Select Committee on Business, Enterprise and Innovation debate -
Wednesday, 11 Dec 2019

Vote 32 - Business, Enterprise and Innovation (Supplementary)

Chairman

I remind members to ensure their mobile phones are switched off for the duration of the meeting as they interfere with the broadcasting and recording equipment, even when left in silent mode.

I welcome the Minister for Business, Enterprise and Innovation, Deputy Humphreys, and the Minister of State at the Department of Business, Enterprise and Innovation, Deputy Halligan. I thank them for the briefing material provided for the committee. The purpose of the meeting is to consider the Supplementary Estimate for Vote 32 for the Department of Business, Enterprise and Innovation, which was referred by the Dáil to the committee on 19 November with an instruction to report back to it not later than 12 December.

I propose the Minister and the Minister of State make brief statements to the committee. The select committee can then consider the relevant subheads in the Supplementary Estimate. Is that agreed? Agreed.

I remind members that, in accordance with Standing Order 184, discussions should be confined to the items constituted in the Supplementary Estimates only. Members should indicate the subhead to which they are referring if possible. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

I invite the Minister to make her opening statement.

Minister for Business, Enterprise and Innovation (Deputy Heather Humphreys)

The Minister of State, Deputy Halligan, and I are pleased to have the opportunity to discuss our 2019 Supplementary Estimates with the select committee this afternoon. The Minister of State will say a few words later about his area of responsibility.

The Supplementary Estimate being presented is technical in its nature as it does not seek any additional allocation from the Exchequer. The Estimate is seeking to redistribute some €15.289 million in savings to support particular priorities regarding several of the Department’s enterprise, innovation and regulation programmes.

The Estimate seeks to provide an additional €500,000 in capital funding to InterTradeIreland to support its Brexit activities, in particular its programme of voucher supports. Demand for InterTradeIreland’s Brexit planning vouchers and its Brexit implementation vouchers supports has remained high throughout 2019. It spiked in advance of the two Brexit deadlines in March and in October. Almost 1,800 of these vouchers have been approved by InterTradeIreland. The additional €500,000 being provided through the Supplementary Estimate, which builds upon additional funding provided in budgets 2017, 2018 and 2019, will be targeted at meeting the increasing demands for InterTradeIerland’s services for the remainder of 2019.

The INTERREG programme is one of 60 cross-border funding programmes throughout the EU. The current round of INTERREG, which runs from 2016 to 2022, is jointly funded by the Department and our Northern Ireland counterparts, the Department for the Economy, on a 30:70 basis. The Department’s overall commitment under this round of the programme is €21 million. The additional €1.2 million being provided to the INTERREG programme in the Supplementary Estimate will increase the overall provision to the programme to €4.2 million in 2019. For several reasons, the drawdown in the initial years of this round of the programme was much less than anticipated. The €1.2 million being provided through the Supplementary Estimate is required to ensure that the Department meets its overall funding commitment within the lifetime of this round of the programme.

The future growth loan scheme, which was launched in April of this year, provides long-term financing support to Irish businesses to help them strategically invest in a post-Brexit environment. The scheme operates alongside the Brexit loan scheme, which provides shorter term working capital to businesses that have been impacted by Brexit. In the period since the launch of the scheme in April 2019, some 2,000 applications have been approved by the scheme’s administrators, the Strategic Banking Corporation of Ireland, SBCI. The uptake in the scheme has increased significantly in recent months and the additional €2 million being provided through the Supplementary Estimate will ensure that the SBCI can continue, in conjunction with the participating lenders, to meet this increased level of demand.

The humanitarian relief scheme is intended to provide humanitarian support for small businesses, community, voluntary and sporting bodies that experience flood damage to their premises as a consequence of a severe weather event and have been refused flood insurance. The €59,000 being sought through the Supplementary Estimate arises from claims relating to flood damage suffered in County Donegal in the aftermath of Storm Lorenzo in October 2019.

The Minister of State, Deputy Halligan, will set out the details of the various innovation programmes receiving additional funding through the Supplementary Estimate in his statement later. Of the total of €11.279 million in additional innovation supports being provided through the Supplementary Estimate, €2.55 million will be provided to the science and technology development programme, €1.999 million to the programme for research in third level institutions and €6.73 million to subscriptions to international organisations.

