We have both Ministers of State in attendance, Deputy Tom Kitt and Deputy Treacy, and they are accompanied by their officials. I welcome them to our first meeting and we will deal with matters relating to their Department. We understand it was the Tánaiste's desire to be here and we appreciate why she cannot be here so we take the opportunity of sending our good wishes for a full and speedy recovery. I now invite the Minister of State, Deputy Tom Kitt, to make his contribution.
Estimates for Public Services, 1997.
Vote 34: Department of Enterprise, Trade and Employment (Supplementary).
I thank the Chairman for his words of welcome and apologise for the absence of the Minister, Deputy Harney, who I understand cannot be with us today. I congratulate the Chairman on his appointment and wish him and the Members of the committee well in their work. Both I and my colleague, the Minister of State, Deputy Treacy, will discuss the issues thoroughly.
I am pleased to have this opportunity to elaborate on aspects of the Supplementary Estimate of £5.788 million for my Department's Vote. Before detailing the various aspects of the Estimate, however, it is useful to point out that the continuing boom in the economy is resulting in rapid growth in job creation, both in the indigenous and the overseas investment sectors. The latest labour force survey figures show that 41,000 more people are working in the industry and services sectors and the numbers of unemployed have decreased by 12,000 over the period in question. Overall there has been a more than one in five fall in the number of persons unemployed in the past four years. It is important to point out also that three quarters of the fall in unemployment during this period was accounted for by a fall in long-term unemployment. This Government is committed to ensuring that, by careful and prudent management of the economy, these high levels of growth and corresponding employment will be sustained over the coming years. This is the background against which this request for supplementary financing should be seen.
As regards foreign direct investment, the purpose of the supplementary grant allocation of £950,000 for the IDA is to compensate its promotions and administration budget for loss of rental income in 1997 which has arisen as a consequence of the revised policy on property disposals initiated in 1996. The IDA expects to realise about £11 million through the sale of assets this year.
The amount of £100,000 proposed in the 1997 Supplementary Estimate towards the development of the Dublin Innovation and Technology Centre at Citywest, with which my colleague will deal, is in respect of start-up costs and the design costs of the building. It is envisaged the building will be completed during 1998 when the bulk of the estimated costs of £2 million will be incurred. The establishment of the centre, which has been mooted over the years, is an important development which will serve as a tool in the process of growing new businesses and employment in the high-technology area.
County enterprise boards were set up in 1993 to provide a new source of support for small business and to act as a catalyst for local development. The boards were primarily established as companies limited by guarantee during 1995 and became fully operational as local development bodies on 1 January 1996. The supplementary funds now sought for the boards reflects in part a speedier drawdown by approved projects and annual increases, including national wage agreement increases.
With an average annual participation of 40,000, community employment is the largest direct labour market intervention currently in operation. CE not only provides temporary employment opportunities for the long-term unemployed and socially excluded but also includes a training and personal development element which aims to increase participants' subsequent employment prospects. Deputies will agree the programme is important as it builds confidence and self esteem, as well as providing the work experience and training which together will ensure participants are job-ready at the end of their time on a scheme. The Minister for Finance, in yesterday's budget, provided for an additional 2,000 participants in the scheme.
In relation to the grants to the Get Tallaght Working Co-operative Society the committee will be aware the recommendations of the Tallaght task force, which was established following the closure of the Packard Electric plant, were approved by Government. Included in the recommendations was the establishment of an enterprise fund to provide interest-free loans to former Packard employees who wished to start their own businesses. A total of £75,000 was recommended for the Tallaght trust fund, a subsidiary of Get Tallaght Working, to provided the required interest-free loan funding.
My colleague, the Minister of State Deputy Treacy, will deal with subscriptions to national organisations although I will make a brief initial comment on it. Arising from a Government decision in 1993 to defer Ireland's financial obligations to ESA, Ireland has been operating in permanent arrears. My Department has negotiated some one off special measures and with the agreement of other member states of ESA, has been working to reduce these arrears which exceeded £4 million at one stage. This payment of £4.9 million will wipe out the State's arrears and put us in good standing for next year.
That is a brief overview of the various items with which we will deal under subheads C.1 to (Z). The Minister of State Deputy Treacy and I will deal with these and as the Minister for Enterprise, Trade and Employment is not present, we have divided them between us. We will outline to Members who will deal with the particular categories.
