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Seanad Éireann debate -
Wednesday, 26 Feb 2014

Adjournment Matters

Local Development Companies Administration

I welcome the Minister of State at the Department of Finance, Deputy Brian Hayes.

I too had to race to get to the House on time. I welcome the Minister of State at the Department of Finance, Deputy Brian Hayes, and thank him for taking this motion.

Apologies, I am here to take the motion on the IBRC, which was tabled by Senator Healy Eames.

Unfortunately, Senator Healy Eames is not present. We will proceed with the first matter. I welcome the Minister of State at the Department of the Environment, Community and Local Government, Deputy Fergus O'Dowd.

I welcome the Minister of State to the House. I wish to raise on the Adjournment the concerns that have been raised with me on the alignment process.

The local development companies have a very strong track record and expertise in the area of programme delivery and have in the past number of decades strengthened local democracy and community engagement and participation. They have successfully delivered a range of programmes on behalf of a number of Departments. I know the Minister will be aware of that. As a result of the bottom-up community-led approach that these local development companies, LDCs, have adopted they have unrivalled expertise in their ranks, local knowledge, local recognition of their work in the communities and they offer value for money in the delivery of the programmes. The community-led local development approach of delivering a broad range of programmes to tackle social exclusion, supporting rural development and job creation and enterprise at local level has been successfully delivered by the LDCs. The European Commission has previously endorsed this approach to local development and recommended that this be adopted across other EU funds.

At this time it is not clear what the future holds or how local development companies will navigate their way into the next funding period. It is essential that clarity is provided so that proper planning can be undertaken to manage changing circumstances and to ensure that these LDCs can make the transition to the next funding period. The Minister established an alignment working group, bringing together representatives of the Irish Local Development Network, ILDN, County and City Managers' Association, Pobal and Department of the Environment, Community and Local Government staff to work through proposals as to how the alignment proposals should unfold. Unfortunately the alignment working group, as far as I am aware, has not met since September 2013 and the recent release by the Department of documentation to front-runner local authorities and then to all local authorities without sending them to the ILDN has in its eyes undermined the credibility of the alignment working group process. It has frustrated members of the network. There is great concern on the ground about this. To be frank, the clumsy handling of this has caused a great deal of disarray in the community sector and especially in rural areas. With the changes to the link community development, LCD, programme that are being proposed and the current Leader funding finishing, the timeframe associated with the process is challenging the continuity of delivery of front-line services, and we face challenges if the services are to be maintained.

There is a lack of clarity on the delivery mechanisms and the contractual arrangements between the local community development committees, LCDCs, and local development companies. This has created a lot of uncertainty in my area as is the case in the Cavan-Monaghan Leader joint venture companies Breffni Integrated Limited and Monaghan Integrated Development.

It is on behalf of these groups that I express my concern at the direction of the alignment process, nationally. I am concerned that damage will be done to the delivery of community and local development programmes at a time when demand for these services and initiatives has never been greater. We cannot afford to allow this to happen, especially in rural areas, which need every venture possible in order to boost the economy and keep jobs afloat.

The ILDN wants four issues discussed and perhaps the Minister of State will touch on them today. First is the requirement that LCDCs will hold a tender process for the delivery of successor programmes through the local community development programme. That is very important and is a bone of contention.

Second is the urgent need to provide Leader programme transitional funding for a number of LDCs. Third is the proposal that LDCs will become local action groups in the context of the Leader programme. Fourth is the implications of such a decision for relevant LDCs and the management of communications to the ILDN in the alignment process. These are some of the issues that have arisen. They are important on the ground and community groups are concerned that expertise could be lost should the process not be handled properly.

I thank the Senator for placing the matter before the House. I apologise for the delay in arriving here but Senators moved faster than anticipated.

The House is very efficient.

The approach that the Minister is pursuing, regarding the enhanced alignment between local government and local development, is part of the Government approved local government reforms contained in Putting People First - Action Programme for Effective Local Government. His aim is to bring about greater co-ordination and targeting of scarce resources, reduce duplication and to provide a more efficient and cost effective delivery of local services.