The remaining element of the Estimate involves the provision of an additional €251,000 to the Personal Injuries Assessment Board, PIAB. While the board is essentially self-funded, the Department provides funding to the board in respect of pension payments. The additional €251,000 being provided to subhead C9 through the Supplementary Estimate reflects the costs of unexpected retirements by members of staff of the board in 2019.

The savings funding our 2019 Supplementary Estimate have been generated in the following programmes: administration pay savings of €448,000; agency legacy pensions savings of €500,000; IDA Ireland savings of €2.1 million; Enterprise Ireland savings of €8 million; workplace relations programme savings of €1.115 million; Health and Safety Authority savings of €375,000; Office of the Director of Corporate Enforcement savings of €1.4 million; Competition and Consumer Protection Commission savings of €500,000; and Companies Registration Office savings of €850,000. The briefing provided by my officials to the committee's secretariat sets out the details of the circumstances giving rise to the savings in each of the aforementioned subheads. I am happy to discuss these further with the members of the committee. The committee will see, however, that more than 60% of the savings have been generated by Enterprise Ireland and IDA Ireland, which account for €8 million and €2.1 million, respectively, of the savings.

Regarding the IDA, the savings of €2.1 million essentially arise in respect of its property programme. Large-scale capital investment in land and property such as that engaged in by the IDA is a complex and lengthy process. The inherently complex nature of property and land development transactions, which involve acquisition, engagement with stakeholders, including local authorities, complicated commercial arrangements and building contracts, can, and often does, involve delays. Nevertheless, regional development remains a top priority for the IDA. In this regard construction of advance buildings in Dundalk and Galway is almost completed. The construction of buildings in Carlow and Athlone will begin in 2020.

Regarding savings in Enterprise Ireland, the committee will be aware that in addition to the funding it receives from the Exchequer, Enterprise Ireland generates income from equity investments that it makes in the companies it supports. Enterprise Ireland is permitted, subject to the approval and sanction of the Minister for Public Expenditure and Reform, to retain and use own-resource income, ORI, in support of enterprise development. Enterprise Ireland has succeeded in generating a significant surfeit of ORI in excess of the amount sanctioned by the Department of Public Expenditure and Reform in the course of 2019. Under public expenditure rules, Enterprise Ireland is required to expend ORI before drawing down Exchequer funds. Accordingly, the additional ORI generated by EI essentially means it will not need to call on its full 2019 Exchequer capital allocation of €65.75 million under subhead A7 of the Department's Vote, thus generating a saving on this subhead.

I hope I have given the committee an overview of the various expenditure and savings elements of the technical Supplementary Estimate I have presented to members. With the Chairman's permission I now ask the Minister of State, Deputy Halligan, to give some further details of the additional funding being provided to the Department's innovation programmes through the Supplementary Estimate.

Minister of State at the Department of Business, Enterprise and Innovation (Deputy John Halligan)

I welcome the opportunity to introduce very briefly the elements of the Supplementary Estimate relating to research and innovation. Under the Department's proposed allocation, just over €11 million would be apportioned to meet commitments in respect of various research and development programmes of national importance. This will help us to accelerate delivery against our targets and goals as set out in Innovation 2020.

The €5 million Supplementary Estimate funding for the European Space Agency, ESA, will be invested across six technology development programmes to drive Ireland forward as a competitive player in the space sector. This investment is directly aligned with the new national space strategy for enterprise, which I published earlier this year and which aims to increase public and private investment in the ESA by 50% by 2025 and develop a strong and economically sustainable space-active industry in Ireland. As I have noted previously in committee and in the Dáil, our investment through the ESA delivers a sevenfold return in terms of its ultimate impact. It is critical that we increase our ambition in this area.

The specific programmes in which we will invest include telecommunications and integrated applications, exploration, transportation and earth observation. An additional €1.7 million will be paid to the European Southern Observatory as a contribution to our existing membership liabilities, including the joining fees, which are to be paid over a number of years, and Ireland's contribution to the extremely large telescope, ELT. Membership of the ESO affords Irish astronomers and researchers the opportunity to be part of an international scientific community conducting groundbreaking research in the most advanced facilities. ESO membership will grow Ireland's skill base in high-tech areas, delivering on the ambitions of Future Jobs Ireland.

