw as a very useful programme, the jobs initiative programme. That was a programme specifically designed for long-term unemployed people aged over 35 and more than five years unemployed. Recruitment under that programme ceased a number of years ago and effectively it is withering on the vine. We are looking for a change in that position to open recruitment in that area. This programme was particularly beneficial to long-term unemployed older men.

Regarding some of the comments on how extensive is the interagency working, in recent years the INOU has been able to develop a redundancy project whereby we link in with companies making workers redundant by way of providing fairly comprehensive social welfare information on rights and entitlements to people who are about to lose their jobs. Most people who have been in employment for a long number of years will, rightly, have had little or no contact with the Department of Social and Family Affairs or its agencies and will not know much about what they need to do at a practical level to link in with those agencies, sign on for social welfare payments, register with FÁS and so forth. We link directly into companies when redundancies are announced. We approach the human resource managers of the companies. We link in with trade union representatives and so forth. One of the questions we ask is the extent to which other agencies have been in contact with or offered support or advice to those organisations. Mostly we hear that we are the first people to have contacted them. The experience of many companies has been that there has not been that input and linkage and certainly not in an immediate sense. I would like to ask Mr. Rody Molloy a question in response to that. Do FÁS and the other agencies focus on large-scale redundancies? I refer to circumstances in which hundreds of people, rather than 50, 60, 80 or 90 workers, are laid off. It is obvious that there has been a fair number of large scale redundancies over recent years. That has certainly been the organisation's experience. Companies have told us that they have not been approached or contacted by FÁS.

Deputy Arthur Morgan

When I wrote to the Chairman in June to suggest that the groups which are present at today's meeting be invited to address the committee, I specifically asked that the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, also be invited to come here. I am particularly disappointed that she is unable to attend this meeting. It would have been very useful to hear from her. I would have liked to have asked her about an issue has been highlighted to some extent today. I feel that all the groups represented at this meeting, together with the city enterprise boards and the Leader groups, should be under a single heading. The operation of those groups needs to be reviewed. The existence of such a significant number of groups could be leading to a loss of efficiency. I appreciate that all the groups have particular areas of specialty which need to be retained rather than eroded in any way.

I thank the various delegations for their presentations. I appreciate their contributions. I would like to ask Mr. Frank Ryan about incubation space. Is much capacity available in that regard at present? Is more capacity required? Can Mr. Ryan comment on that aspect of this issue?

We are all familiar with businesses which are being, or have been, supported by Enterprise Ireland. Could the support process be accelerated somewhat? I know of a significant number of people who are dealing with Enterprise Ireland. I have heard about little hitches which were identified, causing the whole process to be held up for a month, after plans had been drawn up and the various bits and pieces had been prepared - when these businesses were right up against the wire. In many cases, the supports which are needed lead to the creation of additional employment within companies. Does Enterprise Ireland have adequate personnel, including agents, to deal with such matters? Is it being constrained by problems of this nature, which can reduce significantly the number of jobs in a company?

I understand that Enterprise Ireland spends a significant amount of money on advertising. I was surprised to learn that its advertising budget is greater than that of IDA Ireland. Would it be more efficient if Enterprise Ireland were to contact companies directly by sending them mailshots? It is easy to get a list of companies. Would it be possible to do that?

As other members of the committee have had a go at Mr. Molloy, I will do likewise. No, I will not. I am not having a go.

Mr. Rody Molloy

I am well able for it.

Chairman

I will not allow it.

Deputy Arthur Morgan

We all want retraining. Is FÁS considering different processes? We know that a significant number of homes are not energy efficient. Is FÁS thinking about ways of retraining people to meet the country's needs in that regard? All sorts of things can be done in sectors like agri-tourism, eco-tourism and fishing tourism. Can new thinking be brought to bear in that respect? I would like to ask Mr. John Stewart the same question. In his submission, he rightly asked:

How do we re-skill and upskill those who have lost their jobs in a rapidly changing labour market? How do we persuade a critical mass of employers, employees and potential employees of the need to pursue lifelong learning?

Those are brilliant questions. We have posed similar questions on occasion. I suppose we need answers at this stage. Will the witnesses reflect on those questions if the Chair gives them an opportunity to do so?

I would like to ask Mr. Barry O'Leary some questions. I accept that IDA Ireland is operating in a particularly tough environment at present. When representatives of IDA Ireland attend meetings of this committee, one of the first questions to be asked usually relates to land banks. I am aware that IDA Ireland continues to retain some land banks. I appreciate the need to retain many of them for potential customers. I wonder if some of that land could be shared with Enterprise Ireland, to be used for incubation units, etc. I would appreciate it if Mr. O'Leary could address that matter.

I have a load of other questions. As it is 12 o'clock, I should let some other members speak.

Chairman

The Deputy knows how cross I can be.

Deputy Arthur Morgan

I do.

Chairman

I will let Mr. O'Leary answer the first question while Mr. Molloy is reflecting.

Mr. Barry O’Leary

IDA Ireland has substantial land banks. We provide land and buildings for a number of Enterprise Ireland clients, rather than duplicate the service that is in the ownership of IDA Ireland. Many projects backed by Enterprise Ireland end up on IDA business parks.

Deputy Arthur Morgan

I am aware that some sharing takes place between IDA Ireland and Enterprise Ireland, having recently examined figures concerning IDA Ireland's land banks. The question is whether Mr. O'Leary will shed more light on the issue.

Mr. Barry O’Leary

We have a stock of land banks around the country, some of which are substantial sites of hundreds of acres. When we are developing business parks and putting infrastructure in place this land is made available for promotion to both IDA Ireland and Enterprise Ireland clients. As I indicated, a number of these clients take up this offer. There is no limitation on providing land for Enterprise Ireland clients.

Deputy Damien English

Mr. O'Leary indicated land banks are available for IDA Ireland and Enterprise Ireland clients. However, many other companies, which are not clients of either organisation but which create jobs, are unable to secure sites or land, including from local authorities. They are left to one side and no one finds a solution for them. While it is not necessary for Mr. O'Leary to comment, it will be necessary to address this issue. It shows a lack of co-ordination when companies willing to create jobs are unable to secure land when other agencies have spare land available. This is a problem in many counties.

Chairman

That is an old chestnut which Deputy English has raised previously with IDA Ireland. Given that he will not let the issue lie, someone will have to respond. In fairness to the Deputy, he has diligently pursued this matter.

Mr. Rody Molloy

Table 5 in our presentation lists substantial numbers of new training programmes FÁS has developed this year in response to changes in the marketplace. They include a number of training activities in the environmental and energy areas. We discussed this issue at some length during my most recent appearance before the joint committee. That is the easy part of the answer.

In addition to these measures, FÁS is actively engaged in finding new ways of delivering training, either at different times that are more suitable to people or by changing the nature of the delivery in order that we can get people through the system much quicker. This may sound easy but that is not the case. Even in terms of delivery times we have to wrestle with industrial relations issues in the organisation. However, we are making progress on the delivery side, continually changing and updating our programmes and introducing new programmes. I covered this issue at some length at the previous meeting. The list in table 5 is indicative of what we are doing.

Deputy Arthur Morgan

Would Mr. Ryan address the issue of incubation space?

Mr. Frank Ryan

For Enterprise Ireland, incubation space breaks down into the space made available at universities and, more important, the institutes of technology. We work closely with the latter, which play a very important role in economic development at regional level. We work with them to manage occupancy levels and in the past six months calls for proposals have been made for the expansion of existing facilities in the institutes of technology where they are at capacity.

An issue arises regarding the turnover of clients. At times we have to work with some of the institutes of technology on the issue of not keeping start-up companies in the incubator for too long. Companies tend to be in the incubators to grow before moving out of them, a process that must be managed. A number of the institutes have submitted applications. Enterprise Ireland has a very close working relationship with the council of the institutes of technology.

The other area, as I outlined, is the community enterprise centres, an area in which Enterprise Ireland has a scheme in place.

On the time taken to issue approvals, I will comment on one aspect of the question before asking my colleague, Ms Julie Sinnamon, to comment on internal processes. On external processes, we deal with a large number of people who start up businesses. At times they know what they are doing while at other times they need substantial assistance. We sometimes ask people to rework things because many of them are using redundancy money, the only money they have, to start up their business. For this reason, we have a responsibility to take extra care to ensure the chances of the business being a success are maximised.

