County Enterprise Boards (Dissolution) Bill 2013: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

Senator Brian Ó Domhnaill

In my contribution yesterday I outlined the importance of the county enterprise board structure, the model, the work the boards had done since their establishment in 1993 and the opportunity that could be lost. Akin to what is happening in respect of this House, we should be looking at reforming, reinvigorating and re-energising the county enterprise board structure instead of abolishing it. The model has been proved to have worked and it is a mistake to go down the road of abolishing the county enterprise boards.

I outlined yesterday that board members came from a wide array of bodies, including local authorities, trade unions, employer organisations, State agencies and local businesses. They gave of their time on a voluntary basis and that will now be lost as a result of this Bill. It is also an attack on the competence and professionalism of the county enterprise board staff around the country who have been unfairly treated in this process. I will return to this point when we come to section 12. It is undermining the competence of people who have a proven track record and ability. Many county enterprise boards share IT and payroll functions with local authorities and savings can be made through that process if it is a question of savings.

As I mentioned yesterday, the county manager in Donegal had been chairperson of the Donegal county enterprise board since its establishment in 1993. There is a new county manager there now and that person is chairperson of the board.

A major area of concern is that the plans envisage the local authority providing matching funding for funds allocated by central government to the new local enterprise office, LEO. We are all aware of the financial constraints of local authorities. If they are expected to part-fund the functions of the LEO, it will place a further financial strain on them, given that the county enterprise board model has been funded exclusively to date since 1993 from central government funds. How will this difficulty be addressed? What discussions have taken place with local authorities or with the Department of the Environment, Community and Local Government? From where will the shortfall in funding come? Some local authorities are not merely struggling but approaching bankruptcy. The idea that the local property tax would replace such funding is a non-runner because the model has an 80% return based on what is collected. That will not fill this gap, as I am aware from having discussed the matter with the staff in County Donegal that money has already been budgeted for by directors of service and county managers. That is a grave mistake and it will have drastic consequences. I hope there is an explanation for that.

As I mentioned, the staff of the county enterprise boards have been dealt with quite inappropriately. Section 12 provides for Forfás, Enterprise Ireland or a local authority to accept staff into their employment that were previously employed by a county enterprise board. What discussions have taken place with county enterprise board staff to date?

We are talking about business and creating jobs and many things need to be done to sustain our employment base in the country, particularly the domestic employment base. We need a system where grants can be made available by the Government through agencies because the banks are not lending. Zero-interest loans should be made available to those who create employment in the economy. It is the only way forward, the pathway towards the recovery. Leaving lending to the banks amounts to negligence because that will not work and it has been proved not to work up to now. Despite the falsified figures banks are providing, they are simply not lending.

Another issue is commercial rates, which needs to addressed. If local authorities are expected, on the one hand, to collect commercial rates from prospective employers and, on the other, to be seen to be funding business, there is a conflict of interest. That is a wrong move.

Senator Maurice Cummins

I will speak briefly to the Bill which I welcome. As one who was a member of an enterprise board in Waterford for a number of years, I recognise the work enterprise boards have done not alone in my city but throughout the country. They have been quite successful. I compliment the staff, past and present, the board members and the evaluation committees who did such tremendous work down the years. I hope that as a result of setting up these LEOs we will not lose all the expertise that was available to enterprise boards. When entrepreneurs were going about their business, they were helped by enterprise boards but what they wanted was a one-stop-shop for local entrepreneurs. They wanted information on State supports and developments of services. While the enterprise board could give them quite an amount of that information, bringing these offices in under the umbrella of the local authority - the vast majority of the members of boards were local authority members who gave tremendous service to the boards - is a change in local government. It gives more power back to local government in that it is involved in enterprise. This should be welcomed by officials and members of local authorities. There is nobody better placed in the community than the local authority to have a one-stop-shop, bringing together these bodies. We all know that micro-enterprise and the small business sector are the backbone and the lifeblood of the community and that they provide many jobs.

It is welcome that while the LEOs are coming under Enterprise Ireland and will be in the local authorities, they will be supported by a centre of excellence, by Enterprise Ireland. The addition of the functions of that centre will include promoting innovation and best practice and approach to supporting start-up and entrepreneurship, working with the LEOs to design and deliver appropriate national training and management development programmes at local level, and developing a common approach to mentoring and mentor management. That is to be welcomed. These are types of supports that people starting off in business want. They want and need to be mentored. I am delighted to say that many of the small businesses that started up through enterprise boards have gone to on to be under the umbrella of Enterprise Ireland when they created ten or more jobs. It is a follow-on bringing all these bodies together under Enterprise Ireland and it is to be welcomed. It is part of the jobs action programme. These LEOs will play an important role in creating jobs. If we could get micro, small and medium-sized enterprises to create only one job in each of them, we would probably solve our unemployment problem. That is the importance of that sector. The Government does and will continue to support this sector at every possible opportunity. Regarding loans for businesses, I am sure the Minister of State will outline the number of areas where businesses can get help from the State sector other than going to the banks.

I welcome the Minister of State. I also welcome the Bill before us. I hope the LEO sector will prosper and provide the necessary jobs which we need for our young people in particular.

