I welcome the Minister for Transport, Tourism and Sport. Senator Conway is on parade.
Commencement Matters
Railway Stations
I am delighted that a former Senator and colleague has been appointed Minister and shall take this important Commencement item. I commend him on the work he has done in the Department of Transport, Tourism and Sport.
Crusheen railway station is located on the western rail corridor. The number of people using the western rail corridor, specifically from Ennis to Galway, has grown in recent years. In 2015, 102,000 passengers travelled the route from Ennis to Galway. It is the highest number of passengers so far since the line was opened a number of years ago. Given the fact that parts of the line have been flooded, particularly from Limerick to Ennis, the number of passengers is quite impressive.
I request the Minister to outline when he plans to commence work on opening a railway station at Crusheen. There is an old railway station in Crusheen. There is a growing population in the area from Crusheen to Ruan and in the surrounding northern and eastern districts of Ennis that would definitely use a railway station at Crusheen.
Many stations of this type are now automatic, as a result of advances in technology, so no human resources would be necessary. The more stations that are opened along any of our rail lines - and specifically this line - the more people will use those lines for leisure and to commute to and from work. I hope the Minister might have some good news for the people of Crusheen and the surrounding areas who are hopeful of having a railway station at some stage in the near future.
I thank Senator Conway for raising this important matter. He has made a very good case, within the context in which we work, for the station he mentioned at Crusheen, County Clare. I will begin by addressing the broader context of this issue. The Senator will be aware that submissions are being taken as part of the public consultation side of the ongoing rail review. If Senator Conway and others make the case for Crusheen in the context of the public consultation process, which will continue until mid-January, that case will be considered on its merits. As Minister for Transport, Tourism and Sport, I am responsible for policy and overall funding of public transport. The operation of the rail network, including the stations on it, is a matter for Iarnród Éireann. There is sometimes an expectation that I can move in and build a couple of railway stations to satisfy various vested interests, but it does not work like that. Perhaps it should. I am not sure. At present, the operation of the network is left to a body which is not directed by politicians on a daily basis.
I would like to set out the background to the redevelopment of the western rail corridor, including the Ennis to Athenry line on which the proposed station at Crusheen would be located. In 2006, when a great deal of capital funding was available for infrastructure projects, the Government of the day approved funding of €106.5 million for the first phase of the redevelopment of the western rail corridor under the Transport 21 programme. This investment allowed for the reopening of the 36-mile stretch of railway line between Ennis and Athenry and the opening of six stations. The line was opened to the public in March 2010. In the business plan for the first phase of the western rail corridor, it was projected that annual passenger numbers would reach 200,000 by 2015. However, the latest official passenger numbers from Irish Rail show that just 102,442 passenger journeys took place on the line in 2015. I note Senator Conway's point that flooding may have caused a reduction in the number of passengers to be expected. After five years of operation, just over half of the passenger numbers estimated in the original business case have actually been realised.
I understand that Clare County Council granted planning permission for the proposed railway station at Crusheen in 2010 and that funding for the construction of the station was included in the predecessor to the current capital plan, which was to cover the period from 2012 to 2016. However, the station was not progressed for a number of reasons, including the reduction in capital funding for rail infrastructure that was required to support emergency funding for the CIE group in the 2012-2013 period. Although the case made by Senator Conway is a good one, he will understand that the development of Crusheen railway station was one of the many victims of the crisis of recent years and the lack of funds associated with it. He will be aware that Exchequer funding for public transport projects over the coming period is set out in the current capital plan, the transport element of which covers the period up to 2022. As I have said on a number of occasions, the first priority of the Department of Transport, Tourism and Sport within the capital plan is to ensure the maintenance of existing transport infrastructure, including the heavy rail network, at steady-state levels so that it remains safe and fit for purpose. Based on the funding allocations for public transport under the capital plan, we should achieve steady-state levels by 2020. This, rather than the expansion of the network or the opening of new stations, remains our focus in view of the current constraints on availability of funding.
