SELECT COMMITTEE ON ENTERPRISE, TRADE AND EMPLOYMENT debate -
Wednesday, 23 Jun 2010

Annual Output Statement 2010

Chairman

This meeting has been convened to allow the committee to consider Vote 34, Further Revised Estimates for the Department of Enterprise, Trade and Innovation and the annual output statement for 2010 for that Department.

In this respect I welcome the Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, and the Minister of State at the Department, with special responsibility for labour affairs, Deputy Dara Calleary, who is a former member of this committee, and he is welcome back. We welcome the Minister of State at the Department with special responsibility for trade and commerce, Deputy Billy Kelleher, and the Minister of State at the Department with special responsibility for science, technology, innovation and natural resources, Deputy Conor Lenihan. That is the first time I have had to tackle a mouthful like that.

I also wish to welcome officials from the Department of Enterprise, Trade and Innovation, Mr. Gerry Donnelly, assistant secretary for corporate services, who was here before, Mr. Brian Whitney, assistant secretary for enterprise development, Ms Helen Nugent, principal officer, science, technology, innovation and natural resources, and Mr. William Parnell, finance officer, whom I recall was here before. I thank all for their attendance.

Members will be aware that as part of the budgetary process reform initiated by the Minister for Finance in his budget speech, 2006, each Department must now publish an output statement for consideration by Oireachtas committees. In line with that reformed budgetary process, an output statement has been provided and circulated along with the briefing to committee members. This is a very important issue and is intended to facilitate better parliamentary involvement in the budget and Estimates process.

In addition, in his correspondence, the Minister for Finance requested that the Estimates debate should have a particular focus on the outputs to be achieved for the moneys being voted. I propose we begin with an opening statement from the Minister, followed by opening statements from each of the Opposition spokespersons, namely, Deputy Varadkar, Fine Gael, Deputy Morgan, Sinn Féin, and myself for the Labour Party, subject somewhat to a moveable feast. I am not someone who sticks rigidly to procedure, so be it. I invite the Minister to address the committee.

Minister for Enterprise, Trade and Innovation (Deputy Batt O’Keeffe)

I welcome the opportunity to discuss my Department's Further Revised Estimate for 2010 and annual output statement. The 2010 Estimate reflects the transfer of functions between my Department and the Department of Education and Skills from 1 May and supersedes the Revised Estimate published in February of this year.

Responsibility for training policy and employment programmes transferred from my Department to the Department of Education and Skills with effect from 1 May. However, expenditure incurred by my Department up to 30 April in this area is reflected in my Department's 2010 Estimate and is reported on in the annual output statement for the sake of completeness. The balance of funding available for this activity this year is reflected in the Estimate of the Department of Education and Skills. The net Exchequer Estimate for my Department for 2010 totals approximately €1.104 billion. This sum comprises €634.8 million in current expenditure and €470 million in capital expenditure. Appropriations-in-aid in my Department's Estimate will amount to €72.796 million this year, giving a gross allocation from the Exchequer of more than €1.177 billion.

The annual output statement also provides details of own resource income, which some of my Department's agencies expect to generate and use in the delivery of their programmes this year. This income is additional to the voted Estimate. When this income is taken into account, the total gross expenditure for 2010 for my Department's programmes will amount to almost €1.392 billion. In addition, a sum of €6.44 million is available to my Department's Vote by way of carry-over of capital savings from 2009.

I would like to outline some of the key objectives for the use of these funds, as set out in statement. In spite of the challenges which have prevailed over the past 18 months, the Government has continued to focus on policies which will enable Ireland's economy to return to growth, by restoring competitiveness, creating the right environment for export-led growth, supporting enterprises, and investing in the smart economy. My Department is at the centre of delivering these policies, assisted by the enterprise development agencies. Our aim is to position Ireland as a competitive, innovation-driven location in which to do business, promote entrepreneurship, target future inward investment and grow exports in existing and fast growing markets.

A budget of €717.9 million is available in 2010 for the restoring competitiveness and supporting enterprise programme area, including my Department's administrative costs and agency own resource income. The 2010 budget for this programme area represents an 18% increase on the 2009 outturn. The increase is accounted for by the significant resources provided this year for the employment subsidy scheme, additional Exchequer funding which is being made available for the payment of agency pensions following the transfer of certain pension fund assets to the National Pensions Reserve Fund — this is essentially a cost-neutral transfer of funds between the NPRF and the agencies, and a projected increase in agency own resource income. The level of own resource income that will be realised in 2010 will, however, be dependent on general economic conditions.

In spite of the difficult business environment last year, IDA Ireland approved 125 investment projects, Shannon Development approved a further 13, Enterprise Ireland supported 73 new high potential start-ups and the county enterprise boards exceeded their targets for engagement with enterprises, entrepreneurs and students. Building on this success, the committee will see that challenging targets have been set for this programme area for 2010.