We only advertise our schemes and do not spend any money advertising Enterprise Ireland. There are about 3,500 active companies engaging with Enterprise Ireland and we want to bring more inside the tent. An example of how we are doing this is the introduction of innovation vouchers for research and development for micro-enterprises which have never engaged in it. We must use appropriate levels of advertising to bring opportunities to the attention of people who do not normally come in contact with us. For any micro-enterprise it can be challenging to approach a State agency or Government office to discuss business development plans. We hope to use appropriate levels of advertising in the future.

I ask Ms Sinnamon to comment on the internal approval systems for proposals submitted to us.

Ms Julie Sinnamon

We were not happy with the time it was taking to process the large numbers of applications we received. We spent a lot of time and money examining our internal processes. About six months ago we introduced on-line application processing for our clients. Currently, 80% of our applications can be carried out on-line and we have set a target turnaround time of ten days from receipt of the application. At this stage 95% of the smaller applications are approved within a ten-day period and we are working towards reaching 100% before the end of the year. The bulk of our other approvals which are not on the start-up side are for the growth fund and the RTI fund. These are competitive funds; applications are all received on a certain date and people are given a date, which is eight weeks from receipt of the application, by which all the applications will be processed and sent to the committee. There was certainly room for improvement. We have made many changes and resolved many issues. The bar is constantly being raised in terms of the expectation of faster turnaround times, and we continuously work to improve these.

Deputy Leo Varadkar

I thank the Cathaoirleach for the opportunity to discuss this issue. The discussion is timely as we learned yesterday that the standardised unemployment rate has risen to 6.1%. I am concerned, based on what has been said by some of the people at this committee and also by the Government, that there is major complacency about the extent to which the employment situation is deteriorating. We often hear people say we are still behind the average European unemployment rate, which is 6.8%, but what is missing from this picture is the fact that unemployment in the European Union and the euro zone has been falling over the last year while our rate has been rising.

The EUROSTAT publication of 29 August - which is only last week - shows the figures from 2003 to 2008 and how the trend in Europe has actually been downwards. At the moment, based on these figures, 15 of the 27 EU member states have lower unemployment rates than Ireland, including Denmark, the Netherlands, Cyprus, Austria, Sweden, the three Baltic states, Malta and the UK. Although unemployment is likely to start rising in other European countries next year, it will continue to rise here too. Thus, there is a distinct possibility that if we do not accept this is an emergency, we will again become a country of high unemployment in the European context within two years, perhaps even overtaking Italy and others. I am concerned about the degree of complacency that exists; all of a sudden the country that spent the last ten years being number one in the world and in Europe in terms of unemployment is now content to be somewhere around the European average.

I have four questions and I will be brief. The first is about the suggestions from the INOU with regard to the jobs initiative. I may be totally wrong but I understood the programme was more or less discontinued. It was deemed not to be an effective labour market measure as the proportion of people who got involved in the scheme and then went on to gainful employment was around 14% or 15%. Perhaps we could have some clarification from the FÁS representatives of how effective it was. However, I would not advocate, nor do I see why the INOU would advocate, recommencing an expensive programme that fails 85% of the time.

My next question is about people who do not turn up for activation meetings. Perhaps someone could miss one meeting, but what is the view of the representatives with regard to a person who does not turn up for his or her activation meeting on two occasions? Would it not make sense at that stage to reduce the person's jobseeker's allowance? I accept there is a difference between it and jobseeker's benefit. However, it should be made clear that while we are happy to provide an individual with €200 a week, if that person refuses training and assistance he or she will have that sum reduced.

We should be most concerned about the long-term unemployed. Most of the people on the live register will get back into employment sooner or later but the 32,000 long-term unemployed are a distinct group on which we must focus. Is the figure of 32,000 correct? For example, some people on disability allowance could work if they were trained for appropriate work and those on the one-parent family payment whose children are in full-time education could also work. Do the delegations agree with the European Anti-Poverty Network that activation should be applied to all of these groups and not just to people on jobseeker's allowance? It seems to me that many people are being scrap-heaped into those other benefits and condemned to a life of relative poverty.

Up to 16% of those on the live register are foreign nationals. That is how it should be as 16% of the labour market comprises foreign nationals. All of those people have worked, paid their taxes and are entitled to benefits. Would there be a case for making an offer to foreign nationals on the live register to receive up to six months of benefits if they agree to repatriate to their country of origin and forego benefits? Would it not make sense economically to give them that option? It would not be forced on them but would just be an option.

Mr. John Stewart

We recognise that more can be done with the progression rates in the jobs initiative, particularly with helping people make the transition into the open labour market. There are regional variations in how successful the labour market programmes are. I understand that in certain areas there have been successes with the programme. We know from our work that many people who were previously long-term unemployed got wonderful opportunities through the scheme to link in with training and education. Through this, they have managed to move out of the jobs initiative and into the open labour market.

Regarding recommencements of recruitment on to the jobs initiative programme, it is not our intention that such a programme would be structured like the existing one which is being wound down. There would have to be a significant active labour market programme to this. The training, interventions and so forth would have to be very focussed. It would also have to link in with potential employment situations to ensure the potential and success of such a scheme could be maximised.

Ms Bríd O’Brien

One area people need to be careful with in discussing activation is that there is actually something that people can be activated into. I am concerned about some of the questioning of youth unemployment and challenging people's entitlements. People, whether they have worked or not, once they have passed the age of 18 should be entitled to a welfare payment. The challenge is to how to encourage people, particularly those who left school early, back into education training which is meaningful and will have an outcome for them.

In some respects, it is about linking the education training to job opportunities. For example, a person could work for several days and then do a training course related to that job. If such people are successful in completing the training, they could then move into a more permanent capacity in the job.

Genuinely seeking work criteria are being applied stringently in many social welfare offices. There are issues with getting employers to respond to job applications, so the person in receipt of welfare payments can prove he or she has been seeking work. There is also an issue for young people who left school early and who query what is on offer in the education and training system. If people are to be encouraged or even forced into it, then it must be of very good quality. If they are pushed into programmes that are of no use to them, it will have a major detrimental effect. If the courses are of good quality, then people will engage with them. It is then about how the providers can do a sales job to encourage young people to apply for them. It is about selling the programmes to young people and ensuring that what is on offer is about good quality payments.

The idea of activating one parent family payment recipients and people in receipt of disability allowances is something that has come from the official side as well. It is in Towards 2016 and is being followed through. There are challenges to both of them in pursuing it, and many one parent family organisations will be concerned that the Green Paper has ground to a halt. There are particular challenges to those on disability allowances, because many people who were long-term unemployed were encouraged to go down the route of disability allowances, and they must wonder why they are being reactivated when they were encouraged by officials to go on to disability allowance.

I have concerns about repatriation options, having worked for many years on anti-racism issues. If people are unemployed here and want to go elsewhere to seek employment, regardless of whether they are Irish, it should be about how the welfare system here can support them. People can sign on in other countries for a period of time, which I think is up to 70 days. That may need to be extended or promoted so people can explore their employment options elsewhere. That should be open to everybody, as I do not think it is in our interest to have different options for different segments. There needs to be targeted responses, but everybody should be able to access certain options if they feel they will be useful. If people wish to go elsewhere to seek employment, they should be facilitated.

Mr. Rody Molloy

Let me assure Deputy Varadkar and the committee that we are not complacent about what is happening in the labour market and I apologise if my comments earlier were interpreted in that way because it was not my intention. However, I was reminding the committee that it was not that long ago that unemployment rates were 17% and we would have thrown a party if we could get them down to 6.1%. I accept there is an upward trend and FÁS is trying to give the responses to minimise that trend until there is an upturn in the economy again. I am not complacent, nor is my organisation or any other organisation here today. We are all acutely aware of what is happening out there and the risks being run.

The job initiative programme was very expensive and did not get the outcomes we expected or intended from it. The intention was that people would spend a year or two in full-time employment and then move out of the programme into open employment. The reality was that we found it impossible to move people off the programme. We set up a programme which essentially was full-time public sector employment with no opportunity to bring new people into it, so it became self-defeating in that context. We were also conscious that the people on the programme had become very dependent on it, so we did not just close it down. We have been winding it down gradually as schemes come to their natural end.

