I move amendment No. 8:
In page 6, subsection (1), line 8, to delete "assigned to" and substitute "vested in".
This amendment is proposed simply to maintain alignment with the 1993 Act, where powers are vested in Forfás and then assigned to the agencies.
Amendments Nos. 9, 12 and 13 are related and may be discussed together, by agreement.
I move amendment No. 9:
In page 6, subsection (1), line 14, after "Minister for Finance" to insert "a copy of which scheme shall be laid before each House of the Oireachtas as soon as may be after the making and sanctioning thereof".
Section 6 (1) refers to a scheme which would be drawn up by Forfás and the agencies sanctioned by the Minister, with the concurrence of the Minister for Finance. This amendment is in line with the principle of amendment No. 3, which I proposed and which the Minister was good enough to accept. This amendment makes the same point and would ensure that the nature, terms and conditions of these schemes will be known to Members and the public. Because this amendment is so similar to amendment No. 3, which has been accepted, I hope that the Minister will accept this one also, as the principle is the same and it should not cause undue difficulty.
It is important that these schemes and their precise terms and conditions be publicly known. What is being proposed under this section is something doubtful. I am not sure that I agree with it, because there will be no proper accountability. That is why I propose, with amendment No. 13, that full details of the investments and loans given will be published in the annual report of Forfás and of each of the agencies and that the Minister will be accountable to the Dáil for all such investments or loans. The statements in the annual reports should include information on the beneficiaries of all such investments and loans and the use to which the moneys are put. However, I take it we will deal with amendment No. 9 before I move amendment No. 13. As far as amendment No. 9 is concerned, I hope that the Minister will accept it because of its similarity to the earlier amendment.
I take a different approach to amendments Nos. 9 and 13, in that amendments Nos. 12 and 13 look for a lot of details. I will come back to that when they are moved. I accept the Deputy's point in relation to amendment No. 9. What we require to be provided publicly is the scheme under which the establishment of investments and such funds is operated, so that Members can view the terms of reference of such funds and satisfy themselves as to the prudential approach being taken and the manner in which risk is being shared. That knowledge should be in the public domain and I accept Deputy O'Malley's amendment No. 9.
When it comes to the details of each and every investment that might be undertaken in the myriad of small investments that might emerge from these funds — which are joint funds, combining both the Exchequer and other private parties — that is not a general requirement I would be disposed to agree to. What I can say is that, like other funds, they should have a report on their success and their performance and whether they are showing adequate returns. All those things are, rightly, in the public domain. When one gets down to the details of each and every case that comes for venture or seed funding from a joint venture seed fund, it is not a reasonable or necessary item to be provided in the way the Deputy seeks.
Arising from the fact that the Minister has been good enough to accept amendment No. 9, I put it to him that it is logical and in the same spirit to accept amendment No. 13 also. While amendment No. 9 will ensure that the overall schemes are published, it is necessary to give details of these investments. I remind the Minister that, under the 1986 Act and earlier industrial development legislation since the early 1950s, all grants or other investments — loans or equity — which an agency such as these made has to be published in the annual report of that agency.
Deputy O'Rourke and other Members argued on Second State that one should not have to wait until the annual report is published, because these reports are sometimes delayed for a long time. For example, if an investment was made by the IDA on 1 January 1994, the public would not become aware of it until the publication of the 1994 annual report, which might not be published until near the end of 1995 — nearly two years after the investment is made. Even allowing for that kind of delay, the information should be published eventually.
I do not see how the Minister can distinguish a grant given to a company, which has to be published under existing legislation, and a grant, investment or loan given to one of these funds for the advancement of industry and technology in the State. If one has to publish details of a loan, grant or equity investment in a company, how can the Minister justify not publishing it if it is made to a fund or body for the advancement of industry and technology or the development of a particular sector of industry? I do not see how the Minister can distinguish between the two. The need to publish information in relation to these general funds is at least as great as it is in relation to individual companies.
I expressed on Second Stage my concern about investments in these vague and non-specific bodies for which there would be no accountability. I will oppose the section unless the Minister accepts this amendment or something along its lines, otherwise we will have no accountability.
On Second Stage, I also expressed the fear that moneys paid into these vague funds or bodies could be hidden or cloaked in various ways and I gave some instances, which I need not repeat, of how that might be done. Certain people who wanted to acquire substantial investments in their companies could do it more easily through one of these funds, through which it might be difficult to follow the money. A person could then become a beneficiary without the public or the Dáil ever becoming aware of it.
For that reason, I ask the Minister to accept amendment No. 13 to make it necessary to publish these funds, to specify the beneficiaries — the present arrangement does not make this clear — and the use to which the money was put.
I move amendment No. 10:
In page 6, subsection (2), line 17, to delete "the Agencies" and substitute "an Agency".
Without my amendment, the provision does not make sense. The power conferred on Forfás by section 1 shall, in relation to a specific scheme or schemes, be assigned to and exercised by an agency. The two agencies together cannot exercise the power.
The agency in question at that time is what is meant.
Yes. I wish to substitute the words "an agency" or "the appropriate agency" or some phrase like that.
I am happy to accept the Deputy's amendment.
I move amendment No. 11:
In page 6, subsection (4), lines 27 and 28, to delete ", partnership or other body" and substitute "or partnership".
The section applies to a body which is a body corporate, partnership or other body. I cannot imagine what it could be other than a body corporate or a partnership. Another body could only envisage some kind of statutory body or something of that kind and for that reason I suggest that this should read as it does in my amendment.
That is too restrictive in that one of the possible vehicles where there is interest is the concept of a trust as a possible vehicle. I am not disposed to accept the restriction that the Deputy is putting forward because it would possibly limit the scope of this measure unnecessarily.
A trust would have to be formed either as a body corporate or as a partnership, would it not?
My understanding is that it would not.
What other form could it take?
I understand that the business innovation fund is established as a trust and is not a body corporate.
Are you pressing the amendment?
This is our interpretation but we will make sure that we are correct in our interpretation.
Perhaps between now and Report Stage the Minister could send me details of how this business innovation fund is constituted.
I will do that.
I move amendment No. 12:
In page 6, between lines 31 and 32, to insert the following subsection:
"(5) Forfás's power to make investments in certain bodies will be subject to an annual order by the Dáil.".