Investing in innovative products and services that anticipate and meet the emerging needs of consumers and society will be the key to creating sustainable jobs and positioning Ireland as an innovation-driven location in which to do business. In this context, the commitment to investing in science, technology and innovation remains a major component of the Government's economic renewal plans. Funding under the science, technology and innovation programme area of my Department for 2010 amounts to €342.6 million. This includes the transfer of €41.2 million from the Department of Education and Skills in respect of the Programme for Research in Third Level Institutions, PRTLI, and other research activities. The transfer of the budget for PRTLI to my Department is an important element of the streamlining of resources which will greatly enhance the efficiency and focus of the Government's investment in science, technology and innovation. It will ensure that funding is strategically targeted on those areas that can achieve greatest impact. Funding is delivered primarily by Science Foundation Ireland and Enterprise Ireland but also supports the discover science and engineering awareness programme, the Patents Office, the Tyndall Institute and programmes delivered by the Irish Universities Association. The IDA has a complementary role to play in promoting research and development through its allocation under the restoring competitiveness and supporting enterprise programme.

The work being undertaken by my Department and its agencies under the strategy for STI is having a real and positive impact on improving Ireland's competitiveness, not only in high-end innovative products, but across the enterprise spectrum. It is also meeting the objective of improving Ireland's international reputation for generating and using new technology and knowledge. For example, in 2009, 745 indigenous enterprises undertook research, development or innovation projects with the assistance of Enterprise Ireland. This enabled companies to maintain a competitive edge through product and process improvement, and through the development of new products. Enterprise Ireland is also working to bring the commercial potential of Irish research to fruition. IDA Ireland secured 62 research, development and innovation projects last year, with an investment value of €500 million, and Science Foundation Ireland operates a range of programmes designed to deliver a world-class standard of research activity to Irish enterprises and research institutions. Through its activities, SFI is helping to support the retention in employment of more than 56,000 people in high-value jobs in Ireland.

Given the central role my Department plays in promoting the research and innovation agenda, my Department will also drive the work of the high level implementation group set up to implement the recommendations of the innovation task force report published last March. Safeguarding the rights of those who are at work and providing industrial relations mechanisms to prevent and resolve disputes helps to support a better workplace for both employers and employees. This is the fourth programme area outlined in the annual output statement. My Department provides services in this area through the Labour Court, the Labour Relations Commission, the Employment Appeals Tribunal, the National Employment Rights Authority and the Health and Safety Authority. My Department also processes redundancy and insolvency payments, which are an important support for those who have lost their jobs.

Total funding for this programme area in 2010 will amount to €49.8 million, as set out in the annual output statement. The demand for the services delivered under this programme area has increased substantially over the past two years due to the economic climate, and this has put huge pressure on my Department and its offices. For example, the number of redundancies notified to my Department in 2009 amounted to 77,001. This represented a 90% increase compared to 2008. Claims to the Employment Appeals Tribunal increased by 73% last year, while referrals to the rights commissioners' services increased by 34%.

My Department increased the staffing resources in the redundancy payments section in 2009 to address the huge influx of claims. It also refined its procedures to help improve the processing of payments. The aim is to build on these initiatives and make significant inroads in the processing of claims in 2010. The Employment Appeals Tribunal is also taking measures to increase the number of claims which it processes this year. The Labour Court and the Labour Relations Commission will also continue to play an important role in the industrial relations arena under this programme area in 2010, while the National Employment Rights Authority will continue its programme of inspections and provision of information on employment law.

Due to the continuing high rate of fatalities in the sector, the Health and Safety Authority will place a particular focus on farm safety this year. We will also support the HSA and the Irish chemicals sector in addressing the demands of two major notification requirements to be met by the end of the year under the EU's new framework for the regulation of chemicals.

The investment in the programme areas I have outlined is underpinned by my Department's programme to support better regulation, business and the consumer. This programme area aims to ensure markets work in a fair and efficient manner, that competition is promoted, and that consumers' interests are safeguarded. The programme area finances the activities of the Office of the Director of Corporate Enforcement, the Companies Registration Office, the Registry of Friendly Societies, the Irish Auditing and Accounting Supervisory Authority, the Competition Authority and the National Consumer Agency, NCA. Funding for this Programme Area in 2010 will amount to €30.4 million.

Priorities for 2010 include the presentation to the Oireachtas of the consumer and competition Bill, which will provide for the merger of the NCA and Competition Authority, and the publication of the final report of the sales law review group. Drafting will continue on the companies consolidation and reform Bill, with a view to its presentation to the Houses of the Oireachtas in 2011. In addition to the programme areas that I have outlined, two smaller, but nonetheless important, programme areas are set out in the annual output statement which has been presented to the committee.

The delivery of the Department's strategic goals across all programme areas is enabled by the central supports provided by my Department's corporate services division. These supports include human resources services, ICT services, financial administration, building maintenance and other services such as processing of Freedom of Information Act requests and supporting Oireachtas business. The total funding available for this programme area in 2010 is €17.2 million. The other services programme area outlined in the annual output statement provides funding for a number of diverse activities and the total Exchequer allocation for this area in 2010 is €21.39 million. I will be happy to take any questions the committee may have regarding to the Estimate or the targets set out in the annual output statement.