Is it proposed we might make a short general intervention and then go through each item separately?
Yes. I understand Deputy D'Arcy will speak on behalf of Fine Gael.
I presume we will be allowed to intervene.
It has been agreed by the Whips that Deputy D'Arcy will speak on your behalf. After the Vote, any Member who wishes to participate may do so.
I welcome the two Ministers of State. I regret the Minister could not be present but I wish her well and understand quite clearly that she cannot be here. There is very little we can do about the Estimates but I presume we can question the headings and their operation as far as the Departments are concerned.
Yes.
Subhead G1 refers to county enterprise boards. These are very important and are functioning reasonably well with very limited resources. In Wexford they are important from the point of view of small towns and villages which want to develop. We want community groups to qualify for grant aid but the Minister knows it is not easy at all times to have matching finances available for community groups. Private developers become involved in most cases.
Many people living in rural areas would have good ideas but would not have the finance to build factories with an average area of 5,000 or 6,000 square feet which would cost somewhere between £60,000 and £75,000. That kind of initial capital is very important to these people. Are there terms of reference in respect of that and has the Minister given a direction to the relevant county enterprise boards in this respect? The former Minster for Enterprise and Employment, Deputy Richard Bruton, was concentrating on that particular area when the Government changed.
It is all very well to talk about Cork, Dublin, Limerick and Galway receiving major investments but small investment is just as important to a country area. In small country areas such as Bunclody, Ferns or Gorey, ten jobs would be just as important as 200 to Cork or Dublin. That is the greatest area for potential investment. What is the present position on this?
Deputy Owen indicated she wished to contribute to the debate and may do so before I call on the Minister.
I welcome the Chairman's appointment and I welcome Deputy D'Arcy's appointment as Vice-Chairman. I also welcome the Ministers of State. It is not such a long time since I was a Minister so I am aware that dealing with the Estimates can be a daunting task.
There will be little disagreement with the Estimates for the Department of Enterprise, Trade and Employment where additional sums of money are concerned. The Minister for Finance announced yesterday he was making budgetary provision for an additional 2,000 participants in community employment schemes. What impact do the Ministers think that will make on the number of people who are long-term unemployed? The Fianna Fáil and Progressive Democrats Programme for Government states that the Government intends to produce 25,000 places for the long-term unemployed. Even if it is lucky enough to stay in office for the average Government tenure of four or four and a half years, the Government will only have reached a target of 8,000 to 10,000 places if it continues at this rate. What other schemes and training proposals are there to deal with long-term unemployment?
Many skills shortages exist in our society and they are not all in the area of high technology. When people talk about skills shortages they tend to automatically think of very high skilled technological or industrial operatives. There are skills shortages in the areas of hotel reception work, bar work, shop assistants and customer service. If one walks around any town, be it big or small, almost every business will have a sign in the window saying "staff wanted". These businesses may be hairdressing salons or beauty salons, dog beautician parlours and so on. There are large gaps in the range of skills available and I am concerned that FÁS and other training bodies are not focused on the gaps in employment. So many people are now receiving an opportunity to go on to third level education that people who are leaving school after their junior or leaving certificates without having the necessary requirements for third level education must be directed towards the areas in which shortages exist. The provision announced yesterday for an extra 2,000 participants will not have any significant effect. I welcome the funding for the Get Tallaght Working Co-operative Society which was initiated by the previous Government. I am glad that is progressing well and additional funding is being made available.
On the European Space Agency, I am well aware of the difficulties associated with this and of the fact that we are in arrears. I understand that means we are not eligible to get our names on the lists from which contracts might be secured from the European Space Agency. Will the Minister tell me if he is satisfied with the policy change which occurred some years ago where Ireland decided to try to spread the number of companies that might be eligible to put in tenders for ESA work? In doing that, are the more select companies, who perhaps have the ability to carry out the work, being ignored? Not every technology company can tender for ESA work as it is a very focused and targeted kind of technology which is being sought. I hope we are not cutting off our noses to spite our faces in our efforts to spread the work and in the process exempting companies who have already secured work with the ESA and are seeking more.