Senator Paschal Mooney

I welcome the Minister of State, Deputy Perry, to the House again. Sadly, our side of the House has already indicated that we will be opposing the dissolution of the county enterprise boards and the subsuming of their role into the local authorities. We believe this is part of a pattern of Government decisions which have more to do with creating an illusion of reform than delivering real results, the detail of which I will go into later. There is a strong case for retaining and streamlining the existing structure with greater co-operation across county enterprise boards to share best practice ideas while retaining the ability to respond to specific local needs.

The enterprise boards were established "to fill the gap in the support services for local enterprises" and "to develop indigenous potential and stimulate economic activity at local level primarily through the provision of financial and technical support for the development of small enterprises". Significantly each board is made up of voluntary members representing the local authority, local or national agencies and local community interests. The boards employ a small number of staff who deliver board supports in the locality. As the Americans would say: "If it ain't broke, don't fix it." We already have a representative group of people who embody both those who are elected representatives as well as those from the voluntary and civic society who deliver a service already. To put it in context, the county enterprise boards have supported the establishment of more than 13,500 businesses; assisted approximately 20,000 businesses to increase their sales, employment and exports; helped in funding business which created just under 35,000 jobs; led the promotion of an enterprise culture in schools and colleges, with more than 10,000 students per annum participating in county enterprise board programmes; provided training for more than 72,000 entrepreneurs and employees; and provided value for money job creation at an average cost of €5,500 per job.

In that context I cannot see the reason for the rush to dissolve the CEBs and subsume them into the local authority structure. It seems to smack of reform for the sake of reform. It is comparable to the proposals for the Seanad and for Dáil reform. That is what they will remain. It is a great pity that the wool is being pulled over the eyes of the people in that regard. This is another example of it.

The CEBs have proved themselves to be one of the most effective supports provided for small local business. Already many CEBs share IT and payroll functions with the local authority. The savings to be made from this change are likely to be negligible. The local authority's providing matching funds for the funds allocated by central government to the new enterprise office is a matter of major concern. To date, the enterprise boards were funded entirely from government, with part from the Exchequer, and in part from the regional development fund through the regional assemblies, the Department of Enterprise, Trade and Employment, which all came under the national development plan. It is a major cause of concern as to how they will be funded. The new proposals will require county councils to provide matching funding. All councils are already hard pressed given the demands on services and dwindling resources. We know the local authority's budgets have been reduced significantly in the past few years and now they must take on a new role and subsume an effective organisation, without funding coming from Europe because of the changed nature of our economic situation. From where will the money come?

Recent independent evaluation undertaken by Fitzpatrick Associates, on behalf of Forfás, Ireland's national policy and advisory board for enterprise, trade, science, technology and innovation, highlighted the central role the county and city enterprise boards have played in the development of local economies through enterprise. The case for the retention of these bodies is very strong. I am not suggesting that local authorities should not have an expanded role. We have been crying about local authorities having an expanded role. Is this a case of reform for the sake of reform? There seems to be no logical reason that the existing structure will be subsumed into the local authority. The added question mark hanging over the future funding of county and city enterprise boards certainly raises very serious issues and for that reason our party could not support this Bill.

Senator Denis Landy

I welcome the Minister of State. My colleague Senator John Kelly has spoken on behalf of my party and I will add some comments.

The county and city enterprise boards have done an excellent job during the past 21 years. They were set up in 1992 and I was a member of the first South Tipperary county enterprise board. It was one of the most worthwhile committees that I served on during my time in local government. The CEBs provide hope for communities by providing a kick-start when people set up a business and help them by providing mentoring. Society is facing change. This area is no different. I am a former councillor and with many others in this Chamber I have called for reform of local government and for more power to be devolved to local authority members. I am glad to say this is an example of that happening.

I believe that all work relating to job creation should emanate from the local authority and should be administered under the local authority system. There needs to be accountability in terms of finance and decision making. Each county enterprise board has an individual mission statement specific to its geographic area. Nobody is better placed to put that mission statement and business plan in place than those who are elected by the people who understand their own areas. When this change is implemented, we will see greater levels of job creation emanating from the new structure. It is critical that the power and decision making with regard to job creation across the country has an input at local level. Nobody knows better than the elected members of a local authority the opportunities for job creation on the ground in their area.

We have complained about centralisation of decision making, that local authority elected members were not having a say. I served with very good people from the various pillars of business, community, agriculture and so on in my time on South Tipperary Enterprise Board. At the end of the day, we were answerable to the organisation we represented. The elected members of the local authorities are answerable to the people. That is the key difference. I look forward to the new process whereby greater involvement and input can occur through the services that will be provided. Recovery of the economy has started but there is a long way to go. I am very proud of the fact that 33,000 jobs were created in the past year, that unemployment figures are reducing but I am not blinded by the fact that in excess of 400,000 people are unemployed. It is incumbent on us to ensure that the structures that have served us well for more than 20 years can be improved and will be improved by this legislation.

The Minister will be well aware that the county councils in Tipperary north and south riding will be amalgamating. Does the Minister know what impact that will have on staffing numbers and the role of the new structure in County Tipperary? I would appreciate it if that specific question was answered.

I welcome the Bill and look forward to its passage through the House.

Senator Michael Mullins

I join in welcoming the Minister of State. I acknowledge that nobody understands the difficulties that small businesses are experiencing right now better than he does. I compliment him on his work since taking office.

