Proposed Regional Employment Service: Discussion

We now proceed to an engagement with the Minister on the matter of procurement for local employment services, a matter that has very much exercised the members of this committee over the past number of months. I ask members to be concise in their questioning and bear in mind that this questioning must conclude by 11.30 a.m. Before bringing in members, I say to the Minister that the regional employment service is set to replace the existing jobs clubs and local employment services. These have been assisting communities across the country for the past 25 years both in urban and rural areas.

Research commissioned by the Minister's Department that was carried out independently by Indecon indicates attendance at local employment services have been beneficial to those who have used the services. The concern is we are going to deny people access to a walk-in, person-centred and community-based employment service, to be replaced with a profit-driven, results-based process that will happen on referral only. Members of Dáil Éireann have consistently criticised this model since it was first introduced nearly a decade ago.

We will now take questions from members before I ask the Minister to respond. The first member who has indicated is Deputy Ó Cathasaigh and he will be followed by Deputy Paul Donnelly.

I will be brief as other members of the committee have more knowledge of the granular details of the matter. I will defer to their greater experience in that regard. I say to the Minister that I am worried. This committee has received an article of correspondence from Maynooth University entitled, Winners and Losers?: the social marketisation of civil society. It is an extremely good document that addresses many of my concerns.

I accept the rationale presented by the Minister that this had to be introduced in this manner because of competition law but I am very worried that we are moving away from a model that is person-focused to one where a person is reduced to a unit and we may be looking at attempts to increase throughputs of units through the service. It is a real worry that there will be a change of focus. Will we begin to look at a jobs service focused on getting people into any job rather than getting them into the right job? Perhaps we will not even be worried about the job at the end but the other aspects of the process.

It may be somewhat tangential but I noticed Denmark managed to get around procurement problems because it has an well-empowered local government system. It is widely acknowledged we are much too centralised in our Government model. Would it not be fantastic for the likes of Waterford's council to be much more hands-on in procuring this kind of service? I will defer to other members now.

I concur with the comments of Deputy Ó Cathasaigh. I was also sent the document from Maynooth. Has the Minister read it? If she had, she would be much more concerned about moving forward with the policy that is currently proposed. As others wish to contribute and time is very short, I will ask some questions.

Has there been any consultation with the local employment service, LES, providers prior to the roll-out of the proposed regional employment service model? Has the Department carried out an analysis of the impact that the proposed model will have on existing local employment services? If such analysis has been carried out, is the Minister willing to share that with the committee? Models of commissioning have been outlined to us by a number of community projects and local employment services.

They outlined that the social inclusion and community activation programme, SICAP, and Tusla have built-in performance targets and penalties for underperformance. They protect the taxpayer's investment. That is particularly true of SICAP, which was developed by the Minister's own Department and is based on contracts that guarantee performance but respect the financial structure of community-based charities. Why has this model, which serves the funder and service users so well, been ignored in this request for tender, RFT?

Can the Minister confirm that the proposed regional employment service, RES, will be a referral-only service and not a walk-in service similar to the LES? What is the rationale for that proposal? A lot of people will be left out of this service, like lone parents, carers, people with disabilities and others who will not be able to access it because they prefer walk-in services. Other people wish to ask questions so I will leave it at that. There is massive concern in the community about this and there is a huge fear that we are moving a lot of our services to a for-profit model. That fear is now being realised. This is absolutely unacceptable.

There is a problem with the issue of walk-ins. Can the Minister confirm that the regional employment service being proposed will be done by referrals from the Department only? If that is the case, how does the Department propose to provide employment services to cohorts like lone parents, people with disabilities and others who are not in receipt of jobseeker's payments? How are they to be provided with that employment service?

Some LES staff said to me that they were worried about the tender but that this is worse than they had feared. This is a big mistake. This proposal would erode the community ethos and the not-for-profit model so well fostered by the likes of the LES and job clubs for so many years. I am disappointed about how this has been put forward. The LES and job clubs were led to believe that they would be pleasantly surprised and now they may not even be in a position to tender for what has been put forward, if they would even want to, given what has been put forward for a payment by results model. Can the Minster outline what this tender means for job clubs specifically? There has been a lot of emphasis on the LES but what will this mean for job clubs, both those included in this first tender for those seven areas and those not included, in the new year? I also ask the Minister for details on the second phase of this tender. When is that planned and are things going along on time?

