COMMITTEE OF PUBLIC ACCOUNTS díospóireacht -
Thursday, 1 Dec 2011

Annual Report 2010: Discussion with FÁS

Mr. Paul O’Toole(Director General, FÁS) called and examined.

Chairman

Before we begin I remind members, witnesses and those in the Visitors Gallery to turn off their mobile telephones, as interference from mobile telephones affects the sound qualify of the transmission of the meeting. I advise witnesses that they are protected by absolute privilege in respect of the evidence they are to give to this committee. If they are directed by the committee to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given, and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a Member of either House, a person outside the House or an official by name or in such a way as to make him or her identifiable. Members are reminded of the provisions within Standing Order 158 that the committee should also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits of the objectives of such policies.

I welcome Mr. Paul O'Toole, director general of FÁS, and invite him to introduce his officials.

Mr. Paul O’Toole

I am accompanied by: Mr. Michael Dempsey, chairman; Mr. Bryan Fields, director, training policy development and support; Mr. Oliver Egan, assistant director general of operations; and Mr. Conor Dunne, assistant director general with responsibility for finance and information technology.

Chairman

I welcome the representatives from the Department of Education and Skills.

Mr. Brian Duggan

I am a principal officer from the FÁS liaison unit of the Department of Education and Skills. I am accompanied by Mr. Niall Monks, assistant principal officer.

Mr. Dermot Nolan

I am from the Department of Public Expenditure and Reform.

Chairman

I invite Mr. Buckley, the Comptroller and Auditor General, to introduce the FÁS Annual Report 2010.

Mr. John Buckley

The financial statements of FÁS for the year ended 2010 have received a clear audit opinion. There were no special reports on FÁS in 2011.

The principal elements of the organisation's response to the reports that issued in previous years - there were three - which were considered by the previous committee, is set out in its statement of internal financial control.

From the viewpoint of how it manages its business - some key adjustments that were made in the year were included - the board has sought to improve information submitted in support of its decision making; it has established a finance committee to monitor the system of financial reporting and review the accounts on a quarterly basis; it has introduced quarterly performance reporting; it has established a business risk management system; and year-end declarations by senior management are in place in regard to the management of risks at divisional level. Overall, the audit of the accounts for 2010 was completed with generally satisfactory results.

Chairman

I thank Mr. Buckley. I invite Mr. O'Toole to make his opening statement.

Mr. Paul O’Toole

I thank the Chairman and members of the committee. As requested I will provide a brief opening statement on the work of FÁS in 2010. The figures I will quote have all been rounded off.

Conditions in the labour market continued to be difficult during 2010. Although the flow of new job losses slowed compared with 2009, employment still fell by 65,000, and by the end of the year was down by more than 300,000 from the peak reached at the end of 2007. Unemployment continued to rise, reaching 300,000, 14%, towards the end of the year - that is 17% for men and 10% for women.

As part of the Government's response to rising unemployment in 2009 and 2010, FÁS was mandated to provide guidance and information to a greatly increased number of newly unemployed clients, including those referred by the Department of Social Protection; increase the number of training supports for newly unemployed people; maintain existing levels of community-based training for early school leavers, people with disabilities and other disadvantaged groups; and maintain existing levels of support for temporary employment in the community sector through the community employment scheme. These measures were additional to those undertaken by agencies other than FÁS. For example, participation in post leaving certificate courses run by VECs increased, as did funding support for unemployed people returning to full time education under the back to education scheme.

Total current expenditure in 2010 was €1.012 billion, a decrease of €44 million on 2009. Some 79% was expended on programme costs, staff pay and overheads represented 15% and pension costs represented 6%. Of the expenditure of €802 million on programme costs, 65% was paid to unemployed participants and apprentices, 15% was paid on programme personnel costs, that is, non FÁS staff costs, such as community employment scheme supervisors and staff in local employment services offices. The balance of 20% represented payments to external training contractors, consumables and other direct running costs.

Average daily participation on all programmes was approximately 50,000 people. We provided programmes for 170, 000 beneficiaries in total, with 125,800 completing these programmes during the year. Of these beneficiaries, 98,000 were unemployed people, 12,000 were apprentices, and 50,000 participated in community employment, jobs initiative, supported employment, jobs clubs and the wage subsidy scheme. The balance of 10,000 participated in a number of smaller schemes. Our learners secured 124,000 awards, principally from FETAC.

The FÁS jobs website provided 64,000 full and part-time vacancies, an increase of 16% on 2009. Surveys showed that 87% of these vacancies were filled within two months. Employers indicated a high level of satisfaction with this service.

In addition to the above, FÁS provided initial guidance interviews to 165,000 unemployed people, both directly and through local employment services. 78,000 of those receiving an initial guidance interview were referred by the Department of Social Protection under the national employment action plan and the remaining 87,000 made direct contact. At the same time, FÁS managed a significant reduction in human and other resources. Staff numbers were reduced from 2,272 in December 2008 to 1,936 in December 2010, and staff pay costs in 2010, at €109 million, were down by almost €23 million, 17%, since 2008. Non-pay and pension overhead costs were reduced by €17 million, 29%, between 2008 and 2010.

In addition to the programme of downsizing and cutting budgets, while increasing services, 2010 provided a number of significant developments and challenges for FÁS. A new, smaller board was appointed in late January following a public call for applicants. It has introduced a number of reforms including a new finance committee, quarterly financial reviews by the board and key performance measures for the organisation, director general and senior management.

A different approach to the operation of the construction skills facility in Mount Lucas, County Offaly, was required. This facility came into operation in 2009 with the objective of meeting the training requirements for key construction skills on a site which simulated typical building site conditions. Given the current state of the construction industry, it has not proven possible to fully utilise it for its original purpose. Operating costs have been scaled back and the infrastructure is being used for other training courses.

At the end of 2010, the closure of the Cabra training centre took place, primarily on health and safety grounds. Its operations were transferred to other Dublin centres. Further issues emerged regarding contract training and certification processes. In response, a new training standards system has been developed and introduced. Revised procedures for contract training and processing of certificates were also introduced.

Detailed investigations into problems highlighted by the Comptroller and Auditor General and the FÁS audit committee were commenced, as was an examination of serious grievances raised by a FÁS staff member. These were completed in 2011. European Globalisation Fund initiatives were undertaken in respect of former workers from Dell, Waterford Crystal and SR Technics. As requested by the committee, we have provided a separate briefing note on 2011.

By the end of this year, the combination of around 400 staff members, who will have left FÁS since the commencement of the moratorium on recruitment, together with the transfer of approximately 700 colleagues to the Department of Social Protection will have reduced our staff complement by almost 50%. Management numbers will have reduced by 55%. We are now preparing for the dissolution of FÁS during 2012 following the expected enactment of the necessary legislation. In conjunction with this, the Government intends that a new further education and training authority, SOLAS, will be established with responsibility to plan, co-ordinate and fund further education and training. Responsibility for training delivery together with the FÁS training centre network and associated staff will transfer to the planned 16 new education and training boards.

Ultimately SOLAS will have a staffing complement of between 10% to 15% of that of FÁS. It will be a new organisation, with a new mandate. Our focus in 2012 will be to put in place the necessary transformational change programme to ensure that it is established on a sound and effective basis for the benefit of future learners who choose further education and training as their route to personal development and employment.

Chairman

Do we have permission to publish that statement and the other information given as updates?

Mr. Paul O’Toole

Yes.

Deputy Sean Fleming

I welcome the witnesses. It is good to have representatives of FÁS before the committee with a clean audit report in the financial report for 2010 and no comments by the Comptroller and Auditor General. I have one question about the past and the various legacy issues, although I will not get involved in a specific issue. What lessons were learned generally and what was the cost of the lessons?

It is a new dawn for FÁS representatives to be before the committee dealing with a straightforward set of financial statements, but it is really a sunset appearance because the organisation is to be dissolved by legislation next year. A total of 700 staff will have gone to the Department of Social Protection while the majority of the remaining staff will go to the vocational education committees, VECs, throughout the country. The organisation will be left with 200 or 300 staff. What will be the mandate of the remaining complement of staff in FÁS? Perhaps Mr. O'Toole would also comment briefly on the lessons and costs of legacy issues, without dealing with any specific item.

Mr. Paul O’Toole

On the role of the 200 people, or whatever the final number will be, the Department of Education and Skills will provide SOLAS with all the funding that the State manages in further education and training. The further education part is new and the training budget of the old FÁS will also be within that. It will be the job of SOLAS to plan, co-ordinate and fund, and agree with the Department of Social Protection, the Department of Education and Skills and the education and training boards the application of the fund to learners to help them on the pathway to employment. That is a short summary.