The proposed allocation of €1.5 million for Tyndall National Institute in Cork will contribute towards upgrading works to accommodate more researchers in the field of cutting-edge ICT. This funding will enhance Tyndall's ability to support innovation and deliver significant economic benefit in the form of highly skilled jobs, new start-up activity and investment.

An additional €1 million is proposed for Science Foundation Ireland for a number of existing commitments that fall due in 2019. Taken together with increases in its capital funding in 2020, SFI will be able to fund additional research activity through both its research centres and its funding for individual awards.

The €2 million for cycle 5 of the programme for research in third level institutions, PRTLI, will address existing financial commitments under that programme. The PRTLI has supported investment in top-class infrastructure and human capital development across Ireland's higher education institutions. It has been an important programme for creating the foundation on which further investments by SFI and our other funding agencies now build.

The evolution of research, development and innovation and its associated investment have been a cornerstone of Ireland's enterprise policy for many years. In order to become an innovation leader, it is essential Ireland keeps apace with and anticipates developments in the field. This ambition must be matched by investment in innovation, research and development and reflected in the above funding decisions. This supplementary allocation of just over €11 million will provide welcome additional funding into our system, support the quality and impact of our scientific capacity, contribute to our job creation and enterprise growth and help us to deliver on our Innovation 2020 targets and commitments as we look to the future. Again, I welcome the opportunity to give a very brief introduction as to where this €11 million is being invested.

Chairman

I thank the Minister and the Minister of State. I will start with the Minister of State. He spoke about the €5 million Supplementary Estimate for the European Space Agency and said an additional €1.7 million will be paid to the European Southern Observatory. As he is aware, research and innovation are vital for the Irish economy, and membership of international research organisations is an important part of increasing our own research output. Ireland is currently one of only three European countries that does not have any formal agreement with CERN, which I know the Minister of State is very supportive of. Innovation 2020's vision is for Ireland to be a global innovation leader driving a strong, sustainable economy and a better society. If Ireland is to deliver on this vision, membership of organisations such as CERN, which are at the forefront of innovation, is critical. The committee recently did a body of work on CERN and we launched our document in the past month. I wish to put the following to the Minister of State strongly on behalf of all the joint committee members. Some of them are not here, and I am probably straying slightly outside the committee's remit, but at the same time it is a great opportunity to put this to the Minister of State. While concerns have been raised that Ireland may not be in a position to take advantage of all the potential benefits of membership of CERN, the committee believes that joining CERN, even as an associate member, which would initially cost €1.3 million, would create an environment that would encourage Irish researchers and businesses to take maximum advantage of these opportunities. The committee has made a number of observations and recommends that negotiations start with CERN with a view to Ireland becoming an associate member as soon as possible. I hope we will get the opportunity to discuss the Estimates for 2020 next year but I just wanted to put out a marker on behalf of every member of the Oireachtas Joint Committee on Business, Enterprise and Innovation that we fully support the Department starting negotiations with CERN with a view to Ireland becoming an associate member. Could I hear the Minister of State's thoughts on this?

Deputy John Halligan

Of course the Chairman can. I acknowledge that CERN is one of the largest international research organisations in the world. It is a leading research collaboration investigating the fundamental composition of matter. The Government gave a specific commitment in Innovation 2020 that we would initiate discussions with several international research organisations. Discussions with CERN started in 2016. As a matter of fact, an Irish delegation visited CERN in 2016 and we met the director general. The Department has been proactive in advancing Ireland's membership of CERN. Representatives of CERN met me and departmental officials some months ago. We continue to keep the position on CERN membership and its cost under review and we continue to contact officials in CERN.

I thank the committee for its support because I am a great supporter of joining CERN. I hope to visit CERN in January to continue further discussions. I should tell the committee that based on the indications received from CERN the cost of Ireland's full membership, and I believe we should have full membership, at current prices would be approximately €13.6 million annually, which is substantial money. To become a full member, a country must go through associate membership prior to membership.