Iarnród Éireann remains in a challenging position financially and has limited resources of its own to fund additional projects. The company has not made any proposal to the Department recently regarding the opening of Crusheen railway station. I will make inquiries in the next week about the Department's determination and whether it has received representations on behalf of Crusheen. The Senator will be aware that the Government has committed to review the capital plan in 2017. I am determined to make the case for public transport investment to be increased and accelerated as a result of that review to address our growing transport needs. If additional funds were to become available following on from this, there would be many competing demands within the public transport sector. All projects would be subject to robust analysis and would require strong business cases to justify their value and demonstrate how they would significantly improve the public transport system. I would welcome it if the case which has been made by Senator Conway this morning were repeated at that time.
As the Senator will be aware, the National Transport Authority is running a public consultation on rail in Ireland. As I have mentioned, it was launched last week with the publication of the 2016 rail review, which the authority undertook in conjunction with Iarnród Éireann, and the authority's consultation document on the role of rail in Ireland and funding its delivery. The public consultation process, which will give the public and all interested parties an opportunity to give their views and contribute to the debate on the future of heavy rail in Ireland, will run until 18 January 2017. The National Transport Authority will then prepare a report based on the findings. I intend to bring this report to the Government thereafter. No decisions will be made about the heavy rail network until the public consultation process has concluded and been evaluated. It would be welcome if the Senator were to contribute to that process by making a submission that includes the case for Crusheen.
I thank the Minister for his fair response in respect of this matter. Two major issues have challenged the railway line in question. I acknowledge that the projected passenger numbers did not materialise. First, the downturn in the economy affected all sectors of our society. Second, as the Minister correctly pointed out, parts of the line between Ennis and Limerick were closed for almost six months in 2015 due to flooding. That was always going to hamper the number of people using the line. I agree with the Minister that we cannot expand the rail network any further. We have to maintain and develop the current network. I would slightly disagree with the Minister. I am of the view that the more railway stations that are opened, the better because additional stations make our railway lines more accessible. I think Crusheen has a case to make. I will subscribe to the review. I encourage those who are promoting the need for a railway station in Crusheen to do likewise. As the economy continues to grow, I hope funding will be available to provide the people of Crusheen and the surrounding districts with a railway station.
I thank Senator Conway for his remarks. Now that he has raised this case with me, Crusheen will certainly be embedded in my mind when these matters are being considered. I might respond to his sensible agreement that a lack of funding has been responsible for many of the difficulties relating to our railways by saying we expect that the rail review, which has identified a funding gap of approximately €103 million per annum over a long period, will compel us to address the problem of underfunding. The funding gap has to be addressed by subvention or other means. The crisis with our railways cannot be allowed to continue in this way. This means that we must address the problem according to two criteria.
One is the social need for rail and the absolute commitment of the Government to a very efficient and necessary rail network in this country. Whether that is done by subvention or value for money will be something decided when the consultation process is over. All I can say to Senator Conway is that no stations have been identified for either building or closure at this stage. That process will take place after the consultations are completed and handed into the NTA which will then report to us. It will put the case that Senator Conway has made for Crusheen in the mix.
Poultry Industry
Before I proceed with Senator Mullen's Commencement matter, I note that it deals with a sensitive subject matter which has the potential to affect adversely the reputations of individuals. I remind all present of the long-standing rule that Members should not comment on, criticise or make charges against a person outside the House either by name or in such a manner as to make them identifiable. I am sure Senator Mullen will be able to address the concerns he has raised adequately within the bounds of that rule. I have every confidence in the Senator. He has the floor.
I thank the Leas-Chathaoirleach for his confidence. I will certainly try to do that. I welcome the Minister to the House and thank him for taking this matter. Last week in the Seanad, I drew attention to reports that a Cavan-based poultry farmer, Alo Mohan, a man who had declined to take part in certain-----
The Senator-----
I am only repeating what is already on the record of the House-----
I know that but-----
-----and I am not making any imputation as to any individual nor will I be doing so.
The point I am required to make is that it should not have been on the record.