I record my appreciation of the great work done by the county and city enterprise boards during the past 20 years. I acknowledge that many of the very successful businesses in County Galway today got a start from the assistance of the county and city enterprise board. I had the pleasure of serving on the board for a period. I appreciate and record my thanks to the very many successful business people who gave of their time and talents together with the elected representatives to ensure that worthy projects were awarded funding for a successful start.

I am surprised that our colleagues on the other side of the Chamber have so little faith in the local authority structure and are opposing the Bill on this occasion. This new development will give the system a shake-up and provide a one-stop advice centre for start-up businesses.

The Bill is designed to create a centre of excellence in Enterprise Ireland and develop new thinking and best practices for supports provided for small and micro businesses. Local enterprise offices will provide a one-stop-shop service for small and micro businesses and be very responsive to the needs of start-up businesses.

Yesterday the Minister mentioned that the measures were designed to help new start-ups survive the first five years and to increase the number of start-ups by women. We all encourage those goals. We all know many successful women entrepreneurs in our counties. We have quite a number of very successful women entrepreneurs in the House but there are far too few in the country.

We must improve the record of job creation and innovation in the small business sector. We all know that job creation is the greatest challenge facing the Government. We came to office with record numbers of unemployed and the number has escalated at an alarming rate. To date, unemployment has increased by more than 34,000 per annum. Job creation is not fast enough because, as previous speakers have said, there are still more than 400,000 people unemployed. The Government's job creation policies are heading in the right direction but we must do everything possible to increase the level of activity. Every Department has been challenged to play a job creation role. The Taoiseach clearly set out that aim two years ago when Action Plan for Jobs was launched. I look forward to having a further debate and discussion with the Minister, Deputy Bruton, in the House when we review the plan's progress. I am sure every Senator will want to have an input into how we can escalate the pace of job creation.

Yesterday, some Members expressed concern, during their contributions, about the culture of enterprise in county councils. I think the new style of management in local authorities is more enterprise and cost-oriented. I have every confidence in the new system of replacing county enterprise boards. I am sure it will be effective and have the desired effect.

We all know that the creation of employment in small numbers and in small enterprises will help breathe life back into the rural areas. However, IDA Ireland's commitment to smaller towns is not what we would like to see. Major job creation projects go to the larger cities of Dublin, Cork and Galway. My town of Ballinasloe lost 1,000 industrial jobs in the past decade. Smaller towns are finding it very difficult to attract the sort of job replacement numbers that are required. All small businesses in small towns and villages are under severe pressure. The centre of Ballinasloe is under pressure due to out of town developments. We need to review planning and address the existing imbalance. The lifeblood is being sucked out of the town centres which have paid parking. In contrast, large multinationals have their profits repatriated outside of the country and provide customers with free parking and facilities. As a result, the multinationals enjoy a greater footfall. Local authorities need to examine ways to address the imbalance. The multinationals should pay for their out of town facilities.

Yesterday, Senator Quinn mentioned that job creation projects could be funded by releasing funds from pension schemes and welcomed the fact that 30% of an AVC can now be released. I would like the scheme further expanded because it will stimulate the economy by encouraging people to spend their money and put badly needed cash in circulation.

I encourage the Minister to ensure the new structure is effective and closely monitored. Expertise will be transferred from the county development boards but I want it supplemented by additional resources and funding from local authorities. We need to create jobs at a much faster pace to overcome our economic difficulties. I worked in industry for many years and would like to see a greater concentration of investment in manufacturing, particularly small enterprises. We must encourage young people with skills to get involved in manufacturing. We must create many more apprenticeships in the trades which will be of great benefit in the future. Those skills are in scarce supply and skilled personnel are necessary to boost the manufacturing industry.

I wish the Minister of State well and thank him for being here today. I hope the new structures will be effective. I look forward to his return in 12 months time to debate progress made under the new structures.

Senator Colm Burke

I welcome the Minister of State and support the legislation. It is important we do not lose sight of the fact that county enterprise boards were established to help get small businesses up and running. Let us not lose sight of that goal. Smaller companies employ a large number of people. The boards arose due to an over-reliance on IDA Ireland which focused greatly on the larger companies. The county enterprise boards did a great amount of work to level the playing field. They ensured that people who wanted to establish or grow their business could access the relevant information.

There is a need to co-ordinate the support groups provided by the local authority or educational institutions for small enterprise. I was involved in a project where it was discovered that departments in a local authority were not co-ordinating. That was unfortunate and the project was delayed for quite a long period. I hope the amalgamation of services in the local authority will eliminate any difficulties experienced by small enterprise. It was a planning issue that delayed the project to which I referred, but problems could range from a minor planning issue to compliance with health and safety regulations, etc. I hope services can be streamlined and obstacles removed. Obviously, there must be full compliance with regulations and legislation.

During the period 1994 to 1997, when Deputy Richard Bruton was the Minister, we created 1,000 jobs per week. We are moving towards that level again, and I hope that 1,000 jobs marker is not far away. An additional 3,000 people have been returning to work every month in recent months and I hope the figure continues to grow.

There is a need to focus on areas located outside of Dublin because we have already seen problems.

I know that, when trying to create jobs, one cannot pick and choose where companies locate. However, we are already seeing the knock-on benefits in the Dublin area where there is an increased demand for accommodation for people and commercial premises. It is therefore important that we work closely with and encourage new businesses to establish outside Dublin, whether that is in cities such as Cork, Galway, Limerick or Waterford or in smaller towns.