I thank Deputy Owen and with Members' agreement I would like to move on to deal with the subheads and get the Ministers' responses to the questions already asked. Members will have an opportunity to comment at that stage. We could take subheads C.1, F.2 and G.1. Will the Minister of State, Deputy Treacy, respond to the relevant questions under those headings? That would prevent any repetition.
We are delighted to be here and I congratulate you, Sir, the vice-chairman and the membership of the committee. It is an important and exciting committee. It is an exciting Department to work in. The Tánaiste's responsibilities are illustrated by the fact that two of us had to be despatched here to take her place.
I will resist saying anything.
(Interruptions.)
We look forward to collaborating with the committee over the next four and three quarter years.
Deputy D'Arcy asked about subhead G.1, which covers the enterprise boards. I was responsible for the creation of the enterprise boards in 1993. They were my idea, based on the old county development team system which was founded in 1965. In 1992 the total amount allocated to enterprise was £750,000. This year, £21.151 million has been allocated to the enterprise boards alone. We hope to increase that, with the sanction of the committee, by £1.5 million to meet all our commitments for 1997.
They are the only structures focused on small industry. Local entrepreneurs with ideas who needed assistance were in a dark tunnel until the enterprise boards were established. The development of major international industries and large local projects meant that small industries were left behind. I felt there was a huge gap in that area and the Government agreed to my proposal to create enterprise boards when I was Minister of State at the Department of the Taoiseach and at the Department of Enterprise and Employment.
There are now 35 enterprise boards doing an excellent job. Their target was to deliver 8,000 jobs in their first five years of operation. They have been in operation for three years. By the end of this month they will have created 6,600 job equivalents and will exceed the target in the first half of next year, that is at least one and a half years before the target date. We are optimistic it will be even better than that. It is money well spent.
We created a number of new systems and structures because there was a major problem in that many people with great ideas did not know where to turn and had no resources, apart from their own human contribution. We created a system whereby they could get technical assistance grants to explore their ideas and bring them to fruition. They can qualify for grants up to £5,000 at the rate of 75 per cent. That helps them investigate whether an idea is commercially viable and sustainable.
The boards have a capacity to deliver grants up to a maximum of £50,000 for job applications up to a maximum of ten people. They also have the flexibility to decide to support projects which can stand alone but which need specific support to create a structure or system, as distinct from job creation.
In regard to Deputy D'Arcy's question, if people have ideas the technical assistance is available. If they wish to create a structure in which to locate their project, the board has the discretion to make a capital grant available to create that structure. It can impose whatever conditions are recommended by its evaluation committee.
The boards and the Department have an operating agreement linked to the Department of Finance. They must operate through that agreement but they have flexibility. Our Department is very willing to examine any impediments to delivering a better job creation structure.
When will the Minister of State stop discriminating against the Dublin region?
That is a serious statement from a Deputy who is elected to serve the people of this city, county and country. If Deputy Broughan can ask me a focused question I will answer it. That is a blatantly vague and unfair question to ask in a public forum.
It is accurate.
The enterprise boards are very focused and have done excellent work. I have dealt with them in Ballymote where we have set up a community economic based company. We spent up to £400,000 on its development and the centre employs 30 people. It is the way forward.
Companies require initial seed capital. We purchased a property for £62,000, which we had to borrow from the bank. Our company is limited by guarantee and deals exclusively with job creation. The biggest difficulty for such companies is finding the initial capital. The enterprise boards should give interest free loans to enable projects which meet the criteria of a viability study get started.
Our company in Ballymote has a net annual income of £20,000 which will be invested in additional manufacturing jobs. The enterprise boards are a fantastic idea and could be extended to help other communities. People in huge employment black spots would be delighted to set up a community economic based company, primarily geared towards job creation. The difficulty is finding the initial capital and there should be a fund to encourage the development of such companies.
When I was in Opposition I asked a question about the administration cost of enterprise boards. There are four enterprise boards in my county with a combined annual administrative cost of about £1 million. Does the Minister of State think the administration cost of those boards is inordinately high? Does he think it should be reviewed? Perhaps some boards could have a common administrative office which would reduce the costs and ensure additional funds were available for projects.