I await the Minister's comments on that amendment. While amendments Nos. 9 and 12 deal with two separate issues, they are essentially the same type of amendment.
If the Minister looks at amendment No. 14, he will see that the thrust of amendment No. 13 and what I have in my amendment concerns accountability, transparency and openness, admirable traits and characteristics which should infuse all Dáil and business activities. Sadly, they do not.
In the seven months I have been the Fianna Fáil spokesperson on Enterprise and Employment, I have found great difficulty in getting accurate facts about IDA, Forbairt — I have not asked too much about Forfás — concerning the money and jobs provided, the clawback if the jobs are not provided and other details which should be in the public domain. Every time I ask this question, the Minister tells me it is not his business but that of the agency in question who is not able to release these facts for reasons of confidentiality.
These agencies are being given huge amounts of money. Nobody is saying that anything untoward is happening to that money but why are we not given the facts about the number of jobs on which that money was based and the number that failed to live up to the rosy promises? If I ever became responsible for those agencies, I would ban all these heady and optimistic forecasts. While we would love these jobs to materialise, they never seem to come to fruition. There should be an audit of what happened and perhaps then we may find out why these promises have not been realised. There may be an adequate reason, but I dislike raising people's hopes and then dashing them. Parents will ask me, when they hear a factory is being proposed for their region, if their sons or daughters can get a job in it. The Minister knows that not all of these jobs referred to in the initial press release will come about.
I want to know, pro bono publico, to what use this money has been put and if we can we have a full account of it? This is in the interest of openness, transparency and accountability, which were very much trumpeted by this Government.
It is interesting to hear Deputy O'Rourke sing a completely different tune when she is out of Government.
Deputy Broughan was in Government with us. Does he not remember those days?
I do.
The Deputy's Minister brought this Bill forward.
And I remember some of the heady announcements she made.
I never made them but the previous Minister for Enteprise and Employment, Deputy Quinn, made them endlessly. The Labour Party was in that Government as well so Deputy Broughan need not try that stunt.
Both of them worked well together. I came up through the local enterprise movement and I welcome the tenor of this Bill and the development which this Minister is bravely implementing. Deputy O'Malley and Deputy O'Rourke seem to forget the commercial realities. We are expecting a developing new enterprise with State input to behave in the most competitive and commercial way possible. The Minister has covered this sufficiently in the Bill. The Labour Party attempted to get the concept of State investment off the ground but we were hindered at that stage and the incoming Fianna Fáil-Progressive Democrats coalition dismantled it.
We should be aware of commercial realities. I wish Forfás and the new county enterprise boards well in what they are attempting to do, but we should not expect them to play on a different pitch from that of normal commercial developments.
A range of different issues has been raised and I will try to deal with them in order. I agree with Deputy Broughan that this is an exciting and new departure.
Essentially it is a new approach. What we are seeing is the establishment of seed and venture funds jointly funded both from money put in by the agencies on the one side and private sector money on the other. That is the type of vehicle we have in mind. In Opposition, I was always keen to see proper reporting of the performance of State money. In accepting certain amendments, I am agreeing to proper performance reporting on the agencies' investment in such funds. I have, therefore, agreed with Deputy O'Malley that the framework of the scheme will be available to Deputies. I am also willing to accept the first part of his amendment where he seeks to have details reported of what moneys the agencies put into these funds. I am not willing, however, to provide that I would be accountable for or report the decisions taken by those newly established joint venture funds on their specific investments. That is not my role and I am not accountable even for the day-to-day operations of Forbairt or the IDA, let alone the day-to-day operations of such a fund that will be established.
I accept the first two lines of Deputy O'Malley's proposal. I propose that in their annual reporting they would not only provide Deputies with the framework within which they put money into these funds and the amounts they put in, but also that they would report on the performance of the fund just as other such funds would report. They would report the broad sectoral areas where money was invested from the fund as well as reporting the financial performance of the fund in terms of value for money put in. I cannot agree, however, to the suggestion that we should get into answering questions in the Dáil which would be totally at variance with any former practice. It would also be at variance with the legislation under which these agencies were established.
This is day to day activity and it is not my role to report to the Dáil for them. I do not propose to go down that road. Perhaps Deputy O'Rourke is frustrated with not getting all these individual details included item by item. I can understand that when the time comes she would like to have that sort of reporting but that is not the basis on which we established these agencies and I do not propose to change that basis.
It must also be borne in mind that we are bringing in a private investor to jointly invest in funds which will be managed commercially. Just like other BES investments, where BES funds are reported globally, they do not report every individual investment and we do not propose to report every individual case of money being discharged jointly by a private financial agency and ourselves in respect of seed and venture. Public accountability demands that this should be properly managed within an accepted framework, that the State's exposure is not unreasonable, that risks are shared and that the performance of the fund is properly reported so that the Oireachtas can decide whether this was good use of public funds. That information can be provided to committees but I will not provide details of item by item investments from such funds.
I have not had a reply to my proposal that Forfás's power to make investments in certain bodies will be subject to an annual order by the Dáil.
It would not be possible to provide an annual order but, as I said, I can provide reports on the moneys going in. That will be included in their annual report. One cannot provide that each investment will be done by an annual order. Forbairt is involved and it has to get financial partners to become involved with it in the funds. It cannot have an individual vetting procedure of the sort the Deputy is seeking. Of course, the Oireachtas has the overall power so that where Exchequer moneys are involved these are voted moneys.
The Minister has now finally given me an answer to amendment No. 12. They are voted money on an annual, but global, basis. When the Minister brings forward his Estimates to the Dáil there is a sum of money under the subheading which is discussed and then either agreed to or rejected when voted upon. However, it is done in a global sense, there is not an individual capacity to each particular investment. In the circumstances, my amendment is very reasonable. The Minister is ultimately responsible to the Oireachtas for moneys voted by the Oireachtas but it is in a global and national sense, not in an individual sense. There is certainly a gap there and what I am saying is agreed by Members of all parties.
There is a general belief that we need to know more about what agencies are doing with their money and how they succeed in their statutory job creation, maintenance and development remit. There is general unease at the lack of accountability, not in the sense that anybody is doing anything untoward with those moneys but with the imprecise nature or lack of facts emanating from State agencies.