It is difficult when a company is about to invest large sums of money in creating jobs - one has to walk on eggshells and must not be seen to be setting down too many restrictions relating to its establishment. We need to keep that in mind, especially where we have third level institutions that can give a lot of back-up support to companies. In particular, the institutes of technology do a superb job in preparing people for work. It is also important the institutes of technology, the third level institutions and our schools look at where the jobs will be. A mistake that was made in the past ten to 15 years was the lack of focus on the changing job market. As I said in the House earlier this week, I had the privilege of speaking to a person who has a good qualification. Even though it was not a third level qualification, he was offered jobs in three different countries at the same time. He had a difficult choice to make and it was interesting talking to him about that. It would be great if we had many more people who had such choice, and that is something that we need to work towards.

I welcome the legislation. It is about co-ordination of services, making sure that all the obstacles are removed and encouraging people to take a risk. People take a financial risk when they set up a business; there is also a risk about the hours that must be put in. No one who sets up a business works 25, 30 or 35 hours a week. I assure Members that as someone who has been self-employed for the past 30 years, I found - other Members will have found this in their own businesses and the Minister will find it in carrying out his role - I put in on average 60 to 80 hours a week, which is needed in order for businesses to survive. The private sector has given that level of commitment over the years. It is therefore important that, when we get that commitment from people who are prepared to put their hands in their pockets and take the risk, then we, too, should take the risk by ensuring they get all the possible support available and the playing pitch is levelled for them, so that they can move forward and create jobs.

Senator Michael D'Arcy

Like many Members, I came to the House from a local authority background. I speak as a former member of the Wexford County Enterprise Board. I compliment everyone who was involved in that board, from the chairman to the staff, as well as those who participated voluntarily, either as board members or in a mentoring capacity. Their efforts should not be forgotten at a time when we are looking to change the structures of county enterprise boards. However, they are boards of their time - how they were established was part of a legacy; therefore, we should not be afraid to make changes and put in place a different structure that is suitable for the second decade of this century.

I am glad that some of the functions of the boards are to fall under the auspices of local authorities. Given that local authorities are losing certain services, with water going to Irish Water and more and more motor taxation matters being centralised with online applications, they have the opportunity to focus on generating jobs and work within their county boundaries. As local authorities probably were not doing enough of this, it is good that the work will become part of their core remit and some of the best people in the local authority will be in charge of the new structure.

I am critical of IDA Ireland and Enterprise Ireland because they are committed exclusively to larger towns and cities and not small, rural towns. That is a mistake. For example, in my own town of Gorey, IDA Ireland owned a portion of land there, but it sold it - it could not move the land fast enough, which shows its level of commitment. I would not have minded had it sold it when prices peaked, but it sold it almost at the trough, which was a mistake.

A local employment office would bring a knowledge that Enterprise Ireland or IDA Ireland do not have. I do not think that county enterprise boards had sufficient clout to bring their knowledge to the powers that be in the attempt to focus on getting jobs and business into each community. An example is Glanbia's site at Inch, which is close to where I live north of Gorey town. Glanbia closed down its operation. The Yoplait franchise was repurchased from Glanbia by Yoplait. The entire facility was closed down, much to my dissatisfaction and displeasure. It was very much a commercial decision made by Glanbia. However, there is now a valuable site available for someone else who wants to come in. Through the work that I and others, including Enterprise Ireland and Glanbia are doing, we are hopeful that the site can be traded in the short to medium term and facilitate the reintroduction of employment in the area, which is important.

I want the legislation - perhaps we can discuss this in more detail on Committee Stage - to give local authorities and employment offices the flexibility to facilitate business to flourish. Most businesses struggle in their early stages. It should be possible to do a deal at local employment level rather than having to deal with national legislation on, in particular, rates, and for a small company that might have ambitious plans to be given the opportunity for a waiver to be facilitated in the county structure, rather than having to go to other agencies or departments to look for consent.

I also want to discuss the commuter zone. I have no wish to talk down any other area, but 1.25 million people live in County Dublin, which is more than 25% of the nation's population. We must realise that there is a large commuter zone that crosses county boundaries. It practically starts at Dundalk in the north and goes perhaps as far as Portlaoise all the way to my town in Gorey in an arc from north to west to south. We need a strategy for the commuter zone. There are businesses that would take the opportunity to establish in the commuter zone where the motorway structure - the M50, with the M1 north, the M4 west, M11 south and other motorways - facilitates the transfer of workers in the opposite direction rather than everything being based in Dublin. A commuter establishment - every company that could establish in areas outside greater Dublin, whether in Gorey or the other towns I mentioned - has the opportunity to have a lower cost base. I am not trying to make a political point, but the previous Government did not give the matter any consideration and I do not know that the Government is giving it enough consideration either.

It is a matter that needs to be discussed as part of this legislation.

Senator Martin Conway

I welcome the Minister of State, Deputy John Perry. He understands the sector having been in small business throughout his life and it is appropriate that he would be dealing with this legislation. Between 2004 and 2009 I served on a county enterprise board in Clare. Fortunately that board had a 96% success rate in the projects and businesses it supported, creating jobs and more importantly retaining them. It was a remarkably high success rate. Credit for that is largely due to a very committed CEO and other executives who were determined to flush out the projects to ensure they were sustainable.