In terms of the key lessons of the past, there are three key lessons we must take forward. The first is about focus. FÁS as an organisation lost focus. As it moved from being the employment and training authority it acquired different functions and took on different tasks. The infrastructure and the processes necessary to support those properly never caught up. The focus of any agency, certainly of ours, is critical.

The second key lesson is the management structures within the organisation. The organisation adopted a matrix style of management, and while the theory of that was fine what happened in practice was a confusion of responsibilities and therefore of accountability. That confusion contributed to the problem. The third key lesson is that the behaviour of some senior management was out of step with the stated values of the organisation and that cast a long shadow on the organisation. The culture of an organisation and its values need to be expressed and manifested by everybody, particularly senior management. Those are the three key lessons that emerged.

Deputy Sean Fleming

Does Mr. O'Toole know the costs, for example, various legal costs and settlement costs?

Mr. Paul O’Toole

Over that period?

Deputy Sean Fleming

The witness must look back and wonder what it all cost the organisation.

Mr. Paul O’Toole

I will try to give the full and proper answer to that question. The cost of dealing with this probably arose after my appointment in 2009 and the appointment of the board in early 2010. At that time, for myself as the new director general and the board a few months later, we were arriving on foot of a saga that had come into the public domain through the media and specifically through a report issued by the Comptroller and Auditor General in May 2008, a report of the Committee of Public Accounts in February 2009, two further reports by the Comptroller and Auditor General and a submission by the audit committee of the outgoing board to the board in December 2009. That outgoing board decided that we needed to investigate the behaviour and the level of culpability, if any, of 14 managers within the organisation. In a parallel, related but separate process a senior manager came to me and articulated a set of grievances against 17 individuals. We therefore had to undertake two processes.

The level of expenditure that had been reviewed by this committee, among others, was more than €50 million in respect of advertising and promotion, foreign travel costs and flights and what are called representation expenses, that is, hospitality and entertainment. The average expenditure on those between 2002 and 2008 was approximately €7.5 million per annum. The corresponding figure in 2010 was less than €0.5 million, a reduction of 94%. That is the context in which we undertook this work. The work was very long and complicated, and it was decided at an early stage to use external expertise to help us. We have been doing that since 2010 and 2011.

On the specific question, the cost of the grievances that were expressed against 17 people by a senior manager finished up at €188,000. All of these figures are exclusive of VAT. That is not recouped by FÁS but goes back to the State. This is the fee component I am dealing with. The cost of the 14 investigations and the related advice in respect of those 14 investigations was €550,000, an average cost of €39,300 for each individual investigation. These are the costs we put in place through the decisions we took. We were then brought to the High Court by one person in respect of that. We got into a very complex set of proceedings in the High Court and did a mediated settlement before the full case commenced. The settlement cost of that case was €175,000, which included €125,000 to the individual concerned and a €50,000 contribution to the person's legal costs. Finally, the cost of the High Court proceedings, driven largely by very extensive discovery within a contracted piece of time, was €404,000. When all the bills come in, there may be variations, but that is largely what the figures are.

Deputy Sean Fleming

The outcome of what the director general has said is that the cost of dealing with this specific core action will be slightly in excess of €1.3 million. That is the cost of getting the disputes investigated and resolved but the bigger picture over the six-year period is that €7.5 million per annum was spent on advertising, foreign travel and representation expenses totalling €50 million. This has now been cut by Mr. O'Toole, and spending on these services is now less than 10% of that figure per annum. Is he saying that 90% of that €50 million was waste?

Mr. Paul O’Toole

When I came in as the new director general there was a new board. The probity and the value for money of that expenditure had been examined extensively by the Committee of Public Accounts and the Comptroller and Auditor General. It was in the media. The reports are all there on the public record. We tackled each of those issues. Times are different and we are in a different public financial environment and a very different public sector. In 2010, we reduced expenditure in this different arena and the saving that is coming through is in respect of those matters.

Deputy Sean Fleming

Given that €7.5 million per annum was being spent under those four headings for a period of six years, when the current budget is less than €500,000, which is below 10%, this contributed to the decision to wind up FÁS.

In his opening statement, Mr. O'Toole referred to the national employment action plan, and I wish to paraphrase one sentence from it. Under the national employment action plan the number of referrals from the Department of Social Protection for interview was 118,000 people, up 15%, at the same time the attendance rate at interview fell by 2% from 68% to 66%. A figure of 34% of those people who were referred to FÁS for interview by the Department of Social Protection failed to turn up and as a result only 78,000 people were interviewed under that programme. What happened to those people who refused to turn up for an interview? Presumably they would have been in receipt of jobseeker's allowance or benefit and were referred to FÁS for interview. Over one third, 40,000, chose not to turn up. Did they continue to receive their payment? I know that is a question for the Department of Social Protection but the reason I address it to Mr. O'Toole is that I hope there is joined-up thinking between the Department of Social Protection and FÁS. It is shocking that so many people did not show up for an interview. What is the consequence for those who did not turn up for the interview?

Mr. Paul O’Toole

I think the matter the Deputy raises is probably part of the reason that a new national employment and entitlement service will emerge. The income support mechanisms of the State were traditionally delivered through the Department of Social Protection and the employment services, which help people on a pathway to employment, have been delivered by separate institutions. That is obviously now changing since the end of this year. People are referred to FÁS and we set up interviews for them and we expect them to turn up. If they do not turn up, the data is sent on file to the Department of Social Protection. There is a host of different reasons for their non-attendance. Some presumably deliberately do not turn up, others will have found employment in the meantime. Others will be rerefered.

Deputy Sean Fleming

Why would the Department of Social Protection be referring people to FÁS if they were in employment? They would not be on the books at that stage?

Mr. Paul O’Toole

They refer the person to us and we then have to schedule appointments. Sometimes there is a gap, but it is fair to say that the level of compulsion to attend would not have been manifest during the years of the Celtic tiger. What is happening now, and this reflects the Government's decisions in this matter, is that the income support mechanisms for people who are unemployed and the activation approach, which means that a citizen has to do something for himself or herself, having received the income support have been joined and my colleagues are moving over to the Department of Social Protection to be part of that.

Deputy Sean Fleming

If somebody loses his or her job, the first thing he or she does is go to the Department of Social Protection to collect money for the following week and sometime later he or she might contact FÁS to know if there is any job out there that they might do. In most other countries, if somebody loses a job, he or she goes into the local equivalent of a FÁS office, having registered already with that office and having proved that he or she is looking for a job. He or she then gets a letter from the local office to bring to the social protection agency in order to get a jobseeker's payment. Ireland is unique in that a person gets a payment before looking for a job, rather than the other way round. Other State bodies have joined-up thinking, and let me give an example. If one is looking for a supplementary welfare allowance for rent purposes, one cannot just get it, one must go to the local authority and put one's name down on the housing list and then get a letter to prove that one is on the housing list and then one may get a payment subsequently. Would Mr. O'Toole accept that the reverse procedure seems to have been happening in FÁS?

Mr. Paul O’Toole

In terms of the employment action plan clients, that is the case. Let me highlight, as I tried to do in my report, more than half the people who come into a FÁS office do so of their own volition. We are talking about different groupings of people. It is important to note that there has been a change in the legislation this year. The previous sanction that would be available, as I understand it, and I should be careful speaking about social protection, is that the only thing that one could do was cut off the person's benefit entirely. The new legislation allows a different sanction with a graduated cutback in benefit and working with the client. The new approach and the new policy is to be more pro-active in the linking of income support with the mutual obligation of an individual to find a way back to employment or find a route into employment themselves.

Deputy Sean Fleming

Mr. O'Toole referred earlier to the loss of focus in FÁS. I am looking at some of the programmes offered by FÁS, namely, a bridging foundation programme, a foundation progression programme, return to work programme, specific skills training programme, traineeship, local training initiatives, specialist training providers scheme, on-line and blending learning scheme, short-time working and pilot training schemes, redundant apprentice schemes, part-time third level programme schemes, technical employment support schemes, technical employment support schemes, evening courses and so on. One would need a degree to work one's way around the system. I am utterly confused by that list. I am a practising TD. One would need a degree to understand what is on offer. A person on a jobseeker's allowance would not have a clue. I know it is asserted that each course is targeted at a different group, but in the targeting of specific groups,the ordinary person who is looking for basic support from FÁS gets confused with all of this. The organisation has over-complicated matters.