I agree with Opposition Deputies. There is usually a cloak of secrecy which makes it difficult to procure information about these three agencies either through tabling Dáil Questions or by other means including statements, raising issues on Private Members' time or on the Adjournment. I fail to understand why there cannot be a greater breakdown of their financial structure. As Deputy O'Rourke said, we usually see a global figure in the Vote or in annual reports.
We hear so much about job creation, including wild promises of 1,500 jobs by the year 1997 or by the next century. We should have a more realistic approach. It is time we announced job numbers relating to a particular year rather than claiming in newspaper headlines that by 1995 Leixlip will have 1,400 or 1,500 jobs, because that will not happen. The fact that many industrial projects never reach the announced target figure creates a lot of anguish in towns throughout the country. It is a sad fact that some of the prospective employees may well have passed away by the time the job target figure is reached.
This is not a Second Stage debate.
Investment in development funds aimed at particular sectors of industry is a risk area and reporting procedures and monitoring are very important. If the proper monitoring and procedures are not in place there is a risk to public funds. We have doubts, like industrialists throughout the country, as to where money has been invested and, where there has been a joint venture, where the funding was spent. Guidelines and accountability are very important and it is vital that the agencies should be accountable to the Dáil.
The Minister mentioned the BES. That is mainly in the private sector area and there is no public money involved in it as he well knows. Investment from the private sector is very welcome but this is a risk area and that is its nature, it is not public money. I would hate to have a scheme analogous to a BES scheme or schemes with money invested by the IDA or Forbairt or Forfás in the development area, because it would open up the floodgates in the public area and encourage the use of public money as venture capital
I am concerned about monitoring procedures. We have not had this type of commercial role and it is a dangerous area. Annual reports do not ever give in detail the full information on the subsidiaries, the profit and loss and what happened to the funding. I have grave reservations about that section, especially the phrase "this section will allow them to invest in development funds aimed at particular sectors of industry." It is not the business of the State agency to get involved in that risk area with public money.
Is amendment No. 12 being pressed?
I am not pressing it in the light of section 7, amendments Nos. 14, 15, 16 and 17 which seek to amplify the accountability process.
I move amendment No. 13:
In page 6, between lines 31 and 32, to insert the following subsections:
"(5) Forfás and the Agencies shall include full details of all investments and loans made by them or any of them in their annual report and the Minister shall be accountable to Dáil Éireann for all such investments or loans made or granted under this section.
(6) All such statements in an annual report as required by subsection (5) of this section shall include information as to the beneficiaries of all such investments or loans and the use to which such moneys were put.".
Amendment No. 13 to section 6 has already been discussed with amendment No. 9. Is that being pressed?
As I understand it, the Minister has indicated that he will accept the first two lines of subsection (5), that would be down to the words "annual report" I will accept that for the time being and we will look at the rest of it on Report Stage. Could I delete the bit that begins "and the Minister shall be accountable" down to the end?
Is that agreed? Agreed. On that basis, is the amendment withdrawn?
The amendment is made, the remainder of it is withdrawn.
The first two lines of subsection (5) in the Deputy's amendment have been accepted, the rest has been withdrawn.
The section was originally opposed. I assume you are not opposing this section now?
He is not opposing the amendments he had made.
In view of the fact that several amendments were accepted it would be ungrateful of me to oppose it.
Amendment No. 14 in the name of Deputy O'Rourke. Amendments Nos. 14, 15, 16, 18, 19 and 20 are all related and may be discussed together.
What about amendment No. 17?
We will take that separately.
I move amendment No. 14:
In page 6, before section 7, to insert the following new section:
"7.—Section 6 (1) of the Act of 1993 is hereby amended by the addition of the following paragraph——
‘(f) to lay before the Houses of the Oireachtas, when projects are announced, information on total grant-aid and any and all other benefits to be paid or given to companies by IDA Ireland, Forbairt, An Bord Tráchtála and such other bodies as the Minister may designate, and on a six-monthly basis to report on any amendments made during the intervening period to any of the grant/benefit packages for projects previously announced.'.".
Those amendments are an amplification of earlier discussions we have had here on various sections of the Bill. I will go over them briefly.
They are all related. Amendment No. 14 provides that "information on total grant-aid and any and all other benefits" be laid before the Houses of the Oireachtas "when projects are announced".
Amendment No. 15 makes provision for directors "to appear before an Oireachtas Committee, as designated by the Minister, to give information on the operations of Forfás, IDA Ireland and Forbairt, and each such Director shall be immune from prosecution". This arose on Second Stage and in parliamentary questions. I await the Minister's reply but I understand he was not averse to allowing appearances before Oireachtas committees.
The purpose of amendment No. 16 provides that "on a six-monthly basis from the passing of this Act, information on the grant claw-back and rent claw-back provisions agreed with" such companies be laid before the Houses of the Oireachtas.
The purpose of amendment No. 18, which relates to SFADCo, is to treat it in the same manner in which I wish IDA Ireland and Forbairt to be treated.
Amendment No. 19 provides that the directors of SFADCo "shall appear before an Oireachtas Committee, as designated by the Minister...". I was given to understand that these amendments would have to be separate.
Amendment No. 20 provides that SFADCo "lay before the Houses of the Oireachtas, on a six-monthly basis from the passing of this Act, information on the grant claw-back...".
This is an amplification of the debate which we had on earlier sections of and amendments to the Bill. It attempts to pin down my straightforward and justifiable wish to have more details of what is going on in these State agencies.
The Minister has already replied to most of those points. Perhaps he might like to——
They are more precise here.
In the first of these amendments, the Deputy is looking for more than could reasonably be expected.
Will the Minister go through them so that I will know to which one he refers?
Amendment No. 14 deals with laying "before the Houses of the Oireachtas, when projects are announced, information on total grant-aid and any or all other benefits to be paid" by all these agencies. Laying out those sort of details would involve considerable client confidentiality. Essentially, this is sensitive information regarding marketing, financial, research and development plans, which could not be released outside the agencies. Besides, we are in a competitive marketplace. IDA Ireland is competing in a competitive world and information about the packages which it might be offered is important. You would not want to reveal it and IDA Ireland would not wish to show its hand. The Deputy is looking for the detailed reporting of the negotiating mandate agreed in each specific case. That type of information has never been reported.