If the executive was happy a project was sustainable it made a recommendation to an evaluation committee, which was made up of volunteers with business expertise, including one who had worked in the financial services industry and a former accountant. While these people had retired, they had expertise in their field and were utterly community focused and determined to make a contribution to society. We could make more use of such resources in the various strands of society, including in education. There are many retired people with a significant skill set who are very healthy and eager to contribute. As I have said previously, we need a mechanism to facilitate the interaction of such people with community, education, health and so forth. This was one example where retired people with expertise played an extremely useful role. They forensically examined each application. In some cases they sent them back to the executive with recommendations that they be tweaked with resultant positive benefits for the project. Then the evaluation committee recommended acceptance or rejection of a project to the county enterprise board. Most of the time they got it right; sometimes they did not. That is where the local knowledge of councillors played a vital role. There were four or five councillors who were geographically spread through different parts of the county. People relied on councillors' local knowledge. I remember once querying a project that had been recommended for approval. Knowing the background, I asked certain questions. It was referred back to the executive, which further investigated it and discovered that my concerns were legitimate, and the project was denied funding. In a number of other cases I was able to recommend that projects should get funding.

I would not to like that structure to evaporate under the new legislation. I fully accept that what is proposed is necessary. For too long we have had too many institutions acting in a quasi-independent role and there was overlapping. Local development companies were operating a grant structure, business support structure, tourism support structure and so on. County enterprise boards were providing upskilling for businesses, with employment grants, marketing grants and business development grants to small business. In addition there was the economic development directorate in local authorities. They were all operating as independent republics in every county. The Bill's objective to create synergies and bring them together into one focused effort that is channelled through the local authority, makes logical sense and of course I support it.

The economic wing of a local authority is incredibly important and the county enterprise board in itself is important. Joining the two together should result in synergies and allow us to pool expertise to ensure a proper focus on enterprise and development within a county. Given that the local authority is granting planning permission and is also trying to ensure the county development plan has a significant economic development focus, bringing the county enterprise board into the one structure will be very workable. It should have happened a long time ago but did not. There were too many independent republics - there still are - and there are too many quangos. This will bring them all together.

We have had some limited success with the Action Plan for Jobs and we need considerably more. I agree wholeheartedly with Senator Michael D'Arcy about the temptation for incoming international companies to locate within the greater Dublin area or within the city areas in general because of the ease of attracting good quality staff and so forth. However, we need a regional approach. Each of the 26 counties in the Republic of Ireland needs to rise. If there is a rising tide we need regional strategies. The Government has done a considerable amount on getting the framework right, including in moving the job-creation responsibilities from Shannon Development to IDA Ireland to have one entity involved in job creation. It was ridiculous that the job-creation brief for the mid-west, incorporating Kerry, Clare, Limerick and Tipperary North, was with Shannon Development given that IDA Ireland had responsibility for the rest of the country. It was ridiculous to have a structure supporting four counties competing with a structure supporting 22 counties. At least that has been dealt with.

The structures are now in place with the enterprise boards and the local authorities brought together, ensuring we have a combined local effort as such. Now we need significant results. The way to get the country out of recession, get a feel-good factor and ensure things work effectively is by breaking down barriers and reducing dole queues by creating jobs. There are plenty of opportunities. After two and a half years in office the Government has had limited success, but we need much more. We need significant job creation, which needs to percolate to every county. I am sure my colleagues on the other side of the House will agree there is a temptation to focus things into the greater Dublin area and other city areas, but we need to avoid that temptation.

Overall the Bill represents the correct approach to pool our resources in an effective way and I support it.

Minister of State at the Department of Jobs, Enterprise and Innovation (Deputy John Perry)

I thank the Members of the Seanad for their valuable contributions yesterday and today on the reform of the system of supports to small and micro-enterprise. While I acknowledge a wide range of topics were introduced, I will address some of the matters raised on the proposed new LEO model.

Senators Mary White and Breian Ó Domhnaill raised concerns over the dissolution of the CEBs and the location of the LEOs within local authorities. While I take their views on board, following all the consultation that has taken place the view of the Government is that this will be a great opportunity for local enterprise and for jobs on the ground. I recognise the wealth of experience in the current CEBs and their years of entrepreneurial experience in business. I am happy that all of the current CEB staff will migrate to the LEOs and be ring-fenced for three years to allow the LEOs to embed and to ensure continuity of service to LEO clients.

The experience and expertise of the CEB staff will be further enhanced by the local authority staff with knowledge of broader economic development. A range of services will be incorporated to support and develop enterprises.

The services to be rolled out include general business advice; advice and information on rates and planning licensing - next January every licence will be issued through one portal; information on access to other Government services; revenue seed capital and seed protection; SOLAS employment; the Company Registration Office; and the Credit Review Office. Other services that have an impact on business will also be very much available, including advice and information on local business with regard to assessment of public procurement, enterprise support, training and support on how to start a business, mentoring and marketing, as well as a whole suite of services that will be driven by the centre of excellence such as entrepreneurship and enterprise development. This a new beginning and these services will be embedded in the new structure.

The experience of the CEB staff will be further enhanced by local authorities with knowledge of broader economic development. The new structures will bring in local authorities as direct partners in promoting entrepreneurship and supporting small and micro-businesses. Evaluation boards were mentioned. The practice of local business people sitting on them will continue - the new structure will bring in all those people.