I apologise. The farmer in question declined to take part in certain VAT avoidance arrangements and, as I put it, was forced out of business because he was no longer in a position to deal with local processors. The man in question is a respected farmer in County Cavan. He is a former chairperson of the Irish Farmers Association poultry committee and an FBD Nuffield scholar who completed a study, Thinking Different - Encouraging the Transfer of Knowledge in the Poultry Sector. He is also a member of the Irish Poultry Council and a chair and founder of Taste of Cavan food festival.
Senator-----
This is all complimentary.
I know that but can we deal with the general issue?
The gentleman is married with four children and he was producing more than 1 million chickens a year on a family farm as well as cattle and sheep. The issue is that because he declined to take part in certain VAT avoidance arrangements, he is no longer trading, according to the Irish Independent. He is no longer in a position to earn a livelihood from what is a very well-kept and high quality family farm.
The issue I have had all along is there is a need for the Department of Agriculture, Food and the Marine to be extremely vigilant about whether there is any unfolding scandal here of an abuse of power in the poultry industry. If a farmer is not able to sell his milk to one co-op, he can go to another one, but what happens when a farmer finds he is not in a position to sell his poultry because he has done due diligence and checked whether he can act in a particular way according to the requirements of Revenue and so on? If that farmer found he was not in a position to take part in certain arrangements and was blackballed as a result, either or indirectly, is it a matter that would be of concern to the Department of Agriculture, Food and the Marine? It certainly should be and one does not have to be, as I am, from a small farming background to be concerned that small farmers are entitled to make a livelihood. I would not fault any farmer for entering into an arrangement to make a livelihood but a small farmer, or even not such a small farmer, who wants to, as it were, follow his conscience or take the route of good citizenship should never be victimised. There is a real danger in our world today internationally that the big corporations have their way with the small guy. That should not happen in Ireland, in Cavan or anywhere else. I want the Minister and his Department to take an active interest in this case because it seems to me there is not a whole lot of competition among processors in the poultry sector and that creates particular dangers.
In the news report, the farmer said he had lost out on an additional €25,000 a year because he had not participated in certain arrangements. A processor, such as Carton Brothers Manor Farm, is entitled to source produce from whomever it likes, but if there is a question of a supplier getting penalised because he took the route of good citizenship, then an important public issue arises. That is the issue I want the Minister to address. We cannot stand back and say it is a private arrangement between a processor and a supplier. It is an issue if somebody took the route of good citizenship and finds themselves cut out. This farmer is no longer in business. Sheds are lying idle which is a change from a situation where a guy was producing 1 million chickens a year.
It is very much in the Minister's interest to find out what went on regardless of whatever issues arise on the VAT issue in future and whatever the tax arrangements were. The State has an interest in ensuring the people who take the route of good citizenship are protected, whether that means informal or formal activity by the Department of Agriculture, Food and the Marine. There is an issue here. It is an issue I will not let lie. I will return to it again and again until I am satisfied the State is doing everything necessary to investigate whether people have acted properly. Whether it is the big processor, Carton Brothers Manor Farm, Mr. Mohan or others, it is important that the State ensures the small guy does not get victimised, particularly if he is acting according to his own lights and doing what he believes to be the right thing having exercised the necessary due diligence.
I do not know what response the Minister will give today but there are options. This issue can trundle on and become more of a controversy while an individual seeks justice. It is perfectly within the gift of the Department to appoint a mediator to try to bring the sides together to try to get to some kind of understanding and to ensure in any case that justice is done in the final analysis.
I thank Senator Mullen for raising this matter. While I have overall responsibility for the regulation and development of the Irish poultry sector, the specific matter raised by the Senator is solely under the remit of the Minister for Finance. The matters raised are being dealt with through an amendment to the Finance Bill which the Minister for Finance is currently bringing through the Oireachtas legislative procedures. I have, however, indicated my support to the Minister, Deputy Noonan, for the initiative in the Finance Bill to ensure there is no abuse of the flat-rate VAT system, thereby ensuring the integrity of the system and its continued availability to farmers. The flat-rate system generally works well and is an established element in agri-taxation policy.