It is very laudable that the enterprise boards created 6,600 jobs. They are working very effectively but I am concerned about the interaction between the Leader scheme and enterprise boards. Will the Minister of State examine whether there is any duplication of effort between those two structures? Could they be better synchronised? There is a view that bureaucracy has taken over. The bottom line is that we want to deliver jobs and cut out as much bureaucracy as we can. We need better synchronisation of enterprise boards, Leader groups and county development teams, which are now part of local authorities.
I congratulate you on your appointment and look forward to working with you over the next couple of years.
I have encountered clashes between Leader and the county enterprise boards in my constituency and there appears to be duplication. It would be useful to resolve the matter.
I am delighted with the county enterprise boards which have vast potential. I congratulate the Minister for establishing them. However, perhaps not enough people know about them. People have approached me with good ideas to establish a business but did not know where to turn. Perhaps the boards should be more proactive in advertising their existence.
There appears to be confusion about the number of different agencies involved in this area and the extent of bureaucracy. This matter was raised at a recent meeting of the Committee of Public Accounts. It would be useful to obtain cost per job figures from these bodies, similar to the information provided by IDA Ireland. Can the Minister indicate the cost of creating a job through a partnership board? It is important from a transparency point of view that the public knows how much it costs the taxpayer to create these jobs. What percentage of this job creation effort is being sucked into administration, salary and personnel costs?
I wish both Ministers of State well. I appreciate their positive approach outlined in their opening addresses. This is an important committee.
While there has never been a better time for young people it has come to my notice that some of them are being encouraged to leave their courses in the regional colleges before they are fully qualified. There is a downside to that. Many leave having obtained certificates and diplomas whereas they would be fully qualified if they stayed on another year or two. While employers tell them they can attend night classes it is difficult to resume studies. This is regrettable because there are excellent courses, especially in computer skills and there is a great scarcity of people with these skills.
The county enterprise boards, Leader and FÁS are not fully co-ordinated. They all protect their own areas and are not inclined to direct people whose projects are unsuitable, to go to more appropriate agencies. If people are refused once they may not pursue matters. This is not helped when confusion arises over what the agencies can grant aid. Nevertheless, the county enterprise boards are doing marvellous work, as are FÁS and Leader.
The Minister of State took umbrage with one of my colleagues.
Not umbrage. I wanted a more focused question.
It is reasonable to ask for a fair balance in wealth distribution. Not all of the regions are getting a fair crack of the whip at a time of great opportunity. For example, the Border region has not progressed with the rest of the country. The decline in unemployment has been slowest in the region. That cannot be allowed to continue.
The sale of property belonging to IDA Ireland appears to be a high priority. What are the criteria for sale? Are there safety clauses to ensure such property is not bought for speculative purposes? Will the State get a claw back if the property is not used for the purposes for which it was sold? For example, speculative buyers may divide the property into smaller units, despite undertaking to use it for industrial development.
I congratulate you, Sir, on your appointment. I also congratulate Deputy D'Arcy on his appointment as vice-chairman. I welcome the two Ministers of State.
In his introductory remarks, the Minister of State, Deputy Treacy, sounded like the enterprise minister in North Korea in that he likes to rewrite history.
I like to make history, not rewrite it.
The Minister of State has painted himself into the picture in the same way as old regimes painted people out. Everybody knows the county enterprise boards were founded by the then Minister for Enterprise and Employment, Deputy Quinn. He also developed the concept of community employment in the 1980s when he was a member of a former Fine Gael and Labour coalition Government.
I welcome this allocation. As somebody involved in small business and local enterprise I have a great deal of confidence in the county enterprise boards. However, the four Dublin boards often receive similar allowances to the other counties, despite the fact that their population amounts to approximately one third of the total. The Fingal board is often strapped for resources in attempting to address the good ideas from the north county Dublin area. Similar problems arise with the city enterprise boards, especially with regard to the rules for service industries. There should be more resources for the cash strapped Dublin county boards.
I hope the two Ministers of State will actively liaise with the Minister. There is much fear in the county enterprise boards that the Minister is planning a severe rationalisation of the whole area which may have a big impact on the level of employment. The boards have done important work at local level. They have raised morale and have brought the local business communities and trade unions together on the same team to work for local areas.