Mr. Paul O’Toole

There was a build-up of these schemes. In the future we will need to ensure there is a clear focus on what we are doing. The origins of FÁS were in An Chomhairle Oiliúna which dealt with training, the Youth Employment Agency and the then Department of Social Welfare. Along the way it was given many responsibilities relating to social inclusion, equality supports for people with disabilities and supports for persons involved in drug treatment programmes, etc. Many of the schemes emerged as specific responses and were embedded in that way. It is important to try to understand this.

I share the Deputy's view that we need to make matters simpler for the client. It is important to understand a broad range of people seek to use the services of FÁS. We deal with people who are highly disadvantaged, including early school leavers with literacy and numeracy problems. Highly qualified individuals come into our offices at the same time. FÁS training interventions might not be the right approach for such persons. We deal with young people who are trying to learn skills or crafts. We deal with people looking for employment who worked in the construction industry, or other industries, for many years and now need to reskill, upskill or find a new direction. We have been attempting to tailor our supports to meet the needs of such learners.

In recent years we have had to respond quickly and tactically to what has been happening. In other words, we have had to change direction rapidly as a result of the substantial difficulties in the economy and their impact on unemployment. I think we have done well in that regard. We have helped more people to maintain some contact with the labour market. However, that is not sufficient. The strategy for the future must involve being very clear about how we can help people to develop themselves on a clear pathway to employment. We will work with all organs of State to do this more effectively.

Deputy Sean Fleming

Page 23 of the FÁS accounts refers to training for companies and the employed. I mention this in order that people can follow where I am coming from. It seems that during the year in question FÁS issued 87,721 Safe Pass cards and distributed 12,296 cards under the construction skills certificate scheme. I would like Mr. O'Toole to clarify an issue in this regard. Did these certificates come from the private sector companies which provide Safe Pass training courses and certificates? As a State agency which provides a service, FÁS was in direct competition with the private sector. How did that work? Given the manning levels and State support available to FÁS which is fully funded by the taxpayer, I suggest the system was unfair on the private sector operators which were trying to compete with FÁS by doing the exact same work on a commercial basis. Was it good practice? Should FÁS be doing this? Will whoever was dealing with this system in the past continue to deal with it in competition with the private sector? Would it not be better for the authority to be no more than a certifying and regulating body in this regard, rather than participating in the sector by competing against those for which it has to certify?

Mr. Paul O’Toole

I will clarify that point. FÁS does not deliver Safe Pass programmes. We do not deliver certificates under the construction skills certificate scheme or the quarry skills certification scheme. We provide the mechanism by which the providers of these services issue the cards. The courses that take place are offered by private sector companies. These companies send to us the details of the individuals who have successfully completed the Safe Pass programme. We are responsible for the card-issuing service. We also have a monitoring role.

Deputy Sean Fleming

I would like Mr. O'Toole to clarify a remark in his opening statement. His comment "further issues emerged regarding contract training and certification processes" implies that FÁS was involved in contract training. It seems to have been involved in the training aspect as well as the certification aspect of the system.

Mr. Paul O’Toole

That is not the case in respect of the Safe Pass programme. We contract out much of the work on our other main training programmes to the private sector.

Deputy Sean Fleming

Was some of it done internally by FÁS? That is what I am asking.

Mr. Paul O’Toole

FÁS has a decreasing instructor base. We provide both adult and apprentice-based instruction at phase 2 through our training centres.

Deputy Sean Fleming

That brings us to the matter of the Mount Bolus centre which is not very active.

Mr. Paul O’Toole

I assume the Deputy is referring to Mount Lucas.

Deputy Sean Fleming

Mount Bolus is in the other county in my constituency. I am sure I will be forgiven. I do not stray over there too often from County Laois. How has FÁS recorded the Mount Lucas facility in its accounts? Do the accounts record the full historical cost, minus 2% for depreciation? Given that the facility cannot be worth what it cost, FÁS is hardly carrying the full cost of it in its accounts at this stage.

Mr. Paul O’Toole

I will ask my colleague, Mr. Conor Dunne, to give the committee some information on the depreciation policy of FÁS. The Deputy is aware of the background to the Mount Lucas centre which was built for a specific purpose. The construction industry fell off a cliff. We have the centre and have cut the operating costs within it. We are using it to provide some construction training. We are also using the classroom facilities for other purposes.

Deputy Sean Fleming

I would like to ask about the FÁS apprenticeship training programme. I understand there used to be approximately 8,000 apprentices in the FÁS system each year. That number decreased to approximately 1,200 in the year under review. Can FÁS do much to broaden its work in this area? Historically, all of the apprenticeships were focused on the construction industry. They generally related to the construction, electrical engineering, motor and printing trades. Can this be broadened in this day and age as it seems to be very narrow and specific? It reminds me of the training that used to be provided by An Chomhairle Oiliúna. It does not seem to have been broadened into other areas of the new economy.

Mr. Paul O’Toole

We run 27 recognised apprenticeship courses. We also run a series of traineeships and a range of training and other disciplines. We offer a broad range of provisions, including 27 recognised apprenticeships, to the client. An overall review of apprenticeships is due and will be undertaken by the Department of Education and Skills. The appropriateness of the current model will be examined in that context. The apprenticeship model has served Ireland well. The performance of Irish craftspeople is internationally recognised and has been evidenced time and again. However, it is subject to review. The question of whether it is fit for purpose will be assessed as part of the review.

Deputy Sean Fleming

I would like to ask two final questions. What was the outcome after it had emerged that 80 of the staff of FÁS had 44 days' holidays a year, in addition to their generous basic holiday allowances? The intention of the additional holidays was to ease them gently into full retirement. What was the outcome? Mr. O'Toole will understand people were absolutely outraged that such a thing could happen. Where are we on that issue?

Mr. Paul O’Toole

The system of pre-retirement leave was put in place a decade ago. As the Deputy has rightly pointed out, the pre-retirement leave allowance, depending on the individual involved, was significant. The board decided that the entitlement was not appropriate and should be removed. The trade union representatives engaged with us in the Labour Court which recommended that it be removed completely. Those affected will be given a one-off leave allowance, as a form of recognition, before the allowance disappears totally. We have accepted the Labour Court recommendation and the trade union is balloting on the matter.

Deputy Sean Fleming

What does the director general mean when he refers to a one-off leave entitlement?

Mr. Paul O’Toole

My colleagues will correct me if I am wrong, but I understand the workers in question, depending on their length of service, will get five day, three day or two day allowances on a one-off basis in lieu of the existing overall entitlement.

Deputy Sean Fleming

Will they get this instead of the 44 day allowance?

Mr. Paul O’Toole

Yes. There was an 87 day allowance in some cases.

Deputy Sean Fleming

That was two years worth.

Mr. Paul O’Toole

Yes.

Deputy Sean Fleming

Is there any associated additional financial compensation?

Mr. Paul O’Toole

No. That is it.

Deputy Sean Fleming

Will Mr. O'Toole comment on the absence of a formal system for tackling under-performing staff, an issue which has been well reported? Salary scales are supposed to be linked with how people perform.

Mr. Paul O’Toole

The reference there is to the introduction of a performance management development system. The organisation will put in a performance management development system for all staff in the context of the emergence of SOLAS. That is a clear intention of the organisation and the process has begun. As I stated, the board of FÁS has put in a set of organisational performance indicators, indicators for me personally as the director general and for the senior management team, that will be developed and spread throughout the organisation.

Deputy Sean Fleming

I thank Mr. O'Toole for his replies which have been helpful, straight, concise and to the point. Other people who appear before the committee in future should take a lesson from that. Mr. O'Toole has a difficult task and his new management team is to be complimented on doing a good job in difficult circumstances, none of which was of its own making. I hope his talents will be well used in the public service in the years ahead, whether in SOLAS or elsewhere.

Chairman

Deputy Fleming referred to Mount Lucas. How many staff are employed at the Mount Lucas facility? How many people participate in its courses? What is the annual cost of the centre?

Mr. Paul O’Toole

The operating cost last year was €294,000. This year, our estimate is that it will be €290,000. These figures refer to the cost of staff, running the centre, keeping it open, etc., and do not include the cost of participant allowances for trainees. The figure is the operating cost, which will be the same this year as it was last year. In 2009, the operating cost was €697,000 so we have more than halved the cost of the centre through reconfiguring. We will have in total 273 course participants this year, taking part in a variety of courses in classroom settings, including courses that were operated by the VEC, evening courses and a variety of non-construction courses. We also have a number of construction courses that will take place on the site. This does not include 513 Safe Pass training days which will also be handled on the Mount Lucas site.