Deputy Leo Varadkar

I will concentrate on the Estimate as the annual output statement is good. I refer to salaries, wages and allowances. I have not seen social welfare employer's contributions in an Estimate previously. Is that PRSI contributions?

Will the Minister explain the 136% increase in consultancy services? I acknowledge it is only an increase from €59,000 to €139,000 and it is not a huge amount in the greater scheme of things. Does he intend to issue consultancy contracts that require a 136% increase in this allocation?

I have a similar question regarding advertising where the Department plans to increase its advertising spend by 58%.

Office premises expenses will increase by almost €200,000. Most businesses across all sectors are reducing their office costs such as those for rent and energy. Why is the Department's allocation increasing by 14%, particularly when significant functions of the Department will be transferred to the Departments of Social Protection and Education and Skills? That is incongruous.

I am most concerned about grants to industry under the Enterprise Ireland subhead. The estimate had been €92.4 million for 2009 but the outturn is expected to be €100 million. I am guessing that largely relates to the enterprise stabilisation fund and existing capital commitments but that the allocation has been reduced to €76 million this year, which is a stealth cut in supports being offered to indigenous companies and exporters, in particular. I have flagged this previously but I did not receive a satisfactory explanation. At a time unemployment is still increasing, why is the Government resiling from its commitment to support jobs and industry?

Deputy Batt O’Keeffe

With regard to the question on PRSI, it relates to the employer's contribution. The social welfare element is the employer's contribution.

We laid out the 2009 allocation for consultancy services, which was €155 million, but the outturn was €59,000. We are basically saying the €139,000 allocation for this year is an estimate and will not be the reality. I am conscious that we must cut these expenses, in line with Government policy to cut them by 50%. However, there was a dramatic difference between the estimate and the spend in 2009. There will be a significant reduction again this year. There are specific areas in which we have to bring in external consultants where we do not have the expertise in house, for example, for ICT programmes. We have to ask people to do specific jobs for us but we are confident the estimate will not be the reality, similar to last year.

With regard to advertising and information resources, the estimate in 2009 was €351,000 and the outturn was €199,000 and we expect something similar will happen this year. We continue to try to reduce office expenses. Last year's allocation was €1,566 and the outturn was €1,232. We hope at the end of this year the outturn will be much reduced and we are making every effort to be as efficient and cost effective as possible.

The Deputy asked about enterprise grants to industry. A sum of €58 million was provided last year and it related to the stabilisation fund. We are examining the predictions on the economy by, for example, the OECD and Bloxham Stockbrokers. The latter indicated yesterday that the economy will grow by 5% for the rest of the year, by 3% next year, and by 4% in 2013 and 2014. There is a view that we are entering the recovery phase and the companies Enterprise Ireland is helping are still vulnerable. However, we also want to take into account other companies that are fit for purpose and that have increased export potential. We are putting significant funds into them and into companies involved in research, development and innovation.

Deputy Leo Varadkar

Does the Minister think it is a little premature to pull back supports from industry and exporters through Enterprise Ireland? If a recovery is under way, it is a jobless one and many businesses are still going to the wall or seeking redundancies. Would it make more sense to maintain supports at their current level for at least another year rather than pulling back on them so quickly?

Deputy Batt O’Keeffe

The funding allocated to Enterprise Ireland under subheads D, F and L for company supports in 2010 amounts to €278 million, a significant 26% increase on 2009. We are not only supporting one area. I do not say we would not like to provide more supports but we are satisfied we are meeting demand.

Deputy Arthur Morgan

I thank the Minister and his officials for attending and going through the Estimate. I enthusiastically congratulated the Minister on his appointment but I also congratulate him for managing to shunt FÁS off his agenda because that was a major issue that needed a great deal of work. It was the subject of tortuous discussion at the committee.

Deputy Batt O’Keeffe

I thought I was staying where I was and FÁS would come under the remit of the Department of Education and Skills.

Deputy Arthur Morgan

I will keep an eye on the Minister because he is wily. I refer to the €6.44 million carryover from the 2009 capital allocation. How was that saving achieved?

With regard to county enterprise boards, Leader, FÁS and so on, the committee has been discussing for some time the possibility of establishing a one-stop-shop. I am sure the Minister has constituents calling to his clinic who point out when they approach one agency they are given a form or two and then they are told they must go to other agencies to complete the process. They spend a number of days and experience huge frustration trying to achieve what they need. There is no provision for such a facility in the Estimate. Is the Minister considering the concept of a one-stop-shop? Would that require additional funds?

Various agencies, including NERA, the Equality Appeals Tribunal and so on, are under pressure because of the economic crisis. Will additional staff be provided to them? How is the embargo affecting these agencies, given their budgetary allocations are static?