Essentially, we need to see information on performance. I am currently working on improving the reporting of goals and indicators of performance set for these agencies so that we can have meaningful figures on costs per job and performance in different areas. I am keen to see greater reporting on such aggregate performance indicators to give people the ammunition, if you like, for a meaningful debate about the performance of these agencies. Such information needs to be developed from a policy framework in order to get it into the public domain at the earliest possible time. That is not the case in relation to the information which the Deputy seeks.
On the question of appearing before an Oireachtas committee in amendment No. 15, clearly the Government is to legislate for the compellability of witnesses, which will provide that the Oireachtas can compel the appearance of public officials such as those to which the Deputy refers. It is clearly the Government's intention to facilitate the Dáil, where, in pursuit of the public interest, it wants to cross-examine such people. When that Bill emerges, as it will soon, we will have the vehicle to deal with this. It is not appropriate to provide for something in a sentence or two in this Bill which is getting careful consideration in a full Bill. That will, of course, have knock on effects. I am sure the Committee on Procedure and Privileges will look at the terms of reference of specific committees in accord with the new powers that are available to the Oireachtas.
I have no problem with the appearance of our agencies at committees. The chief executive of Forbairt, Mr. Flinter, has already appeared before the small business committee. In a short time, the Deputy will have the opportunity to deal with all this. It is the Government's intention to provide the Dáil with the powers to compel appearances. That is the direction in which we are keen to go but I do not see it as an area to be addressed in the Bill.
Before we leave that amendment, the proposed compellability of witnesses Bill is an entirely different matter. I do not agree with the Minister. The proposed compellability Bill involves bringing reluctant players whom the Dáil suspects, or has reason to suspect, of engaging in nefarious activities before a Dáil committee to explain their activities and how they impinge on whatever is under investigation at the time. We are talking about matters which were recently in the public domain, such as the beef tribunal, etc. I will not be fobbed off by including in that "to appear before an Oireachtas Committee". I am not impugning any nefarious activities to IDA Ireland, Forbairt or anyone like that. I do not accept and find it quite wrong of the Minister to put forward the proposed compellability of witnesses Bill as a mechanism for persuading IDA Ireland and Forbairt to attend committees. It is wrong to use it. They need not be compelled. I know what the proposed compellability of witnesses Bill entails because we went into it when we were arranging, as we thought, the rebirth of the partnership with the Chairman's party in those dark November and December days. It is certainly not about allowing IDA Ireland, Forbairt, FÁS or any agency to appear before an Oireachtas committee. Amendment No. 15 seeks to make it normal and routine for an agency, which has been voted large sums of money out of the public purse, to appear before an Oireachtas committee.
I was interested, and spoke about this before but it is worth repeating, that the Minister put this forward when in Opposition to the then Minister for Enterprise and Employment, Deputy Quinn. On that occasion, I remember he said that IDA was just a PR exercise. I do not go that far, it does valuable work but——
The Deputy is misquoting me.
I want to see its personnel before an Oireachtas committee and I cannot see why not.
It can and will happen. I understand the public accounts committee will be calling the precise bodies to which the Deputy refers. I have no problem with it but I am not putting it into legislation because the issue of immunity from prosecution is a matter for the Bill to which I referred and the issue of arranging the terms of reference of different committees is a matter for the House.
I can stop at "Forbairt" then. I was only trying to be helpful by adding that "each such Director shall be immune from prosecution...". I accept this, if the immunity of witnesses is to be a matter for the proposed compellability of witnesses legislation.
I will not agree to an unnecessary, out of place amendment. There is no problem with our agencies appearing before committees. As soon as the House organises itself to have such appearances, we will provide them. The Public Accounts Committee calls them; they appear and we are happy with this. If an issue arises whereby the Committee on Procedure and Privileges changes the order of reference for this or some other committee to include activities other than those now in force, I would be happy with that. However, it is a matter for the House, it is not a matter for primary legislation.
They have always appeared before the PAC.
They will appear before any committee——
The Public Accounts Committee does not have the wherewithal to ascertain the necessarry information.
There is no problem——
The Minister is not quoting from the proposed compellability of witnesses legislation.
We are getting into an argument here. We will not make any progress if we proceed on this basis.
I resent the Minister attempting to refer me to the proposed compellability of witnesses legislation as a conduit. The Minister advised that witnesses could appear as soon as the proposed legislation was enacted. I take exception to this because I am aware of the proposed legislation and it is not concerned with the IDA, Forbairt or FAS appearing before a Oireachtas committee.
The proposed compellability of witnesses legislation is relevant to this issue. The Deputy is proposing an amendment to industrial legislation to provide immunity from prosecution for certain people which will be provided for in this legislation.
The Minister is changing his tune.
On the broader issue of agencies under my Department appearing before Dáil committees, there is an open door policy. We are happy for them to appear. There is no necessity for amendment in legislation. They have appeared in the past, for example, they appeared before committees of which I was a member. They will appear before the Public Accounts Committee and before any other committees that the House so orders. They have appeared before the Oireachtas Joint Committee on Small Businesses. I am happy with this situation, but I am not disposed to accept changes in industrial legislation for something that the House has the ability to order.
I am very disappointed, especially given that an attempt was made to fob me off by referring to the proposed compellability of witnesses legislation. I know my business and I do not appear before an Oireachtas committee without having done my studies. The Minister did not reply to amendments Nos. 16, 18, 19 or 20.
The Minister is only required to answer the points raised in debate, not to answer each amendment. They were grouped for discussion. They are all your amendments, Deputy, and you have proposed them on a group basis. The Minister replied to your questions. We will not have a debate on each amendment.
I put forward each amendment.
If any questions have not been answered by you, Minister, I suggest you answer them. However, I will not allow a debate on every amendment, having grouped them for the purpose of discussion.
With regard to amendment No. 16, the provisions vary depending on each specific grant agreement made. However, the broad principle is clear. Essentially, these are claw-back clauses, where if the project in question does not achieve a certain job target it will have a claw-back clause. These are a feature of all grant agreements I have seen. However, specific schemes would be varied by the agency depending on each case, so there is no general scheme that I could lay before the House. There are only the individual schemes negotiated in the same way as other packages. It will have been seen in the beef tribunal how they work in principle: They claw back, but there is not a model clause that is applied in each case. It varies from case to case, and in the same way as in the earlier amendment, it gives rise to exposing the details of individual negotiations.