Chairman

How many course participants were there last year?

Mr. Paul O’Toole

I do not have the figure immediately but I will get it for the Chairman.

Chairman

How many staff are employed at the centre?

Mr. Paul O’Toole

We have three full-time staff at the facility.

Chairman

The annual staff cost is, therefore, €294,000. FÁS is spending €10.4 million on rent on 124 properties. In 2010 it had to exit some of its leases and is spending €178,000 on three such leases. To what use are the properties in question being put?

Mr. Paul O’Toole

I am a little caught-----

Chairman

The total rental cost is €10.4 million.

Mr. Paul O’Toole

Yes.

Chairman

FÁS exited three leases.

Mr. Paul O’Toole

We probably exited a number------

Chairman

The organisation is paying €178,000 annually on the three leases that are left. For what are the buildings in question being used?

Mr. Paul O’Toole

Will the chairman provide a little more detail? I am slightly caught on the point.

Chairman

I refer to note 15 in the annual accounts. How many leases does FÁS intend to exit in 2011 and what costs will arise from doing so?

Mr. Paul O’Toole

My colleague, Mr. Conor Dunne, will address that issue because he looks after the estate. The general picture is that FÁS has some freehold property and a lot of leased property, that is, employment services offices and what we call satellite training centres which were used during the construction boom. The leases in respect of the employment services offices will transfer to the Department of Social Protection or the Office of Public Works on its behalf. We are exiting any unused property as quickly as we can and bringing our rent costs down in respect of that. As we move into Solas and the education and training boards, we will pass over the centres and properties there. I ask Conor Dunne to address the specifics.

Mr. Conor Dunne

I believe the Chairman is referring to the under-utilised properties which are costing €178,000. One of the properties in question was Tolka Valley, which we have moved out of, while we are using another property in Baldoyle, which was costing about €100,000, for a construction course in plant fitting that moved from Cabra. We have also left the third property, which I believe is in Athlone. At the moment, all our buildings are utilised whereas in 2010 we had three buildings which were not fully utilised.

Chairman

In terms of 2011 and projected activity for next year, will FÁS continue to incur costs from properties it has exited or is it managing its way out of this?

Mr. Conor Dunne

No, we have managed our way out. There were three properties and we have managed our way out of them. We are using them. What is happening next year, just to explain to the committee, is that 55 employment services offices will transfer to the Department of Social Protection on 2 January. We will then be left with, I believe, 16 freehold training centres and a number of rented satellite training centres. Our biggest rent will be on our head office in Baggot Street.

Chairman

How much is the rent on that building?

Mr. Conor Dunne

It is in excess of €1 million per year.

Chairman

That is the annual cost of FÁS headquarters.

Mr. Conor Dunne

Yes. A break clause on part of it is coming up in 2013.

Chairman

What is being planned in respect of the break clause?

Mr. Conor Dunne

We only occupy about half of the building and have rented the other half to Citibank as a disaster recovery site. Our ultimate plan will be to exit the building as it will not be fit for purpose.

Chairman

A sum of €1 million per annum is a heavy cost to the organisation.

Mr. Conor Dunne

Yes.

Chairman

When is the break clause on the lease?

Mr. Conor Dunne

There will be a break clause on part of the lease in 2013. The next break clause on the other portion of the lease is in 2017.

Chairman

Is it possible to lease the other half of the building?

Mr. Conor Dunne

We have half of the building leased at the moment.

Chairman

It is fully utilised.

Mr. Conor Dunne

It is utilised. The building takes a total of about 780 people. We are occupying a part of it that probably takes 450 people and we do not have 450 people in the building. With the transfer to the Department of Social Protection of head office staff, which may happen later in the year, the building will not suit the purpose of SOLAS going forward, although at the moment these staff will continue to be based in Baggot Street because of the shortage of space in the Department.

Chairman

Is there any possibility of securing a reduction in the rent given the state of the property market or is the lease subject to an upward only review?

Mr. Conor Dunne

It is an upward only review. We have had initial discussions with the landlord which I do not want to go into at this meeting because they are commercially sensitive. We have a plan of action.

Chairman

Is it the case that the rental costs of €10.4 million on 124 properties should be reduced dramatically in the course of this year, with the biggest burden being the €1 million cost of FÁS headquarters?

Mr. Conor Dunne

Yes, although the biggest portion of the €10.4 million cost would be the 55 employment services offices that we rent and are transferring to the Department of Social Protection.

Chairman

Rather than reducing rents, the rental costs are being transferred to the Department.

Mr. Conor Dunne

Exactly, but they are offices that are used and staffed. They are in key locations so that clients can access them easily.

Deputy John Deasy

I welcome Mr. O'Toole for whom I have a general question. What does he envisage will be the growth areas in employment for the Irish workforce? What commercial areas and industries has FÁS identified or is focusing on in respect of the people within its remit?

Mr. Paul O’Toole

I will try to shape my response by looking at where employment happens at the moment. In the economy there are two sources of employment, namely, replacement demand and expansion demand. In any one year, a large number of people get jobs. I think the estimate for 2010 was that a minimum of 200,000 got jobs but many of these jobs are replacing people who have left, retired, emigrated or whatever.

Deputy John Deasy

I understand that. My question refers to specific sectors. I want an idea as to which sectors FÁS has identified for employment. The world has changed and continues to change quickly. The director general stated that tactically FÁS has moved very quickly over the past couple of years. I ask him to identify growth sectors.

Mr. Paul O’Toole

The areas that are perceived, not just by ourselves, to be areas of growth would be information technology, which is a very broad spectrum, gaming, many of the developments in digital media and life sciences, both in medical devices and biopharma. This reflects the export investment policy of the Government and previous Governments, services generally - domestic and internationally traded services, whether in tourism, call centre, or back office support for various functions, financial sectors and so on. They would be the broad areas where the expansion demand would come.

Deputy John Deasy

The director general said that construction, to use his words, has fallen down a cliff. The director general has been in position for the past two years. How have the courses been changed or redesigned in the areas of IT, life sciences, and in services such as tourism? How many people are being trained in those areas as opposed to two years ago?

Mr. Paul O’Toole

In many of the disciplines on the expansion demand, the training for those or the education are not within the FÁS remit. There is an important point I wish to make here. We provide basic training, generic skills, specific skills and intermediate skills for people aligned between one and six of the national framework of qualifications. We do not seek to replicate what happens in universities, institutes of technology and-----

Deputy John Deasy

I understand.

Mr. Paul O’Toole

We are the intermediate skill. We will not be training the scientist but we will train the skilled operative - that is our space. We have expanded overall, therefore, the overall numbers have increased and they can be divided into a number of headings. We have learner-oriented training for people who have very few skills and very particular needs. We provide basic entry level training, whether introduction to computing, how to approach going for a job - we provide a good deal of training in that area. I will invite my colleague, Mr. Bryan Fields, to provide some specifics on it.

Deputy John Deasy

In the area of construction, how many people is FÁS dealing with in construction now as opposed to two years ago?

Mr. Paul O’Toole

I do not have that number myself. I will check if Mr. Bryan Fields has any numbers for that area.

Mr. Bryan Fields

At the end of 2010, we had 3,700 individuals of a total of 73,000 in constructed related programmes. Of those construction related programmes, 35% were in the new green energy sector. We are moving from the traditional construction general operative, concreting, kerbing----

Deputy John Deasy

How many people did Mr. Fields say?

Mr. Bryan Fields

In construction related we had 3,736 at the end of 2010 out of a total of 73,000. That would be in the region of 4%.

Mr. Paul O’Toole

May I make a point on construction? We have had to change for construction in a number of ways, one of which is to the newer technologies which Mr. Bryan Fields mentioned. The second change is to deal with a large number of former construction workers who are on the live register and seeking reskilling in different directions. Many of those come in at a very basic level because their work and their life has been in the construction sector. We have had to deal with that issue. It is important to note there are still more than 100,000 people who are working in the construction sector. Even though there has been a huge fall off in the numbers in the area, there are still 100,000 registered as being employed in that area. While we are in this valley and will probably never get back to the position that obtained four or five years ago, there will be a continuing demand in the economy for construction level skills.

Deputy John Deasy

How does the organisation gauge its effectiveness in the context of people who go through FÁS and gain a job? How does the organisation gauge the effectiveness of its training on a long-term basis?