The walk-in issue is hugely concerning given that those furthest away from the job and labour market will not have the access to services they have had up until now.

What are the differences between the model being proposed in this tender and JobPath? I ask the Minister to please look at the results from JobPath. Nearly €300 million was spent and over 280,000 people were referred, some of them two, three or four times. That is now ended, which is welcome. Around 7.9% of those people found jobs that have been sustained for over a year. That is not a success. I ask the Minister to look at that.

For an awful lot of people, the wraparound services and supports provided in LESs and job clubs will not be available in what is being proposed here. That is also a huge loss. For some people it is not just about any job. It is about training, education and other supports they may need, which they will need now more than ever as we emerge from Covid-19. I would appreciate if the Minister could come back to me on those questions. There has been a real lack of engagement on this matter. I met with the job club in Ballaghaderreen last week. It has not been communicated with and the people involved do not know what is happening. That is a mistake and must be corrected. People need to know. Some of them have been running these services for 25 years. They have given it everything and have been treated poorly in all of this.

Many of the questions I was going to ask have been asked. I will not repeat them but I endorse all the points made by my colleagues. There are two types of model here: one in which the focus is on getting number results to satisfy the Department and get paid; and one based on service. We need the latter. There is a cold chill going down a lot of people's backs with the fear that when the SICAP comes up for retendering a similar results-based approach will be taken. My experience of the JobPath programme over the last number of years has not been good. I am not blaming the providers because they just bake the cake according to the recipe. JobPath encouraged throughput, numbers and "results" but the problem with that is that people in such a system do not have the time to reach out to those who most need help. Instead, they reach out to the people who are going to give them the best results. That is inevitable in systems that become results driven. As I said, there is a big concern that this is the model being adopted by the State for the community and voluntary sector. It is not the one we were used to, that gives the best results, is most community friendly and reaches those who are hardest to reach in society. At the end of the day, reaching those people takes a lot of time but what is the point in helping people who probably would have sorted themselves out anyway at the exclusion of those who really need assistance? That is the nub of this issue.

Members have expressed a broad range of views and concerns regarding this tender process. I ask the Minister to encompass responses to the questions that have been raised in her contribution.

I thank members for their contributions. When I started this process I had the same concerns as they do but, having put a huge amount of work into this and having consulted extensively with the providers, I am satisfied that this request for tender will meet the needs of the one person I am most concerned about in all of this, namely, the person who is unemployed and looking for a job.

I will try to answer some of the questions that have been raised. I accept that they are valid questions because I asked the exact same ones of my officials when we started this process. There has never been more consultation with the local employment services than there is now. For people to say they were not consulted is absolute nonsense. My Department has undertaken extensive consultations with the existing contract providers over the last number of years. This is about expanding the services. There are a number of areas in this country that do not have an employment service and I want to expand that service. That is why this has gone out for tender. We will learn from this tender process because at the end of the day it is about making sure unemployed people get all the supports they need to help them get a job.

In 2018, my predecessor attended the Irish Local Development Network, ILDN, annual meeting and informed all the CEOs of the partnership companies that the current contractual approach was not in accordance with EU and national procurement rules and that the Department would be working to introduce reforms, including open competition for the existing contracts, in order to meet our legal obligations. Officials from the Department engaged in a detailed question and answer session with the CEOs following the Minister's speech. In January 2019, the Department published the Indecon report and hosted a briefing session with all LESs and job club providers at which Indecon presented its findings and the Department outlined that it was now moving to implement those recommendations. They included the need to amalgamate LESs and job club services and award contracts through open procurement.

Officials from my Department in late 2019 visited all LES and job club providers to inform them of the Department's intention to procure contracts on a competitive basis and seek their input and views on the possible design of the RFT and contracts. The Department appointed consultants in 2019 to review the public employment service, including the contractors. As part of this review process, the Department insisted that the consultants engaged without the presence of the Department with nominees from the local employment service and job club providers. A series of workshops were organised as part of this process.

Officials in my Department have briefed representatives of the ILDN on the plans for future procurement since 2019 and these briefings have continued on a regular basis throughout 2020 and 2021. In my role as Minister in the two Departments, I host a regular forum with ILDN member companies and we have provided updates on the Department's plan at previous forums. My Department continued to engage with the ILDN to the fullest extent possible prior to the publication of the RFT rules. On 3 June, I hosted an information session on the phase 1 procurement process for the interested parties.