We are continuing negotiations with CERN. It is my view and that of the Department that we should join CERN. We will continue negotiations with CERN over the coming months. I have spoken to the Taoiseach and the Minister for Finance about CERN. I hope to have further meetings with the Minister for Finance in the coming months before I go to CERN. I support the committee. CERN is a premier international research organisation. Believe it or not, it is conducting research in 2,000 areas. I know a good deal about CERN and we should join it. I fully support the committee. Unfortunately, I have not given the Chairman a direct answer. The Minister will have to give that answer. If the Chairman were to ask whether the Government supports joining CERN, it does and it is in our programme.

Chairman

To be quite clear, the committee felt that if we took a baby step first it might be helpful to the Department because there is a lot of money involved. The committee recommended that negotiations with CERN start immediately with a view to Ireland becoming an associate member as soon as possible. The committee then recommended that after three years of associate membership the Department would conduct a cost-benefit analysis and assess whether there is a case to be made for moving towards full membership. The committee also recommended that efforts should be made to fund the annual fee for associate membership, which we were told is €1.3 million, within the Department of Business, Enterprise and Innovation Vote. We felt we were trying to lead the Department towards it. I know many in the Department are supportive. We felt we should look at associate membership first and then, after three years, do a cost-benefit analysis to see what benefits we could get from full membership of CERN, and try to find initial funding from within the budget. We felt we took appropriate steps in this respect. The Minister might give us her thoughts on this, if she would not mind.

Deputy Heather Humphreys

I can verify that the Minister of State, Deputy Halligan, is certainly a strong advocate for CERN. We are examining carefully joining CERN and this is because CERN activity involves data analysis, which is key to our enterprise sector. We keep it under review. As the Chairman said, associate membership is €1.25 million and full membership is €13.6 million. The committee can appreciate that there are always competing pressures in the budget. It is certainly something we are anxious to progress.

Deputy John Halligan

It is important that we are upfront with the committee. In the same way as with the European Space Agency, what we put in we get back. Associate membership would probably cost approximately €1.3 million but this would only allow us the same percentage return. This is my belief and I may be wrong on this. Importantly, the return from our €18.3 million annual investment in the European Space Agency has been continuously improving, as demonstrated by the value of the contracts in Ireland, which has increased from €13.9 million in 2017 to more than €21 million. There is no doubt in my mind that whatever investment we make in CERN we would get back. I have met most of the heads of the universities and institutes of technology in Ireland, who all advocate that we join CERN. It is a priority for the Department and the Government.

Chairman

I am glad to hear it is a priority because when Professor McNulty was before us the committee was really struck when he showed us a map of Europe and only three countries did not have any form of membership, including associate membership. Not to put the Minister of State on the spot but could we get a commitment today that the Department will look initially at associate membership, which is a smaller cost at €1.25 million? I know this can be doubled or trebled with the same input. The members of the joint committee were unanimous on this. At the launch four weeks ago, 21 academics from every institute of technology and university in Ireland were present and they were excited for the first time. They have been banging this drum for a long time. Over the past ten years finances have been stretched and it has been very difficult but I believe the time is right to take a step towards associate membership.

Deputy John Halligan

I can give the Chairman a commitment that we will explore it. There is no question about that. We continuously actively engage with CERN. We have met CERN. We have been there and we have met representatives of CERN in Ireland. I hope to go to CERN in January.

Chairman

I thank the Minister of State and I appreciate it.

Deputy Robert Troy

I welcome the Minister, the Minister of State and our guests. Will I ask all of my questions together?

Chairman

If the Deputy wishes or he can go over and back.

Deputy Robert Troy

I have a number of questions which the Minister can answer and then I will go back and forth if I need to. My first question is on subhead A14 and the future growth loan scheme. The Government is due to carry out a review of the Brexit loan scheme. As the future growth loan scheme operates alongside this, are there plans to review the future growth loan scheme? According to figures I obtained in reply to a parliamentary question in mid-November only 25% of the €300 million capital investment Brexit loan scheme for farmers and fishermen had been drawn down, with only 400 loans sanctioned. What has the review of the Brexit loan scheme thrown up? Has there been an increase in sanction and drawdown? Does the Minister feel it is fit for purpose? Is it easy and accessible enough for those who have need of it?

With regard to subhead B5, the programme for research in third level institutions, it is very welcome that we are putting additional resources into third level research, which is a critical part of what our third level institutions do. Is this the final allocation in cycle 5 of the programme for research in third level institutions? If not, how much remains to be delivered? Are there plans for a new cycle? The outline in brief lists the institutions benefiting from this additional resource. Many third level institutions are not benefiting from it. What process is there for institutions to avail of this funding?