On the particular circumstances in which this producer is currently operating, the Senator will agree it would be inappropriate for me to comment directly on the detail of it. The issue of where and to whom suppliers send their produce and the nature of their relationship with their processor is a commercial arrangement in which no Minister for Agriculture, Food and the Marine can have any role. That said, it would be a matter of some concern if any supplier suffered adverse consequences solely as a result of drawing attention to alleged wrongdoing in any part of the agrifood sector.
On the wider issues, the poultry sector is an integral element within the agricultural economy accounting for approximately 3% of the gross agricultural output and proudly supports around 6,000 jobs, most of these in rural areas. Output at producer prices in 2015 amounted to €190 million and the value of poultry meat exports amounted to €320 million. On the back of increasing demand for poultry protein and low feed costs, the outlook for the sector is positive for the remainder of 2016 and into next year.
As part of my Department’s contribution to the development of the poultry sector, we have a range of supports currently in place. Last year we announced the opening of the new pig and poultry investment scheme under the targeted agricultural modernisation scheme, TAMS II, helping to underpin economic growth and development throughout rural Ireland. This investment reflects our ongoing commitment to the growth potential of this important sector and to the modernisation of farming in Ireland. There is also additional funding under the young farmer capital investment scheme and the organic scheme for the poultry sector. Poultry producers are also eligible to apply under the animal welfare safety and nutrient storage scheme.
Earlier this year, my Department launched the €100 million knowledge transfer group as part of Ireland’s €4 billion rural development programme. Knowledge transfer groups will be implemented for some 27,000 farmers across six sectors, including poultry. These groups will provide a key support to the agrifood sector in building its knowledge and skills base to underpin continued growth and competitiveness.
The scheme builds significantly on the previous discussion group model and is designed in such a way as to ensure the farmer and adviser engage in one-to-one discussions on key aspects of a farmer’s business such as controlling input costs, environmental sustainability, breeding and herd health. This one-to-one engagement will be complemented by group-based discussion and the sharing of experience and information between farmers. I am satisfied that these various measures will greatly assist the ongoing development of the poultry industry. Food Wise 2025, the ten-year strategy for the agrifood sector published in July last year, identifies the opportunities and challenges facing the sector and sets out an enabling strategy that will allow the sector to grow and prosper. Food Wise 2025 includes over 400 recommendations on cross-cutting themes of sustainability, innovation, human capital, market development and competitiveness, as well as specific sectoral recommendations.
Food Wise 2025 foresees the creation of 23,000 additional jobs in the agrifood sector all along the supply chain from primary production to high-value added product development. The implementation process for any strategy is vital for its success. I chair the Food Wise high-level implementation committee, with high-level representatives from all the relevant Departments and State agencies. The committee reviews progress on detailed actions on a quarterly basis in order to identify and solve problems quickly. Stakeholders regularly present to the committee on priorities for particular sectors or themes in enabling and delivering sustainable growth in investment and employment to benefit the agrifood sector.
Opening markets is a priority, particularly in the context of Brexit to further increase the market opportunities for Irish food and drink internationally. We are after all an exporting nation with 90% of our food produce leaving the island. It is for this reason that we have undertaken major trade missions to Asia and Africa in recent times. In summary, the success of the Irish poultry sector, as with other elements of our agrifood sector, rests on the relationship between farmers and their processors in the first instance and further up the chain between the retailers and consumers. It is imperative that there is equal opportunity for all concerned to make a sustainable margin and I trust in the poultry sector as with others that the opportunity exists for the producer to undertake its business in such a manner.
I thank the Minister for his response which certainly increased my store of knowledge on many different issues. When he says that it would be a matter of some concern if any supplier suffered adverse consequences solely as a result of drawing attention to alleged wrongdoing, I presume he does not mean that it would not be a matter of some concern if, for example, he were to suffer consequences for going on not to participate in certain arrangements. What does the Minister mean when he says it would be a matter of some concern? Does he mean that he would make it his concern and the concern of the Department? I think I have said enough to show that there is a case here for the Department to look into a matter because a significant public interest issue arises if somebody is victimised because in some way he or she did not want to get involved in something he or she believed was illegal. That is the issue before us and it is one we are going to have to return to. I think the Minister will agree with me that the State should ensure that the system should not be rigged against small farmers or against individuals who do not play ball with big corporates. That is what this issue is about and I think we might have further conversations on this in the future but I very much thank the Minister for the attention he has given it to date and for coming in this morning.