Would it be possible to make savings in IDA Ireland's overseas operations such as in the five US cities where Invest Northern Ireland has a presence? Is there an opportunity to share facilities? It could be argued Invest NI is a hostile entity and the two organisations are standing back to back but, at the same time, they have the same objective to attract business to the same island. Will the Minister at least review such a concept to achieve savings for both the IDA and Invest NI while increasing their activity?

Nothing is allocated for the European globalisation fund. The fund has been a source of huge frustration in a number of parts of the country.

Deputy Batt O’Keeffe

That has been transferred to the Department of Education and Skills.

Deputy Leo Varadkar

The Tánaiste took half the Department with her.

Deputy Arthur Morgan

Does the Minister's Department have anything to do with the fund?

Deputy Batt O’Keeffe

It will be part of the training.

Deputy Arthur Morgan

All the applications will, therefore, go through the Department of Education and Skills.

Deputy Batt O’Keeffe

Yes.

Deputy Arthur Morgan

I thought the Minister's Department would have a remit to at least following through on the applications from Limerick and SR Technics. This happened before the Minister took up office and my criticism is not aimed at him.

Deputy Batt O’Keeffe

All the staff resources have been transferred at this stage to the Department of Education and Skills.

Deputy Arthur Morgan

It is done and dusted and, therefore, there is no point in going any further.

Chairman

I am shocked at this. Ms Elisabeth Morin-Chartier, MEP, chairperson of the European Parliament Employment and Social Affairs Committee, headed a delegation of MEPs who appeared before the committee three weeks ago to discuss the European globalisation fund. One of the problems is the Government had not got its act together. That is no wonder when the fund is being hived off around Departments like Lanigan's Ball. How could anyone get that act together? The fund is about work and training. We did not come top of the class. Ms Elisabeth Morin-Chartier did not give us a clean bill of health. She said we were tardy about our approach and she was shocked that a top down approach was being taken and that this committee had no input and was not even notified about applications. The idea was that we would have an input. This fund is all over the place.

There has been a less than satisfactory outcome regarding Dell, SR Technics, Waterford Crystal and so on. The opportunity is available now to put two or three projects together. There was misinformation on the website on how long one had to make an application. The Minister of State, Deputy Calleary, was aware of this and he will address it. It is probably a problem the committee no longer has to deal with it but the fund is important for workers who were made redundant. I understood the remit of the fund was being widened and this had been approved by the European Parliament a few days before Ms Elisabeth Morin-Chartier appeared before the committee. Three of our MEPs, Marian Harkin, Proinsias De Rossa and Joe Higgins, and a Dutch MEP, Ms Marije Cornelissen, accompanied her.

The Horizon 2020 strategy was an excellent blueprint. That is the way forward. It set down a clear road map and the IDA and Enterprise Ireland are doing excellent work. I have acknowledged that at every opportunity. The Taoiseach once accused me of being a parochial politician. If that is correct, I stand indicted and guilty as charged. It is incredible how the IDA has failed the people of Westmeath and, in particular, Mullingar. There is a 70-acre site with 25 acres prepared and roads and so on in place and everyone on board. How there has been a failure to attract a major industry to the centre of the country is mind boggling. We have a good road network comprising the N4, N6 and N52 and Mullingar is 43 minutes from Dublin. Turnaround time is critical and we are still waiting. This has raised the hackles of people around the town. It is not just the Minister's problem. Notwithstanding that I have spoken to Mr. Barry O'Leary and the local IDA representative, Mr. McCarthy, this is the fourth year in a row I have had occasion to raise this issue and it is with grave disappointment I do so again on behalf of the people who elected me. While getting the parochial issue out of the day, I must still acknowledge what the IDA is doing.

The Minister made a speech on 11 June in west Cork about county enterprise boards. There are 35 boards and he indicated he intended to do something about their structure. I could be misquoting the Minister but will he answer and clarify issues for me?

More than 1,100 enterprises were supported in some way by the 25 county enterprise boards last year, approximately 52,000 students are engaged in education in enterprise, which is vital because it is the future, and 26,000 training events were sponsored by the county enterprise boards. That is phenomenal. The county enterprise boards are local and are the first port of call. As Deputy Morgan often says, the first port of call is absolutely vital. The acorn seed, or the first step, is very important to get to the oak tree. What has the Minister in mind? The local nature of the county enterprise boards and the help they provide to micro-enterprises will play a key role in getting us out of our difficulties, as will foreign direct investment, Enterprise Ireland and so on, although I am open to correction there as well.

Some 77,000 redundancies were notified in 2009. I compliment the Minister of State, Deputy Calleary, on the work he has done in this area to try to streamline it. Notwithstanding his efforts, there is still a significant delay in dealing with redundancies. However, I acknowledge the effort he has made in as positive a way as possible. Is there any way we can accelerate redundancy payments because very often there is an opportunity for people to use redundancy money positively? If bills accumulate in the interim, the money may well dissipate to pay outstanding bills. As the Minister said, if one can get back into the workforce in some form or other within six months, it is always better as one retains one's skills and so on.