Mr. Paul O’Toole

We have a number of approaches based on the information that becomes available to us. When we provide a course and training provision for somebody there are three basic things we need to get right. I should preface that by saying that the most important thing is that the nature of the provision is relevant to the individual, that we are putting them on the right courses. When they are on the course, it is about the quality of tuition they receive, a fair assessment of their standard and the issue of a certificate they can carry with them to help them compete for employment. Right now, there are not enough jobs for everybody. However, we are helping them to compete by having a skilled qualification that does that. In 2010, our learners would have received 124,000 awards. Some of those were minor component awards from FETAC, others were industry standard in, say, computing, others would be through City and Guilds programmes. Of the 124,000 awards some were basic, some highly technical and some relevant.

Deputy John Deasy

That is not what I was asking.

Mr. Paul O’Toole

I beg the Deputy's pardon.

Deputy John Deasy

How does FÁS gauge its effectiveness as a training agency? Other jurisdictions spend much of their time finding out how sustainable a particular job is after training.

Mr. Paul O’Toole

Yes.

Deputy John Deasy

I do not think FÁS does that. I do not think FÁS has systems in place to track how good and how sustaininable its training is in regard to particular employments. How does it find out? Does FÁS check with the person who has gone through the agency or with employers after the fact?

Mr. Paul O’Toole

We conduct a survey every two years. We take the pool of people in a particular year and track them on a survey basis in respect of where they are - whether in employment, still in training or education, in the social welfare system, if they have left the country or whatever. While we do that, we would certainly like to do more - which is the core of the question.

Deputy John Deasy

That is the point. In May, the ESRI said that some of the training programmes being conducted by FÁS are useless. I use its word, "useless". I am concerned there is not that type of data and information to allow FÁS ascertain how effective it is as a training agency. Again and again, when I ask people in FÁS this question they say they should do more of this tracking. I refer the director general to Committee of Public Accounts reports for 2008 and 2009 which mention deficiencies in record keeping in respect of participants and the need for data collection in order that the outcome of State interventions can be evaluated. In the recommendations it is stated that key management information on which to judge the impact of the FÁS, in this case, the competency development programme, on which €126 million was expended, is not available to the State. I think we have a problem within the agency. I do not know if that collection of data exists throughout FÁS to allow the agency to determine how good or effective the agency is and how good are its outcomes for people. This has arisen time and again. This is not something new. People have raised this issue for the past five to ten years but the systems within have not changed.

Mr. Paul O’Toole

The systems are not what they could be but are improving. We track, on a survey basis, the outcomes of our training programmes. Other analysis has been conducted by the ESRI, among others. I do not recall that the ESRI said our courses were useless. If I recall accurately, in its most recent piece of work it said there was a strong correlation between training and the employment prospects of individuals and that the longer specific skills training had very good outcomes. They said that some of the introductory courses also had good outcomes and that many of the shorter courses needed review to see whether they were effective. I do not recollect that the ESRI said our courses were useless.

Deputy John Deasy

The ESRI study said, Irish unemployed return to work schemes, including FÁS programmes, are generally useless. That is the headline.

Mr. Paul O’Toole

It may be the headline, but the piece of research-----

Deputy John Deasy

I will give it to Mr. O'Toole afterwards.

Chairman

It is on the ESRI website and it refers to a study by the ESRI.

Mr. Paul O’Toole

Can I address that particular study?

Chairman

It is not a headline. It is in the body of the report.

Deputy John Deasy

I accept Mr. O'Toole's point that tactically FÁS has moved very quickly over the last couple of years. However, I am not sure how he can design its courses to change with the adaptations occurring in the global economy if he does not know how successful its graduates are, and if he does not have a system in place that evaluates the success of its training programmes in respect of the long-term sustainability of their employment. How could he? I have looked at Scotland and at other jurisdictions and they do that conscientiously. They base the design of their programmes on their success and on the success of their graduates. I have a real concern that we do not do this effectively enough in our training agency.

Mr. Paul O’Toole

I will not tell the Deputy that everything is as good as it could be. That is not the case. However, I want to nail a couple of points here, in particular the ESRI issue. The reporting of that case is not consistent with the ESRI piece of work. If I am correct on the piece of work to which the Deputy refers, it was a review of the national employment action plan, how people were referred to social protection, their engagement with job assistance and the outcomes for those individuals. It dealt with a period of time and a group of people in 2006 who were registered for the first time, and what happened. The report stated that people who were referred engaged in an interview but did not have a positive employment result arising from that. It attributed that to the notion that people who were engaging in this way were not motivated, activated or sanctioned if they did not engage fully. The ESRI published a second piece of work which clearly did not attribute that to the job guidance interview provided by FÁS. It subsequently issued another paper which looked at the training interventions per se, and this stated that there was a strong impact from the training. It described two courses and stated that we could do better in the middle, which we accept. It is important to get the record straight on that point.

We know from surveys over time that people move into employment. We are not where we should be in terms of understanding the dynamics of that training more fully. That is not just an issue confined to FÁS. To date, we do not have access to the data of people's employment. If they do not give it to us or we do not get it from surveys, we do not know what their employment status is. The Government's new national employment and entitlements service joins the gaps on the sources of information and within that, we will have a memo of understanding between Solas, the education and training boards and the new national employment and entitlements service in the Department of Social Protection to join the dots more effectively.

Deputy John Deasy

How are some of these courses designed? Does FÁS interact with the IDA, Enterprise Ireland, the Department of Jobs, Enterprise and Innovation? Who puts these courses together? Is it done in conjunction with different Departments, based on what is going on in the world and within Europe?

Mr. Paul O’Toole

We have access to labour market information, both through ourselves and through the expert group on future skills needs. We use that as a guide for our cohort of people. We are currently mandated by the Government in respect of what are called priority cohorts. We do not try to offer a service to everybody. We have been given specific categories of unemployed people on which we must concentrate. In particular, we have to focus on younger people, those who are low-skilled and people who are coming out of vulnerable areas like construction. We tailor our programmes to that end.

We have tabled a proposal to have a new model of training adopted, which we call cluster training. We are looking at clusters of similar disciplines, such as information technology, or craft work, and we want to provide a course designed within our remit - levels 1 to 6 - and in conjunction with the education and training boards. On our traineeship and specific skills, we have reference to employers and their needs as well.

That is the broad picture, but Mr. Fields knows much more about this than I do.

Mr. Bryan Fields

We are currently meeting directly with industry representatives. For example, in the meat processing industry we have met with a group of ten leading meat processing companies. They have told us that there is a skills shortage in the industry and they have identified what it is. We then assign two course designers who develop the course very quickly.

We recently met with the chief executive and the training director of an aircraft maintenance company in Dublin last year. They said they needed skills in this area. We designed two courses then. We offered them to unemployed individuals, primarily those in the construction and craft industries.

Another example is of a company that replaces overhead lines. It used to take in individuals from overseas, but it wants to stop doing that and it asked us how FÁS can help. We designed a programme that will be starting very shortly.

Deputy John Deasy

I thank Mr. Fields for those examples. I am conscious of time, but I would like to ask one final question. I am getting the impression that it is almost like a new departure within FÁS to do this. It seems novel to go to these industry types and ask them what they want. Is this something that-----

Mr. Bryan Fields

No.

Deputy John Deasy

Has the rate increased over the last-----

Mr. Bryan Fields

Yes. Our traineeship programmes were all developed with the industry. We have quite a number of those. The significant plus factor for us is that all the reports we are talking about, including the study on the NEAP, identify that workplace training is crucial for the benefit of the learner.

Deputy John Deasy

That is not quite what I asked. Mr. Fields has given a few good examples, and I welcome the fact that FÁS is identifying those industries with industry types when it comes to designing its courses. However, I get the impression that this is quite new.

Mr. Bryan Fields

Not really. We are doing more of it.

Deputy John Deasy

Some people are nodding their heads, but Mr. Fields is saying "No". That is okay.

I would like to ask a specific question about the TalkTalk workers. Obviously FÁS has been interacting with many of the 600 former employees of that company. What kind of outcomes have occurred and what kind of interaction has taken place?

Mr. Paul O’Toole

I will bring in my colleague Mr. Oliver Egan to speak a little bit more about that. The TalkTalk issue was a disaster for all concerned. We immediately engaged with the group. We had 16 group sessions and we quickly carried out one-to-ones with those who wanted it. Sometimes when people become unemployed, it takes them a while to get their head around it. They do not always want to interact straight away. We engaged with those who did and we joined a group of agencies set up by the city manager. We have a number of people on training courses already, and a number of people scheduled for courses.