An additional expense is the redundancy payment at the end of the programme and these payments must be taken up by the Exchequer, as it is seen as normal employment under employment law. I would be very slow to go back to a full job initiative programme, as what one might intend to happen does not always happen as certain realities come into play when the programme is up and running.

Many of those who do not turn up for activation do not go back to social welfare either. There is a leakage off the live register. We inform the Department of Social and Family Affairs about those who do not turn up. The Department then begins a process in which it engages with the individuals concerned, leading in some cases to the stopping of social welfare payments. However, this is not a simple process in that people have families and there are dependency and poverty issues involved. It can sound nice to say one should just cut off payments for a particular reason or because people did not turn up but the actual practice is much more difficult. It is something on which we actively work with the Department. There is computer interchangeability between the two bodies on who is referred or who does not turn up, and this information is acted upon. I am not suggesting the system is perfect or that we could not improve it, as there is no system that cannot be improved. We try to achieve this but there are serious issues buried in what seems like a simple concept, particularly with regard to poverty and people's dependency on the payments.

Again, at the risk of being accused of being complacent, long-term unemployment figures have only started to move up very slowly and surprisingly are still very low. There is perhaps a time lag involved in this and if the downturn continues, this will obviously become a bigger problem. When growth in the economy was at its height, we still had a number of long-term unemployed persons but a substantial number of them had the kind of problems that made getting them into employment extremely difficult. When people are registered as long-term unemployed, they often have real problems around being capable of entering employment which we must bear in mind. It is not just able-bodied people sitting around in receipt of long-term unemployment benefit; there are other issues involved.

As the INOU stated, part of Towards 2016 concerns the activation of lone parents and people with a disability. In the statement I circulated I mention, albeit briefly, the work we are doing with the Department of Social and Family Affairs in trying to activate both groups. There are different issues between the different groups. With lone parents, there are issues with regard to the payment they would need in employment to equal their allowances. It is a very difficult issue to handle because, again, one is wrestling with the poverty issue and the consequences for the parent and the family if one were too strong in deciding people's allowances should be cut off. The market pays a certain level for work and that is it. We must be aware that many in this category tend to be low skilled and that consequently the wage level they can command in the open market is low.

We have done an enormous amount of research into trying to activate people with a disability. It is a complex issue. Part of the problem is that we talk about people with a disability as if they were a homogenous group, which they are not. There are people with physical disabilities of varying degree, as well as those with mental disabilities of varying degree; therefore, one single response will not work. One then runs into issues about their dependence on the State and a fear of losing State support if they enter employment. No matter what assurances people are given, there is a huge reluctance to accept that, somehow or other, they will not lose out on State intervention.

We work very closely with all of the disability groups to try to find ways to get people back to work. In survey work we have done to try to get behind the reasons, if we talk to an individual who has a certain disability, we may find his or her approach is completely different. If a young person is involved, we talk to his or her parents who might be looking at the issue from a completely different perspective. It is something we are and have been struggling with, certainly for the past five years, in an effort to find mechanisms that will ensure greater activation for people with a disability.

When there were real shortages in the economy and unemployment had dropped to its lowest level, we believed there would be opportunities. However, even in that context, we had difficulties finding employers prepared to accept people with a disability, notwithstanding that we were offering them grants to engage such persons.

Moreover, many people with disabilities ultimately found the leap into employment too much to take. It is a complex area and, to be frank, we are struggling to deal with it. We are examining all possible means of working more closely with employers and others to make progress on the activation of people with disabilities.

In regard to non-nationals and finding a way of encouraging them to return home, we must bear in mind that the vast majority are European Union nationals. I emphasise that as far as I and my organisation are concerned, any EU national is entitled to exactly the same rights as an Irish citizen. This arrangement is in our interests because it means that Irish people working in other EU countries enjoy the same rights as the citizens of those states. I would have to give careful thought to any proposal which might in any way suggest an attempt to reduce the rights of non-nationals who are EU citizens.

Deputy Leo Varadkar

I was suggesting something voluntary rather than any element of compulsion.

Mr. Rody Molloy

It is fine to designate something as voluntary but one invariably finds that questions arise as to whether it is voluntary in practice. Any such scheme would have to be clearly articulated and absolutely voluntary. Even so, problems may arise. For example, what could be done in a situation where a non-national has accepted payment and returned to his or her country of origin only to re-enter the State three weeks later?

Deputy Leo Varadkar

In that instance, the individual in question would have forgone habitual residency and would not be entitled to benefits.

Mr. Rody Molloy

Yes, but we must bear in mind that we are moving increasingly towards total integration in the labour market. In that context, such an approach would be extremely difficult. I am certainly prepared to explore possibilities, but we must tread carefully to ensure there is no violation of the rights of EU nationals working in the State.

Chairman

I ask members to be as succinct as possible in their questions as we are working under a time constraint.

Deputy Damien English

I will be as brief as I can. There has been reference to a lack of urgency in addressing the current difficulties and a failure to acknowledge the extent of the problem. We have been harping on about this for a long time but have seen no plan of action or roadmap. That is our concern. I had hoped today's meeting would be less concerned with historical data and more with projections for the future, where we are going in the next six months, two years and so on, and the plans and solutions to move us forward.

I hoped to receive advice from the delegates on what needs to be done in the October budget. We in the Opposition wish to be constructive and will try to be so. In fairness, Mr. Stewart's presentation included a list of actions to be taken, but there seems to be a lack of focus and a shortage of new ideas to tackle the problems we face in the current climate. I have asked the Minister on Question Time on many occasions since Christmas whether there is a need to refocus the objectives of the various agencies involved in job creation to concentrate on specific issues. For example, Mr. Ryan referred to the importance of retaining jobs. Should our focus and priority be holding onto what we have? I assume the delegates are working within a budget and must set priorities within that. How will resources be targeted to retain jobs and sustain employment?

Many of those who now find themselves unemployed are accustomed to working and have been active in the labour force for a long time. They want to return to work. However, many of them are made to feel small when they seek to access the services to which they are entitled. I do not refer to services provided by the organisations represented at this meeting but rather to some aspects of the social welfare service. It is not good enough that people in this situation should receive poor treatment. If we do not look after them properly, they will not engage with the system and the opportunity for retraining will be lost. Inordinate delays and poor treatment are unacceptable. These people are doing their best to return to employment.

Mr. Molloy referred to the high incidence of unemployment among those under the age of 25. Have our educational plans got it wrong in respect of encouragement or career guidance? Is this an issue that should be examined? Obviously, something is wrong if such a high number under that age are unemployed. Other issues pertaining to education also should be considered. The delegates should comment in this regard.

Mr. Molloy has mentioned that, in common with everyone else, he expects further rises in the live register. I presume there are several scenarios as to what could happen and what it might mean. FÁS must be in possession of trends in this regard. While I can believe Ministers receive such information, members also would like to have it. I refer to what can be expected. Does this mean FÁS needs extra money? If it will be obliged to train additional people, it will require additional funding to a greater extent than will other groups. However, members must be informed of this to plan for it, as they would be in a dream world otherwise. Some serious decisions must be made about how our money is spent and who should get it.

Mr. Molloy has stated FÁS has sufficient staff to be able to cater for people coming in. I accept this and while I wish the same was true in respect of social welfare, this is not the case. As for the construction sector, the last time Mr. Molloy appeared before the joint committee he stated the Construction Industry Federation, CIF, intended to come forward with some ideas and plans, mainly in respect of apprenticeships. However, I find no reference to them in the presentation. Have such ideas been put forward and, if so, what are they? What comments have been made by the CIF? I repeat that I am unhappy with the lack of progress made since April 2007 when FÁS first set up the working group to tackle this issue. While I do not necessarily refer to FÁS, someone has not driven this matter fast enough because although we are now near the end of 2008, not much progress has been made.

I note a few comments and ideas have been included in respect of apprenticeships. What about creating new vacancies for them? At the last meeting many members from all sides and parties advocated working out new schemes such as community employment schemes or others that would engage such persons in employment and enable them to continue their training. Two benefits would accrue, namely, they would be trained and the State would get something done. However, the presentation makes no mention of any movement in this regard. While I accept the meeting only took place a few months ago, has this proposal been discussed with the Minister? Is it being considered? Can imagination be applied to try to find a solution that will result in more than one benefit and which will benefit more than one sort of person?