I appreciate the Senator's comments but it is also appropriate to reflect on my opening paragraph where I say it is not really the responsibility of the Minister to get involved in the detailed commercial arrangements that exist between a dairy farmer and his processor, a beef farmer and his beef processing plant or indeed in this instance between a grower and a processor in the poultry sector. It would be of concern to me if I felt somebody was being victimised. There are many avenues that may lead to a resolution of this. I am sure there is hardly a county in the country that does not have a story about some farmer in some enterprise who has a difficulty with his processing outlet. If the Department was to become engaged in trying to find a resolution to each of those individual problems it would be overwhelmed. In many respects even the Competition Authority has made it abundantly clear to us that we have no role to play, for example, with regard to the arrangements that exist between farmers who are constantly in difficulties with the meat processing plants. We are told strictly that is not a function for us. I do not have the detail of the case the Senator alludes to. I have read the media comments on it etc. and, as I said in my response, I would be concerned if I felt that a grower in the poultry industry was being victimised solely on the grounds of raising an issue which the Senator has alluded to. I would like to think that this issue could be resolved. I am not saying that is a role I or the Department can play but there are many people out there, stakeholders and representative bodies, who may feel, as the Senator strongly does, that this is a case of large versus small and I am aware that in terms of the poultry industry, there are not many outlets where one can go if one has a falling out with a major processor. I would like to think that this issue could be resolved but I am of the opinion that it is not an area where the Department or I can usefully play a role.
Live Exports
It was with deep shock and alarm that we heard the news last week that Cork Marts proposes to pull out of the export trade of live calves. It is a very important trade because it takes the glut of Friesian bull calves off the market, which helps our beef and dairy industries. This is an alarming decision for the agricultural community. Approximately 60% of the dairy industry is based in Munster and there are 1.4 million dairy cows in Ireland. Of those, the vast bulk will be in calf to a Friesian going forward and to have a glut in the market for Friesian bull calves running into the January-February calving season is a great worry.
Last year, Cork Marts exported up to 20,000 head of calves. Spain received approximately 7,000 head and Holland approximately 12,000 head. That is equivalent to a quarter of the export trade at the moment for live calves in Ireland. In 2015, 85,500 live calves were exported. This year, the number dropped by 13,000 to 72,500. This will have a knock-on effect on the beef industry. The kill in Ireland has increased by 5.1% or 70,000 head of cattle. It is projected next year that the kill will increase by a further 6% on top of that, which would be a further 120,000 head of cattle. There will be a glut on the beef side of the market too, which will have a knock-on effect on the beef and dairy industries. Nobody wants these Friesian bull calves in Ireland. We need to get a market. The most appropriate and fastest way to get these calves off the island is to take them off when they are between three and six weeks old, because seven calves can be moved in the same space as a 500 kg bullock would require in the trailer.
It is a major worry for our market and for the island. In many ways we need to engage with the exporters to ensure we have an outlet. This could become a welfare issue because how will we deal with 1.4 million dairy cows calving with no outlet for these Friesian bull calves? Artificial insemination, AI, is up 6% and most of it is Friesian so there will be more Friesian bull calves on the market. We need to work with the exporters and with Cork Marts to get them back into the business. Bandon Mart will have 1,800 head of Friesian bull calves going through it in peak weeks. That is a phenomenal figure. It is the biggest mart in Ireland. We need Cork Marts to come back into the business because it is in a real dairy heartland. If it does not come back, calves will plummet from €90 to €120 this year to anything between €50 and €60. That would be the maximum. It is a huge problem for us and I hope An Bord Bia might be able to work with the exporters and with the Department to try to encourage exporters.