Mr. Oliver Egan

We did 16 group presentations in conjunction with Skillsnet. We have conducted 180 one-to-one guidance interviews to date. Using a mixture of TESG - a training grant - and our own direct training, we have provided the following interventions. Thirteen people have been provided with training on ECDL. We have trained people on Train the Trainer, Solar PV and payroll, and we have called people to training in Comptia, Cisco, Java and computerised payroll. We are working with the taskforce in an ongoing survey, so that we can tailor more interventions.

Deputy John Deasy

How many people is FÁS directly interacting with?

Mr. Oliver Egan

We have had 180 one-to-one guidance and 16 group sessions. I do not know how many were at the group sessions, but I think there was quite a large attendance. To date, about 60 people are currently in different types of training.

Mr. Paul O’Toole

That excludes what Skillsnet is doing and what VECs, institutes of technology and universities are doing. It is in terms of our immediate interventions.

Chairman

To follow on from what Deputy Deasy said, in today's Irish Independent there is a headline, “Mystery of how jobless fared on €30 million scheme”. The article does not mention FÁS, but I wonder about the delivery of schemes to get the jobless back to work. In this account it is stated €29.5 million was spent on a scheme and that, according to a consultants’ report, the Government does not know what happened to over half of those who took part. The report was published by the Department of Education and Skills. Was FÁS consulted on the delivery and co-ordination of these courses which involved the spending of taxpayers’ money?

Mr. Paul O’Toole

I beg your pardon?

Chairman

I am referring to the labour market activation fund in 2010. Courses were delivered, presumably, through the Department of Education and Skills. A total of 10,163 people completed courses, but there is no idea of what the outcome was for 4,802 of these in terms of whether they got jobs. Is there joined-up thinking in Departments on how these courses are delivered? There does not seem to have been real value for taxpayers' money. To go back to what Deputy Deasy was saying, it does not seem to have factored in analysis or collection of information to determine how other courses might be tailored. Was FÁS involved? Did it advise on the matter? Where did the Department of Education and Skills come up with the need to provide the types of course undertaken? Why were the data not collected for analysis after the delivery of courses?

Mr. Paul O’Toole

I cannot speak for the Department of Education and Skills which operated the labour market activation fund. We were consulted about its work - we were represented on a steering committee or working group in that regard - but the fund was operated by the Department.

Chairman

You were a member of the steering group. Were you consulted about the fund?

Mr. Paul O’Toole

A colleague was, yes.

Chairman

Would you not have requested the information about which we have just been talking - information on the type of participant involved, how effective the course was, or the jobs people got afterwards? Did anyone connect the numbers? Did FÁS not request them to connect the numbers in order that it could feed them into its general analysis of the outcomes of such courses? We are talking about a spend of €29.5 million; surely somebody is actively pursuing this issue and connecting the data?

Mr. Brian Duggan

We had an independent consultant conduct an analysis, review and evaluation of the labour market activation fund.

Chairman

Was that PA Consulting?

Mr. Brian Duggan

Yes. It has just completed that task and we will probably be publishing the results when the report is completed. We have made an analysis of the effect of the fund and the Government is considering a new fund.

Chairman

It was published on the Department's website.

Mr. Brian Duggan

Yes.

Chairman

If the Department of Education and Skills has no idea of what the outcomes were for 4,802 of course participants, as is stated in the report, should a greater effort not be made to collect that data in order that they can be used by SOLAS, FÁS or whatever is involved? It tells us what is needed and the success of the spend of €29.5 million.

Mr. Brian Duggan

The overall result of the study was that the labour market activation scheme was a successful initiative. I cannot answer the question about the 4,000 people - that is what the report states and I have not got it in front of me. However, the overall analysis and evaluation were positive.

Chairman

I want to press the point and will then leave it at that.

Deputy John Deasy

We are not being negative.

Chairman

They are the data.

Deputy John Deasy

It is a question of connectivity.

Mr. Brian Duggan

What I am trying to say is we had a fund that was specifically directed at certain target groups and we have made a follow-up analysis. We did not simply run a programme and leave it at that; we have followed up with an analysis of the programme.

Chairman

There is no idea of what the outcomes were for 4,802 people. That is not following it up. The information is on the Department's website and in the PA Consulting report. It is a failure on someone's side that the data were not obtained for 4,802 people. There should be systems that connect the data accurately for every course participant in order that we can reflect in a rounded way on all the other courses that might be embarked upon, particularly if the fund is going to be made available next year.

Mr. Brian Duggan

I am sure that will be reflected in a new fund. If a new fund is agreed and approved by the Government, I am sure that will be taken on board.

Chairman

I want to know why it was not taken on board in the first place, to go back to Mr. O'Toole's answer to Deputy Deasy. It is a fair question.

Mr. Brian Duggan

I must apologise, Chairman; I had no involvement and cannot answer for it. It was not part of our brief for today and it is not in my area.

Chairman

Can the Department find out?

Mr. Brian Duggan

Certainly I can provide the information.

Chairman

Would you mind corresponding with the committee in order that at least we will know what happened?

Mr. Conor Dunne

For clarification, the easiest way to collect data on progression - what happens to someone after he or she goes on a course - is through the PPS number. There is a protocol under the Data Protection Act that we cannot access the information on whether the person applies to the Department of Social Protection or goes into the tax system. That is the simplest way to track the outcome of a training course. The setting up of the National Employment and Entitlements Service, NEES, will eliminate the issue of non-communication between FÁS and the Department of Social Protection because it will be one entity. I do not know what will happen with the Department of Finance in terms of tracking a person into employment. That is the core of the issue. If we can track someone's PPS number from start to finish, we can see that he or she has gone onto a training course, perhaps had a Department of Social Protection intervention and he or she is now in employment.

Deputy John Deasy

Is Mr. Dunne saying FÁS is precluded from-----

Mr. Conor Dunne

Yes, under the Data Protection Act. We have someone's PPS number solely to be used for purposes to do with training, while someone else has it solely for use with regard to employment benefits or tax purposes. They are not joined up. Two of them will be next year, but I am not aware of what is happening with the third. I just thought that should be explained. If we had an open system, we could track everything.

Deputy John Deasy

I am sorry. Thousands of people go through the books of FÁS - tens of thousands. That is no excuse for not collecting data to assess how effective its courses are.

Mr. Conor Dunne

After every course is finished, people fill in a survey form on how they felt about the course. That does not necessarily state they will get a job.

Deputy John Deasy

I am not talking about the course. I am talking about for how long they will end up being employed for and how effective the training is with regard to employment sustainability over one, two, five or ten years.

Mr. Conor Dunne

That can only be done through surveys. That is why we do the surveys we conduct.

Deputy John Deasy

It is nothing to do with PPS numbers.

Mr. Conor Dunne

With the PPS numbers, we could get, on a yearly basis, the number of people trained who have gone into employment and so on. For example, if we run a course on Java programming and find that no one has got a job as a result, there is something wrong.

Chairman

Mr. Dunne is saying FÁS does not know whether people got jobs as a result of doing its courses. Here are 4,802 people who, at some stage, sat in a room and were, therefore, a captive group with whom FÁS could engage. Someone paid PA Consulting to make an analysis, but the consulting firm was unable to track the 4,802 people from courses that had cost anywhere in the region from €7,500 to €7.5 million to operate, from a total package of €29.5 million spent. PPS numbers were not needed to follow thelm because FÁS had them in a room.

Deputy John Deasy

It is a basic premise. Spending this amount of money without knowing how effective the spend is cannot be tolerated any longer.

Deputy Kieran O’Donnell

Does FÁS have procedures in place? For example, if it runs a course, does it have a section that follows up on those who do it by writing to or ringing them on their mobile phones every three or every six months after a course takes place? If there are restrictions in terms of PPS numbers I imagine FÁS would have designed procedures to enable it to follow up on the value for money of courses. With regard to what the Chairman and Deputy Deasy stated, will the delegation explain what follow up procedures are in place in FÁS for the benefit of the person examining the FÁS annual budget? Ultimately, it is about re-training but it is also about employment.

Mr. Paul O’Toole

There are two main indicators that apply to any programme, not just FÁS. The first is output, in other words, what we got for the money. We track this through the number of people who do the course against target, the cost of doing the course and whether they received an award for their course of training. That is an output measure. We have those figures and I have reported on them.

Deputy Kieran O’Donnell

That relates to the results of a course. The outcome I seek relates to the people who get a job and how sustainable that job might be.

Mr. Paul O’Toole

We do not have all the data but we do that in two ways. Every two years we do a survey whereby we take a representative sample of people who have been through our courses and we check whether they are in employment, further education, whether they have left the country or whatever. We track that.

Deputy Kieran O’Donnell

The director general is saying that every two years FÁS examines a representative sample. How large is this sample?