There has been good progress to date, with input from the alignment working group which he established to advise him on the implementation of the alignment recommendations. As part of this process, my Department has had ongoing contact with the Irish Local Development Network, the representative organisation for 50 local partnership companies. There have also been a number of bilateral meetings with the network and the Minister has met it on several occasions and plans to do so again shortly. He wants to emphasise that there has been a substantial amount of engagement with the local partnership companies on the alignment process. The partnership companies are not the only stakeholders and, in that regard, the Minister and his Department have met representatives of the community and voluntary sector who are also important stakeholders.

The changes arising under alignment, including the establishment of local community development committees, will bring challenges for the companies relating to structures and staffing. In the context of achieving better value for money, with continuing constraint on programme budgets and the requirement to undertake a procurement process for the delivery of the local community development programme, it is simply not possible to guarantee a continued high level of funding for all of the bodies involved. These issues are part of the ongoing dialogue with local partnership companies. He recognises, in particular, that the legal advice, to the effect that my Department must procure the delivery of the local community development programme, is a significant change to the previous arrangement which awarded the companies these public contracts without any competitive process. We will manage the programme in line with the legal advice and procurement requirements. I have confidence that, given their expertise and experience, the companies are very well placed to submit robust applications for future delivery of the programme.

The issue of procurement does not have the same implications for the Leader programme which is implemented by 35 of the 50 local development companies. Leader is covered by EU regulations that set out conditions by which the programme must be implemented and these do not require a competitive tendering process. I see the partnership companies as key partners on the new local community development committees, with a strong implementation role under Leader and very similar to the delivery role that they currently have.

Change processes are challenging for all concerned but change is necessary, both as part of the overall local government reforms and to ensure the optimum use of scarce resources, especially for valuable local development funding. I am confident that if we continue, as we have done in the past 12 months, to work in partnership and engage openly, the result will be a strong and robust local and community development model that will deliver real and sustainable results for citizens and communities.

The Minister of State mentioned the working group and the related process in his speech but the group has not met in five months even though the Department issued documents. As I said, there was a feeling that the move undermined the credibility of the group and the co-operation that existed. He also said that the Minister plans to meet the ILDN shortly. The ILDN has a number of concerns and I urge the meeting to take place as soon as possible.

IBRC Mortgage Loan Book

I welcome the Minister of State at the Department of Finance, Deputy Brian Hayes, to the House.

I welcome the Minister of State. I have just spent the past two and half hours discussing the sale of the Irish Nationwide Building Society loan book via the IBRC at the meeting of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. We are talking about 13,000 mortgages. We need to step back from the issue and say, as the Minister of State and I know, that property rights are deeply ingrained in the psyche of Irish people. One hundred years ago we had absentee landlords and now we are about to be sold-off again - and some might say by necessity - to absentee landlords. The very least that we must do is protect and respect the Irish home owner. In the Constitution property rights are ranked second highest, right after the right to life, and I am up there with my support of those rights.

I ask the Minister of State to ask the Minister for Finance to ensure that Irish homeowners are given the first right of refusal and a window of time to buy back their loans, if they so wish. At the meeting earlier we heard from the special liquidator who said that 10% of the 13,000 people wanted to buy back their loans. That means that 1,300 Irish people want the right to buy back their own home loans and perhaps set up a new mortgage with another Irish bank or institution. It is only fair and right that they are given the opportunity.

We also learned, at the meeting, that some of those Irish people who have home loans are prepared to offer more to the Irish Nationwide Building Society and the IBRC than a foreign bidder will give. That will not do the State creditor any good because the State and NAMA own more than 70% of the loan book. In light of what we have learned today, I ask him and the Minister to think seriously about giving a window of time to the Irish person, the Irish homeowner, the mother, father or individual, who wants to buy back their home loan. We have heard that it will take another two months before the deal is completed. Please give them all at least a month because we all know that it will take a little time to qualify, etc.

If people do not wish to buy back their home loan then we need to know home loans that are sold to a foreign bidder have the protection of Irish law and practice, including the code of conduct on mortgage arrears. Last night we learned, and we learned again today from the special liquidator, that the code is voluntary. That is still progress but it is not written on paper. We often use the phrase "it is not worth the paper it is written on". However, the code is in word only and is not written on paper. The code is an act of goodwill but the Minister of State, who is a very wise man, will know that it is valueless. It needs a statutory basis which I shall deal with. Mr. Edmund Honohan, the Master of the High Court, has said that the green fields of Ireland will change hands and the secondary market for mortgages will grow. Plus, Ireland needs to regulate for a secondary mortgage market and recognise that mortgages will be bought and sold abroad.

