I thank the Chairman for the opportunity to present my Department's 2008 Estimate and annual output statement. I apologise about the mix up but we are here and we will work through it. I am sure all committee members are anxious to get out and canvass so we will cut to the chase.
I hope committee members appreciate that as this is my new portfolio, pro forma I ad lib on my speeches but I will do my utmost to provide a cursory viewpoint of the issues and the speech will be taken as read. Deputy Devins is also new to his post. The Minister of State at the Department, Deputy Billy Kelleher, sends his apologies. He is returning from Luxemburg and cannot be here.
I can state without fear of contradiction that the Department's remit extends across a wide range of activities and is crucial to developing the economy and supporting business, while at the same time protecting workers and ensuring fairness of competition. The brief, which has been circulated to members, itemises my Department's 2008 Estimate allocation by subhead, and shows the corresponding Estimate and outturn figures for 2007.
The Department's annual output statement for 2008 has also been submitted to the committee for its consideration. As the committee will be aware, the annual output statement is a fundamental part of the Government's drive to reform the Estimates process and to set out more visibly the return on the investment of public funds in key services and programmes.
The annual output statement breaks down the Department's Estimate over seven key programme areas and sets out targets for each of these. It also provides details of the progress made against the targets which were set for 2007. I am glad to report that the Department met or exceeded most of its targets for 2007. The annual output statement also provides explanations for the small number of areas where the outcomes were not as high as expected.
There are some differences in layout between the annual output statement and the structure of the Department's Vote as published in the Revised Estimates Volume. My officials are exploring with the Department of Finance how changes can be made to the structure of the Vote to bring it more in line with the layout of the annual output statement. This will be of great assistance to the members of the committee in their deliberations on the Estimate in the future.
The Estimate of net voted Expenditure for 2008, which I present for the committee's consideration, totals €1,492.917 million. This sum is made up of €998.033 million in current expenditure and €494.884 million in capital expenditure. Appropriations-in-aid in my Department's Estimate will amount to €95.439 million in 2008, giving a gross expenditure from Exchequer sources of over €1.588 billion this year. This represents an increase of 5% on the 2007 Estimate and 9% on the provisional outturn for last year. In addition, a sum of €23.428 million is included in my Department's Estimate by way of carry over of capital savings from 2007.
The committee will note that the national training fund will contribute €409.907 million on top of the Exchequer allocation to my Department this year. This fund is used to upgrade the skills of the labour force through training and research into future skills needs. The annual output statement also provides details of our own resource income which the Department's agencies expect to generate this year. This income, like the national training fund, is additional to the voted Estimate and will amount to over €257 million. When all sources of income are taken into account for my Department's programmes, the total gross expenditure for 2008 will amount to €2.255 billion.
I will outline some of the key objectives for the use of these funds, as set out in the annual output statement, starting with the area of science, technology and innovation. The rapid globalisation of trade and competition which is being driven by new technologies is creating increasing pressure on Irish companies to innovate and develop new products and services. The competitiveness of enterprises and of Ireland's economy as a whole will increasingly be driven by innovation and knowledge. Increased and continuing investment in science, technology and innovation activities will be crucial to Ireland's future economic success.
The Government is committed to investing in this area through the Strategy for Science, Technology and Innovation 2007-2013. That strategy constitutes one of the principal pillars of the new national development plan. Over the lifetime of that plan, the State will invest €8.2 billion in science, technology and innovation in a whole-of-Government approach. The allocation to my Department up to 2013 will amount to €2.75 billion.
The science, technology and innovation programme area of my Department's Vote, which is funded under subhead F, supports the Department's activities under the science strategy. These activities are delivered primarily by Science Foundation Ireland and Enterprise Ireland. IDA Ireland also has a complementary role to play in promoting research and development through its activities under the enterprise development programme area of the annual output statement.
Enterprise Ireland's primary objectives under the science strategy are to get more firms involved in conducting research and development, to increase the amounts of research and development that existing performers are doing and to raise the quality of research and development they carry out. Enterprise Ireland is also working closely with the research community to maximise the commercial potential of research for the benefit of the economy.