Mr. Paul O’Toole

I do not have that. In previous surveys through the good years we found that more than half of people who had been through training were in employment. Others had left and others again were still in training and education. These numbers dropped in the 2009 survey. In other words, in 2009, reflecting the economy as a whole, people were not going into jobs or retaining jobs to the same extent. The high levels that we experienced during the better times are not reflected now. This is probably an obvious conclusion. However, we track within the data available to us on a monthly basis with regard to what happens to people three months after finishing a full-time course. After three months we know where that individual is and whether he or she is still on the live register. At the moment our tracking indicates that three months after leaving a FÁS course, some 50% are not on the live register. I cannot state therefore that 50% are working because that would be inaccurate but at least 16% of these have moved into jobs. Some people do not complete only one course, they go on to further education and training. There is a balance of people to whom a whole host of things have happened, such as those who leave the country, those who remain unemployed, and others who might fall out of entitlement to benefits. There are a range of other things. Others may be in employment and we simply do not have access to the data.

Deputy Kieran O’Donnell

Is this in the annual report? If FÁS is doing this for three months following completion, why does it not carry out a survey for six months, nine months and for one year following completion? Why is that not taking place?

Mr. Paul O’Toole

It is a rolling three months. We do it every month. It is a rolling report over time.

Deputy Kieran O’Donnell

What about the people who have left the course in the previous three months? If someone did a course, FÁS would track it for the first three months but would that cohort of people who came from a course be tracked thereafter?

Mr. Paul O’Toole

That is done by survey every two years.

Deputy Kieran O’Donnell

That is a sample as distinct from the individuals.

Mr. Paul O’Toole

Yes. It is a sample.

Deputy Kieran O’Donnell

Would it not be good practice in terms of value for money and in terms of what FÁS does that FÁS would have proper procedures in place to track the outcomes? Should this not be rolled out? To go back to what Mr. Fields stated, ultimately this relates to the quality of the courses. Does the analysis FÁS gets back provide information not only on people in jobs but on the effectiveness of the courses in yielding the jobs outside of the downturn in the economy? It is fair comment to suggest that it is a major weakness in the follow up procedures of FÁS. Can we take it there will be a commitment from FÁS to put such procedures in place?

Mr. Paul O’Toole

I accept Deputy O'Donnell's point and the point made by Deputy Deasy about whether we can do better here. Yes, we can. I say as much because these are the questions we have asked ourselves. That said, we have spent the past two years dealing with some fundamental issues within FÁS. These include trying to improve our training, downsizing, dealing with legacy issues and responding to a greatly increased demand for our services. This has been our focus. We are now planning for the dissolution of the organisation and its replacement by a different model. This model will not simply be made up of the proposed Seirbhísí Oideachais Leanunaigh agus Scileanna, SOLAS; it will include restructured VECs and the new national employment entitlement service in the Department of Social Protection. There is a commitment as part of all of these change processes to do better by the citizen by being more effective and this requires us to have better information systems and better data. I accept that point.

Deputy Kieran O’Donnell

With due respect to Mr. O'Toole, let us reflect on and consider the various inquiries and investigations into grievances and so forth. The core job of FÁS is to train people to get employment. Let us leave aside the restructuring. Any business that is restructuring has basic procedures in place to follow the patient or trainee and it appears these are not in place or have not been in place in FÁS. I would have thought that a simple procedure could take what FÁS does after three months and redirect staff to do the same after six months, nine months or 12 months without great difficulty. Will FÁS give a commitment that this will now happen outside of restructuring because this is FÁS's core activity and business?

Mr. Paul O’Toole

It is our job to help people find employment and I accept that. Some people are distant and it takes them longer and some are closer. However, there is a commitment to improve the systems, including the capture, the effect and impact of our training.

Deputy Kieran O’Donnell

Is that a commitment?

Mr. Paul O’Toole

Yes.

Chairman

It is disappointing to learn about some of the developments related to the steering committee. I refer to the question of the €29.5 million and the information FÁS began to realise was necessary. It is striking that the data was not insisted upon in terms of the courses under discussion, which were the subject of the PA Consulting reports. No one knows anything about some 47% of those who participated, but we should. I am keen to learn more about this. Will FÁS insist, through the person on the steering committee, on the report being brought to us with some analysis on what happened from the Department of Education and Skills? Perhaps new standards with regard to the collection of data should be discussed by the Department of Education and Skills or any other Department or agency delivering courses to jobless people or those seeking employment so that we can get a better picture and so that FÁS can get better information to tailor courses for the future. Will FÁS ensure that we get such a report and analysis by way of posting it to the committee so that we can examine what happened in that instance?

I refer to a similar matter to that raised by Deputy Deasy. FÁS was notified that 7,407 apprentices lost their positions through changes in the marketplace and so on. I am still asked by apprentices how they can finish their terms and this remains a big issue. FÁS does not need PPS numbers because these people are on someone's books. What is happening to each of these people? They continue to complain that they cannot get into somewhere either through the agency or an employer which would allow them to finish the course. Many of them wish to finish the course they were on so that they will be fully qualified. Some are keen to do so because they plan to leave the country but they want to get their papers before they go. Will Mr. O'Toole tell us exactly how he is dealing with that issue?

Mr. Paul O’Toole

FÁS has an enormous commitment to dealing with that group of 7,500 and is making great strides in tackling the issue. They were taken on in good faith in the years of the boom and left high and dry by being made redundant because of the impact of the collapse. We know them and their parents personally.

We have put in place a series of six or seven initiatives. One of the key initiatives this year is the new redundant apprentice placement programme, on which we will spend in the order of €13 million in 2011. It will help 2,000 of the apprentices involved with one of their on-the-job phases. I will explain what is involved because people may not be familiar with it. The approach to apprenticeship in Ireland involves a sequence of on-the-job and off-the-job training phases. There are seven phases and the rules are rigid. An apprentice must go through all seven phases. We have tried to not compromise on standards by giving people qualifications, rather we have tried to find routes, depending on circumstances. We have a range of other initiatives such as the recognition of prior learning, competency determination mechanisms at phase seven, the final phase, and the redundant apprentice placement programme which is a major initiative. Mr. Fields will describe the initiatives which I have not fully described.

Mr. Bryan Fields

We have a couple of initiatives in this area. We have the competency determination mechanism in which many of the individuals to whom the Chairman referred are stuck after phase seven. We have developed and are rolling out the mechanism and if they pass that test, they will be awarded their craft certificates. We are rolling out the programme in eight trades: electrical; carpentry and joinery; bricklaying; stone laying; cabinet making; plumbing; metal fabrication; and painting and decorating. The process has started and we have identified in the region of 1,500 apprentices for next year. It is a crucial initiative to deal with the individuals who find themselves stuck after finishing all of the phases but have not completed the time element.

We have conversion programmes in other areas for plumbers and electricians and in respect of overseas work placements. In the region of 100 apprentices will be placed with German companies to finish their work experience.

Deputy Simon Harris

I thank Mr. O'Toole and his officials for attending. There has been a lot of progress in FÁS since he took over and it is only right that we acknowledge this. A lot of the issues we are discussing are legacy issues, with regard to which, as a Government Deputy, I can empathise.

To follow up on the points made on systems by the Chairman and Deputies O'Donnell and Deasy, it is about more than having to do better. I have read the annual report and there is a need to change the way FÁS measures outputs. The report states X number of people went through FÁS, received such a service and left. From our point of view as public representatives and protectors of taxpayers' money, there is very little about how many jobs were created or retained. I ask Mr. O'Toole to consider this point as part of his change agenda.

It is stated on page 13 of the annual report that 118,000 people were referred to FÁS by the Department of Social Protection in 2010. The attendance rate for interviews was 66%, which represents a decrease of 2% on the figure for the previous year. In effect, one in three people referred by the Department to FÁS is not bothering to turn up. Is that a fair comment? Can Mr. O'Toole give us an idea of the challenge this presents in terms of resources and the rationale behind it?

Mr. Paul O’Toole

Deputy Fleming asked a similar question. When people are referred, they are scheduled for interview and there is a follow-up to try to get them to it. If they do not present for interview, we supply that information to the Department of Social Protection. At the root of the issue is the fact that there is not an absolute requirement for somebody to attend an interview. Some people have very genuine reasons - others less so - for not attending, but there is no effective follow-up because no particular sanction can be imposed. As I understand it, until legislation was passed this year, the only option the Department had was to knock people off in terms of the receipt of benefits, with the result that a series of other problems ensued. Now it is able to impose lower penalties on somebody who does not attend to try to encourage him or her to do so.