Chairman

I will let the Minister in to deal with these two questions first and the Deputy can then come back in.

Deputy Robert Troy

Okay.

Chairman

There are a few questions in each and it might help us not to miss anything.

Deputy Heather Humphreys

The Minister of State will take the PRTLI one, while I will take the one on the future growth loan scheme. We will review the scheme and are happy to hear any suggestions. We have drawn down €46 million of the €300 million for the Brexit loan scheme, which is the overdraft working capital facility, and it has been sanctioned at bank level. Some 798 applications were approved by the SBCI and 210 loans were progressed to sanction at bank level to a value of €46.2 million. Of the approved applications to date, 159 were reapplications, given that eligibility expires after six months.

Deputy Robert Troy

The figure the Minister mentioned has been sanctioned, not drawn down. There is a difference.

Deputy Heather Humphreys

It has been sanctioned by the bank. It is up to the customers thereafter and it is there for them to take. The nature of an overdraft is that it is used only as it is needed, because it still has to be repaid and the interest on it still has to be paid if it is drawn down.

The future growth loan scheme makes €300 million of loans available in terms of eight to ten years at a competitive interest rate. No security is required for loans up to €500,000. There has been a strong uptake of the scheme since its launch, and to date there have been 2,374 applications for eligibility under the scheme, of which 2,215 have been approved by the SBCI. Some 615 loans have been sanctioned at bank level, to a total value of €116.9 million. It is a popular loan, given that the terms extend to eight to ten years. When we put the scheme together, we identified there was no long-term lending in the marketplace. My Department has started to review the future growth loan scheme, in light of the success in take-up to date, and it is regarded by enterprises as addressing a need for them at firm level or for longer-term investment finance.

Deputy Robert Troy

I am quite clear about the differences between sanctioning and drawing down, and between being overdrawn and not. Anyone who works an overdraft will know the difference between being availing of it and not.

Deputy Heather Humphreys

That is fair enough. I have worked on the other side of it.

Deputy Robert Troy

So have I. The Minister stated that €116 million has been sanctioned for the scheme. At the beginning of November, approximately €45 million had been drawn down. Has she an up-to-date figure for what has been drawn down?

Deputy Heather Humphreys

No, the banks would not give us a figure for the amount drawn down on their loan books. The money has been sanctioned and is there for customers to take.

Deputy John Halligan

The future cycles of the PRTLI are referenced in the national development plan and a scoping of a future cycle has been undertaken by the Department of Education and Skills. Action has been taken by the Department of Business, Enterprise and Innovation and by the Department of Education and Skills to fund the main elements of the PRTLI, such as research, building equipment and structured PhD programmes. The €2 million supplementary allocation will be used to pay off some of the remaining Exchequer commitments. The outstanding cumulative Exchequer commitment for cycle 5 of the PRTLI is €3.042 million, following the payment of €2 million. The institutions that will benefit most from the allocation will be Dublin City University, University College Galway, Maynooth University, Trinity College Dublin, University College Cork, University College Dublin, University of Limerick and Technological University Dublin.

Deputy Robert Troy

A total of €3 million remains to be delivered under the cycle 5 programme.

Deputy John Halligan

Yes.

Deputy Robert Troy

Is there a timeframe for a future programme or will the Minister of State say only that it is in gestation?

Deputy John Halligan

I do not have a timeframe for a future programme. We are aiming to do what we are doing with the €2 million to pay off the commitment. It would be wrong of me to tell the Deputy we have a timeframe because we do not have one.

Deputy Robert Troy

I thank the Minister of State for his honesty.

I take it that the IDA Ireland savings will not have an effect on any potential foreign investment, although I am sure the Minister will clarify that. Has her Department ever considered introducing multi-annual budgets for the IDA as opposed to an annual budget? It would alleviate the need to divert money from its budget at the end of year where it is not spent, and would give the IDA better certainty in planning for future development. It would know exactly what level of funding it had over a multi-annual period. There are many regions, and any of us could identify projects in our constituencies that could be delivered. The IDA will always state it has a defined budget and must adhere to it. At the end of the year, however, some of the agency's money will be reallocated to other projects, which a multi-annual budget might prevent happening in the future.