Earlier in the committee room Ms Ann Nolan, from the Department of Finance, said that the Minister was looking at legislation. That is great but this matter is so urgent that we must consider introducing emergency legislation so that none of the 13,000 people involved will be subject to abuse, higher surcharges, higher interest rates, etc. than they would have had to pay here.

The Minister of State will know that the Ulster Bank is in trouble and is looking at selling out here next year. That is only the beginning. Mr. Honohan said: "The need for legislation was broader than the Irish Nationwide problem. Securitised and judgment mortgagees are not regulated by the Central Bank or covered by any consumer code." Therefore, we need to get on with the business of regulating and protecting all homeowners. Those are my two requests and I look forward to hearing the Minister of State's answer.

I thank the Senator for raising what is a very important issue. I am aware that the liquidator and colleagues from the Department of Finance appeared before the Joint Committee on Finance, Public Expenditure and Reform today. It was a useful exercise. I saw some of the engagement. I am aware that the Senator asked one of the officials from the Department of Finance about the question of legislation. I will repeat what the Minister for Finance, Deputy Michael Noonan, said in the House last week, which was repeated to the Senator today by an official from the Department of Finance: that if successful bidders row back from the voluntary commitment obtained by the liquidator, the Minister, Deputy Noonan, will act quickly and decisively for the purposes of enshrining rights for people who find themselves in this situation. I repeat that in the House this evening as the Minister repeated it last week. As Ms Nolan told the Senator today, that is the firm position of the Government and we do not intend to change our position on that.

In relation to the proposals that mortgage holders be given first right of refusal to purchase their loans, it is worth pointing out that such an opportunity exists at par in the case of the liquidation in IBRC. I think that is the correct course of action in the case of IBRC. The special liquidator has written to each individual mortgage holder in this regard. I understand from the appearance of the special liquidator before the Oireachtas committee today that approximately 400 IBRC mortgage holders have repurchased their loans to date.

There is no legal impediment to this course of action by the special liquidator, and the terms and condition of many mortgages, including non-IBRC mortgages, allow for redemption at par value. The terms and conditions of the redemption would not be affected by the sale of any loan book. There has been some discussion in the Oireachtas and the media in recent weeks about the suggestion that IBRC mortgage holders who have the financial capacity to do so would be given the exclusive opportunity to buy their mortgage loans at a discount. There has also been the incorrect suggestion that this opportunity was offered to larger corporate borrowers in IBRC and that individual borrowers secured debt write-downs in certain circumstances. I take this opportunity to state for the Senator and other Members of the House that I have been informed by the special liquidator that no IBRC borrower is being provided with an exclusive opportunity to buy back its loans at a discount. To direct the special liquidator to give this opportunity to any borrower or group of borrowers could affect the value of assets in the bank and could leave the Irish taxpayer open to legal challenge, future costs and financial risks. That issue was highlighted today by the special liquidator in the evidence he gave to the committee, part of which I saw, where he said that the firm independent advice open to him and his colleague in terms of maximising the assets for the purpose of the taxpayer was to go down the route as he had suggested. That was the firm advice given to him by way of his independent powers and the role and function given to him by both Houses of the Oireachtas through legislation passed last year.

Again, in the case of IBRC, the obligation on the special liquidator is to ensure that maximum value is extracted from the loan sales process for the benefit of all creditors of IBRC, including the State. The sales process plan and the timeline for the sale of the residential mortgage portfolio has been developed following professional advice and in light of requirements for a robust and credible sales process in that context. The special liquidators have obtained this independent advice from PricewaterhouseCoopers, PWC, in respect of the residential mortgage portfolio. The special liquidators have decided that the residential mortgage would be subdivided into four tranches with a view to maximising market interest and return within the timelines set out in the ministerial instructions. Obviously, in the case of future loan sales by other banks operating in Ireland, it would be a commercial and operational matter for the board and management of the institution to decide on the sales process. As part of this consideration, issues such as individual mortgage sales and discounts would be considered.