I am worried about the Minister's policies on centres belonging to IDA Ireland. I understood many of them were established as incubator centres with low rents. The purpose of the local enterprise movement was to help people until they were strong enough to engage in the commercial arena and incur commercial rents.
When the Minister of State replies will he elaborate on the sale of property belonging to IDA Ireland? How is the sum of £11 million constituted?
I do not wish to rewrite history. Before Deputy Broughan entered politics I conceived the idea of the enterprise structure. I created the first board in 1992. A general election followed after which the Labour Party was in Government. I created the enterprise boards and the structure of community elections, co-operative industry and innovation. I had the BICS, the co-operative industry and the community involved with the political and public servants' structure. There were many impediments thereafter but, as a result of detailed negotiations, the then Minister for Enterprise and Employment, Deputy Quinn, concluded the business. The number of boards and administrators was greater than we needed. I will take a detailed look at that situation.
I thank the Deputies for their positive comments on the county enterprise boards. The issue of loans and grants was raised by a couple of Deputies and the Department is examining that. County enterprise boards are not in a position to give loans. The State cannot be seen to do so either because it does not have a constitutional or financial role in this regard. As a result of their expertise and links with the banks, county enterprise boards have created a system where they can make a recommendation to the bank which will accept it as commercial reality, thus making it easier to draw down money. I will reconsider my 1992 proposals to create a national fund for these boards.
The point was made that we have too many organisations. In some parts of the country people can apply to ten or 12 different bodies for grants for the same projects. That is ridiculous. The Tánaiste and the Department are examining this. Nobody needs to worry because decisions will be taken in the interests of all the people and the country's industrial development.
As regards the Leader programme vis-à-vis the enterprise boards, the enterprise boards are a permanent national system for delivering jobs. The Leader programme was a pilot project created by the European Union to stimulate economic activity in the remote rural regions of Europe. Ireland was the first country to adopt it after we were asked to do so by the Commission. It was a major success story which was replicated across the Union. There is no guarantee it will be permanent. However, we must take account of the fact that the Department of Agriculture and Food wants to ensure we draw down the maximum resources for economic advantage. Our COREPER people in Brussels and our members of the European Parliament will work hard to ensure we perform positively and get all we can.
We must balance this carefully and try to clear up the duplication, frustration and confusion which exists. Perhaps there will be some rationalisation. I do not want to pre-empt what decisions will be taken. The matter is being considered and I will have a detailed look at the enterprise board structure because there may be extra administrative costs.
It is difficult to make comparisons about the cost of jobs. IDA Ireland is a long established outstanding organisation which has done tremendous work for this country and will continue to do so for many years to come. An organisation or a job would have to be in existence for seven years to ascertain its value and contribution to the country. It is not possible to compare IDA Ireland vis-à-vis the enterprise board structure. It cost approximately £3,500 to create a job under the former county development board structure. Today, taking inflation and everything else into account, it costs approximately £4,000. We are pleased with that value for money.
Deputy Broughan asked about more resources for Dublin, while Deputy Boylan asked the same question about the Border counties and the west. Our agenda will give equality of opportunity to every part of the country, including disadvantaged areas in Dublin city. We are there to help people who want to create jobs. Nobody has a monopoly of wisdom, but we hope to get it right with the advice and assistance of this committee. The previous Minister for Enterprise and Employment, Deputy Richard Bruton, set up a system of differentiation to determine the allocation to each board under various criteria. Each area would like more but we are satisfied the criteria he specified are correct. We will consider regional adjustment if necessary. We want to treat everyone equally and we will do what we can to make it as sensible as possible.
The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Tom Kitt, will answer any remaining questions.
Are you replying to the Vote?
I will answer the questions raised by Deputy Owen, Deputy Boylan and others.
Deputy Owen raised a number of questions about community employment and training. I agree that much work needs to be done in this area. The ongoing review of employment services is essential. When I was in Opposition I raised the same questions so it is incumbent on us to find solutions. Those of us who are committed to providing proper services will probably never get it right but at least we can try given the changing labour market conditions.
We are focusing on training at the lower end of the market. This point was well made by the Minister for Education and Science, Deputy Martin, when he announced a £250 million package to improve skills in the technological area. We all have confidence in the third level sector, but we must focus on other sectors. Deputy Owen mentioned hairdressing. I am impressed with the training programmes for hairdressers organised by FÁS. I have had discussions with hairdressing representatives who told me there are pilot schemes in the pipeline. A practical scheme has also been put in place for pharmacy assistants.