Deputy Heather Humphreys

I agree that a multi-annual budget would be preferable for the IDA and that it is difficult for the agency to plan. Nevertheless, the money for this year has not been spent and it will receive the money when it needs it. The Department has made a commitment that when the IDA needs the money to fund a building programme, it will receive it. Public accounts are controlled on a cash basis and to change that would be a matter for the Department of Public Expenditure and Reform. That is the way that public funding operates. My Department's budget is subject to the annual Estimates process, although the national development plan sets out our capital allocations until 2022, which gives some certainty. Even though the IDA cannot spend the money this year, it will certainly receive it when it needs it.

Deputy John Halligan

The IDA gives indications on a two-year basis as to what it may require, although that is not always accurate.

Deputy Robert Troy

I acknowledge that the IDA will publish its new plan in the new year and will outline what it wants to do. We all meet representatives of the agency in our constituencies and they often give the same reason for their inability to make important investments. I refer, for example, to Mullingar, where an IDA park lies almost empty. If the €2.1 million was invested there for an advanced manufacturing factory or a hub ready for future investment, it would be most welcome. The issue needs to be examined. In fairness to the Minister, she stated it is a matter for the Department of Public Expenditure and Reform but it is up to her to push that Department to try to change the direction. It would be beneficial for the IDA in future.

Health and safety in the workplace is critical. Will the Minister confirm that the savings at the Health and Safety Authority will have no impact on the work it does and that it will not compromise the health and safety of any employees?

The Office of the Director of Corporate Enforcement has undergone many hours of discussion by the committee in respect of critical legislation and of the essential information the committee needs to advance that legislation. The office has to do a great deal of work.

Anybody looking at the Football Association of Ireland at present would wonder how, in the name of God, €1 million can be diverted from an office that has so much important work to do. The reason is the lack of progress in key legislation. I know the Minister is not holding it up but we should use this opportunity to highlight the need for the information required by this committee to advance the legislation.

There are savings of €8 million with Enterprise Ireland. Will the Minister outline to us a little further where Enterprise Ireland generates its own resources? Why is there a slowing down in drawing down supports that Enterprise Ireland makes available at a time when so many of our businesses are facing the Brexit challenge? One would expect an increase in the demand needed for Enterprise Ireland supports.

There are savings of €500,000 with the Competition and Consumer Protection Commission, CCPC. This is the agency to which the Minister has referred matters relating to the insurance industry and requested an in-depth audit into practices. That agency's representatives have come before this Oireachtas committee in the past quarter and have indicated the commission does not have sufficient powers and particularly sanctioning powers. When will we consider giving this body the powers it requires, particularly at a time it is conducting invaluable work in the consumer interest? How can we justify taking €500,000 from its resources at this time?

Deputy Heather Humphreys

The Enterprise Ireland savings of €8 million essentially arise as a result of that body generating its own resource income in the year beyond that sanctioned by the Department of Public Expenditure and Reform. It is a result of slower than expected drawing down on a number of Enterprise Ireland programmes. Enterprise Ireland also invests equity in companies and when they become profitable, the money comes back to Enterprise Ireland. The body received an increase in its budget last year and it was not able to spend all the income. It had to use its own resource income first and there was therefore a surplus. I was able to move it to other pressing needs.

The savings in the Health and Safety Authority, HSA, arise as a result of delays in filling new staff posts. There is a very competitive recruitment market. Nevertheless, the increases in funding provided to the HSA have enabled it to recruit 13 additional staff, with a number of other positions currently being filled. The money is there but unfortunately the authority has not been able to get all the staff it wants. The resources are available and as soon as staff are recruited, the money will be made available. The authority is having problems because we are at full employment and it is finding it difficult to get people.

Deputy Robert Troy

Is it accurate to say the Health and Safety Authority is not at its full complement of staff?

Deputy Heather Humphreys

It has recruited 13 additional staff and there is money available when staff for new posts are recruited. It is finding it difficult to recruit people.

Deputy Robert Troy

How many posts remain vacant?

Deputy Heather Humphreys

There are two vacant posts.

Deputy Robert Troy

What is the full complement of staff?