Unless exporters come into the space, it will have a knock-on effect on the dairy industry but will a huge impact on the beef industry in the years to come. We do not want grade P animals coming onto the grid. At the moment they are coming on around 350 cent to 360 cent a kilo. It will be a nightmare situation if these animals come onto the market in two and a half years' time. I hope we can engage and do something because if we do not, we will have a huge problem in two and a half years' time and next spring it will be a disaster for the calf trade.
I thank Senator Lombard for raising the matter. The decision by Cork Co-operative Marts to remove itself from its direct involvement in the live trade in calves is a matter for the company. It would be inappropriate for the Department to comment on that decision which is based on commercial considerations.
On the general issue of live cattle exports, I want to stress that we have built huge expertise in this trade over the years with a number of top-class players involved in this sector. Total live exports of calves and cattle amount to nearly 125,000 so far this year. The live export trade, whether to other European Union member states or to third countries, is a vital component of Ireland's livestock industry and serves a dual purpose of stimulating price competition for domestic cattle and satisfying a real demand in overseas markets for specific types of animal. It complements the processed beef trade by providing alternative market outlets, thereby underpinning the meat and livestock industry generally.
The main exporters of calves from Ireland have built up their experience over many years. Ireland takes pride in its strong reputation for maintaining high transport standards. The transport of animals over long distances is conducted in a manner which safeguards the animals being transported. That is something to which we are committed, namely, having the highest animal welfare standards in terms of live export transport arrangements. Not only do we meet the EU standard but in fact we insist on a higher standard. That is appropriate and proper given our significant dependance on that market.
The live cattle trade has proved more difficult in recent years due to changes in animal health rules, particularly in Belgium, as regards infectious bovine rhinotracheitis, IBR. Changes in the interpretation of the European Union rules on animal transport in the Netherlands have in recent times created some additional difficulties for Irish calf exporters for the coming spring. My Department has been working closely with the Dutch authorities in this matter and will continue to do so. Other markets such as Spain will play an increasing role in this trade.
Senator Lombard will be aware that Bord Bia has an active promotional programme in place that supports exports to both established continental and new markets for live cattle. Through its international network of overseas offices, it actively supports the development of the live export trade through the provision of market information, developing market access and promotional activity.
The major development this autumn of the reopening of live trade to Turkey has resulted in three significant shipments already having taken place involving in excess of 8,000 cattle. I should also mention the trade mission I led to Morocco and a subsequent trade mission to Algeria. Apart from these countries, the markets currently open to live cattle from Ireland include Lebanon, Libya, Tunisia, Egypt and Serbia in addition to other member states of the European Union. Last year saw high levels of exports of cattle to both Britain and Northern Ireland, largely driven by favourable currency rates which made cattle from this country very competitive in those markets. I will continue to ensure that Irish livestock producers have the option of exporting to as many global markets as possible.
Senator Lombard can make a brief supplementary comment.
I welcome the statement made by the Minister on this important issue. Bord Bia's involvement in the markets is important. All I can ask is that we perhaps redouble our efforts regarding Bord Bia and see whether it could engage with exporters. If there is a space where a quarter of the export market is left open, we need to encourage new people to come in. I appreciate that it is a sensitive issue with the Bandon Mart co-operative stepping out of it, but the space and where it is at the moment is a huge issue for the agriculture industry.
I assure the Senator that endeavour will continue and intensify. Bord Bia's engagement in this matter is in partnership with the live exports. I was in north Africa recently on a trade mission which had participants from the live export trade as well as from Bord Bia on the trade delegation. There is that joined-up thinking in respect of the endeavour.
I appreciate we are facing a perfect storm in many respects. The expansion of the dairy herd has brought an increased number of Friesian bull calves, in particular, to the marketplace. The overwhelming trade in the export of calves has been in that space. We also face immediately the challenges associated with Brexit in the form of fluctuations in sterling, which has made it more difficult for the beef sector. This makes it imperative that live export opportunities to any possible location are exploited, bearing in mind our continued commitment, and that of live exporters, to the highest animal welfare standards which are a fundamental foundation stone of that policy as approached by both the exporters and my Department. I again thank the Senator for raising the matter.