I recently presented certificates at the Loughlinstown centre to a number of people who are now back in the workforce because they received the right training. Training programmes are also useful in the software sector because often industry cannot wait for people to spend three or four years at university. Practical things are being done. A Supplementary Estimate of £1 million is being allocated to provide more facilities and equipment in training centres. That will help to meet the needs in this area. Some 25,000 to 28,000 people avail of the training programmes organised by FÁS each year. This is in addition to the 40,000 people on community employment schemes. There is a good job placement rate. Some 70 per cent of people get jobs as a result of skills training.
Deputy Owen also asked about commitments made in the programme for Government to give people the going rate for jobs. I remember discussing this matter with Fr. Seán Healy, for whom I have great respect, when in Opposition. There was a commitment to give 25,000 people the going rate for the lifetime of the Government. There is an agreement with Fr. Seán Healy to give 10,000 of the 40,000 people on community employment schemes the going rate for the job between now and the year 2000. That is something which can be achieved.
As regards Deputy Boylan's point about lifelong learning, I was involved in the preparations for the employment summit. We need to spell out the significance of that summit and of Commissioner Flynn's involvement. When this matter was debated in the Dáil, the media did not comment on the cross-party statements of Deputy De Rossa, Deputy Quinn, Deputy John Bruton and others. It is a sign of the times that such issues do not get the recognition they deserve. I would like to get a two or three page summary of the summit's conclusions to show the EU's commitment to increasing the numbers involved in training. There is a huge emphasis at EU level on seeking to increase the numbers of people who have access to training. We are trying to get the best practice in the top three performers throughout the EU and expedite the training process. There are many buzz words such as "training", "upskilling", "reskilling" and "lifelong learning". These are fine aspirations but the bottom line is to put them into practice. As Minister of State for Labour Affairs I am interested in pursuing this agenda and in discussing with our EU colleagues how best this might be achieved. The then Minister, Deputy Bruton, rightly decided to get rid of some of the property portfolio. As a result the rent has gone down and we are looking for a Supplementary Estimate of £250,000 to make up for this.
They got £11 million from the sale. Why did the Minister of State not take some of that?
In accounting terms, it is not possible. The Deputy might wish to raise the money we have later in the discussions. It comes in at the lower end of the scale - I think it is about £5 million. As regards the IDA sales for speculative purposes, there are controls in place and many of the properties are being purchased by the industrial tenants. The requirement is that the property must be sold for industrial development purposes. We will have to ask the IDA to forward a schedule of the large disposals. The Department steers clear of individual transactions but I would be happy to get the information from the IDA for Deputy Owen.
I wish to raise the matter of the enterprise boards being more proactive in advertising their existence. Many people do not know about them or what they do. It seems that, because of a change in the Department of Social, Community and Family Affairs' methodology, FÁS may have a difficulty in attracting recruits to some of the county enterprise board programmes as people may lose their secondary benefits. Would the Minister comment on how this anomaly can be countered, especially in view of the fact that some of these people were under the impression that they could retain their benefits? Now people are losing their Christmas bonuses and secondary benefits. This is not a very nice Christmas present. Can anything be done about this?
There is a great opportunity for partnership between the county enterprise boards, local authorities and Leader. In Sligo there is a great idea of housing these agencies in the one building. Even though some agencies are competing with each other, if they were located in the one building this would provide a one stop shop and cut down on some of the duplication.
I will speak to the enterprise boards about their having a higher profile. Perhaps they should advertise, hold exhibitions or develop a road show to alert people to what they are doing. I agree with Deputy Perry about the benefit of a localised one stop shop where people can get all the information they require. We can control the enterprise boards to a certain degree. However, the criteria for Leader is laid down by Europe and there are certain specifics pertaining to location, property and draw down. It is not that easy to marry to two but we will see if we can generate more co-operation.
Is seed capital gone from the Minister's thinking?