Turning to the code, as recently explained, the application of the CCMA to unregulated entities is something the Department of Finance is investigating in conjunction with the Central Bank and the Attorney General's Office. This matter is legally complex and it could affect contracts already entered into. It needs to be carefully considered. I remind the House that it makes commercial sense for buyers to adhere to the CCMA, as evidenced by previous sales in December 2013. Lloyds banking group sold its Irish residential portfolio of about 2,000 mortgages to Apollo Global Management. Apollo Global Management met the Central Bank and the Department and indicated clearly that it intended to voluntarily adopt the CCMA in managing the acquired loans. Apollo Global Management believes following the CCMA is in the best interests of both parties, and it forms part of its core strategy. I was delighted to hear last night that the special liquidators had announced that an agreement had been reached with the phase two bidders for the IBRC mortgage book. The agreement provides that, if successful, in acquiring the portfolio the phase two bidders will ensure that the relevant acquired mortgage loans are served in accordance with the terms of the Central Bank's code of conduct on mortgage arrears.

The special liquidators were aware of the anxieties of mortgage holders, as we all are, and had noted the concerns expressed in recent weeks by the Minister for Finance and other Members of the Oireachtas. I welcome this positive announcement and remind the House that the Government has always been clear about ensuring that mortgage holders retain the protection of the CCMA. The Government's firm objective is to ensure that mortgage holders in Ireland are afforded the protection of the CCMA. As the Government has previously stated, if it becomes evident that the voluntary application of the code in the case of IBRC and other non-regulated entities is not delivering the requisite protection for mortgage holders in arrears, it will bring forward the required legislation. Work on draft legislation is already under way.

I am delighted to hear that work on draft legislation is under way. I was really concerned when the Minister of State said that if foreign bidders or non-regulated entities rowed back from the voluntary code the Minister would act quickly. In another conversation I would say "Why wait until then?" because that is very poor practice. Suppose we had another Government or another Minister that was not as concerned about people's homes. He or she might not act that quickly, so we do need more protection. I seek clarification on one point because I do not understand this. Perhaps the Minister of State would comment on why we should wait until an entity rows back from the code. The Minister of State said in his response: "I understand from the appearance of the special liquidator before the Oireachtas committee today that approximately 400 IBRC mortgage holders have repurchased their loans to date." Is there a right to repurchase? I know there is nothing to prevent it but I thought they were not allowing it. That was how I understood it today.

On the first issue, the Minister for Finance gave firm commitments last week which, unfortunately, some people deliberately chose to ignore. Those firm commitments were highlighted again by Ms Nolan at the joint committee today on behalf of the Department of Finance. I think it is important that we do not talk ourselves into an emergency.

I am just asking the Minister of State to answer those questions.

I cannot direct the Minister of State to respond. If the Minister of State wishes to-----

I am answering the Senator's question. I seek the same protection I gave the Senator. The Senator asked two questions, and I will reply to them, if I may. It is important that we do not talk ourselves into an emergency for whatever reasons people might choose to do this for their own ends. In regard to the question referred to in my opening remarks, my understanding is that the position has been set out by the liquidator that an offering has been made in circumstances of on-par mortgages. I understand there are four special tranches within the loan book - performing, non-performing and two other categories that I cannot recall - so that provision has already been made. Again, that has been in the public domain for quite some time and there is nothing particularly new in it. The objective for the State - as the Senator well knows, because she supported Bill, as I did, when it came through both Houses - was to make sure that in so far as these are assets, the State maximises the return. That is the only ambition of the Minister for Finance, Deputy Noonan. Second, in circumstances where people's homes are on the line, as is the case for this particular mortgage book, the objective is to make sure that we afford the same protections that apply to other mortgage holders through the CCMA.

I greatly welcome that, as the special liquidator told the Senator today in the committee, after two weeks of intensive negotiation, two potential bidders for the next tranches of the loan book have confirmed they will sign up to that. Were that sale to proceed - this is without prejudice until such a time as a sale does proceed - and were any difficulty to arise, the Minister stated last week, Ms Nolan stated today and I now am telling the Senator that the Government will proceed with legislation to ensure those people have the protection both of the code and, second, of the case law in which the High Court has ruled in circumstances where financial institutions have been attempting to move people out of their homes. The case law from the High Court has been clear in respect of obtaining protection for people in a circumstance in which they have been engaging with the bank and have been attempting to work out a solution that is fair and equitable for the purpose of the institution and their own purpose. This is case law, these are precedents and this is precisely what has happened in the Irish High Court by way of all these matters that have come to the attention of the courts. This cannot be set aside either and, consequently, by way of the case law and the voluntary code, the Government hopes the protection will be given to these people because it does not want them to be adversely affected by the sale of the loan book. While everyone accepts the State must of course maximise its take, because there are significant assets left over by way of the liquidation of the IBRC process, it must be done in a way that is fair for all. The approach the Government has taken in this regard is correct and if further action is required, further action will be taken.