What happens when a company withdraws?
When a company withdraws, the claw-back is triggered and one recovers so much per job that was achieved.
However, this is not done, and the Minister is aware of this.
What about the situation where a company closes down for market reasons but is still solvent?
In general, such claw-back clauses would be secured on a parent company, so that they could be drawn down and called upon. It would be a provision to an agreement, whereby one would not have the claw-back clause applied to a subsidiary that could disappear. This is part of the negotiating mandate that IDA Ireland or Forbairt, as the case may be, take on. They fill in the details of a general claw-back, and negotiate the principle of claw-back in detail in each case to secure their investment as best they can. However, it is not the kind of situation whereby one can set down a scheme that applies in every case. It can only be done in individual cases, and one is then getting into matters of the individual confidentiality of the case.
I accept that there is no universal claw-back scheme that one can say is suitable for every project. The Minister advises that the claw-backs are invoked and paid. Where is that money allocated? Is there a subhead for inclusion?
If an independent company is solvent and fails to perform, the money is recovered directly from it.
Where does the money then go to?
It goes back into the agency. It would count as own resources in the agency. When the accounts of the agency appear before the committee when it is considering the Estimates, so much would be in respect of voted moneys and so much in respect of own resources. They would include rent recovery, recovery of preference shares, recovery of grants that were paid and recovered, rent on property that they lease——
I understand rent on properties. However, in many cases the grant claw-back per jobs not realised is not fully invoked. There should be a mechanism whereby if the job targets are not realised there should be some reportage of this, with the reason, the amount of moneys involved and when they were paid back.
The term "own resources" is misleading, for example, I always understood it to mean moneys they generated themselves. There should be a specific part of the annual report which states, under a subhead, from where the sources of the own resources derive. Targets are not always realised.
It is individually illustrated. If one looks at the Estimates, one will see grants recovered as a line in the——
I understood the Minister advised it was under own resources.
That is correct, but it is a separate subhead.
It is a separate subhead of grants paid back.
Exactly.
It is the claw-back of non real job realisation or whatever term it is given.
Yes.
Is the value indicated?
Yes. There is a separate subhead to show how much moneys were paid back.
Surely it is a short step from this to knowing what firms did not realise their job targets?
It is not an issue we would report normally. The agencies normally report what they have paid to date and what they paid in the year. I presume they also report the companies from whom they recover grants.
To whom?
In their annual reports. It is not in the Department's Estimates in the detail to which the Deputy refers.
I do not think they report firm by firm.
I am anxious to provide aggregate performance indicators, such as the comparison of job targets against realisation. We should have some aggregate reporting broken down by sector so that we can see our investment perform in certain sectors. I am in favour of that. However, I am not in favour of getting company by company reports where one is putting into the public domain material which is not part of the essential reporting of performance.
At present, we are trying to evolve indicators. I am not persuaded this is a crucial indicator. Any agency will have failed investments and they are clawing back in respect of those. We should not add to a reporting burden if it is not already being done. I will check exactly how they report the grant recoveries. I do not have the information to hand.
I am anxious we do not have a Second Stage debate. The amendments are to be discussed as a group and we cannot have a debate on each amendment individually.
This is all about accountability and transparency — words which the leader of the Minister's party uses. We have been more broadminded but I fail to understand why we cannot have the information. It is important for those working in the agencies as they will find their cheques unpaid.
Amendment No. 17 is to insert a new section. It states:
The Minister shall from the passing of this Act prepare an annual review of national industrial performance in respect of the previous year and of national industrial policy and shall cause the review and the conclusions arising therefrom to be laid before the Houses of the Oireachtas each December.
I am not particular about the month in which the report is laid before the Oireachtas. This is a development of what the Minister says he intends to do — to work out indicators of industrial performance and to see which sectors were performing well. The Minister made the point that they could then be tailored into how one would view the requests for grant aid for particular new industrial developments.
This group of amendments is not based on punitive measures for non-performance. Creating jobs and encouraging industry is a risky business. Not every target for jobs can be met. The purpose of the amendments is twofold — to give more openness and transparency and to ensure we would know which sectors are worth supporting. Amendment No. 17 would allow for a review of industrial performance and policy. It is a necessary amendment.
This amendment is non-political and the Minister should accept it. It allows for a review of what has happened in the past year. From the taxpayers' point of view it is important a comprehensive review would be made available to the Houses of the Oireachtas.
We must develop reasonable indicators so that we know what is happening. They would be general, aggregate indicators which would be available for parliamentary questions relating to aggregate performance and the policy aspects of performance of these agencies.
However, that is different from a triennial review of industrial policy——
We get letters from the Ceann Comhairle telling us it is not a matter for the Minister.
Day to day issues are not a matter for the Minister but——
The Minister provides the Vote for them.
Precisely. There is a distinction between the day to day man- agement and what Deputy O'Rourke is interested in, the reporting of the policy performance for the Exchequer's money.
That is the concern of this amendment.
We would tie up our agencies too much if the triennial policy review became an annual review. It would tie up resources in detailed evaluation of programmes involved in such a review. We should have access to proper headline indicators of performance so we can have a realistic debate on the success of these agencies and see what is happening. The information would be available for Deputies to address the issues.
I am not keen to agree to an annual detailed review of national industrial performance to which we are committed on a triennial basis. I see no merit in doing that yearly as it would wrap up the resources of the Department and the agencies in reporting on what they are doing instead of getting on with their work. We need to ensure there are proper indicators which are routinely collected and available for scrutiny by Deputies. I am not disposed to accept the amendment but I am keen to see the development of meaningful indicators that would give the Deputy the information she wants.
The Minister is making a mistake in not accepting amendment No. 17 but, of course, we do not have the numbers to oppose him. He is telling us that he will not give us an annual report of the IDA because the Department is too busy.
That is not what I am saying. There will be an annual report of these agencies——
An annual review of national industrial performance in respect of the previous year?
That is different.