Will the Minister appoint additional chairpersons to the Employment Appeals Tribunal to try to deal with the backlog? That might be an issue for the Minister of State, Deputy Calleary. There is a significant backlog and more technical cases are being brought before the Employment Appeals Tribunal but for the most part, it is still a lawyer free zone.

Deputy Varadkar asked about the temporary employment subsidy scheme. We were all shocked that €20 million disappeared I do not like to saying by stealth but without fanfare. When a figure is increased, the noise is deafening with the whirring of press releases greeting good news. We raised it with the Minister at a committee. In combative style, he referred to the €278 million, said I was a little bit parochial and told me to look at the bigger picture to see from where he was coming. I accept that but I thought this was very positive, in particular in the context where €100 million was promised for 2009 and 2010. However, €20 million was whipped away overnight without fanfare or a great announcement. I agree with Deputy Varadkar who said it was a little premature to engage in that type of thing.

I refer to the insurance scheme. On a previous occasion, the Minister said he was speaking to the Minister for Finance. I believe he said last Sunday that he is now ready to bring something to Government, although perhaps I am misquoting him. The points the Minister made were well made. We do not want it to be a replacement scheme for moneys that should become available.

The other day I used some language which was fairly close to unparliamentary in support of the Minister's efforts to kick the banks into shape. The ordinary person struggling with his or her mortgage and the small businessperson has heard that €22 billion has gone on a train to nowhere and will never come back — at least if one went to San Quentin, one might get out sometime.

Last night I heard the chairman of Anglo Irish Bank try to explain it on a programme and I paid particular attention to him. It is mind-boggling. What would €2 billion do for small businesses which are struggling? It would relieve the Ministers of State, Deputies Calleary and Kelleher, of many problems. Some 11 times €2 billion is going on a train to nowhere and that is only part of the story. However, that is a wider Government problem.

I support what the Minister is trying to do. These people should be called in every month to get proper reports. The Government should not accept any obfuscation or side-stepping or be dazzled by figures which its own reports indicate are not true. These people had the brass neck to tell the Government all was well. All is not well. We speak for ordinary small businesses because the big companies are well able to engage public relations people to speak for them. Small businesses which provide four to eight jobs are the future and we speak for them.

I accept the Minister does not want to replace money or allow somebody who should lend money to use this as a perfect excuse not to do so. How far advanced is this scheme? I know it must be tied down. This is not a political point but in December, the Minister for Finance announced the PRSI reduction of €30 million, which is very important to employers and will play an important role. However, it took six months to get it out of the traps. The Minister will say he had to deal with the Minister for Social Protection, there was a change of Minister and so on and that all of that slowed it down. I know that because I am not a fool.

When does the Minister believe this insurance scheme will be introduced? I know he must get it through the Department of Finance. Has his Department made a compelling argument and are all his officials on board? Is it true officials in the Department of Finance do not have the same degree of enthusiasm for it as the Minister and the Ministers of State in his Department? Is that a fair summary?

If that is the position, is this not the dead hand which will never be lifted, notwithstanding the Minister's enthusiasm? The Minister is enthusiastic about this because when he became Minister he said he would remove obstacles if he saw them. I acknowledge that he is somebody who would do that. However, if there is a dead hand ensuring this does not see the light of day, is there any way we can all get behind it? This is important not as a replacement but as an additional support for those companies.

I acknowledge the comprehensiveness of the Minister's statement and the work the Department and the Ministers of State are doing. They are very facilitating to us as Members of the Oireachtas.

Deputy Batt O’Keeffe

I thank the Chairman for lauding the efforts of IDA Ireland and Enterprise Ireland. They are doing a superb job on behalf of Ireland. One week into office I went with IDA Ireland to the mid-United States and I was more than impressed with the operation. I have been on many trade missions with Enterprise Ireland. We are fortunate that we have such expertise and professionalism within both organisations. When one thinks that 2009 was one of the worst year's ever, they were still able to provide 125 foreign direct investments and 50% of them had a research and development content. That is a good news story.

What is in the pipeline for this year is very good. We will continue to make——

Chairman

Will the Minister see if that pipeline contains Mullingar? It is on the N4 and N6.

Deputy Batt O’Keeffe

I was informed during the week by Deputy O'Rourke that she has a Chinese agenda. I thought that would be extremely important to the Chairman.

Chairman

It is, but Mullingar is where it is at. I bet if something was going to Ballincollig or somewhere else, the Minister——

Deputy Batt O’Keeffe

I saw a partnership between Shanghai and Mullingar during the week.

Deputy Arthur Morgan

Will the Chinese understand them?

Deputy Willie Penrose

We would manage everything.

Deputy Batt O’Keeffe

In response to Deputy Morgan, of the €6 million carryover, €5 million was in respect of IDA Ireland commitments to capital projects and that will be paid out.