Local Employment Service
I thank the Minister for coming to the House to talk about this very important issue.
I speak today in the context of the figures released that 52% of the total number of people unemployed are long-term unemployed and that 82,000 are participating in jobs schemes. I am deeply concerned about the involvement of foreign private contractors delivering similar services to that already provided by the local employment services in an effort to reduce the number on the live register. The basic requirement even to be considered eligible to bid was that a company had a minimum turnover of €20 million per year, which excluded many local Irish companies from the scheme.
I am concerned that the local employment services and other such groups are competing with international companies whose very design is to generate huge profits. With these companies driven by profit and wanting to ensure the full payment can be drawn down, there is a danger that the long-term harder to reach unemployed are overlooked in favour of those who are more ready to slip back into certain employment sectors. These companies are paid by results within timelines, in contrast with the LES. For example, mediators use guidance counsellor principles to assist clients as part of the planning process. In many cases this can be extremely labour intensive in supporting individuals to the next step in their progression. This can be especially intensive with those most distant from the labour market or individuals with issues around alcohol, substance misuse or mild depression. Is it not true that if a client has mental health issues or any kind of disability, he or she is referred back to the Department?
I am also concerned that outlying rural areas will be abandoned in the drive for profit maximisation and in the name of efficiency, effectiveness and value for money. The 2016 LES contracts reduced mediator caseloads to 120 activation clients for the first time as part of the Pathways to Work initiative, ensuring activation clients are met and supported on a monthly basis. I am concerned that this reduction is part of the Department's obligations to ensure JobPath contractors have sufficient client referrals to comply with the contractual agreement with the Department. Will the Minister explain why the Government thought it necessary to privatise these services, displacing existing services and engaging British companies when there was no legal obligation to put such services out to tender?
JobPath in Mayo commenced at a time when the economy was starting to improve. It would appear that the JobPath contract came too late and at the taxpayers' expense. Did the Department consider reviewing the LES contracts at the time to deal with the demand generated by the recession?
There is also the issue of those selected for JobPath. They are being forced to travel miles to access services that are provided in the local LES offices. This does not make sense. For instance, we are spending money on taxis to take people from one end of the county to the other when they are passing by their LES office where they could be supported into employment and receive exactly the same, if not better, supports as they would from JobPath.
People are being told to attend the information days and are required to register with, for instance, Seetec in Mayo and the west. If they do not, their social welfare payment will be cut.
Once registered, they are no longer eligible for a community employment scheme for up to a year. Again, that makes no sense whatsoever. Additional travel and child care costs are pushing those participating in JobPath into further poverty. Many of those people feel intimidated and live in fear of losing their benefit. An additional payment needs to be considered by the Department. My experience is that clients are not being provided for adequately through the benefits system.
In light of the planned review by the Department of Social Protection of employment services, including JobPath, Jobs Clubs and local employment services, how much has the programme cost to date, that is, the entire tendering process and use of economic research specialists? How much will the programme cost the taxpayer by the end of the four to five year cycle? Are there any break or penalty clauses if the Government decides to pull out early? How can we expect the local employment services to compete with companies that are for profit and are being widely promoted to third parties by Government and the Department of Social Protection?
I thank Senator Conway-Walsh for raising this matter and apologise on behalf of my colleague, the Minister for Social Protection, Deputy Leo Varadkar, who could not be here as he had a previous engagement.
Ireland’s public employment service is managed by the Department of Social Protection and delivered directly by its own Intreo service as well as by contracted private companies, namely, the JobPath companies, the local employment service, LES, and Jobs Clubs.
The JobPath service is a new approach to the provision of employment supports to jobseekers who are long-term unemployed. An open public procurement process was conducted in accordance with European Union and Irish procurement rules. Two companies, Turas Nua and Seetec, were selected to deliver the JobPath service.
The companies deliver services directly and also engage with a range of local subcontractors, including training and employment service providers. JobPath is an addition to, not a substitute for, the services already provided by the Department and the LES. JobPath is thereby increasing the Department’s overall capacity to engage with, support and assist jobseekers to get sustained employment.