I thank the Minister of State.

Fish Farming

I welcome the Minister of State, Deputy Tom Hayes, to the House.

Cuirim céad fáilte roimh an Aire Stáit. Táim an-bhuíoch dó as teacht isteach. I am grateful that the Minister of State has come into the House to take this Adjournment matter. I had actually tabled the Adjournment question before reading this morning's edition of the Irish Examiner which had a banner headline stating, "Full-scale war over Galway fish farm". It refers to the issue of the proposed farm off the island of Inis Oírr in Galway Bay, which would be a mega-fish farm. The proposal is being advanced by Bord Iascaigh Mhara, BIM, to build what would be the biggest ever fish farm, perhaps in the world but certainly in Europe, and it has met with much disquiet from different sectors, ranging from those who are involved in the fishing industry, through local people with concerns regarding the impact on tourism, to those involved in ecology and so on. Obviously, there are concerns regarding the viability and sustainability of such a project, as well as in respect of the science underlying the project and from where that has come.

The full-scale war over the Galway fish farm to which the Irish Examiner alluded pertains to an ongoing interdepartmental debate in which one is told a full-scale war is under way between the Department of Agriculture, Food and the Marine and Inland Fisheries Ireland, which is likely to determine the fate of this proposed fish farm. It is reported the European Commission is investigating the reason it did not receive a scientific report from the Department of Agriculture, Food and the Marine that showed the amount of sea lice likely to come from such a farm could devastate much of the country's wild salmon and trout. This report was drawn up by Inland Fisheries Ireland, which is responsible for protecting and developing inland fisheries and sea angling, as well as protecting wild salmon under the European Union's habitats directive. What the Department did instead was to send a different study from another State agency, namely, the Marine Institute, which stated the danger would be small, at approximately 1%, compared with the 39% suggested by the report from Inland Fisheries Ireland.

The Irish Examiner also reported that the Ombudsman is investigating this issue and was told by the Department that the Inland Fisheries Ireland report had many inaccuracies and fundamental errors and, had it been sent to the Commission, would have had a disastrous result for Ireland's reputation. A number of questions arise from this report. First, two State agencies are completely at odds with each other's findings on scientific issues on which one would imagine they could find common ground. One must be wrong and the other right and if this is the case and one is completely wrong, is there a question mark hanging over the competence of the agencies that have drawn up the scientific reports?

I note that the Marine Institute report also has been questioned by four independent scientists when published in the Journal of Fish Diseases and as a result, Ireland has a huge issue on the European stage in this regard. In addition, I note a meeting took place recently between the Taoiseach, the Minister for Agriculture, Food and the Marine and a man named Alf-Helge Aarskog, who runs the company Marine Harvest. Many players in the industry would imagine that Marine Harvest is one of the prime suspects that might run the BIM-sponsored project. While the licence proposal for the project is being developed by BIM, the intention is to license this mega-fish farm to a company to operate it. There are probably only a small number of players globally who have the capacity to run such a project and one certainly would imagine that Marine Harvest would be in the running in this respect. The aforementioned company already has a track record in Ireland of running quite a number of fish farms.

My issue in this regard is there is an ongoing process seeking to have the licence either granted or not granted in respect of the fish farm off Inis Oirr in Galway Bay. The project is being proposed by BIM, which falls under the remit of the Department of Agriculture, Food and the Marine. Other Members of the Houses have questioned whether the Minister, who will sanction or not sanction a licence, should be in the position whereby he essentially is the proposer, on foot of being in charge of BIM, as well as being the adjudicator on the application at the same time. While this certainly is an issue, during such a process one would imagine the Minister would refrain from meeting any of the key players in the process. He certainly has refrained from meeting some of the detractors who are opposed to the project. However, it appears quite strange that he and the Taoiseach could have a meeting with the head of Marine Harvest, who potentially could be the licenceholder in this case. I question the efficacy of that meeting because, as the report that appeared in Irish Examiner stated, "Aarskog, chief executive of Norwegian fish-farming giant Marine Harvest, jetted in especially for the Government face-time and is optimistic that it will bear fruit in the form of some new licences for Irish salmon farms". Consequently, there is a question of interest in this regard and I hope the Minister of State will be able to clarify this point.