Deputy Arthur Morgan

Is it that those IDA Ireland capital projects did not commence?

Deputy Batt O’Keeffe

No. They were not completed or the money was not required at the end of the year. In all of these cases, one could take across 10% of the capital to the following year and the €6 million would be well under the 10%. However, there were commitments of €5 million for capital projects that were not going to be paid out before 31 December and will be paid out in the early part of the year. That was the main reason.

In terms of the operation of Ireland abroad, Enterprise Ireland, Fáilte Ireland and IDA Ireland, by and large now we are trying to have one house, which is, Ireland house. That is operating quite extensively in the United States where they all operate out of the one building. I am calling in all of the agencies to the Department within the next two weeks to look at their operation and to see how we can integrate them further and how we can synergise the activities that will be in the best interests of Ireland overall.

Is there a vote now?

Chairman

Yes.

Deputy Arthur Morgan

I have a brief question. I am wondering about Invest Northern Ireland, the "poor ol' divils" up in the occupied six. Is there no way, when the Minister has his colleagues in, he would ask them if they would consider sharing some space with them in Ireland house? No matter what one's political view, if one could get them in, one could save a few bob and invest the money better in trying to attract investment.

Deputy Batt O’Keeffe

By and large, there is a significant level of co-operation between IDA Ireland and its counterpart in the North.

Deputy Arthur Morgan

I know there is.

Deputy Batt O’Keeffe

They meet regularly. We want to approach this with an all-island view and we are moving increasingly in that direction. The integration taking place and the level of co-operation North and South, and with the UK, has never been at a higher level. We see it as being advantageous for all of us to synergise our activities. During my term in this Department, I will be making every effort to ensure that happens.

Deputy Arthur Morgan

I thank the Minister.

Deputy Deirdre Clune

I want to ask the Minister about the McCarthy report's suggestions for rationalising agencies. Will the Minister be doing anything in that area? Last week, he spoke about the Competition Authority and the consumer agency. There is NERA and the HSA, and there are proposals in those areas. Has the Minister moved on it?

Deputy Batt O’Keeffe

On the McCarthy report,——

Chairman

We should suspend and return to the matter. In fairness, there are a number of points and the Minister of State, Deputy Calleary, wants to make a couple of points as well.

Sitting suspended at 11.55 a.m. and resumed at 12.15 p.m.

Chairman

The Minister will continue his reply to questions.

Deputy Batt O’Keeffe

The Chairman asked about the loan guarantee scheme. The Government examined various supports and Forfás did a report for us on such a scheme. High-tech businesses that do not have collateral find it difficult to get credit from banks and we decided to tailor the scheme to specific areas. That has to go to the Government and the Department of Finance for approval. I guaranteed there would be consideration of it before the summer recess.

Since our meeting with the banks, not much time has elapsed but I have given a guarantee that I will let this take its course for two months before the Ministers of State and I meet various SMEs around the country to ensure something tangible has happened. If not, we will examine it again. The banks have submitted a plan to us but we are not totally happy with what has been submitted and we will send that back to them.

County enterprise boards, CEBs, have been a tremendous success and local input is vital. I will try to ensure any changes made to them will consolidate local interest but there are aspects of the boards that I would like to examine. While money is given to them, nobody is examining the output. Some are outstanding but others are not as good. We should have a group to monitor output. We must also control the staffing levels, as there are significant differences around the country. The intention is to examine these issues and not to do away with the boards. I am emphatic about the importance of local input into them.

The Chairman is also concerned about the European globalisation fund. We will still have an input through Enterprise Ireland and the CEBs. They will be part of an overall group considering the suitability of an application for INTERREG funding. While all the staff have been transferred to the Department of Education and Skills, we will still provide our expertise through Enterprise Ireland and the CEBs and there will be co-operation across the boundaries.

With regard to the subsidy scheme, it expires at the end of the year and even if we were to provide more money, I am not sure we would be able to address what has happened. There is a 26% increase in company supports given to Enterprise Ireland through the stabilisation fund.

Deputy Clune had a query regarding the McCarthy report. The proposal of the special group cuts across a number of Departments and agencies. I supplied a table on this during Question Time recently and, therefore, that is available if the Deputy wants to see where is each item. The Shannon Development issue is ongoing and we are also examining the mid-west region, in particular, through the task force under Mr. Denis Brosnan that has been in place. I met him recently to discuss his findings and recommendations and we are examining them in the Department.

With regard to a merger of the HSA and NERA, the problem is there are radical differences between the nature of the two inspectorates and the overlaps between the agencies are minimal. A merger will not result in appreciable savings and it would require substantial legislative amendment. It is not a feasible option. Reference was made to the merging of the functions of the Registrar of Friendly Societies and the Companies Registration Office. Both offices are the statutory responsibility of the same public official and, therefore, they have been brought together. The merger of the Irish Takeover Panel and the Competition Authority could lead to unnecessary policy conflict and it would not be in line with best international practice. We are proceeding with the merger of the NCA and the Competition Authority and we will publish the heads of the Bill before the summer. The Bill will be published before the end of the year.