I want to be very clear. We have consulted extensively with local employment service providers. I know that in some places, they provide an absolutely excellent service. Reference was made to the Indecon review. It found that LES had, on average, a job placement rate of 28.8% when the annual target was 30%. Some would say that is not bad, and it is not.

However, I would like to point out something else. When one breaks down the figures a bit further, this average covers a significant range in placement rates from 14% to 45%. Some providers provide a great service and others do not do as well. I want everybody to provide a good service. That is why in this contract there is a minimum price. That is to ensure that people get the service they deserve. That is important.

I want to be clear that the total focus is on the user. My Department wants to procure high-quality employment services which focus on supporting individual jobseekers and other cohorts who are furthest from the labour market. This will be a tailored intensive employment service designed to address the needs of the people who are supported by the service. Bids will be evaluated on the basis of quality and an organisation's ability to access a wide range of supports and services to best meet the needs of their clients.

I do not want to say too much about the procurement process but I can state clearly that local employment services have a lot of contact with many different organisations. On that basis alone, an organisation's ability to access a wide range of services will be evaluated as part of the process. There is a limited cost element in the RFT, but it is within defined parameters.

The vast majority of the awarding criteria will be determined by the quality of the service, design and key personnel, as well as links with relevant local partners and stakeholders. There is a strong focus in this request for tender process for local services from local providers. This is about expanding the delivery of high-quality employment services across seven counties. The new service will have a strong local focus and its fee structure will be heavily weighted towards client engagement and progression. That is the one thing we all want to achieve. We will all agree that it is the client that is the number one person in all of this.

My Department will learn lessons from the phase 1 procurement process and apply them in the design of the multiple requests for tenders that we will publish later this year under phase 2. I cannot stress how much effort and time we have put into working with providers. This is not a for-profit driven agenda by any manner or means. This is a service for the people who need assistance to get them to help them get back into the workplace. Now more than ever, we need that because of the challenges Covid has presented to us.

Walk-ins were mentioned. The public employment services Intreo offices offer all individuals who require advice access to employment services. Under the request for tender for the new service, my Department will be able to refer long-term jobseekers, as well as other cohorts to the new service. All referrals will be organised by my Department's Intreo offices. They will determine the best employment service based on an individual's specific circumstances and requirements. In many cases, supports for individuals will be delivered through my Department's Intreo offices or will be referred to the new regional employment service.

If an individual is not in receipt of a social welfare payment he or she should contact the local Intreo office, which will offer him or her the supports and advice they want. It is important to say that this focus is again on the person looking for employment.

The JobPath model was mentioned. It is not the case that this is replicating the JobPath model in terms of procurement. I want to be clear that the request for tender for regional employment services is carefully designed to ensure that all sectors can bid for the contract and the fee structure reflects the intensive engagement required to support those furthest from the labour market. This is very much focused on the needs of the person. It is about how he or she can be assisted and helped to the maximum extent possible to help him or her get ready to enter into a job.

The JobPath payment structure is almost an inverse of the payment structure within the request for tender. JobPath has a nominal fee associated with the engagement with the customer. After that, any further payment to the contractor is associated with sustained employment. This means that where the customer does not enter into employment, the JobPath provider only receives the registration fee but must provide 12 months of employment services to the jobseeker.

The opposite is the case with regional employment services where the majority of payments, an indicative average of 90% of total fees, are associated with engagement, the service and individual progression. Under this model, 90% of the fee goes to the provider of the service in order that it can put all of the resources necessary into getting a person a job. A provider will get the last remaining 10% of total fees when the person secures a job. I want to be clear that 90% of the fee, which involves a minimum price, will go towards working with a person and giving him or her all of the support he or she will need to get him or her achieve employment.

I do not know if I have answered all of the questions, but I hope I have given the committee a flavour of what we are trying to achieve. It certainly is not to short-change anybody. It is about working and making sure people who need that service get it.

I will take any brief supplementary questions from colleagues.

I thank the Minister for her responses. Could she outline specifically what the request for tender means for current job clubs? While there is a lot of focus on the LES, I refer to job clubs. Is the Minister able to tell us whether there will be a referral fee built into the aforementioned 90% of fees? I ask her to confirm that the model is shifting to payment by results.