In addition, there appears to be opposition from many fronts. It appears to me there will be a major spat over this project and that people who are opposed to the fish farm, for all their different reasons, will fight this tooth and nail and it will end up before the European courts. Therefore, we will have a major case on our hands in Europe and the State will end up fighting that case as far as the European Union courts, much money will be wasted and the people's concerns are quite genuine in many cases. I am not completely opposed to the development of aquaculture but there are ways and means of doing this that are sustainable and which will create jobs. While one certainly must consider the possibilities for the industry, the general consensus being reached around Galway Bay in particular is to the effect that this is the wrong project in the wrong place. It is thought it will not work and will not have the full support of the local community and that at this point, the Minister should kick to touch and blow the project out of the water. I look forward to the Minister of State's response.

I thank the Senator for raising this issue. I am taking this Adjournment matter on behalf of the Minister for Agriculture, Food and the Marine who is unable to attend. I perceive aquaculture to be a crucial component of the Government's Food Harvest 2020 strategy. To expand the production of Irish organic farmed salmon, I tasked BIM to investigate the creation of new fish farming production areas in deeper waters. The placement of farms in deep waters is designed to ensure that there is no impact on Natura 2000 sites, no significant environmental or visual impact and no interference with migratory salmonids, wild sea fisheries, navigation or tourism interests. BIM has estimated that just one of these production areas could generate more than €100 million in exports per annum and create 350 direct jobs. A further 150 jobs will be created indirectly in the service sector, supplying fish feed, netting, transportation and other services.

There always is a strict separation between the duty of the Minister to promote sustainable development of the industry, as evidenced by a wide range of initiatives he has taken in the last two years, including deep sea aquaculture, and his ministerial role as a decision-maker in respect of aquaculture licence applications.

I regard this separation of duties as extremely serious and it is strictly observed at all times.

In 2012 BIM submitted an application to my Department for an aquaculture licence for the cultivation of finfish near Inis Oírr in Galway Bay. The application and its accompanying environmental impact statement are being considered under the provisions of the 1997 Fisheries (Amendment) Act and the 1933 Foreshore Act, which provide for extensive consultation with stakeholders and also for a period of general public consultation. The public consultation stage of the assessment process in respect of the application is closed and a total of 410 valid submissions were received by my Department.

All aspects of the Galway Bay application are currently being examined by my Department in conjunction with its scientific, engineering, technical and legal advisers. All submissions received as part of both the statutory consultation stage of the process and the general public consultation stage will form an integral part of my Department's consideration of the application. It is important to note that the legislation provides for extensive consultation with stakeholders, including Inland Fisheries Ireland, which has responsibility for wild salmon stocks. It is important for all parties to understand that, as the application is under active consideration as part of the statutory process, it would not be appropriate for me to comment on the merits or otherwise of the application pending the completion of the formal assessment process by my Department. The application process is governed by legislation and must not be subject to parallel discussions by me as Minister of State or my Department which could be misconstrued as indicating a predisposition by my Department in respect of the application. No such predisposition exists and the formal assessment process will take into account and evaluate all observations received from stakeholders and the general public in respect of the application. It must also be borne in mind that any person submitting a licence application to my Department has an entitlement in accordance with fair procedures to have the application fully considered in accordance with legislation.

The legislation also provides for appeal of the ministerial decision to the Aquaculture Licences Appeals Board, an independent authority for the determination of appeals against decisions of the Minister. I assure the Senator that the public interest is well protected under the provisions of the relevant legislation and I am conscious of the importance of proceeding fully in line with statutory requirements.

I thank the Minister of State for his reply on behalf of the Minister and I take on board all that he has said. Could he ask the Minister to issue a statement that at the meeting between Alf-Helge Aarskog, who runs Marine Harvest, the Taoiseach and the Minister, no reference was made to this fish farm project? That would contravene everything stated in the Minister of State's reply. It would have been inappropriate, as this is one of the companies that could become the prime mover and shaker in the project. This would be important if this process is to be seen as open, transparent, fair, etc., and the preconception that there would not be any predisposition on the Minister's part needs to be upheld. The Minister needs to make a clear statement that he and the Taoiseach did not discuss the BIM Inis Oírr project with the man who runs Marine Harvest during their meeting.