No. I made a note as a result of the Deputy's contribution. I had an idea about creating a fund for the enterprise boards as I felt they needed cash. They are not bankers but we might be able to find some facility whereby they could be linked to a fund from which they could draw down funds. In Dublin there is an innovation fund which the enterprise boards can use through the Dublin BIC. I am impressed by this and there is more money in the capital than in the rest of the country. This is an excellent fund which is working well. We will implement a similar fund across the nation if we can.
This is a straightforward Supplementary Estimate and we will have an opportunity to tease out every issue. I will accommodate as many questions as possible when the opportunity arises. However, we have now dealt with subheads C1, F2, G1, K3, K4 and K5. Can we take it that those subheads have been agreed and move on to subheads L3, P2, T, W and X2?
What does "trade union amalgamation" mean in subhead P2?
I wish to comment on Deputy Stanton's reference to people on CE who are paying the standard rate of PRSI, who go on to unemployment benefit and lose secondary benefits. This is an important issue. I understand that the INOU agreed to this process when the scheme was set up by Deputy De Rossa. This is a matter for the Minister for Social, Community and Family Affairs. I will convey the Deputy's views to him.
As regards subhead L3 - Grants to Get Tallaght Working - the background to this is simple. The Government agreed that the funding of all the task force's recommendations was to be found from existing subheads. However, in the case of interest free loans, there was no area within the Department which provided this facility and, accordingly, following consultation with the Department of Finance, it was suggested that a new subhead representing a new service could be created within the Department's Vote. In June 1997 the Department of Finance sanctioned expenditure under this new subhead in advance of Dáil approval for a Supplementary Estimate being passed. In this regard, the Department agreed a provision of £25,000. A total of five start-up projects have benefited to date with an additional eight awaiting approval by the trust fund. Accordingly, a Supplementary Estimate to cover the new subhead and the total amount of £75,000 required for loan funding is hereby requested. I have further information on specifics if Deputies are interested.
The concept has been a huge success and everyone is grateful to the Tánaiste and the Minister of State's Department for the work done in getting replacement jobs into the old Packard site. The jobs coming onstream will not suit everyone and this is where the interest free loans will come into play. Hopefully people who have not been able to fit into the new system will be able to find other forms of work.
I thank Deputy Lenihan who rightly said the replacement industry at the former Parkard plant has been secured with the creation of 500 jobs. We are clearly committed to continuing their efforts and I would be glad to give Deputy Lenihan any additional information he requires.
As regards Deputy D'Arcy's question on trade union amalgamation, the amount in the Supplementary Estimate is £140,000 and this involves amalgamation of trade unions which I think is admirable.
Will the Department provide grant aid for that?
Yes. The Department provides grant aid as it is in the interest of the social partnership that we have a more cohesive representation. In 1986 there were 80 trade unions and now there are 55. Clearly successive Governments have pursued this approach with regard to amalgamations. We are concentrating on one amalgamation in particular - AGEMOU with SIPTU.
Is the Minister saying it will cost £140,000 to amalgamate AGEMOU with SIPTU? He is giving a grant of £240,000 but the extra amount is £140,000. Will the £240,000 be an annual cost? It is unusual to have a Supplementary Estimate in this area and the wording here is not clear. It says one merger has taken place. That assumes only one merger took place in 1997 and that merger cost £240,000 to effect. Is that right?
Under the Trade Union Act, 1975, grant assistance is available to assist the rationalisation of the number of trade unions. The Deputy is right; the figure I have for the amalgamation of AGEMOU with SIPTU is £240,000. If the Deputy wants further information on how that is broken down, I will be glad to get it for her.
What is the reason for this?
It is in the interest of long-term stability in industrial relations that we have more streamlined representative groupings. From my involvement in a number of issues since my appointment I know it can be difficult to find representative groups for various sectors. The Minister himself will be conscious of that with his experience in the agricultural area. It is worthwhile in the long-term. It is costing £450,000 and our costs will be £250,000.
How many members are in AGEMOU? If the aim is to reduce the number of trade unions and a number of amalgamations are planned it will be a costly business over the next few years.
Prior to transfer AGEMOU had just over 200,000 members and SIPTU has submitted an application for grant assistance in respect of expenses incurred in the transfer. If there is any additional information I can provide the Deputy with following further inquiries, I will pass it on to her.
The rationale is becoming too powerful: the lesser the number the stronger the lobby group. When you keep eliminating them there is amalgamation.