Science Foundation Ireland is working to build and strengthen scientific research in the areas of greatest strategic value to Ireland's long-term competitiveness and development, namely biotechnology, information technology and communications technology. Enterprise Ireland and Science Foundation Ireland both work to promote greater collaboration between academia and industry to develop world-class research and systems.
For 2008, gross funding for science, technology and innovation in my Department's Estimate, including the Department's own administrative and support costs, will amount to just over €333 million. This represents an increase of €43.3 million, or 15%, on the provisional outturn for 2007. In addition, €4.226 million will be available for this programme area from the carry over of unspent capital allocations in 2007.
In addition to supporting the activities of Enterprise Ireland and Science Foundation Ireland, funding is also available in this programme area for the Discover Science and Engineering programmes, the Tyndall Institute, the Irish Council for Bioethics and the Irish Universities Association. The costs of the patents office are also included in the funding allocated.
Pages 5 and 6 of the annual output statement clearly indicate how the expenditure has been managed and the enormous contribution it has made to our client companies, of which Enterprise Ireland has 617. A total of 42 client companies achieved in excess of €2 million in research and development in 2007. The target for 2008 is 45 companies. In 2007, 45 research and development investment projects were approved by IDA Ireland. The IDA aims to fund a further 55 such projects this year. During 2007, a new strategic research cluster programme was launched. Under the programme, 12 research clusters were funded, three times more than the number envisaged at the start of the year. These are exciting and innovative new projects. Science Foundation Ireland made a total of 570 awards across its main programmes in 2007, an increase of 14% on its target for the year. In 2008, Science Foundation Ireland will continue to fund the eight existing centres for science, engineering and technology and plans to make awards to two new centres.
A further objective for the current year is to promote awareness of the new EU seventh framework programme with a view to optimising Ireland's involvement in that programme. During 2007, the Cabinet committee on science, technology and innovation agreed that the total share of EU funding to be targeted by Ireland over the lifetime of the programme should be in the region of €600 million.
These programmes combine into a very exciting agenda for science, technology and innovation. The resources are available for investment, with inputs at industrial as well as academic level. Overall, the investment in science and technology for industry in my Department's Estimate will enhance innovation and competitiveness, increase output and promote employment.
Members will be familiar with the enterprise development and competitiveness programme area, which funds activities carried out by Forfás, IDA Ireland, Enterprise Ireland, Shannon Development, the city and county enterprise boards, the National Standards Authority of Ireland and InterTradelreland. A small amount of funding is also provided for the monitoring and evaluation of related EU co-financed programmes. The objectives of this programme area are to optimise competitiveness and growth by promoting entrepreneurship, all-island enterprise collaboration, foreign investment in high value added manufacturing and services activities, scaled increases of exports and balanced regional development. In complementing the work which is being done in the science, technology and innovation area, the enterprise development agencies will be focusing on supporting companies with high growth potential.
Total funding available for the enterprise development and competitiveness programme area in 2008 amounts to €650.944 million, including own resource income of €245.3 million which the enterprise development agencies will generate. The Exchequer contribution is €405.581 million and includes the cost of the staff of my Department who oversee the work of the agencies. The Exchequer allocation in this programme area represents a 13% increase on the 2007 outturn. A further €6.65 million in Exchequer funding is available from capital savings carried over from 2007.
The enterprise strategy group report, which was published in 2004, presented a vision for the development of the economy. A core focus of Enterprise Ireland's new strategy is the development of Irish companies and increasing exports. The agency has set an ambitious target of achieving €4 billion in new export sales from Irish companies over the period of the new strategy. Companies assisted by Enterprise Ireland have experienced export gains of €1.025 billion in 2007 and the target for 2008 is €1.28 billion in 2008. The agency also supported 70 high potential start-up companies in 2007, bringing to 221 the number of such companies funded over the three year period 2005 to 2007. This was above the target of 210 companies which was set at the start of the period. We aim to support a further 66 high potential start-up companies in 2008. Other notable achievements by Enterprise Ireland in 2007 was the approval of €6.74 million towards the creation or expansion of 22 community enterprise centres and the introduction of an innovation voucher initiative to drive an ongoing innovation culture shift. In the 2007 pilot phase of the initiative, 428 companies were approved vouchers with a total grant allocation of €2.14 million.