It is clear from my reply that due process has at all times been adhered to, which is most important from everybody's point of view. This is a statutory and legal process and I have no doubt that in discussions between the Taoiseach and the Minister they were well aware of that and they would not do anything that would infringe legislation or proper procedures. I will ask the Minister as soon as I meet him and report back on what the Senator said. There is significant potential in this industry. Two weeks ago I attended an organic trade fair in Germany and the opportunity to export organic fish all over Europe - and, in particular, to Germany - from Ireland stood out a mile. The Senator is from the west and Senators regularly refer to job creation. A total of 500 jobs could be created through this project - 350 initially and 150 more downstream. If they were on the way for my constituency, I would welcome them. We have to be mindful of job creation in taking decisions. That is why it is important that we do everything properly and I have no doubt that contacts between the Minister and the Taoiseach are always above board. I will report back to the Senator regarding the questions he posed.

Employment Support Services

My matter is similar to that raised by Senator Reilly, although it is more specific. What will be future of local employment services, job clubs and their employees following the establishment of local community development committees? Many of the employees have more than 20 years' experience and they have the expertise, knowledge and wherewithal to carry out the job. Their work complements that of Intreo offices. They offer a fantastic service and they have done tremendous work for the unemployed. They were doing this work long before Intreo offices. I hope the Minister will consider taking local employment services under the umbrella of her Department. This would be cost-neutral because the Department pays the wages of the LES employees. They do the same work as departmental officials. I understand the Minister has taken advice from the Offices of the Chief State Solicitor and the Attorney General regarding the procurement and contractual arrangements for LES providers and job clubs. Is the advice to hand? If so, can the Minister of State share it with the House? What is the future of the services and job clubs? The employees should have stability. They do not know where they stand but they are entitled to know.

I thank the Senator for raising the issue, which I am taking on behalf of the Minister for Social Protection, who is unavailable. She had intended to be here but she sends her apologies because she has had to stand in for the Tánaiste elsewhere.

LESs are an essential component of the employment services offered by the Department to jobseekers. LES providers work closely with the Department in areas and localities throughout the country to provide a much-needed and highly valued service to jobseekers, particularly those who face the greatest challenges in securing employment. The Department values the work of the LES and intends to support and fund their work over coming months and years. In this regard the funding provided for 2014 has been maintained at the same level as in 2013 and the process of renewing contracts with LES providers will be finalised over coming weeks.

JobPath is a programme of employment activation aimed specifically at the long-term unemployed and those most distant from the labour market. The allocation of additional resources to the activation of the long-term unemployed was the focus of an updated Pathways to Work policy statement published in July 2013. Having examined various resourcing options, and taking note of developments in other states and the recommendations of the OECD, among others, the Government decided to contract for additional capacity from providers with expertise and experience in the provision of employment supports or related services.

JobPath provision will not substitute or replace the work of the LESs but will augment and supplement their work and that of the Department's own Intreo centres. In addition, the local development companies, which operate the LESs on behalf of the Department, are free to participate in JobPath, and this may provide a business development opportunity for them. The Department does not intend to cease or change the work performed by the LESs once JobPath is in place.

The successor programme to the current local and community development programme, operated by the local development companies, will be procured in 2015 by the local community development committees, to be established in each local authority in line with the EU procurement directive 2004/18/EC. Accordingly, I am advised by the Department of the Environment, Community and Local Government that it will be necessary to operate a competitive process. This process will be open to local development companies, other not-for-profit community groups in general and commercial firms that can deliver the services under the programme.

I thank the Minister of State for his reply, but I accept that he may not be in a position to speak on this matter in more detail. I will take it up with the Minister for Social Protection again. The employees of the local employment services should be incorporated into the Department of Social Protection because they are doing the exact same work except for deciding on penalties against people who do not take up employment opportunities. They are even paid by the Department. This is valuable expertise which should be brought into the Department of Social Protection.

The Senator has made a strong case and I will relate her concerns to the Minister.

The Seanad adjourned at 5.25 p.m. until 10.30 a.m. on Thursday, 27 February 2014.
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