Deputy Heather Humphreys

I do not have the figure to hand for the full number of staff in the HSA.

Deputy Robert Troy

I would appreciate it if the Minister could revert to me on that.

Deputy Heather Humphreys

I will revert to the Deputy with the number. It was looking for 15 staff and it has recruited people for 13 posts. There are two posts to be filled. There may be a timing issue as well and some people may be coming on board, leading to this underspend.

There was a saving of €1.4 million in the Office of the Director of Corporate Enforcement, ODCE, and I gave extra money to it last year specifically in anticipation that the legislation mentioned by the Deputy would be passed and it would be able to employ extra experts or specialists to deal with this forensic accounting. The work done by the office is quite complex and its staff do it very well. There have been delays in enacting the legislation to establish the new agency and the committee is very familiar with those. When the pre-legislative scrutiny is finished, I will be ready to go. We must get the committee's report before we can go any further. I cannot do anything about this until the report comes from this committee. We are ready and stand waiting to deal with that. Another factor in this particular saving was that the provision included in the original Estimate with respect to legal costs was not fully required. Sometimes legal costs do not materialise in a particular year.

There are savings of €500,000 with the CCPC, which essentially arise as a result of expenditure on pay being less than estimated, which is mainly due to the significant staff churn in the CCPC. All these agencies are the same as businesses across the country, in that they are competing for talent. I have offered more resources to the commission to help it carry out the study of public liability insurance mentioned by the Deputy so it is a matter for it to try to recruit the people it needs. We are here to support the commission in that in any way we can.

The Deputy asked about the powers of the CCPC. It currently has a wide range of investigative powers provided for in the Consumer Protection Acts 2007 to 2014, the Competition Acts 2002 to 2017 and relevant statutory provisions made under those Acts. It may also investigate suspected breaches of Articles 101 and 102 of the Treaty on the Functioning of the European Union. The powers of the CCPC were increased significantly by both the Competition (Amendment) Act 2012 and the Competition and Consumer Protection Act 2014. For example, there are powers to consider commitments by undertakings to be rules of court and extended elements of the Criminal Justice Act are to apply to serious competition law offences. Very high penalties already apply to criminal offences under the Competition Acts. For example, there are fines of up €5 million or 10% of turnover, whichever is the higher, for an undertaking, and up to ten years in prison for a person, or both.

The Empowering National Competition Authorities, ECN+, directive is due to be transposed by 4 February 2021, and it will give the CCPC additional enforcement powers, including the introduction of non-criminal fines for breaches of European Union competition law. It is my intention to transpose the ECN+ directive by means of primary legislation and I am considering further provisions for inclusion, subject to advice from the Office of the Attorney General. Any additional measures will be reviewed with due regard to the recent recommendations of the Law Reform Commission report on regulatory powers and corporate offences.

Deputy Robert Troy

The Minister is acknowledging that she will make changes and increase the CCPC's powers in due course.

Deputy Heather Humphreys

Yes. That will happen with the transposition of the EU directive into Irish law.

Deputy Robert Troy

It is not me saying it has inadequate powers but the commission's own staff when it appeared before this Oireachtas committee.

Deputy Heather Humphreys

It has many powers but it will get more.

Deputy Robert Troy

The Minister said the commission will get any resources it requires to complete the forensic study of the insurance industry. Has it indicated a timeframe on reporting on the completed study?

Deputy Heather Humphreys

I have asked the commission to do it as quickly as possible. I also said it could have whatever resources it needs to employ more people. The commission is working on it currently and it has indicated it will take some time to do an in-depth study. I do not have a timeframe, although I thought we might have been a bit further on with this. It has much work to do on it.

Deputy Robert Troy

The commission has not given any timeframe. The Minister can appreciate that this matter is crippling many small businesses.

Deputy Heather Humphreys

I know, that is why I commissioned the study. We had taken a number of other measures and the next logical step was to review this particular area. The study has commenced. I understand that a procurement process was launched to seek the services of external consultants. To expedite delivery of the study, these consultants will supplement the CCPCs in-house expertise. The CCPC has advised that the study is a priority and that it will be concluded as soon as practicable. The CCPC is an independent body, but I have made it aware that my Department is available to support it to complete the study as soon as possible.