The Minister is influenced in this matter by his departmental officials and by the IDA which does not wish to be bothered by annual reviews of industrial performance. Three years is too long a period in which to try to influence policy and change direction. It could occur during a change in Government or in Ministers which we recently witnessed. I would like an annual review of national industrial performance. It is not good enough for a Department or an agency to say they are too busy and to come back in three years.
I am disappointed and surprised at the Minister. I thought he shared my wish to see greater reportage, openness and transparency in the operation of State companies. I am disappointed at how quickly he has become entrapped in officialdom which tells him what can and cannot be done. It is like an episode of "Yes Minister". The Minister was — and I am sure still is — inventive and creative. He should not become too tied down by official jargon which is endemic in all Departments. I had a good relationship with all the civil servants in each of the Departments in which I worked. However, I have always been conscious of and kept a distance from officialdom. While what is said is not gospel the Minister has the right to write his own gospel and had a chance to do so. I am disappointed by the Minister's attitude to my wish, that of my party and the citizens for more transparency.
I express my disappointment at the Minister who was innovative and came up with many wonderful ideas in Opposition. Obviously, the status quo prevails and after seven months he is going in the other direction. In his opening remarks he referred to confidentiality and the IDA. We all recognise the difficult job the IDA and other State agencies have competing abroad in trying to procure industry. However, there must be a certain amount of openness. The citizens and the taxpayers are entitled to know what is happening. There is no point sheltering behind confidentiality. At one time we all knew the amount of grant aid available to a firm or a company, but is now left to the Cabinet. If a Minister is friendly with a TD on the Government side, we know who will make that announcement and how it is professionally leaked.
The Deputy did it himself in his day.
We will leave parochial politics out of this.
Cork is a large county. I would like to see more openness on the part of the IDA and a greater dialogue with Members. It has a diffident approach which is not good enough. While I realise the difficulty it faces in that it must compete with the Northern Ireland, the Scottish and the Dutch industrial development agencies, more information should be available to public representatives, in particular.
I move amendment No. 22:
In page 7, before section 9, to insert the following new section:
"9.—No stamp duty shall be payable on any disposals, acquisitions or any instrument under which any land, property, easement, way leave, water right or other right whatsoever over or in respect of the land, property or water is acquired or disposed of by the Company, Forfás or the Agencies.".
Acceptance of this amendment would involve the deletion of section 9.
I do not see why we would give an exemption from stamp duty to a private party purchasing assets belonging to a State agency which would not be available to purchasers of assets from any other bodies.
What about acquisitions?
That is in the section. Deputy O'Rourke is adding "disposals".
As distinct from "acquisitions".
The rationale for giving State agencies exemption from stamp duty is essentially money from one pocket of the Exchequer to another. I see no sense in giving the same concession to a person from the private sector who had the good fortune to buy from a State agency as against a private agency. We are giving a windfall to people who buy from State property as against private property. It is handing State money to certain purchasers.
Amendments Nos. 24 and 27 are related and may be discussed together. Is that agreed? Agreed.
I move amendment No. 24:
In page 7, subsection (4), between lines 25 and 26, to insert the following:
"(a) act as the co-ordinating body and a one-stop-shop in the county for all Government funded industrial, enterprise and employment initiatives including Area Partnerships, Leader Programmes, Back-to-Work Schemes,",
This amendment relates to the section dealing with county enterprise partnership boards. The Minister rightly used the opportunity to tidy up matters in the 1993 Act and to make progress on something new — the development agencies of the county enterprise boards. It echoes an earlier amendment but proposes that the county enterprise board should be the co-ordinating body for each county.
As we all know, there is massive duplication of agencies and initiatives and I do not exclude the previous Government in terms of agency building. However, a number of Ministers, including the Minister for Enterprise and Employment, Deputy Bruton, Minister of State, Deputy Rabbitte, Minister of State, Deputy Eithne Fitzgerald, Minister for Social Welfare, Deputy De Rossa, Minister of State, Deputy Gay Mitchell, Minister of State, Deputy Carey, Minister Yates and Minister Michael D. Higgins, are involved in developmental agencies and there is confusion on the part of people who seek information.
They may have an enterprise idea but they do not know whether they should go to one of the seven Departments which have responsibility in this area or the IDA, Forbairt, SFADCo, Leader, county enterprise boards, the Deparment of Social Welfare, area partnership schemes or Údarás na Gaeltachta. It reminds me of a nightmare jigsaw puzzle when all the pieces look as if they will fit together but do not interlock and the jigsaw is never completed. The person who loses out is the man or woman seeking ideas and support for their proposal.
Given the myriad Ministers and agencies and the complexity of what is on the menu for would-be entrepreneurs, the amendment offers the chance to establish one agency, in the form of the county enterprise boards, which would pull all the pieces together.
Perhaps Deputy O'Rourke could deal with amendment No. 27, which is related to amendment No. 24? The Deputy could explain her position and the Minister could then reply to both amendments.
The purpose of amendment No. 27 is to alter the terms of grant waivers or give moratoriums on repayments. The Minister has correctly chosen to give the county enterprise boards more powers and amendment No. 27 seeks to amplify the powers which should be given to the boards. Encouraging a grant mentality is not the best way to encourage enterprise because people try to work up sufficient activity to satisfy the requirements for a grant. I would prefer if a loan facility was available which could include a moratorium on the repayments or interest for a certain length of time. The county enterprise boards should have powers in that regard.
I support the amendments. The county enterprise boards are ideal vehicles to act as single agencies in each county. One of the problems regarding information is that most agencies are located in the back of buildings or do not have street frontages. People cannot just drop in and get the information. This aspect is a drawback and it also applies to the regional boards and the funds coming on stream at present, including IFI, INTERREG and the Delors package. In that respect, an office was provided in Monaghan for the Department of Finance which intends to expand beyond INTERREG to include IBEC and other agencies. A great benefit would accrue if there was a single agency, such as the county enterprise board, which acted as a one stop shop and had all the necessary information.
I have no problem with the amendment but it would meet considerable resistance from those involved in Leader and the area partnership schemes. I am a member of a county enterprise board and even at this stage we are faced with a certain amount of resentment from those bodies because the board appears to cut across their patch. This aspect may be difficult to overcome. Perhaps Leader and the other agencies should not have been established but they have taken root and they consider the county enterprise boards a threat.