To be clear as well on the level of consultation, which I acknowledge, my point was that I believe the LES thought there would have been a pleasant surprise with this tender in respect of job clubs, but that has not been the case. From my engagement and meetings with several job clubs and local employment services, there is a feeling that they were consulted with but not listened to, from the looks of this tender.

I call Deputy Paul Donnelly.

Deputy Kerrane has already asked some of the questions that I wanted to. One question, requiring a simple yes-no answer, is whether there will be walk-ins to the new services?

Before the Minister responds, I have been contacted by representatives of the jobs club in Ballaghaderreen. Job clubs around the country are very concerned about this tender process. The core of this issue is that we must help people to not just get a job but to get a long-term, sustainable job. There is a fear that all we are going to see is a certain amount of churning, instead of securing long-term sustainable employment. The Minister comes from a rural part of the country, like myself, and she knows that the range or availability of jobs in those parts of the country is not the same as the opportunities in urban areas. Sustainability is not the same in rural areas as in urban areas.

We all agree that this scheme needs to go to a tender process, but the key element is how this process is structured. Established models exist, like the SICAP model, that have performance targets and built-in penalties for underperformance. It is imperative that such aspects are included in a process but that the focus will be on securing long-term, sustainable employment for the people availing of these schemes. No one is prepared or willing to defend a situation in respect of successful employment outcomes, as the Minister referred to in her contribution, ranging from 14% to 45%. We want to see all the groups around the country providing these services achieving that rate of 45% and, hopefully, going even higher than that level in providing long-term, sustainable employment. All members of this committee feel that is the approach which must be taken in this regard and that is the outcome we achieved.

I will let the Minister wrap up now on this area, because we are coming close to the time limit for this meeting.

I thank the Chair for his contribution and I also thank the Deputies for outlining their issues. I do understand those issues, by the way. My officials will attest that the questions the Deputies have asked me were the same questions as I asked my officials. I want to be clear that this initiative is not about profit but about the service we provide to those people who need assistance in upskilling, guidance or whatever advice they may need to get them into sustainable and good-quality jobs.

Turning to job clubs, the amalgamation of the local employment service and job clubs into one service was a key recommendation of the Indecon reports on the local employment services and jobs clubs. It was recognised that there was close interaction and complementarity between the services and that amalgamation would reduce administrative duplication and support a more effective and efficient overall employment support service. The request for tender is designed to ensure that all competent service providers of appropriate scale can bid competitively. For some independent job clubs, there will be a challenge in bidding for much larger contracts in respect of services, scale and geographic coverage.

My officials have visited all existing providers and have encouraged them to work collaboratively, and that is the important word here. There must be collaboration with other service providers in their sector and areas. Therefore, the request for tender encourages providers to explore the possibility of collaborating with other similar bodies to submit a joint tender. Under this request for tender, tenderers working together and submitting a joint bid may satisfy the minimum turnover criteria in the RFT as a whole. Again, therefore, there is an advantage to working together and there is also an advantage to the service when people work together and more collaboratively.

Regarding the request for tender, 90% of the funding is in respect of securing the service and the individual agreeing to the personal programme. The individuals concerned get 90% of their payments then and the remaining 10% when they secure employment. Turning to the job club in Ballaghaderreen, representatives from that club came to Dublin and attended the consultation with the consultants. We have certainly taken on board their views. I have to say that some people do not want to change, and I can understand that there is a reluctance to change. Having looked at this issue, though, and examined it very carefully, I am very clear that I want to ensure that it is the end-users who benefit.

Having visited local job clubs in my area and spoken to the people rolling out the employability service, I have every confidence that they will be well positioned to put in a good tender and I have no reason to believe that they should not be successful. I genuinely believe that, because we worked extremely hard with them before the request for tender went out to help them to understand this process. The tender is out there now. We will learn from this process when the applications come in and before we look to the next requests for tender due to be issued before the end of the year. I think this process will instil confidence in the providers. Ultimately, they are providing a service to people and giving them the confidence and advice to help them to take up a job. There is no reason, therefore, why the service providers should not have that same confidence in themselves to win this tender.

I thank the Minister very much, but I think we have taken the talk from her today, judging from the state of her voice. We are all agreed that the focus must be on the individuals and on ensuring that they secure sustainable employment. We are all at one on that issue. I thank the Minister, Deputy Humphreys, and the Minister of State, Deputy Joe O’Brien, and their officials for the assistance they provided to the committee today.

The select committee adjourned at 11.28 a.m. sine die.