Local authorities can provide important services and opportunities for small business. City and county managers recognise that the success of small business will be crucial for growth in their areas, and it is important to harness that commitment. The massive reform of local government includes the appointment of a new chief executive in the local authority, but the backbone of every county is the business environment in every village and town, contributing to the overall success of the county.

The LEO will be a stand-alone entity, with its own distinctive logo and branding, and its functions will be delivered by local authorities within the terms of a robust service level agreement - I advise Members to study the service level agreement, which emphasises critical new services - with distinct performance targets and metrics. It is important to bear in mind that the Minister for Jobs, Enterprise and Innovation will retain responsibility for the LEO budget and enterprise policy.

I will be visiting the majority of counties and working with local government to ensure the initiative is effectively rolled out. I note the points made by Senators Feargal Quinn and Darragh O'Brien on the burden of regulation. I reassure them that I chair an interdepartmental body which is looking at that very issue in an effort to minimise the cost and streamline administration for business. For example, there are more than 30 licences - from HACCP to liquor and restaurant licenses - with 15 different licensing authorities. From next year all of those will be centralised in one portal. That is a huge commitment - the jobs plan will be rolled out in January 2014 - and it will lead to a massive cost reduction. Everything will be available in the same location; people will be told the exact requirement and the application process for anybody setting up a business will be simplified. There will also be a one-stop-shop in every county.

The entrepreneurship forum established recently by the Government is examining the barriers to setting up a business and how to incentivise them. In addition, the centre of excellence and Enterprise Ireland will be charged with producing standardised, simpler grant application forms and report templates for the new LEOs.

I assure Senators Jimmy Harte and Labhrás Ó Murchú that the reformed structure is far from a cosmetic exercise. I agree that the CEBs have served the sector diligently in the past 20 years. They have done an outstanding job - the Sligo CEB has been most successful, for example. However, we are making effective changes to the structure. As I said yesterday, in recognition of the changes to the social, economic and technological landscape of this country in recent years, this strategic reform will make the operating environment for business more coherent, responsive and conducive to entrepreneurship at local level. Small business is the backbone of the economy - it contributes 98% of the economy and employs the best part of 750,000 people. We fully recognise the role of direct foreign investment, and the roles of Enterprise Ireland and the centre of excellence mean that a business plan can be drawn up for the area, including how the marketing of the region to attract direct foreign investment can be facilitated by the LEO working with all stakeholders in the county. They will consider how best to stimulate local enterprise and attract foreign investment. When one considers that more than 150,000 people work directly for Enterprise Ireland companies, how critical they are to every region can be seen. Enterprise Ireland will have a direct role whereas before it was excluded. Enterprise boards are geared up to working with companies employing fewer than ten people; Enterprise Ireland will have a direct mandate with any company. The LEO structure will draw and build on the positive expertise and culture of the successful CEB model.

I will now clarify the position on a couple of topics raised by a number of Members, including Senators O'Neill and Cullinane, and briefly outline the role of Enterprise Ireland and the centre of excellence, the framework service level agreement, and the make-up of the evaluations and approvals committee.

The role of the micro and small business division of Enterprise Ireland is to provide a range of supports. The service level agreement will be clearly benchmarked to the LEOs, which will enhance their impact on the future development of micro-enterprise and small business. Behind every large company are small wheels, and it is important that we recognise the critical role of the start-up companies. The number of new start-up companies is extraordinary, as is the fact that 3,500 net jobs have been created in the economy. Today, I visited Aviva. The Government has put €9 million into researching potential e-commerce technology. That work shows the level of collaboration with private companies; funds of €6.5 million have been provide by private enterprise. Today, I saw examples of small companies delivering e-commerce through new online technology.

The centre of excellence will provide strategic, administrative, technical and financial supports. The latter will include administering the distribution of such funding to each LEO in accordance with procedures agreed between Enterprise Ireland and the Department of Jobs, Enterprise and Innovation. The centre of excellence will develop procedures and best practice for the delivery of supports, including standardised financial support instruments and project proposal documentation, and will provide ongoing advice. That reminds me that the national standards have not been mentioned. The National Standards Authority of Ireland provides a certification service, with the ISO, the International Organization for Standardization, and training opportunities will be there for the future enhancement and education of business people on how to operate their companies.

Business and job creation will be the purpose of the new structure. The purpose of the one-stop-shop will be to promote and encourage business. Several Members mentioned the development of town centres. With the huge new autonomy given to local authorities, were they to decide a town centre enhancement or development incorporating a small business were required, I have no doubt that the plan of action and the business plan formulated by that body will form the action for the LEO.

Another function of the centre of excellence will be to organise training for LEO staff. The plan is that Enterprise Ireland will retain, enhance and develop the capability of the county enterprise board staff as they move into the local authorities. They will be invited and encouraged to attend Enterprise Ireland training courses on subjects such as finance, strategy and marketing.

On the role of finance for business, we have the micro-finance fund. As I have met the board, I know that presents the opportunity to be the vehicle for applications to be processed. People who have been refused financing by a bank can get up to €25,000. I know a number of companies that have been very much encouraged by the level of mentoring and support through the application process. There is also the one-stop-shop, the bank guarantee scheme, and the validation of loans by the two State banks, Bank of Ireland and AIB, which are committed to giving out up to €8 billion to businesses. It is important that they validate those loans, and the enhanced capability of LEO mentoring of financial support will help with this.