I refer to Enterprise Ireland and its activities. While it cites competitiveness as being a major factor, it has no plan that suggests what should be done to tackle this issue. Members also need advice from it, as it deals with companies. While members also listen to them and have ideas, Enterprise Ireland should come before the joint committee and state it wants X, Y and Z to be done. Naturally, not everything can be done but some ideas must be discussed in order that we can try to make some real decisions within the next couple of weeks in this regard.

I refer to job creation and investment. I have mentioned holding on to existing jobs. I seek the delegates' comments in this regard. How much of a focus should there be on this issue? Must the rules be changed to allow Enterprise Ireland to give more grants and assistance to companies to keep jobs? Is a change of procedures required? What must be done in this regard?

Enterprise boards are associated with Enterprise Ireland. Although they are doing excellent work, many of them had no money left at the end of August. They have created jobs, done well in helping businesses and so on but do not have any money left to give grants. However, nothing is being done about this. The issue is not being discussed, although everyone believes they do great work. There should be some real action in this respect. Do the enterprise boards need more money to create more jobs? That matter must be discussed.

The delegates referred to financial supports for businesses and other matters. Should measures such as deferred tax payments, State loans or reduced council charges be considered? What can be done in this respect? While there is competition for resources, these matters must be discussed. Businesses are under immense pressure and do not believe, be they small, medium or large, that they are getting enough help from the State. Although they have continued for years without such help, they might need it now for six or 12 months. Providing such financial help might to save jobs. What are Enterprise Ireland's opinions? What must be done in this regard?

I mentioned the community enterprise centres, boards and so on, which do unbelievable work. Mr. Ryan has mentioned that there are 56 applications and I presume they are all worthwhile. However, not all of the applicants will receive funding. Should they all receive funding or how many can Enterprise Ireland fund? What will happen to those applicants the agency cannot fund? Should the Government decide to find a way to fund them, as they will create jobs? This is the issue I thought members would discuss and get some answers on today. If not today, the delegates should send some papers to members in the next couple of weeks containing their advice and guidance on what is most important and where resources should be concentrated.

I apologise to the Chairman; I will not continue much longer. As members have waited a few months for this meeting, they might as well get through everything, as it is a serious issue.

I will make a couple of comments in respect of the IDA. Mr. O'Leary referred to Coca-Cola's activities in Wexford. While that is great, many Coca-Cola jobs were lost in Dublin and Drogheda. Such activities only constitute the displacement and movement of jobs, rather than the creation of new ones.

We are not really questioning the whole story with regard to Dublin and Drogheda and I am disappointed with that. The Minister at the time did not want to go into the issue. However, let us not fool ourselves that we have lost jobs. We were only creating a small number of jobs there. It is not as big as one would think.

I mentioned spare land and my colleague, Deputy Varadkar, has made several references to empty buildings. Can such buildings be put to better use? Are there State agencies or other businesses currently paying high rents which could pay lower rents to the IDA on a short-term basis? Is there any way to use existing resources to enable us to get through this muddle?

Many businesses and industries fall between stools and do not get help from State agencies. These need to be examined and we must ask those in charge of such enterprises what help they require. We must determine what is required to maintain even two or three jobs. We hear much about situations where 50, 100 or 200 jobs are lost but we do not hear about the two or three jobs trickling away in various companies all over the country. They are the jobs we must hold on to because they could be saved, with some targeted help and advice.

Community employment schemes and similar schemes must be re-examined. They were stopped for various reasons, including the fact that they had served their purpose. The number of places on such schemes has reduced in recent years because they only provided work for certain categories of people. There are now highly talented people who could make use of such schemes if they were revised and revisited. People who are already trained want to work.

Reference was made to reducing the qualification period for the back-to-work scheme from its current level of 12 months. I would welcome further comments on that because it makes sense to do so. Such schemes have worked very well in the past and can do so again. People will take chances, set up businesses and try to create jobs if there is a safety net in place so that if things do not work out, they will be all right. Likewise, people in queues for social welfare payments, whether disabled or not, are afraid to move out of the system because if they take up a job for two or three months and it does not work out, they end up back at square one, waiting six or seven weeks for a social welfare payment. Protection must be provided for those people who are willing to take a chance by pursuing a new job or setting up a new business.

Many of the issues raised must be examined by the relevant groups and the relevant Ministers. We must make plans for the future.

Deputy Thomas Byrne

It is clear that politics in this country has reached a new low when a member of Fine Gael suggests a voluntary repatriation scheme, which follows a segregation proposal by another Front Bench spokesman in the last two weeks. Deputy Varadkar should withdraw his proposal because it is in the dishonourable tradition of the British National Party, the American South and other organisations which I do not care to mention.

Deputy Leo Varadkar

It was a question, not a proposal.

Deputy Thomas Byrne

It is a very dangerous question and I do not know what members of Fine Gael have been drinking in their water over the summer period but they have certainly--

(Interruptions).

Deputy Thomas Byrne

Perhaps Deputy Enright, another Front Bench spokesperson, will clarify the issue. It is a very dangerous comment for the Deputy to make.

Deputy Damien English

Let us stick to the agenda of the meeting.

Deputy Thomas Byrne

I will do that but that point had to be made by Fianna Fáil in this committee room today. It is a new low in Irish politics and a repetition of a pattern of behaviour by Fine Gael in recent weeks which is very dangerous.

On the issue at hand, I am glad to see a sense of urgency at Government level but I do not see the same sense of urgency at parliamentary or agency level. This is a crisis, over which some of us are having sleepless nights. It is very worrying when one hears the negative figures released on a daily basis.

We must be provided with exact figures on activation meetings, on who is attending and who is not. I agree with Deputy Varadkar wholeheartedly on that issue. It is a very serious matter and I intend to table a question to the Minister on it. If FÁS could provide us with data on who refuses to engage with the agency, that would be very useful. We do not have the figures yet, so let us not make broad allegations but if people are choosing not to engage with State agencies, they do not deserve welfare payments and we cannot afford to pay them. If, having examined the figures, it is clear there is a real problem, it must be dealt with.

Given that approximately 80,000 to 90,000 housing units were being built annually in recent years, it is obvious that many people who were working in the construction sector will never do so again because that level of building will never take place again. There simply will not be jobs for them. I presume that Government policy in the future will be not to allow that level of construction to take place again because it is unsustainable. It is estimated now that, subject to market conditions, we will see approximately 50,000 to 60,000 new units being built annually. In that context, we need a plan to re-employ former construction workers in other sectors. Where will such people find employment if we are not building 30,000 additional houses every year? We must transfer tens of thousands of young people from construction-related jobs to completely different sectors. I do not see that issue being dealt with and it must be given priority. The issue of unfinished apprenticeships and redundant apprentices is also very serious and I am glad FÁS is dealing with it. However, even many of them may not be able to get a job in the construction sector, given the slowdown to more sustainable growth levels in that market, which we all hope will come. What are the plans for this?

Generally, I am very happy with FÁS, as I am with the IDA and Enterprise Ireland. However, I have concerns about Ireland Inc., particularly given the fact that the deficit was reported on the front page of the Financial Times yesterday. We should be concerned at such developments and, as suggested by Deputy Calleary, make sure we keep an eye on Ireland Inc. in that regard.

The matter is so urgent that this committee, perhaps jointly with the Joint Committee on Social and Family Affairs, should meet on a regular basis with the agencies involved and Ministers in order that we are kept up to date on progress. I do not blame any parliamentarian in particular but we all need to treat the matter urgently.

Chairman

This committee takes its resopnsibilities very seriously and has been working on the issues involved for a considerable period.

Deputy Olwyn Enright

I will clarify what Deputy Brian Hayes is quoted as saying, for the benefit of Deputy Thomas Byrne. If the Government had kept its pre-election commitments to helping children whose first language is not English, we would not need to reopen the debate on the topic as we have had to.