Deputy Deirdre Clune

The Minister of State, Deputy Conor Lenihan, deals with funding for STI. Will there be streamlining in that area?

Minister of State at the Department of Enterprise, Trade and Innovation (Deputy Conor Lenihan)

The Deputy is correct. The first step in the creation of a single stream of funding for STI has been achieved with the transfer of PRTLI. There remain other issues regarding bodies which are not transferred, for instance, the Higher Education Authority, HRB and IRCSET funding, which remains in the HEA at the moment. The McCarthy report recommended a single fund which should be flagged out to a single Department. We are in discussions with the other Departments but, as one can imagine, many of the other Departments are reluctant in some cases to cede certain activities. To my mind, as Minister of State with responsibility for science and technology, the proliferation of delivery mechanisms does not make sense. One could itemise, for instance, IRCSET, the Irish Research Council for Science, Engineering and Technology, which is still in the Higher Education Authority. It really does not make sense, if one is creating a single fund, for that body to remain in the Department of Education and Science. These matters are subject to discussion and debate within the Government but we have made the first significant step towards the creation of the single fund for science expenditure. A big challenge, in my view, is to clean out the number of agencies involved so that we can have clarity and measure outputs in a more coherent fashion and give a clear signal that the spending in this area is actually working. There is a profound misunderstanding, even in some quarters of the Government, about the effectiveness of the spend in this area and I think the McCarthy recommendation is broadly correct in its thrust, that we need to provide clarity about the funding mechanisms and we need to be able to demonstrate to the public that the significant resources being deployed in the area of science, technology and innovation, are working in terms of metric, outputs and real return to the economy.

As the senior Minister stated earlier, the 50% of inward investment gains we have made in the past two years are coming directly in the area of research and development. The successful 800 companies who work in the research and development sector in export markets, under the direction of Enterprise Ireland, and who receive assistance, are the companies which are increasing their exports in these two very difficult years. There is a very strong umbilical connection between involvement in research and development and science and technology and productivity, both on the inward investment side and the small to medium-sized enterprise side. However, it behoves the State and the Government to provide clarity in terms of how this funding is used and how it works.

Deputy Batt O’Keeffe

There is no great difficulty between the Departments. One issue is whether the humanities should be part of science. This is a really a debate for academics and it remains to be finalised. All the scientific research will be brought under the Department of Enterprise, Trade and Innovation.

Minister of State at the Department of Enterprise, Trade and Innovation (Deputy Dara Calleary)

I will clarify the situation with regard to redundancies. The total volume of new redundancies recorded this year to the end of May was 28,670, which is a decrease of 19.6% over the number received during the same period in 2009. The total number of claims processed to the end of May 2010, was 34,036, which is an increase of approximately 130% over the same period in 2009. The number of claims still on hand at the beginning of June was 34,888. Rebate claims received in December 2009 are being processed. Lump sum claims received in November 2009 are being processed. The current claims processing time has decreased from 53 weeks this time last year to 23 weeks at the beginning of this month. We are conscious this time needs to be shortened further.

Chairman

I agree it is still a bit long.

Deputy Dara Calleary

This side of the Department will transfer into the Department of Social Protection but the Minister, Deputy O'Keeffe, has instructed this is not to happen until all the systems are in place to ensure there will be no delays.

I will offer a clarification with regard to some comments from the Chairman about the European globalisation fund. The Department's difficulty is that false expectations were created with regard to the fund, particularly in the case of Dell. An expectation was created among the affected workforce that they would receive a direct payment, as opposed to a training grant. The frustrations caused by those false expectations made it very difficult for the Department to engage with the workers. However, we have set up a local task force. FÁS has a very good unit which has done very good work and is handling the Dell fund and based in a specific building. Throughout the process I kept the representatives from the mid-west informed. We made ourselves available to speak to the committee but the transfer to the other Department happened in the meantime. The reason for the transfer is because this is primarily a skills fund. The application is being approved for Waterford Crystal and a tender for a management company has been issued. The Tánaiste has lodged an application for construction workers in recent days.

A total of five extra vice chairmen were appointed to the Employment Appeals Tribunal last January. The Department is keeping the tribunal under review. We may appoint further vice chairs later in the year if the need arises. We have asked the existing panel to work harder, to take on more cases. We are examining the functions of all the agencies dealing with employment to see if they can be streamlined and to avoid the practice of dispute shopping.

Deputy Michael Fitzpatrick

I welcome the commitment of Enterprise Ireland to small indigenous companies. I appeal to the Minister to give more support to community enterprise parks. I do not mean community groups but rather properly established community enterprise parks with competent people in charge of them. I would like such parks to be given more support. I know from experience that more jobs can be created at that level but a leg-up is required from Enterprise Ireland.