With regard to the strength of the voice, we have had the process of social partnership since 1987 and successive Governments have supported it.
I am not saying I disapprove; it is a good concept.
I accept that within those industrial organisations there are IBEC and SFA. I think it is healthy there is a constituent group with a larger group with a clear focus. These costs are there. I presume they relate to pensions, redundancies and other factors. They are well tabulated. If there are other questions I will bee glad to find the answers for the Minister.
I too would like to see the details of those costings.
Will the farming organisations qualify for grant aid if they come together?
Provided they come under the Trade Union Act, 1975.
We will move onto subheads L3, P2, T, W, X2, C3, E1, I2, L1 and Z. Is that agreed?
On subhead L1, I see a savings anticipated subhead to disclose and the anticipated start of the four new LES schemes, the slow take up special education and training funds. There is a certain amount of red tape involved because they have to be approved by the Department before they are allowed to commence. Is there any way of expediting that procedure at local level rather than having to do it through the Department? These are schemes which would start if there was less red tape.
This refers to an earlier discussion we had about more efficiency in the service, more streamlining and dispersing of funds in a responsible way. That is what is happening. However, there are problems in this area. When you have savings of £2 million the system has to provide a better service. There is an ongoing review of this area. Not all of the partnership gives the LES the priority it deserves. Between application and procedures there unacceptable delays but we are all trying to get it right and prioritise particular services. Some local employment services are working better than others. I recently opened the office in Clare and was impressed with what I saw. The Deputy is probably aware of the areas where it is working at the moment, the partnership areas, the non-partnership areas, and there plans to expand into other partnership areas, but I accept there is much work to be done to get it right.
How long will it take the Department to implement it?
One million pounds of the special education and training fund has failed to attract proposals from the area in any great number. The Departments have to be responsible and the officials running these services have to be able to come before these committees and account for every penny. My concern is that the process be expedited. It is a good service but it is working better in some areas than in others.
Subhead T - Companies Registration Office - is the Minister satisfied this £100,000 will put into a system that will get rid of the backlog in the registration office? There have been many complaints about delays.
Second, I think it is time we examined our companies registration legislation. From my experience in the Department of Justice, there is a growing concern shelf companies are being used by criminals to launder money and to gain respectability from the point of view of trading in criminal activities. They have a fancy company name which is registered. Ring an office in a particular street in this city, and there are hundreds of names of companies, and an unsuspecting person in another jurisdiction will think this a bona fide businessperson. It has been shown to me on visits to the Europol drugs unit in The Hague that shelf companies are being utilised. There is enough money to upgrade the Companies Registration Office and I think we should come back again to examine the ease with which it is possible to register shelf companies and utilise them for the wrong reasons.
My understanding was that a shelf company in Ireland can no longer remain idle without certain returns or applicable penalties. Perhaps the Minister could offer clarification.
Deputy Owen is correct. They are the reasons we are spending this money. The Companies Office was in an excellent location but had bad facilities. We moved it to Parnell Square and, to complete the work, we propose to install the most sophisticated computer and software systems to assist staff. The number of staff will be increased by 20 over the next year. We want the staff to be focused and to have the most up-to-date information available to them to service queries from other Departments, the State's security services and consumers. The consumer will be able to get the information they require once that information can appropriately be given. We are highly focused on that objective. It is important that this office has a modern operating system as the old computer system is clapped out.
Shelf companies are Irish non-registered companies. Currently the Department is represented on a committee which is urgently working on this problem. The issue is complex and legislation might be required when the committee makes its recommendations. If such legislation is required, it will be given priority. The Revenue Commissioners, the Department of Finance, the Companies Office and my Department are supervising this situation and we await the committee's recommendations. However, we are confident that the combination of the new system, the increase in staff, the new location and the nice working environment will facilitate the Companies Office delivering a more focused service in the interests of both the consumer and the State.
Are subheads L3 to Z agreed? Agreed. I thank the Ministers and their officials for their attendance.
In accordance with new Standing Order 79b the Committee Clerk will send a message to the Clerk of the Dáil to the effect that the Select Committee has completed its consideration of the Supplementary Estimate for the Department of Enterprise, Trade and Employment.
The Select Committee adjourned at 4.15 p.m.