Deputy Tom Neville

In regard to the IDA Ireland savings of €2.1 million, where are we at in terms of IDA growing our footprint in the Asia-Pacific or Oceania countries and fostering industrial development within those economies? I would like an update from the Minister on where these savings will be used and where we are at in terms of expanding into Asia.

Deputy Heather Humphreys

Asia-Pacific is an important region for us. In terms of trade missions, I have visited the region more often than any other.

Deputy Tom Neville

That is good news.

Deputy Heather Humphreys

There are 100 additional Enterprise Ireland and IDA Ireland staff working in offices throughout the world. I have visited Australia, New Zealand, Japan, China, Hong Kong and Singapore and a new office has been opened in Vietnam, which is an area of opportunity. IDA Ireland is diversifying its resources in that area. It has excellent staff on the ground, who work closely with the embassies and Enterprise Ireland staff. It is a team Ireland effort in that region, where there are many opportunities. We are seeing the benefit of the increased focus on this market as the Chinese market is now opening up for Irish beef exports. That is important. Many of our pig producers export into this market as well. We are progressing the work to deepen our links in the Chinese market. While in Singapore, I met representatives of a particular company that exports 20,000 ducks per week to that market. There are many opportunities there, particularly in the food space but also in ICT. When I was in Japan I visited the fintech sector. I understand that the Japanese banking system was closed for a long time and that it had not embraced the opportunity of new technologies. During my visit, we were able to introduce them to many wonderful Irish companies that are bringing solutions in the fintech space. We have a new Ireland House in Tokyo, which will comprise staff from IDA Ireland, Enterprise Ireland, the embassies and an attaché from the Department of Agriculture, Food and the Marine. There will also be a departmental official in Beijing. There is a great deal of focus on this area, where there are many opportunities.

Deputy Tom Neville

While I support the work outlined by the Minister, I would like to see more work being done in the Asia-Pacific region. We often see headlines regarding businesses seeking opportunities in other countries. We need to grow our global footprint in the wake of Brexit. Having worked in Australia I know that the Asia-Pacific region poses a huge opportunity for this country in terms of exports and foreign direct investment, which will foster more jobs and solidify our economy. We need to be focusing on where we want to be in the next ten to 15 years. I believe the Asia-Pacific region presents huge opportunities for Ireland. I thank the Minister for her update.

Deputy John Halligan

Many of the IDA staff operate from our embassies such that they have close association with Irish businesspeople and Irish communities in those countries. The Asia-Pacific strategy is led by the Department of Foreign Affairs and Trade, which does an excellent job. I have also visited China and Japan, where the influence of Ireland is notable. There are also 420 collaborations through Science Foundation Ireland in many countries across the world, including Asia, South America and so on. The Irish footprint is developing strategically well in these areas. As I said, IDA Ireland and Enterprise Ireland operate from the embassies as this gives them a foothold and closer association with the Irish communities in the those countries.

Chairman

Before we conclude, I have a question on subhead A15 - the humanitarian relief scheme. While the budget for this scheme was the smallest, from a humanitarian point of view it is probably the scheme that had the most effect. I note the scheme provides humanitarian support for small businesses and community, voluntary and sporting bodies which experience flood damage and have been refused flood insurance. Am I correct that this is a new area for the Department? It is important that businesses or community and voluntary bodies whose properties have been damaged following a flood can access insurance cover and so this scheme is very welcome.

Deputy Heather Humphreys

This scheme was transferred from the Department of Defence to my Department. We work with the Red Cross in regard to provision of assistance. It is a dedicated funding line and we stand ready to provide emergency support when needed. The maximum contribution under the scheme is €20,000, to restore a business premises or community, voluntary and sporting body property to its pre-flood condition. Thankfully, to date there has not been much call on the scheme this year. However, we stand ready to do so. A number of businesses in Donegal required assistance following the last storm and we were happy to be able to assist them. We do this work in conjunction with the Red Cross, which has been excellent in rolling out the scheme.

Chairman

Obviously, the funding is allocated on a case-by-case basis. If the demand was greater next year, would the Department be able to meet it?

Deputy Heather Humphreys

Yes. The scheme is demand-led and if more funding is required it will be directed to it. Hopefully, the weather will not be such that any further damage will be caused. Nobody wants to see that happen. It is terrible for see what flood damage can do to a business.