On the subject of the county enterprise boards, I can only speak for Kildare which has a very good enterprise board. It would be a disaster for Kildare if anything were to happen to the personnel in the enterprise board. There may be other costs associated with the enterprise board which could be examined but we must retain the personnel on the ground. There could be an opportunity for the local authorities, now that the numbers of local authority staff have been reduced, to take enterprise boards into their premises. There seems to be plenty of vacant space in my own local authority offices and plenty of room for additional personnel. Early intervention is very important in preserving and developing jobs. We hear a lot about new jobs being created but early intervention and the monitoring of companies in trouble would be desirable. In the past, Kildare, being on the periphery of Dublin, got its fair share of IDA business. However, the new road networks have opened up the country and there is easier access. As a result, Kildare, in my view, needs to be targeted by the IDA. I acknowledge Kildare is host to very good companies but the IDA has a much easier job now selling the west than in previous times and I think Kildare is losing out.

Chairman

The Department carried out a study on the land banks available to the IDA and the various enterprise agencies. At one stage a couple of years ago, the IDA was indicating it would dispose of any lands surplus to its requirements and at market value. However, at that time, the market value would have strangled a budding entrepreneur before he or she could even get out of the traps.

What is the current position with regard to any surplus lands that might be available? The committee did a study of lands lying idle. We undertook a study of the commuter belt and the issue of idle land was discovered. Deputy Calleary was a member of that study group. This was a particularly pronounced problem. Rather than leaving lands lying idle forever — land is a valuable and a scarce resource and an economic commodity — if a person comes forward with an idea that may not fit into the IDA or Enterprise Ireland zone of supports, I suggest this land might be considered to be made available either through the local authorities or through the county enterprise boards for transmission to someone with an idea. Any idea should be incubated and developed to ensure that some jobs come out of it. We should take down whatever obstacles, hurdles or impediments are in the way to ensure this materialises. We all want to ensure a positive outcome for jobs, such as the replacement of jobs that have been lost, or new jobs. We should all put our shoulders to the wheel in this regard. I know there are parcels of land available throughout the country and this was noted in our Dublin commuter belt study. I hope we will not just engage in semantics. The Department of Finance claims one should get market value. We should look at the value. Some of those lands were bought in the 1970s and 1980s at low value. We should get approximately 10% or 20% and keep them moving and mobile, and ensure they will be available for people who might have an idea and who would like to develop an enterprise park or incubation unit that is community based.

Deputy Batt O’Keeffe

The Chairman will be aware that building advance factories was how we operated up to 1996. Since then the policy has changed dramatically and companies coming in either rent privately or have built privately. The Chairman will be interested to note that from 1998 to 2002, IDA Ireland disposed of 486 buildings out of a total of 650 on its books. At the end of 2009, IDA Ireland owned 67 buildings of which 36 are occupied or reserved, six are available and 22 are in the process of sale. We have many problems with some of the older buildings which have asbestos in the roofs and so on. We make every effort to dispose of the outstanding buildings, but they are in poor condition and we also must have regard to the economic climate. The Comptroller and Auditor General would require IDA Ireland to sell at market value otherwise the Secretary General of my Department would be answerable like every other Secretary General.

Chairman

I appreciate that but it is a problem. The Minister is right. However, when it is done above the ground and it is there for public exposure, what is the good of waiting to get market value?

Deputy Deirdre Clune

There is no market.

Chairman

There is no market value now.

Deputy Deirdre Clune

If there is a purchaser, there is a market.

Deputy Batt O’Keeffe

We are not allowed to give them away either. If we were to give them to another State agency it could be seen as state aid, so we need to be careful.

Chairman

Could we not at least apply peppercorn rents? We need some ingenuity and to be innovative.

Deputy Batt O’Keeffe

In fairness it has been outstanding in the number of sales it has completed and the profits that have been garnered. We are now down to 22 properties out of a total at one stage of more than 600.

Chairman

The Minister is talking about premises. There is also land as we discovered during our sojourns around the region.

Deputy Batt O’Keeffe

I shall outline the policy on the land. It has been disposing of land that is no longer required. Those that are not suitable for current needs are sold either to the local authority or on the open market. That happened in New Ross, Gorey, Enniscorthy, Bray, Dunmanway, Clonakilty and Cappaquin. Discussions are ongoing with Donegal County Council in respect of properties in Ballyshannon, Buncrana, Lurganboy and Milford. In Dublin a number of sites have been sold on the open market and the moneys realised have been redeployed in the purchase and development of lands outside the Dublin region. Some 18 IDA Ireland units on Gardiner Street are currently on sale on the open market.

Chairman

I thank the Minister, Deputy Batt O'Keeffe, and the Ministers of State, Deputies Conor Lenihan, Kelleher and Calleary for attending. I thank all my colleagues for participating in the debate, which was a very useful exercise. It is clear that we need to pursue a number of issues to advance the cause of ensuring that 430,000 people get an opportunity to get back to work. It behoves us all to act in their best interest to ensure they are put centre stage in all the policies we need to pursue in this regard.