Can the organisations present, particularly the IDA, FÁS and Enterprise Ireland, outline briefly how each has changed its modus operandi in the past 12 months? The climate is very different. I am interested in the issue of responsiveness and particularly how each organisation responds in the changed climate. I welcome the suggestion from FÁS that there be a centre of excellence for construction in my constituency but it would have been far better if one had been set up eight or ten years ago when the construction industry was at its height. Perhaps FÁS can advise us what such a centre would involve in a time such as this, when it is less needed.

I have a question for FÁS on the issue of responsiveness. Further education colleges are having difficulties with permanent staff they have employed for courses for which there is no longer any uptake, particularly in construction, design, etc. How is FÁS dealing with this issue? Is it redeploying staff to other areas? I am not clear from its presentation how it is dealing with apprenticeships. I have been receiving information throughout the summer on the huge number of people affected. I have spoken to staff working within FÁS who tell me classes have been closed and that staff have been deployed to other duties. How will this issue be addressed? When will the students affected, of whom there are approximately 1,000, know what they can do or how they will be facilitated?

The discussion about persons aged between 18 and 19 years who were signing on ignored one aspect. If they do not sign on for three months, they will not be eligible for FÁS employment services and the back to education allowance. I am advising people to sign on, even though it goes against the grain for me to do so. However, if one is really trying to help a person, that is what one has to tell them to do. A discussion on this subject needs to be brought down to the level of the individual because it is only when members sit down with individuals that they realise how difficult it is to advise people where to go for help. Everything sounds fine from the comments of the delegates present but there is a huge number of agencies and Departments to contact, while other immense barriers are put in people's way. We must cut through that problem.

Much has been said about activation, a concept I support. However, Ms O'Brien made a good point when she asked how people could be activated. Activation would have been easier when there were higher employment levels but if there is not a job in the first place, it is impossible to do. We do not have the infrastructure, particularly for lone parents, to deal with the issue adequately.

The issues of transport and child care have not been dealt with, particularly in rural areas. The reality of this needs to be addressed. I also ask the representatives of FÁS to give me an outline of two pilot schemes that have been operating in Kilkenny and Finglas. It would be easier to get the details of the third secret of Fatima than to find out what is going on in these two pilot schemes. I cannot get responses from the Minister or anyone else on how they are working.

The Minister for Social and Family Affairs has said 50 welfare facilitators will be appointed. This means each of them will have a workload of 3,600 lone-parent families. How can one person help 3,600 people by spending time with them? Perhaps the representatives of FÁS can tell me how those 50 people are to interact with the FÁS employment services officers. Who will decide to do what and whose responsibility will it be?

Deputy English made a point to Mr. O'Leary about redundancies. The representatives gave an outline of the companies which will be setting up in the next while. In County Offaly alone, three companies have closed or are closing this summer, with a total of more than 300 job losses. Last night I spoke to an auctioneer who has let 12 people go. Someone who runs a shop in the same town has let seven people go. These are the figures that do not make the headlines in the newspapers. I am referring to one small town only; when such figures are added up around the country, we are talking about thousands. The developments mentioned will not compensate for these losses.

The issue I have in terms of redundancies is a lack of flexibility in the timescale involved. This is probably something that needs to be addressed by legislation but it also needs to be discussed at this committee. As those present know, Boston Scientific has announced it is to close its operation in Tullamore. The company will close in March or April next year with 270 job losses. If any staff members accept offers of alternative employment between now and then, although they know their jobs will be gone in less than six months, they will lose their entire redundancy payments. I do not know if there is a way to address this in the system but it is desperately unfair. To a large extent, those who lose their jobs will be taking up less well paid jobs because it looks as though no similar company is to set up in the region. There is a company in Athlone which may employ some of them but if they leave to go there, they will lose their redundancy payments. This is an issue that needs to be addressed, particularly where people will be taking up less well paid jobs, because they will need the redundancy payment to make up the shortfall. There does not seem to be flexibility in this regard.

I refer to incubation units and similar facilities. In the last ten years there has been an attitude that if we build such units, people will come to them. However, many of them are empty. What kind of advice is given in this regard? To an extent, local authorities have been leaders in facilitating the building of these units. I can name town after town in my constituency that has such empty units. The policy seems to be not to build any more, which makes sense. However, the IDA brings in visitors and these units are available. I know from a meeting with the IDA that it only brings visitors to specific towns, usually gateway towns. Perhaps the representatives could give us some details of the policy in this regard.

The gateway innovation fund, of which I am sure the IDA and Enterprise Ireland are aware, has been cut from €40 million to €10 million. It is aimed at nine gateways, some of which include three towns - for example, the one in the midlands consists of Athlone, Tullamore and Mullingar. Realistically, what innovation can be achieved in nine separate regions sharing €10 million between them? What is the role of the IDA and Enterprise Ireland with regard to such innovation funds?

Senator Nicky McFadden

We have come out of a very successful period for the economy. Listening to Mr. O'Leary mentioning all the jobs to be created, one would think there was no problem. I applaud the IDA for the work it has done. In my experience, such companies do not arrive in Ireland overnight. I imagine that the effort to attract them to Ireland involved years of work on the IDA's part. To echo what Deputy English said, what are the projections for the future and what companies are being courted at the moment?

Regarding infrastructure, have we made hay while the sun has been shining? I know from a programme on RTE recently that we have lost certain foreign direct investment because of poor water infrastructure. Broadband comes to mind as well. What are the projections and what is being incubated for the future in this area?

Another question for Mr. Molloy concerns older people. In Athlone, we recently lost a company with a workforce in their 50s. I am thinking of the individuals and Deputy Enright has said thinking about the individual person is what we are about as politicians. It is very difficult for these people who have no information technology training and so on. How will FÁS help these people in their 50s get back into employment?

I am very sorry to see there is no institute of technology representation present today. We should liaise with them. In Athlone, FÁS liaises with the Athlone Institute of Technology. We also have a fantastic innovation centre in Athlone and IDA Ireland works with it. The institute should have been at this meeting.

Regarding lone parents, I recently met a lady who was refused a back to school allowance because she is working in a part-time job. FÁS needs to train lone parents, not in low-paid jobs but in jobs that will give them a good income that will allow them clothe and shoe their children.

Deputy Michael McGrath

We must develop a more holistic approach to supporting and encouraging start-up businesses. I have encountered several cases in recent months where people have taken the initiative to start up a business and the first knock on the door was from the local authority with a rates bill. This is unfair and we need to be much more imaginative and innovative in the way we support start-up businesses. We should give them every possible support in the first years of business, for example, a rates holiday. Start-up businesses are also landed with significant planning levies if they are involved in any construction or development. There are energy bills. Could the semi-State companies give a discount for the first years in business and could there be a more flexible approach to compliance with the tax regime as well? Someone needs to take the lead and the initiative to develop that holistic package of support for start-up businesses because it does not exist at present and it must be dealt with as a priority in the current environment.

The matter of co-ordination between all the bodies and agencies was raised by Deputy Calleary and answered. Many local authorities have economic development units or sections which do much work in this area. Cork County Council is a leading example where industrial incubation units are developed and so on. Is there synergy, co-ordination and communication between all the groups and how structured is it? The delegations say they meet each other. Are there regular, structured meetings and if so, who attends these? If not, every area in every city and county should have at least a monthly meeting between all the relevant agencies and the local authorities with one item on the agenda, namely, job creation and supporting start-up businesses.

The figures indicate almost 24,500 people in the apprenticeship system. I understand FÁS does much work to develop new courses and programmes to upskill those people. Is there sufficient capacity to meet the demand for those people and how accessible are those courses? What do they cost and what type of supports can we give people in that area?

There were reports during the summer of a significant number of vacant positions in the country and I would like some of the delegations to comment on this. Is it the case that people now seeking jobs are far more selective than in the past? Is it true that there are thousands of vacant positions? We know the sectors involved. Are there ways we can encourage people to at least start their re-entry at a lower level and work their way up? That issue is of concern.

The pharmaceutical industry is a very important industry particularly for Cork which has suffered several setbacks given that the Amgen facility did not go ahead, one Pfizer plant was lost, and there is a possibility of losing a second Pfizer plant. There have been pluses as well with Centocor and others investing in Eli Lilly. Perhaps Mr. O'Leary would comment on what the IDA is doing to help save the second Pfizer plant and bring further investment into the area. Given that it has up to 300 acres in the land bank in Ringaskiddy, is the IDA continuing to market that area in an attempt to attract further inward investment in the bio-pharmaceutical area which is a major growth area?