The staff assigned to the LEOs from the business development units of the local authorities will also be included in the training programmes. The skills of CEB staff are crucial to the success of the new model. We are therefore ring-fencing these staff for three years to allow the LEOs get up and running. They will also receive specific training from the local authorities on the new services and functions to be provided.

I was in a local authority. The proposals are front-of-house. Business is the backbone of the counties. Local authorities have a huge impact, whether through automatic water charges, the valuation of rates, the promotion of vacant properties or derogations to encourage people to rent units. All of this will be considered in the new roll-out of local government and the changes that will be taking place.

The centre of excellence will have a key role to play in maximising the impact of each LEO in the State.

The LEOs will be underpinned by a robust service level agreement agreed between Enterprise Ireland and each local authority which will set out protocols relating to budgets, project evaluation and approval; microenterprise policy guidelines as articulated by the Department of Jobs, Enterprise and Innovation; robust performance indicators - those people I have met in local enterprise offices and the enterprise sections of local government are hugely committed to helping people get on with their business; the roles and responsibilities of Enterprise Ireland, local authorities and the local employment offices; benchmarking of LEOs; and corporate governance. This detailed service level agreement will be periodically reviewed to ensure impact and value for money are being optimised via the LEO network.

The Government is committed to making Ireland the best small country in which to establish, grow and develop a business by 2016. We have the Single Market Act in Europe. The issues of entrepreneurship, giving a second chance to people who have failed, access to credit and red tape are at the core of the Government's approach, because we recognise fully that the domestic economy is the only vehicle. Large companies come here, but more than 650,000 people work in small businesses. This is the engine of growth. In the job I am in I see opportunities and new business and it is very encouraging.

A key element of this new structure will be the consistent application of policy throughout all LEOs, from the evaluation of applications to the spending of budgets allocated. This will be monitored using the service level agreement in each local authority. The ongoing drawdown of budgets by LEOs will be contingent on the achievement of agreed targets. The highest level of corporate governance will be applied, which will involve the allocation of budgets in line with agreed funding guidelines, including spot-checking and quality assurance, management of assets and liabilities and ongoing engagement with stakeholders.

A series of metrics form part of the framework service level agreement. This will be tailored to suit the size and capacity of each LEO and will be included in each local enterprise development plan to be agreed annually between each LEO and Enterprise Ireland. Senator Denis Landy asked about the location and staffing of LEOs. A working group representing county enterprise boards, local authorities and the Department is examining these issues. The work is ongoing and the Department is very much aware and conscious of the circumstances and staffing in each county enterprise board. We will come back to the Deputy on this.

Senator Paschal Mooney raised the role of local expertise, which will not be lost. Local authorities have a clear mandate. We have European funding of more than €70 billion through Horizon 2020 and we also have COSME funding agreed for the first time within the Commission's Directorate-General for Enterprise and Industry. Policy with respect to financial supports available to clients from LEOs will be determined by the Department of Jobs, Enterprise and Innovation and will aligned to microenterprise policy. To avoid double-funding, grant shopping and duplication, clear guidelines will be established between various local bodies to ensure each body adheres strictly to its funding remit. Support for projects under the remit of LEOs should not be duplicated by bodies such as Leader partnership companies and vice versa. Officials from the Department of Jobs, Enterprise and Innovation and the Department of the Environment, Community and Local Government are examining the development of such guidelines. The total budget allocated for 2013 to the LEO structure is €25.9 million, of which €15 million is for capital support. The Exchequer allocation is secured by the Department of Jobs, Enterprise and Innovation and will continue to be the primary source of funding for the provision by LEOs of grant aid support for the micro and small business sector. Individual LEO budgets will be allocated by Enterprise Ireland. It will be provided for Enterprise Ireland as a separate ring-fenced subhead and will not be available for core Enterprise Ireland activities. It may provide an allocation of funds for activities and projects, particularly with regard to enterprise, entrepreneurship and local authority funding for LEOs, but there is no requirement for matched funding.

An evaluation and approvals committee will be established in each LEO area. This committee will consist of a chairman, who will be either the city or county manager or another senior local authority official, not from the LEO, delegated by the city or county manager; the regional manager of Enterprise Ireland or his or her nominee; and five individuals with specific areas of business expertise, such as a record of entrepreneurship, accountancy experience, knowledge of particular markets, sectors, or technology, or banking or financial expertise. A public call for expressions of interest from individuals to serve pro bono on the evaluation and approvals committee will be made by the local authority or the city or county manager. A panel will be formed from which the first committee and subsequent vacancies will be filled. Appointment of the business sector representatives will be made by the city or county manager in consultation with the head of the LEO in each LEO area. Particular account will be taken of the individual's relevant experience and expertise. Appointments will be made for a maximum of three years to provide for a renewal of expertise on the committee; this is very important. I note Senator David Cullinane's concern about State-funded companies and compliance with labour laws. All grant approvals are contingent on compliance with national law.

In addition to drafting this legislation to implement last year's decision to reform the system of supports, the Government has made significant progress on the restructuring project. An implementation working group chaired by the Department of Jobs, Enterprise and Innovation continues to direct and oversee the preparation for the establishment of the new national infrastructure on an administrative basis at local level. I thank the departmental officials for the huge work they have put into this.