JobPath is a payment by results model and all initial costs are borne by the companies. JobPath is so structured that the companies are not able to fully recover their costs until they successfully place sufficient numbers of jobseekers into sustained paid employment. Participants on JobPath receive intensive individual support to help them address barriers to employment and to assist them in finding full-time sustainable jobs. Each person is assigned to a personal adviser who assesses a person’s skills, experience, challenges and work goals. The personal adviser works with the jobseeker to agree a personal progression plan that includes a schedule of activities, actions and job-focused targets. Jobseekers are also provided with a range of training and development supports, including online modules, career advice, curriculum vitae preparation and interview skills. They spend a year on JobPath and if they are placed into a job, they will continue to receive support for at least three months and up to 12 months while in employment. During their time on JobPath, they may also be referred for further education and training opportunities.
In 2016, the Department agreed contracts with the LES to provide a more intensive level of engagement with jobseekers. In order to assist the LES to undertake a more intensive level of engagement, the number of jobseeker referrals was correspondingly reduced. This would not have been possible without the benefit of JobPath. JobPath is thus assisting the LES to deliver a better service for jobseekers and also assisting jobseekers directly via its own range of services and supports.
Rather than being anti-competitive, the JobPath initiative has brought additional providers into the Irish employment services market and is thus providing jobseekers with a wider range of services.
I thank the Minister for the response. In the first instance, in the European Union procurement rules there is no obligation on the Irish Government to privatise these services. I believe it is the wrong direction in which to go.
The Minister said this was additionality in terms of the LES and the services already in place. I disagree fundamentally with that because if it quacks like a duck and walks like a duck, it generally is a duck, especially in this case.
To go back to my original questions which were not answered, and I understand this is not the Minister's portfolio, how much has the programme cost to date in terms of the tendering process and the use of economic research specialists? How much will the programme cost the taxpayer by the end of the four to five year cycle? Are there any break or penalty clauses if the Government decides to pull out early? Those are my fundamental questions and I would appreciate answers to them.
I will ask the Department of Social Protection to communicate directly with the Senator but my understanding is that for commercial sensitivity reasons, it is not appropriate to publish the public procurement cost figure.
As late as yesterday, the published figures on long-term unemployment show that we were making significant progress. As the Senator said, if it quacks like a duck and walks like a duck, it is a duck. Whatever it is, it is working. We have a huge target in respect of long-term unemployed people who for many reasons, including the length of time they have been out of work, the fact that they require upskilling, etc., are the most difficult cohort on the live register in terms of moving them into gainful employment. Bearing in mind the costs, it is appropriate that there is a focus on that cohort.
The Senator made reference to the fact that the companies had the capacity to skim and take on those with whom they could work most appropriately. That is not the case. They have no role in respect of the random selection of people who are long-term unemployed. That is a function of the Department, which gives the clientele base to the company. They do not pick Mr. X or Miss Y who looks like somebody-----
Do they refer back to the Department?
It is a random selection process, and their payment is based on a results model. It incentivises both the company and the individual through the programme they deliver. It incentivises both to achieve sustainable employment. These are not job placements in schemes. This is sustainable employment. This is the most challenging cohort on the live register to deal with, and it comes at a cost. I do not have the figures, and I understand the reason it might not be appropriate to publish them.
In terms of the procurement of services, if we look at the service delivery model in Mayo, and I know it is the case in my constituency and in many other parts of the country, I have no doubt that many of the services are already contracted out to private service operators who run the local social welfare offices. I am sure the Senator is not saying that they do not do as good a job in Mayo as they do in Cork. That is also a service that is contracted out.
Forgive me for intruding, Minister, but in terms of the proximity of other business, I am anxious to suspend the House. Please conclude.
I appreciate the Senator raising this issue. I will ask the Department of Social Protection to communicate on some of the issues she raised. Progress is being made but much more needs to be done in respect of addressing that cohort on the live register.
Sitting suspended at 11.28 a.m. and resumed at 11.30 a.m.