Deputy Joe Carey

I want to follow up on a point made by Deputy English, namely, the cost of doing business in Ireland. Energy bills are soaring and we have suffered a loss of competitiveness, having slipped from fifth to 22nd among OECD countries last year. I assume we have slipped further in the current year. We need to address spiralling energy costs and instil a mind set within business that acknowledges the need to do so. I would like to know in particular what packages Enterprise Ireland is putting together to encourage business to address the issue of costs.

I see a constant stream of people who are self-employed in the construction industry coming to my constituency office. They earned huge money in recent times but now their earnings are dwindling. Next week there will be no work. They are letting people go and there is no assistance for them. FÁS needs to develop schemes to provide some way out for these people who are moving from a position where they had so much money but they are now on the bread line, with children, with mortgages and subject to major pressures. I have heard nothing from FÁS that would encourage me to believe it is doing anything to address this issue.

The loss of the Shannon-Heathrow route in County Clare is putting companies under pressure by increasing the cost of doing business owing to the necessity to travel to Cork or Dublin. I would like to hear the views of the IDA and Enterprise Ireland in that regard. Have they done anything to attract an alternative airline to Shannon and restore connectivity between Shannon and Heathrow?

Chairman

I have two questions. Mr. Molloy will be expecting one of them. Could Mr. Barry O'Leary indicate the number of pipeline projects likely to come on stream in County Westmeath before the end of the year or early in 2009? In that context I am being parochial. There are 72 acres of land at Marlinstown, Mullingar, which has a well developed infrastructure and is located right at the heart of the country, equidistant from all places north, south, east and west. There are no other bypasses around the county but at Mullingar there is a notorious bypass when it comes to trying to get IDA projects. Mullingar has a huge educational base, leisure facilities, a fairly good transport system and everything else. There is a high level of education and third level graduates, many produced in the institute of technology nearby. We are well placed and I hope that in 2009 the bypassing of Mullingar will be ended in terms of IDA investment there. I hope something happens there. Mr. O'Leary will not be surprised I asked that question.

My second question relates to the county enterprise board. It is, perhaps, a question for Mr. Frank Ryan. We are doing a commuter belt study and will probably produce a report before the end of the year. It has been very interesting, extensive and intense. Much of the media do not follow it although The Irish Times has followed it carefully. It will conclude in Mullingar and Portlaoise on 26 September. The county enterprise boards have done a tremendous job and have been well praised for it, as indeed have all the agencies. However, why do we hamstring the county enterprise boards? In April this year not one of them had a red cent to give out in capital at the most crucial time of the economic cycle. They had funding for other projects such as advertising, websites and the like but they had no funding for capital.

Second, why do we constrain them to ten jobs? As soon as the number reaches ten, the enterprises move to another category. However, sometimes they get lost in the valley. Enterprise Ireland is expert oriented and is doing an excellent job in that regard, while the IDA is mainly concerned with foreign direct investment or FDI and competing on the world stage, which it does very successfully. Are we are putting artificial barriers or obstacles in place when there is no need for them? Let us give money even if it is a small number of jobs. My view of the economy is that, while FDI and Enterprise Ireland will be very important, its future will rely strongly on the small and medium enterprise sector. Enterprises providing from two to 12 jobs will be crucial. My view might be wrong but I have an awful feeling that this sector is where many things will happen in the future. We must try to reverse the trends in that regard.

The third issue relates to FÁS. On 3 April 2000, a notice was sent from FÁS to sponsors regarding changes in participation time in community employment for participants over 35 years of age and those in receipt of disability payments. We are now in a different era. A person of 55 years of age could be restricted to seven years participation. These people make a very important contribution to the enhancement of the environment and to community and voluntary projects. These are the projects we laud throughout the country. However, one often encounters people who are 58 or 59 years of age who are cut off from community employment. We are transferring those people from that pool into the jobseekers' pool, where they will not get a job. It is nonsense. Let us stop this rigmarole.

If somebody is 55 years of age and can have seven years community employment, they should be allowed ten years to bring them up to retirement age when they can qualify for pension. People cannot get a job at 58 or 59. I accept that people talk about working until one is 74 or 75 years of age. Fair play to them; that is great. However, I have met people who have worked on a GAA park or in some other community employment. They make a major contribution which the community appreciates. It gives these people an outlet. I am aware that FÁS is reviewing its operations so I hope it will review this edict and allow people to participate for longer periods.

I have a constituent who is on disability payment and is only 41 years of age. There is no way he is insurable. As a barrister, I am aware that the first concern for an employer is the insurance risk. This guy suffered a severe injury but, thankfully, he got into a FÁS programme and is working and making his contribution. However, his fourth year finishes on 20 September so it will be a case of "goodbye". There is a real world out there and we should not divorce ourselves from it. These are real people. Deputy Enright spoke about getting out and meeting real people. The catalyst for change must come from that. I accept that sometimes we come up with harebrained ideas.

Deputy Damien English

Speak for yourself, Chairman.

Chairman

Perhaps I do. Perhaps I am the only one who does so, but I will not be shot for want of trying. Sometimes we come up with fairly good ideas and often we feel we are talking to ourselves and, perhaps because we are politicians, the view is that we come up with those anyway to satisfy a constituency or whatever. I appeal to the organisations to recognise that sometimes when we bring forward ideas, as we did lately in this committee in certain areas, they are not scatterbrained and much thought goes into them.

I assure Deputy Byrne that this committee works very hard. It meets three or four times a month to pursue issues in this regard. In fairness, when Mr. Rody Molloy attended a meeting of this committee six or seven weeks ago, he was the subject of a severe two-hour grilling, if I may use that expression. That is our type of thing.

We should not be afraid of change. A person once told me that the definition of a bureaucrat is a person who looks at an issue and states how it cannot be overcome. To me, the definition of a good bureaucrat is a person who looks at the issue and states that there is an obstacle but here is the way of getting around it and that it can and should be done. That is my outlook on life. I always look at how we can get past the wall without having to go through it. Perhaps that is a simple point on which to end a meeting.

The organisations heard a number of questions and I ask them to reply to my colleagues. Our visitors have been at this meeting almost three hours and we thank them for their patience. It was an interesting exchange. Perhaps they can answer some of our queries, including some of the madcap ideas which I propound from time to time. We will begin with Mr. Molloy.

Mr. Rody Molloy

With deference to the Chair, we will start with the questions of the Co-Chairman, Deputy Penrose.

Chairman

My madcap ideas.

Mr. Rody Molloy

That issue of those aged 55 plus on community employment is one with which we have been wrestling as well. It involves resource issues and ensuring we are not putting people into permanent employment with all that such entails. We are working with the Department of Community, Rural and Gaeltacht Affairs on examining its schemes and ours to see whether between the two we can find a way of improving the situation for people aged over 55. That is actively ongoing as we speak.

I hope we try to take seriously ideas coming from this committee. When we finalise our response to the construction industry, I am confident the committee will see at least some reflection of the issues raised when I attended one of its meetings six or eight weeks ago. We recognise that we do not have all the answers and we are scratching around looking for them as best we can.

Other questions were raised. Deputy Enright expressed frustration at the level of the discussion. This is inevitable given the nature of the meeting, as a consequence of which we cannot go into detail. If any Deputy or group of Deputies contacts my office, we will put in place an opportunity for them to discuss in detail any of the issues they wish to raise and with people who have the detailed information at their fingertips. We are at their disposal and we will try to facilitate them as best we can. We accept that not everything we do is perfect and that sometimes people make mistakes. That is life. When we make mistakes, we try to correct them.

On the issue of those under 25 and education, which is related to the other issue of vacant positions raised by Deputy Michael McGrath, we have a significant number of vacant positions and high numbers of people unemployed, but the issue is really one of the skills match. Part of our challenge as a society is to ensure we provide the appropriate skills for the kinds of jobs becoming available. It is why we have put so much energy into upskilling people in employment to try to change their skills levels to match the new kinds of employment coming forward. On the way to the meeting this morning I heard an interview on radio in which a company chief executive stated that he could not recruit computer graduates of an appropriate standard and that he had to go abroad to get them.