In May, the Ministers, Deputies Richard Bruton and Phil Hogan, and I showcased the first LEO in Fingal County Council, published the framework service level agreement between Enterprise Ireland and the local authorities, and launched the new branding and logo, which are very effective. Enterprise Ireland has established the new micro and small business division and centre of excellence. It has also agreed terms of reference for a single national website, and is in the process of agreeing protocols between relevant Government bodies, such as the Revenue Commissioners, the National Employment and Entitlements Service, SOLAS, the Credit Review Office, Microfinance Ireland and the Companies Registration Office to provide information, access and dedicated points of contact for referral of LEO clients. Work is ongoing at local level between county enterprise boards, CEBs, and local authority county managers on practical administrative arrangements regarding locations and accommodation for the LEOs.

The project plan for the coming weeks is to finalise arrangements for the transfer of CEB staff and their amalgamation with the business support units of the local authorities, and to continue the testing and preparation for the migration of ICT and financial systems to ensure a smooth transition for both staff and clients. Ahead of the formal transfer of functions, it is hoped that the LEO structure will be in place informally in a number of local authorities. To this end, a number of front runners have been identified and plans are ongoing at local level with a view to establishing advance LEOs.

Senator Colm Burke made a point about the role of services. It is very important that the services will be centralised and will provide enhanced financial advice based on a deep respect, understanding and concern for business. It is very important that we give service to this critical role of the economy. As several Senators stated, more than 200,000 Irish companies employ one person and, working with the Department of Social Protection, our job is to encourage people into training. When one looks at models in other European countries, one is amazed at the recognition, understanding and respect that can be given to people as trainers in their own companies.

Senator Martin Conway made a point about fantastic staff, and we fully recognise the extraordinary staff who serve this country exceptionally well. What is being embarked upon is to centralise this expertise. A huge number of people who are very successful want to give something back to Ireland, and we will avail of this expertise in the new structure.

With regard to Senator Michael Mullins's point, we must remember that 1.85 million people are employed in Ireland.

The job is to ensure continued progress on 3,000 jobs per month. This will be the role of IDA Ireland, Enterprise Ireland and the Town Centre Development. This is a unique opportunity for involvement by Enterprise Ireland at local level in the development of small companies into large companies. I believe the success of IDA Ireland will, through the centre of excellence and the remit of local authorities, be far greater.

On Senator Maurice Cummins' point, the action plan for Waterford, in terms of subsidiarity and getting people working on the ground, has been very successful. There must be a recognition of the capacity of young people and the technological sector to develop businesses.

Senator Michael D'Arcy spoke about high potential start-up companies and the issue of rates. The new structure provides a huge opportunity for local government to provide derogations to assist start-up companies. This has been very successful in other jurisdictions and will be the role of devolved government.

I am excited by the opportunity which this new structure presents for businesses on the ground. I welcome the points made by Senators Michael Mullins, Maurice Cummins, Michael D'Arcy and Paschal Mooney in regard to change. Senator Feargal Quinn also made a very good point in regard to crowd financing. His has much expertise in the business arena. We are looking at the avenues open to us to fund business. The Senator is involved in a very successful crowd financing operation. Information on funding will be made available through the local enterprise offices. I look forward to debating the Bill further on Committee Stage, at which time Members may table amendments, if they so wish.

This is important legislation that will assist in the Government's plans to reshape the landscape and make it more effective in meeting the needs of micro and small enterprises by bringing local enterprise supports into an integrated national network of local enterprise offices and creating a seamless support structure. This will be a one-stop-shop that will offer the full range of State supports available. Members may be aware of the community enterprise companies in County Leitrim. They are very successful. The point was made earlier that students are the next generation of business people. We want to encourage enterprise within schools and universities. The local enterprise offices will, as one-stop-shops, offer information on the full range of State supports available to the micro and small business sector. While there will be offices in areas such as counties Sligo and Leitrim these will be governed by the centre of excellence. I have no doubt elected people in the region will play a critical role in the roll out of this new structure. It is important that local representatives have a role in the management and structure of this service.

The new structure will also ensure that this vital sector will benefit from an expanded and benchmarked service across all regions, with all forms of entrepreneurship fostered and supported. We are all aware that a target has been set by the Taoiseach for Ireland to become the best small country in the world in which to do business by 2016. This is an ambitious but achievable target. A key component for the delivery of this ambition is the reform of the national micro and small business support service. One of the pillars of the Government's strategy for promoting jobs and growth is ensuring that micro and small businesses can start up, grow and export. Many of our small companies are very successful internationally and are listed on the Stock Exchange. This legislation will enable the creation of the best possible local environment for micro and small business and the development of a strong network for entrepreneurship.

The Government's overall strategy is aimed at ensuring entrepreneurs feel confident that we have their best interests at heart and that we are implementing necessary change. We are not giving them ten reasons not to start up in business rather we are giving them a reason to do so. The role of Government is to ensure that business start up is not blocked by red tape, access to credit and so on. The opportunity for our micro and small enterprises to succeed and grow underpins our future potential for increased employment, growth and prosperity. This Bill shows our commitment to change and reform to achieve this potential.

I thank my officials for their work on this Bill. I look forward to playing a critical role, with the support of all representatives, in rolling out this service.

Question put and declared carried.

Seanad Éireann debate -
Thursday, 3 Oct 2013