The aim is to give a co-ordinating role to the county enterprise boards.
I appreciate the Deputy's point. However, it may create more problems that it is worth in relation to the back-to-work scheme. I am not sure the county enterprise boards should deal with that area since it is so closely related to social welfare.
I agree with the amendment regarding loans. This area was discussed previously in relation to the county enterprise boards and it may be much more beneficial to give loans rather than grants. What conditions does the Minister envisage regarding the granting of such loans? I appreciate this would not be included in the Bill but what is the Minister's thinking in this area?
What limits will be imposed on these loans? Will they come from the overall budget of the county enterprise board, which, in the case of the board of which I am a member, is approximately £0.5 million? Those aspects must be teased out. Who will have responsibility for administration and collection? Will there be a roll over benefit in so far as money coming in could be used for other areas or will there be a separate budget?
The county enterprise boards are very limited at present and if it was not for local authorities, they would not be up and running. They operate on a shoestring in relation to staff. These matters must be addressed if it is proposed to provide them with more leeway in terms of loans or, as Deputy O'Rourke suggested, as overall co-ordinating bodies for all the entrepreneurs in the area. We must consider the administrative budget of the boards; otherwise they will not be able to function.
I am sure the Minister is aware the public is concerned about what is going on. There are county enterprise boards, area partnership schemes and the Leader programme in addition to other schemes. It has concentrated minds to some degree that, in some instances, people are applying for assistance from all three agencies. The result is that officers from each agency arrive at the applicant's doorstep. Under any circumstances that cannot be regarded as in the public interest or the interest of the economy. It should be sufficient for one person to carry out the assessment.
They each have their own little empires but we are fortunate in County Wexford — I am sure it is the same in every other county — that the county enterprise board, the area partnership scheme and the Leader programme have worked successfully. They have made a tremendous impact on employment within the county. However, the people of County Wexford are asking why it is necessary for three bodies to do basically the same job. We have a duty to the taxpayer to ensure that one agency, perhaps the county enterprise board, provides the most efficient service. I am speaking against myself in this regard because my son works in the partnership area.
However, there is so much duplication — I only mentioned it in the application and assessment areas — that is not acceptable to the general public who fund this scheme.
I have a difficulty with Deputy O'Rourke's amendment. The county enterprise boards could not have a directive co-ordinating role; they do not have the authority to direct the main State development agencies or FÁS to do anything in particular. As Deputy Fitzgerald pointed out, Leader and area partnerships have constitutional independence under their own operational programmes and would resent the county enterprise boards trying to take a directive role and telling them what to do.
Leader and area partnerships have grown out of different EU initiatives. One deals specifically with rural development and the other with disadvantaged areas. The remits — particularly in the case of ADM — go well beyond simple enterprise promotion. They are involved in many other things, including community development initiatives to support the unemployed. One cannot, under legislation, take a directive role for the county enterprise boards over these other bodies. Thy would not have the resources to do that.
We want to see them become, if not a one stop shop, a first stop shop for enterprise. They should be a single source of information for people who want to set up enterprises, who would not have to shop around and would get information on what is available from the county enterprise board. That is something the boards have been asked to work on and, in many cases, are already working on. I am keen to promote a constructive relationship so that there will not be the duplications or waste of resources which several Deputies described.
In tune with the notion of "bottom up" development, this cannot be promoted from the top by legislation empowering the county enterprise boards to come and do all this. Instead, we have been trying to get the agencies to come together at county level and agree oint strategies. That is being done through a number of mechanisms, in some cases by having people holding joint membership of the different agencies, but more specifically through the establishment of a county strategy group, which would try to define at county level what roles each body would take and so avoid waste. Counties have been crying out for the opportunity to shape their economic development. They must also carry the responsibility of ensuring that they do not waste their resources; that is important.
The Leader initiative received a stern reminder from the Comptroller and Auditor General on its responsibilities. We have to devolve power and expect people to use it responsibly. The Government's approach is to encourage the responsible use of the powers being given to these bodies. I wholeheartedly accept what the Deputies are saying. It is what we are trying to achieve but we cannot do it by statutory fiat through a simple amendment. It has to be built from the ground up.
What is a county strategy board? Is it another group?
Essentially, it is an attempt to co-ordinate Leader, ADM and county strategy.
Is it another grouping?
No, it is those bodies acting together to define their distinctive roles, where they will adopt such a role. This has evolved from the EU programme. It was promoted by the EU and is rightly trying to achieve coordination.
On amendment No. 27, there is nothing in the powers the Deputy seeks that is not already in the Bill. Essentially, the county enterprise boards have the discretion to provide loans and decide their terms. Under their ability to provide grants, they also have the power under this Bill, to provide interest subsidies. No additional power would be conferred by the Deputy's amendment that is not already in subsections (4) (a) and (4) (b). The interaction of those two subsections provides the sort of powers the Deputy seeks.
Deputy Fitzgerald asked if we have a detailed set of conditions. We do not; those issues have to be teased out. They will involve considerable discussion and we also have to discuss them with the EU, which is a co-partner in the operational programme under which the county enterprise boards now obtain considerable funding.
I support the amendment. There is merit in having a co-ordinating role. The ideal group to co-ordinate is the county enterprise board. When I look at the number of projects approved in each sector, I see they are all criss-crossing one another — services, tourism, craft, food, horticulture, fisheries and forestry. They are all involved under the Leader programme. Most people who make applications for assistance are duplicating their applications. It would be more helpful if there were a single one stop shop. We have a plethora of agencies now and if those working in them were all to leave their offices at 9 a.m. to inspect their areas of activity, they would create traffic jams. They are all probably calling to the same people three and four times a week, assessing the projects and having to prepare documentation and costings for those who make applications.
The Minister should look at a mechanism that would make it mandatory — through legislation or otherwise — to have everything available in a one stop shop. The county enterprise boards are successful and we should strengthen and improve them further. This amendment is the ideal way to bring about one stop shops. We have heard of the concept of one stop shops in the past, in the areas of job creation and industrial development. This is an opportune time and an opportune way of achieving this in a pioneering way. It is an innovative and farseeing amendment and I ask the Minister to accept it.
We are going back over the same ground.