While that is an issue, it mirrors a bigger issue in our economy regarding how we produce people. For example, we have a major problem with the number of students taking honours mathematics and the teaching of the subject, and the number of students taking science and engineering degrees. FÁS does not have the answer to that but, as a society, we must find an answer if we are to match skills with the jobs available.

Deputy Michael McGrath

Are the unfilled positions at the higher or lower end?

Mr. Rody Molloy

Most are at the higher end. My main concern, which I expressed at the height of the boom, was that we would end up creating an underclass in our society if we did not invest heavily in ensuring people acquired the appropriate skills because companies would bring people in from outside with the necessary skills and we would be left with an underclass of Irish people with no skills. There is no simple and single answer to the skills issue and the resulting youth unemployment. The first issue that must be tackled is keeping people in the education system as long as possible. The dropout rate at second level is too high. We try to deal with that, as does the VEC system, through community training workshops but the participation rates at second level must be increased and that is Government policy. However, it is a difficult issue to crack.

When people leave the education system and find themselves low skilled and unemployed, we can try to deliver those skills to them in various ways, as can the institutes of technology, as Senator McFadden said, and the VECs. Every organisation is trying to engage with these people to give them employment.

I mentioned the construction industry briefly. We worked with the CIF and the Tánaiste and Minister for Enterprise, Trade and Employment over the summer to bring forward programmes to alleviate the difficulties faced by apprentices. Capacity is not an issue. Our problem, given the fall in apprenticeship numbers because of the decline in the construction industry, is overcapacity. The issue is how we handle that overcapacity.

Deputy Michael McGrath

What about retraining people who leave the apprenticeship system?

Mr. Rody Molloy

Many of the programmes I listed earlier, particularly in the environmental-energy area, are geared towards plumbers and electricians who have been made redundant. Their basic skills can be enhanced with skills relating to energy saving or environmentally-friendly installations. I do not pretend we have all the answers but this is an attempt to address the issue.

We have conducted research on activation figures with the Department of Social and Family Affairs. When that is finalised, hopefully it will provide answers. We are trying to get behind the figures to establish what is happening. We can make that available to the committee.

Deputy Olwyn Enright

I asked a question about employment services officers in FÁS and officers of the Department of Social and Family Affairs. Who has done what on the pilot projects? Is there duplication?

Mr. Rody Molloy

I suspect there is duplication, even among all of us sitting around the table. Unless there is wholesale duplication, I would not be concerned about it as long as people are not confused about what is happening. We have groups that meet departmental officials regularly and we look through our different programmes to see how they can be made to fit each other. Sometimes the difficulty is that we are coming at the same problem from a different perspective and there will be differences in how we respond. However, we try at senior level between headquarters and the Department and at local level to encourage the regional officers to engage with each other actively to ensure people do not fall through cracks in the system. We will never get that 100% right and we will gladly take on board any ideas people have to improve this.

The issue of older people was raised. In any of our training centres a substantial proportion of people in our classes are over 40 or 50. We try to provide training for them. They face another problem, which we cannot deal with namely the attitude of employers to employing older people if they can get younger people. We do what we can to ensure older people acquire skills. It amazes me when I go to training centres to see people, clearly in their 50s, wrestling with a PC for the first time and getting to grips with Microsoft Word. It is happening. Perhaps it needs to happen much more.

I have not been able to deal with what was behind many of the questions. However, the offer I made at the beginning of the meeting stands.

Chairman

The offer to meet Deputies, either in groups or individually, is very worthwhile. It will be well acknowledged by my colleagues on both committees.

Mr. Barry O’Leary

A member asked what we do to hold on to jobs. With our key clients we have a transformation agenda where we support and encourage major technology uplift, retraining, upping skills and getting people involved in research, development and innovation. We try, particularly, to get development and manufacturing co-located. The Baxters Healthcare investment of €80 million in November of last year is a good example of this.

However, in the history of attracting foreign direct investment since 1969 we must recognise that every year brings job losses. This will continue to be the case. Job losses account for between 5% and 7% of the portfolio and occur for a variety of reasons such as companies' restructuring, mergers and acquisitions, disposables, cost pressures and patent expiration. Deputy English referred to Coca-Cola and said the new jobs in Wexford had merely been displaced from other centres. Nothing could be further from the truth. The Wexford development has nothing to do with the Drogheda business. From an Ireland Inc. perspective, we see this as a massive win of €190 million for Wexford, which was highly sought after by other countries. It is important to recognise that we will always have that loss while, at the same time, bringing in much higher quality investment. There is a transformation agenda.

Deputy Enright asked what we are doing now that we were not doing 12 months ago and for our responses to the changed economic climate. I have already alluded to some of these changes. We in the IDA are shifting 10% of the resources in the public service, moving 15 posts into business generation. We are putting 20% extra resources into the United States, our main market, and going into new territories of Boston and southern California. We are looking at new sources of foreign direct investment, FDI, such as China and India. A team of two recently went to Mumbai. We have looked at other locations, particularly Russia and Brazil this year and we are currently looking at the Emirates, as new sources of FDI. We are upping our game in London and targeting financial services. We are adding new sectors. Convergence, services innovation and cleantech are all new. We have increased our target by 6% while, at the same time, living within our overall head count. These are significant changes.

We are putting resources into a stronger influencing agenda. Much has been said about the competitive pressures. We are trying to feed, in a much stronger way, what is important for the multinational community in terms of competitiveness and to influence Ireland Inc. We have an enhanced property programme. A number of major sites are coming on stream from places such as Athenry and we will acquire a major strategic site in the midlands.

Chairman

There is a 72 acre one ready for you in Mullingar.

Mr. Barry O’Neill

It is very regrettable that Boston Scientific is leaving Tullamore. The company will be offering jobs in other locations, although that does not suit the majority of people. New medical device companies, particularly Kinetic Concepts and Biomed, are going into Athlone. This may not necessarily suit people in Tullamore but it is important from a spatial strategy point of view that Athlone, Mullingar and Tullamore are viewed together. As regards comments allied to this in terms of our building and land programmes, two of the enablers for both of these companies were to go into buildings on the technology park in Athlone.

Senator McFadden asked about the timing in regard to FDI. It is a long term game. If I may, I will quote SAP and CISCO as two really great companies we won for Ireland. It took 20 years to bring both of them to Ireland. Also, it took approximately five months to bring Kinetic Concepts Inc. to Athlone and a year and a half to bring Biomed to Athlone. The time frame in each situation differs. One can get short term hits but should never lose focus on the long term gain from investing in the process.

I assure Senator McFadden that we are fairly knowledgeable on the issue of water and the multinational company involved. I recall the article that appeared in a local paper. The site concerned was never in contention for the investment referred to.

There was a reference to Pfizer in Cork. I accept difficulties have arisen in regard to Pfizer which is closing approximately 90 plants worldwide and laying off approximately 14,000 people globally. The reason is that drugs such as Lipatur are coming off patent and this will affect its traditional business. What is important, in terms of the new wave of technology in biopharmaceuticals, is that Pfizer has chosen Cork as the location for its new €190 million clinical development centre. Also, some €300 million has been invested in the expansion of its plant on Pottery Road in Dun Laoghaire.

Gilead Sciences Limited is a new arrival to the Carrigtwohill area of Cork. It is adding 80,000 square feet to its plant. We have sold land which is approximately 100 yards from Carrigtwohill to Atlas Packaging which is setting up its European headquarters in the area. Members will be pleased to hear that next week further good news will be announced for Cork in a not unrelated area. Mention was made of Lilly's €400 million investment in its site. There is nonetheless a loss of activity there.

Reference was made to the cost of doing business in Ireland. I do not have time to go into this matter in detail. However, there are many challenges involved in attracting foreign direct investment to Ireland. Senator McFadden stated that listening to me one would think everything is normal. It is a hugely competitive business internationally from Singapore to Switzerland and the eastern states of the United States and, further afield, to India and China. I would not under-estimate the challenge of this hugely competitive game. That being said, one must focus on the positive of what one will win. Ireland is doing this notwithstanding that serious issues such as competitiveness, competition and currency require to be addressed. We engage in dialogue with the various Departments to ensure the Ireland Inc. product of the future is competitive on the international stage.