The 35 county and city enterprise boards, which are probably close to members' hearts, will also continue to work with smaller Irish enterprises to achieve growth in the indigenous sector. In 2007, the boards supported 945 companies, engaged with 11,500 students in enterprise education and attracted 21,000 people to training events. The entrepreneurial skills within these boards are highly important. In 2008, the boards aim to support 1,000 companies.
For their part, IDA Ireland and Shannon Development will work to maximise the quality and number of foreign direct investment projects in Ireland. Last year was very successful. Over 9,000 new jobs were created and total employment in the IDA sector was 136,000 jobs. Some 60% of those new jobs supported by the IDA had wage levels in excess of €40,000 per annum, so members can see the target is at the higher end of quality jobs. The IDA has supported companies with annual sales of over €95 billion, which export almost €91 billion in goods and services and spend over €15 billion directly in the Irish economy. This is very important to us. The IDA approved 114 new investments from new and existing clients, who are investing approximately €2.3 billion in the economy over the coming years. The strategy is for enhanced regional development and 64% of investments in 2007 were located outside of Dublin. The IDA has a target of 122 investment projects, with over 60% to be outside the greater Dublin area.
Members are all very familiar with Shannon Development, which attracts foreign direct investment. Shannon Development approved ten investment projects in 2007, twice the target number set at the beginning of the year. We will also fund InterTradelreland, one of the North-South bodies, where it is envisaged that €70 million in trade and business development value will be achieved in 2007 resulting from supporting InterTradeIreland's business networks and programmes.
The capacity of firms to innovate and achieve high growth is dependent on the quality of our labour force. The presence of a well educated, highly skilled and adaptable workforce has been one of the key factors in attracting foreign industries to set up here. However, we need to continually evolve and improve the quality of our products and services to be competitive and we need to invest wholeheartedly in improving the skills and knowledge of the labour force. We have a specific Minister of State examining that strategy. It is complementary to the objectives of the science strategy to develop a knowledge-based economy. The aim of the labour force development programme, as set out in the annual output statement, is to contribute to continued economic success by supporting ongoing training and upskilling.
Expenditure on labour force development under my Department's remit in 2008 will amount to over €1.13 billion. This represents an overall increase of €30 million, or 3%, on last year's outturn. The figure includes €410 million from the national training fund and €10.5 million in income generated by FÁS from fees. Funding under this programme is provided for training and employment programmes operated by FÁS, Skillnets, Enterprise Ireland, IDA Ireland, Shannon Development and a small number of other organisations. The majority of the funding will be channelled through FÁS.
Members can see a number of the targets set down in the national skills strategy, including promoting active labour participation by marginalised groups. For me, there will be a particular focus on disability and we have a Minister of State, Deputy Moloney, trying to achieve that. The national skills strategy has long-term objectives on human capital, upskilling, training and education. I assume there will be a considerable amount of discussion on FÁS so members of the committee can take the activities shown as read. On the basis of considerable amounts of money in FÁS and given the changing economic climate, all the Ministers will vociferously discuss the roles and needs of the workforce and work closely with the Department of Social and Family Affairs.
In parallel with promoting the development of enterprise, my Department has an important role to play in protecting the rights of workers. Significant commitments were made under the social partnership agreement, which represent the ethos of the Department and the programmes funded in the overall allocation. The activities funded are the Labour Relations Commission, the Labour Court, the Employment Appeals Tribunal, the National Employment Rights Authority and other activities aimed directly at promoting social partnership, including the national framework committee for work life balance policies. It also funds the Health and Safety Authority.
The National Employment Rights Authority, NERA, has made substantial progress since last year. There are 80 or more labour inspectors compared with 31 at the beginning of 2007 with support staff also being provided. The head office is in Carlow and there are regional offices in Dublin, Cork, Shannon and Sligo. We are also very much involved in an information campaign on employment rights.