I do no intend to cover the ground I covered previously. The public will not thank us if we allow what is happening to continue. They are well aware of the situation and that there is duplication. The county strategy committees are really talk shops. We are asking them to make a decision that we should be making. We are taking the soft option. Without putting a tooth in it, this House — to which people look for decisions — should be the body to make that decision.
When the county strategy committees sit down to discuss this issue, there will be strong voices from each of the three groups making a case for their bodies to continue as they are. No one wants to lose funding or face or to create a situation where jobs are lost. We owe it to those funding this scheme — the taxpayer — to make that decision.
I want to ask the Minister about the county enterprise boards. I notice that of the substantial number of jobs created, only 34 per cent were related to the food industry. There has been a lot of development in the food industry, especially the poultry and meat sectors, in my county and I hoped there would have been additional spin offs from those large factories. While we had a number of good projects — the largest one employed up to ten people — they were still disappointing. There should have been more co-operation with the IDA and it should have tried to develop those industries in groups or in conjunction with the larger processors. The fact that only 34 per cent of jobs were created in the food industry is disappointing.
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Byrne, Hugh. Leonard, Jimmy. Nolan, Michael J. Ó Cuív, Éamon. |
O'Keeffe, Ned. O'Malley, Desmond. O'Rourke, Mary. Ryan, Eoin. Smith, Brendan. |
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Níl |
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Bell, Michael. |
Finucane, Michael. |
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Broughan, Tommy. |
Fitzgerald, Brian. |
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Bruton, Richard. |
McCormack, Pádraic. |
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Byrne, Eric. |
McGahon, Brendan. |
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Costello, Joe. |
Mitchell, Jim. |
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Crawford, Seymour. |
Sheehan, P. J. |
Deputy O'Malley was, unfortunately, absent when I called the amendments. Does Deputy O'Malley wish to speak to the section?
I had to go to another committee, regrettably. I give notice that I will table the amendments in my name again on Report Stage.
Thank you for your co-operation.
On Second Stage I listed, as far as I could at the time, the number of industrial development boards. I arrived at a figure of 77 and I am still counting. I dealt also with one or two other such boards which are not directly or solely involved in industrial development but are engaged in related work. We have infinitely too many and putting 35 county enterprise boards on a statutory basis exacerbates the problem. It is not yet fully realised how great the problems will be because of the amount of competition that will go on between these boards. With almost 80 of them it makes the whole thing unworkable. It will lead to a lot of unnecessary and wasted expenditure because individual boards will support particular enterprises in their own area which can only survive if similar enterprises in some other part of the country close down. That is inevitably what will happen. You are then expending public money for the purpose of transferring jobs from one place to another which is very wasteful.
It was always the concern of the Department of Industry and Commerce's small number of agencies to avoid that happening. It sometimes caused difficulties because people in Cork were not interested in what might or might not happen in Kerry and vice versa, but it made sense from a national point of view. If it made sense when there was only a handful of agencies, how much more sense should it make now when there are 80 agencies?
In counting those agencies I did not include the "Back-to-Work" schemes which are mentioned in Deputy O'Rourke's defeated amendment No. 24. Their inclusion would bring the total to over 100 and having realised that, I recommended committee Members to read the Culliton report about the proliferation of agencies and the necessity to slim down the grant giving powers that existed in the 1991-92 period. I see why people who agreed with Culliton feel so disappointed at the way things have worked out. In rural areas, many Leader schemes are genuinely successful and, unlike many county enterprise boards, they tend to be genuinely representative of the wishes of local people. They are fairly effective, with limited funds, in bringing forward worth-while projects in many rural areas.
It is wrong that the various different boards, programmes, schemes and partnerships should be in competition with one another because that is how they will end up. In amendment No. 28, which has been withdrawn but which I hope to propose again on Report Stage, I tried to overcome that by obliging the board referred to in the Schedule to cooperate fully with an area partnership board or a Leader board if either is established in a board's area and to have full consultations with these in respect of any matters or proposals where there is a common interest. Many of the agencies must have common interests, particularly in rural areas. It does not arise so much in the case of city boards but in rural areas there must be a common interest because each agency has limited resources. For the various agencies to operate in competition with one another would be very wasteful.
When he was speaking earlier the Minister said that if he was starting from scratch he would do it very differently. I would also do it very differently if we were starting from scratch. In 1992 I thought I had a clean sheet and I endeavoured to start from scratch but unfortunately my sheet got scribbled on more and more as that fateful year passed. I ended up with a lot of hieroglyphics on it which were put there against my will which have since been reincarnated as agencies, to use the current word.
If a proliferation of agencies could solve Ireland's problems, we would not have any problems. We are fooling ourselves by thinking that having between 80 and 100 such agencies we are doing something effective; we are not. The Minister should go back to the situation I thought I found myself at the beginning of 1992, if he has the time or the stomach to do so, and start from scratch. The situation in which we find ourselves relating to industrial development agencies and other economic agencies of a local or national kind is similar to the situation in which we find ourselves in regard to personal taxation. Our taxation system is a dreadful complicated mess; nobody would design the system we have. If we were starting from scratch we would have a totally different system. Nobody would design our industrial development situation, which has been brought about by all kinds of infighting and other circumstances over the last number of years.
If we are satisfied, as I am sure many of us are, that what we have is far too complicated and unnecessarily dissipated we should start again. If the Minister did nothing else in office. I urge him to try to redesign this and begin again as if we were back at the beginning of 1992. It concerns me that in this Bill we are making a complicated system permanent even though many of us agree it is wrong. We all agree that the taxation system is wrong, too, but we do not seem to be able to make the necessary changes. We need to change this, too.
We cannot go back. The agencies are in place and that is why we want a co-ordinating agency.
I propose the following draft report.The Select Committee has considered the Bill and has made amendments thereto. The Bill, as amended, is reported to the Dáil. Is that agreed?Report agreed to.Order to report to the Dáil accordingly.
I thank the Minister, his officials and the spokespersons for their excellent contribution in the course of the afternoon. I also thank the staff and everybody who co-operated with us. The committee is adjourned until Wednesday, 26 July at 2 p.m. in room G2 when it will consider the Harbours Bil, 1995. The Whips' office will notify Members of Report stage.
The Select Committee adjourned at 5.40 p.m. until 2 p.m. on Wednesday, 26 July 1995.