As regards the pipeline of projects on hand, at the end of our September board meeting we will have had 76 projects approved this year. We are confident of reaching our target of 122 by year end. Approximately 15 or 16 of these projects will be announced in the public arena between now and December.

Mr. Frank Ryan

I very much appreciate the invitation to attend today's meeting. This committee has taken more interest in the development of indigenous industry than any other committee in the history of the Oireachtas. I extend my thanks to the former Chairman of the Oireachtas Joint Committee on Enterprise, Trade and Employment, Senator Donie Cassidy who took a particular interest in this matter.

Ireland has changed. We will never go back to the Ireland of the 1980s. Ireland today is fundamentally different. Many of the projects that worked previously are no longer relevant.

We take on board the comments, suggestions and ideas of committee members. I have taken on board today the comments on CEBs and their operation, which are a matter of discussion currently with the Tánaiste and the Minister of State, Deputy John McGuinness. Perhaps I will say more on that later.

It was said that Ireland has changed. The only reason a company employs anybody is because it is selling more products or services and needs people. Therefore, we must have growth. Without growth, we approach the issue from the wrong end. Traditionally, our growth has come from northern Europe, mainly the UK, and from North America. That environment has changed fundamentally. In the future, our old allies of northern Europe and the United States will not be in the vanguard of strong economic growth. That growth will take place in places like Brazil, China, India, Russia and the Gulf states, which is where we have repositioned ourselves. The Minister of State, Deputy John McGuinness, is just back from a very successful trade mission to Brazil and Mexico, the Taoiseach will lead a trade mission to China in October and the Tánaiste will lead a significant trade mission to the Gulf states in early December. Therefore, we have re-oriented our programme.

Having listened to the helpful and constructive comments made by committee members, Enterprise Ireland should, perhaps, take another look at how it has communicated what has been happening. I assure members that with the pressure we are under from the Government and, in particular, the Tánaiste, there is no complacency across the agencies, anything but. We are trying to make things happen, and quickly. We have gone through a great ten years of economic growth and perhaps the role of the agencies was undercredited during that period. We have worked alongside many successful companies during those years and many of them continue to be successful on the international stage.

As Deputy Enright said, it is important we try new things. We must ensure new sectors happen, sectors such as construction. Construction is not new to Ireland, but Irish construction companies are new to worldwide opportunities for construction projects. I mentioned this specifically in my opening statement. In October, we start a leadership for growth programme for the top CEOs of the major construction companies in the State. The programme will be based on the UK, Russia and the Gulf so that CEOs will be open to opportunities in those areas. The future job opportunities for many of those unfortunate people who have lost jobs in the construction sector will be in managing contracts in the Gulf. This is part of the answer to the problem. The opportunity for us to gain employment and market opportunities has changed and will no longer be about what happens in the British Isles.

The environment is a whole new area for us also. We now have over 100 Irish companies exporting environmental products and services internationally, with exports last year of €106 million. We must try new things. Since last October, we have established a new internationally-traded services division which is looking at financial, educational and a range of services that heretofore Ireland had not strongly developed in terms of indigenous industry.

I assure the committee that the innovation centre in Athlone was 90% paid for by Enterprise Ireland. We have an excellent working relationship with Ciarán Ó Catháin and find him a great ally in making economic progress in the midlands.

With regard to better co-ordination across the agencies, I am unsure that any better high level co-ordination could take place, because we meet regularly and are in close contact, particularly with regard to confidential issues, early warning reports, etc. However, we must ensure that similar close co-operation takes place on the ground. We could make further progress in that area and we will certainly address that in future.

In answer to Deputy English, we need to pay attention to the jobs we have. Sustaining the existing jobs is very important. To sustain jobs, there must be change. It is not appropriate to deliver subsidies to companies that are uneconomic and uncompetitive in the world marketplace. They must change and innovate. It is not too strong to say that a company that is not involved in research and development today will not be in existence within three years because competition is so intense. The focus we have on increasing the number of companies engaging in research and development, and listening to their customers in the marketplace is terribly important.

On the Chairman's comment that the future will lie with the number of small companies, they have a great role to play in employment creation particularly on a regional basis. We will do what we can to work better with FÁS, the county and city enterprise boards and the business incubation centres. I thank the committee for the opportunity to be here and I thank members for their continued strong interest in what is happening in indigenous industry.

Chairman

I thank Mr. Ryan for that last comment.

Mr. John Stewart

None of the final set of questions were specifically addressed to the INOU. I will make a brief general comment. As an organisation concerned with unemployment and employment, we very much welcome and are grateful to hear of the work being undertaken by the organisations represented by Mr. Ryan, Mr. O'Leary and Mr. Molloy. I wish them continued success. It is interesting to listen to the extent of that work. Our key concern is for those people who have lost their jobs in the past year, people who have previously been on the live register and those who, unfortunately, will come on to the live register in the coming months and years. Our focus is on what we can do to ensure that the flows on to the live register diminish and the numbers on the live register start to fall back again. We need to do what we can to ensure that appropriate supports and programmes are in place to ensure that people who are unemployed today will not be unemployed on this day next year and preferably that they will have the facility to take up training and education and employment opportunities again as the months and years go by. I again thank the Chairman for the opportunity to address the committee.

Chairman

We are delighted to have you.

Deputy Jackie Healy-Rae

On behalf of the Joint Committee on Social and Family Affairs I thank Enterprise Ireland, FÁS, and the Irish National Organisation of the Unemployed for coming here and engaging in such comprehensive and timely discussion. I also thank our colleagues in the Joint Committee on Enterprise, Trade and Employment for organising such a worthwhile meeting and allowing us to attend. I pay special respect to the Co-Chairman who carried out his duties here in a very powerful way. I am certain of one thing. If the Waterford team plays as good a match on Sunday as he played today, the Kilkenny players will be sweating.

Chairman

That is unusual. I am delighted to hear that, given that the Penroses came to Waterford, Waterford Glass. However, we lost it along the way and it went to Cork instead.

I thank Mr. Burbridge, Mr. Carty, Mr. Leahy, Mr. McDonagh, Mr. McGrath, Mr. Molloy, Mr. Ryan, Mr. O'Leary, Mr. Rowan, Ms O'Brien, Ms Sinnamon and Mr. Stewart for their attendance today. I also thank them for their patience. We had some detailed interchanges and discussions which were very useful. We are glad that such people, who are working at the coalface with their agencies, have given of their time to come, listen and hopefully reflect upon some of our comments. I heard Mr. Molloy say that he hopes to incorporate some of our comments into his report. As always Mr. Ryan takes the view that we have now focused on an area that is important, the small and medium enterprise sector. We feel it will be even more important in the future.

Mr. O'Leary attends the Oireachtas Joint Committee on Enterprise, Trade and Employment regularly and will be here again shortly for his annual report. We are very glad to hear of a number of significant projects in the pipeline. Irrespective of our political affiliation it is important that we all put our shoulders to the wheel to ensure that Ireland Inc. progresses and survives this bit of a setback in economic terms in recent months. We are delighted that Mr. John Stewart and Ms Bríd O'Brien of the Irish National Organisation of the Unemployed attended this meeting. We thank them for their contributions and suggestions, which we will examine.

We have all seen the recent figures which indicate that unemployment has increased to approximately 6%. The Government must take forthright action to tackle this worrying situation. I intend to follow up this meeting by contacting the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Coughlan, and the Minister for Social and Family Affairs, Deputy Hanafin, which is something that was suggested by a number of speakers. I will invite the Ministers to address the Joint Committee on Enterprise, Trade and Employment on the number of people signing on the live register. We have run into a little difficulty in trying to arrange a suitable date for such a meeting. I will invite the members of the Joint Committee on Social and Family Affairs, led by the eminent Chairman of the committee, Deputy Healy-Rae, to attend the meeting if it goes ahead. The clerks to the committees will liaise with each other and keep the members of the committees informed.

We look forward to having further meetings in the not too distant future with our colleagues and friends who attended today's meeting as witnesses. We need to keep abreast of all developments and, where possible, add a positive voice to those who trying to ensure Ireland Inc. can make the kind of progress we all want it to achieve. I thank the witnesses again for their attendance. I also thank the press officials who sat through this meeting which lasted more than three and a half hours.

The joint committee adjourned at 1.35 p.m. until 2.30 p.m. on Tuesday, 9 September 2008.