Last year, NERA recovered €2.5 million in arrears due to employees as a result of its work. In addition to the National Employment Rights Authority there is the appeals tribunal, the Labour Court and the Labour Relations Commission. These are very much part of the employment rights and industrial relations mechanisms under my Department. One can see the number of cases that have been dealt with.
On health and safety, apart from protection in legislation governing employment hours and conditions, employees have a right to work in a safe environment which is not hazardous or injurious in any way. Unfortunately, 67 workplace fatalities have been recorded, an increase on the 2006 figures. Although it is below the 2005 figure, one workplace fatality is too many. Through information, support programmes and training, perhaps we can try to ensure a turnaround. Some €24.4 million has been allocated under subhead T for that.
On commerce, consumers and competition, this very much underpins markets and ensures they operate in a fair and efficient way, and that competition is promoted. It is balanced with consumers' interests. The commerce, consumers and competition programme addresses these objectives. The activities support the Companies Registration Office, the Competition Authority, the Office of the Director of Corporate Enforcement, the National Consumer Agency, the Register of Friendly Societies and the Irish Auditing and Accounting Supervisory Authority. A small grant is also made to the Consumers Association of Ireland. The priority in gross funding will amount to €37.712 million from own resource generated, a 17% increase on the 2007 outturn.
We can see that regulatory bodies that are supported include the Companies Registration Office and the Office of the Director of Corporate Enforcement. Their outcomes are detailed in the written submission. The Competition Authority has a role in promoting compliance with legislation, particularly in the area of the IAASA and the accountancy profession.
I am sure we will have a further opportunity to discuss the National Consumer Agency, NCA, which was formally established on 1 May 2007 under the Consumer Protection Act 2007. The allocation for the NCA for 2008 is €10 million, representing an increase of almost €3 million, or 41%, on the 2007 outturn. The statutory remit, as the committee knows, deals with the issues of enforcement, advocacy, research, consumer information, education and awareness. The agency has been very successful in identifying and addressing major areas of concern in its first 12 months of existence on a statutory footing. For example, it has dealt with sales scams, product safety and price transparency.
There has been much coverage of prices in the national media and I have expressed my serious concerns on pricing policies, particularly the exchange rate for sterling and how it affects the consumer. We will ask people to make choices and shop around but that being said, I met the director general of IBEC and the director of Retail Ireland on 28 May. I also met senior representatives of Retail Ireland on 4 June. The committee met some of these people as well. I have expressed much concern about the benefits of the euro rise against sterling. We had a good meeting, strong and firm, but we will continue to pursue vigorously the important issues for the consumer.
The industry has given a commitment to securing a satisfactory outcome for Irish consumers. Considering the last week to ten days, there has been movement on prices and we will work again over a number of months on the issue. There are other priorities relating to commerce, consumers and protection, including the reduction of administrative burdens and reviewing the operation and implementation of the Competition Act, which we have discussed and I look forward to deliberating further, particularly as Parliamentary Counsel has been appointed to draft that legislation. We will deal with it all in due course.
We are underpinning all these programmes through the output statement, including the area of delivering strategic goals. We have a Vote, an outcome and an outturn and we have benchmarked them against the strategic goals of the Department. We have received high-level goals that are supported by the human resources and information and communication technology services in our Department. These activities did not feature as a separate programme area in last year's annual output statement but the 2008 statement sets out a number of targets for this year. The cost of those ancillary services in 2008 will amount to €18.91 million compared with €17.2 million in 2007.
There are other service headings, including the cost of research studies for the Department, subscriptions and so on. Committee members can take them as read and the total Exchequer allocation for 2008 is €19.932 million.
I hurried through a number of the extensive programmes but that is no reflection on their importance. I thank the Chairman for giving me an opportunity to outline the ambit of the programme. I will do my utmost to answer as many questions as possible but beg for indulgence on this occasion — I am sure I will not get it next time. I thank committee members for affording me the opportunity to present this Estimate.