On the issue of resources, we schedule and make people available to the local employment services. This creates a challenge. More than half of the people my colleagues in the local employment services see do not come through the national employment action plan. They are self-motivated, a point I tried to address in my opening statement. There is also a series of follow-ups by us and local employment services. If there is downtime, we try to ensure we do this.

The Department has introduced a new initiative this year with which we are co-operating - group engagement. Instead of people coming in individually and having to be given basic information on social protection and FÁS, there is a joint approach whereby an official from the Department and my colleagues meet a group of around 20. They walk them through the social protection and guidance systems. The initiative has been piloted successfully and we have found there is a far greater level of attendance.

The new National Employment Entitlement Service which will join the income support mechanisms of the State with the mutual obligation on the citizen to engage will be in place from the end of the year. When one cannot provide something for everybody, one tries to ensure one provides the greatest level of service for those in need, while those in less need are offered an alternative stream. If one is a highly skilled individual who is out of work but has a good chance of re-entering employment quickly, perhaps one does not need the same level of one-on-one attention as others and there might be other channels, including the web, to obtain information. If a person is more vulnerable and identified in profiling as being at greater risk of long-term unemployment, he or she will be the subject of a longer or more tailored intervention. That is the model the Department and the National Employment Entitlements Service will use.

Deputy Simon Harris

That is a fair answer. It is not surprising that those who self-refer have a higher rate of success because they are highly motivated. However, there is an issue regarding co-ordination.

I want to focus on the use of resources. Page 25 of the annual report refers to the special initiative for Travellers, namely, the scheme that provides Travellers with employment and enterprise supports. In 2010, 600 Travellers engaged in the programme at a cost of €630,000, or €1,050 per person. By comparison, the technical employment support grants programme, outlined on page 14 of the annual report, which aims to meet the needs of job seekers encountering barriers in progressing to the workforce received funding of €6 million and dealt with 14,000 people at a cost of €429 per person. There is a huge disparity and it is to be hoped Mr O'Toole will be able to tell me the reason. I would like to hear how resources are directed, given that one scheme cost the taxpayer €,1050 per person, while another which deals with a lot more people cost €429 per person. Can Mr. O'Toole tell the committee confidently that there has been a good return on the investment?

Mr. Paul O’Toole

The main response to the point is to see everyone as an individual. We are trying to create a journey for someone as a pathway into employment. People have very different needs. A technical employment support grant, TESG, might be used for someone who had lost his job and felt he could get a job in the transport industry if he had a heavy goods vehicle licence. If FÁS cannot directly provide that training we can help the person to source the intervention for himself and give him a grant, of an average of €500, to do that. The grant would help someone who needs a skill component to help him get a job.

People who are disadvantaged and are more remote from the labour market get a greater level of intervention. With our Traveller programme we are one of a number of players in that area who are trying to give a co-ordinated approach and to help the Traveller community to access mainstream services. My colleague, Mr. Oliver Egan may wish to add to that.

Mr. Oliver Egan

The programme is longer running in nature. As the director general has said, the TESG grants are short interventions with a fairly quick turnaround. This programme is the result of an inter-agency strategy to advance the Traveller community and is in the process of being redesigned. Parts of it will be going into supporting employment and the Job Club and parts to the county enterprise boards.

Deputy Simon Harris

Finally, I return to the legacy issues. We had a lengthy exchange on this issue the last time Mr. O'Toole was before the Committee of Public Accounts. I apologise for the fact that I left the meeting for a vote in the Dáil. I know Mr. O'Toole has covered some of this ground with Deputy Fleming. I ask him to excuse me for recapping on it. When one compiles the various costs arising from an investigation, or investigations, into an issue carried out by FÁS the figure is startling. The figure Mr. O'Toole gave to the committee today is €1.373 million. We are talking about a huge sum of money and a number of different investigations. The Mazars report came in at €192,000 and the Lynam report cost €240,300, both before VAT. William Fry was brought in for legal advice relating to the Lynam inquiry and cost €257,200, and High Court costs were around €600,000.

I am confused regarding the timeline. We had the Mazars report, the Lynam inquiry, or investigation, and 22 separate audit reports. Can Mr. O'Toole take me through the timeline of the Mazars, Lynam and audit reports? It would be helpful if we could start with that.

Mr. Paul O’Toole

I tried to cover some of this ground so I apologise if I am repeating. The genesis of all of the issues that arose was a detailed public scrutiny by media, this committee, the Comptroller and Auditor General, the audit committee of the board of FÁS and our internal audit. The Comptroller and Auditor General issued a report as part of an exercise in non-commercial semi-State bodies in May 2008. That was followed by a report of this committee in February 2009 and two further reports by the Comptroller and Auditor General in June 2009 and December 2009. During 2009, the audit committee of the board also requested the internal audit team to examine in more detail the issues surrounding the matters that had come to attention and the team issued 22 modular reports during 2009. The audit committee submitted an audit summary report to the board in December 2009.

As I mentioned earlier, the expenditure under scrutiny related to advertising and promotion, foreign flights and representation expenses, that is hospitality and entertainment. During the period 2002 to 2008, the combined expenditure on those items was in excess of €50 million, which was an average annual spend of approximately €7.5 million. During 2010, that expenditure reduced by more than 90%.

I joined FÁS in June 2009 and the new board came into being in January 2010. The new board, when it was appointed, and I, as director general, were faced with two issues. A set of serious grievances had been raised by a senior manager within the organisation against 17 people. At the same time the board, based on the recommendation of the audit committee, charged me with examining the responsibilities and potential culpability - no culpability was assumed at the time but that was my task - of 14 managers, some of whom had left the organisation and some of whom still worked with FÁS. In my role as director general, I took the decision that I had a straightforward choice. Did I ignore everything that was there or did I try to get to the bottom of it to understand what had happened and where responsibility lay? Equally, I had to protect the rights of the individual who had raised serious grievances, some of which, it transpired, stood up. That process kicked off in 2010. The grievances part of the process was completed during 2010 and the investigation and disciplinary process by Mr. Lynam was completed during 2011, this year.

On the back of that, we took action in respect of one individual who took us to the High Court. He secured two ex parte injunctions against us in September of this year. The issues escalated very quickly through the High Court and we, ultimately, did a mediated settlement and finished those matters.

Deputy Simon Harris

What was Mr. Lynam's brief and terms of reference?

Mr. Paul O’Toole

He was given the internal audit reports and the individual allegations made against the 14 managers. His task was to investigate those with a view to examining the culpability or otherwise of the individuals and, if appropriate, saying what level of disciplinary sanction should be imposed.

Deputy Simon Harris

Had that not been done already by the internal audit reports?

Mr. Paul O’Toole

An internal report only deals with matters of fact. There is a separation between an internal audit report and a human resources matter.

Deputy Simon Harris

That is helpful. What is Mr. Lynam's professional background?

Mr. Paul O’Toole

He is a management consultant. He has extensive experience in the human resources and industrial relations area. He has carried out similar work for other firms down through the years.

Deputy Simon Harris

How long did his work take?

Mr. Paul O’Toole

His work commenced in February 2010. The investigative part was finished in April of this year and his reporting finishes this month.

Deputy Simon Harris

What will happen to the report?

Mr. Paul O’Toole

The individual reports are people-based and are confidential in that regard. It is our job to do the action. I will be giving a summary position to the board of all the actions that happen in relation to the investigation and the outcome of those reports.

Deputy Simon Harris

I presume, Chairman, the committee will be in touch with FÁS in relation to those outcomes.

I thank Mr. O'Toole.

Deputy Paschal Donohoe

I welcome the witnesses and thank them for their contributions. I sense that all of the witnesses are grappling, in many cases successfully, with many inherited issues. Questioning at this committee can be thorough but it is a welcome development that much of this morning's questioning focuses on training and the core competencies of FÁS, rather than on other issues which have cursed the organisation in recent years. I acknowledge, in particular, the work of Mr. O'Toole and his colleagues in that regard.

My questions focus on the training role of FÁS and the performance of that role. This is an area on which I receive many contacts from constituents. I refer to a particular table on page 59 of the annual report, appendix 1(b) which refers to trends in FÁS training throughput. I have a number of questions about the overall trends detailed in this table. I will begin with the information on the first row, the number of FÁS apprenticeships granted annually since 2000. The number of apprenticeships granted in the period 2008 to 2010 compared with the numbers for the early years of the decade shows that the number of FÁS apprenticeships has declined. Given the importance of apprenticeships in teaching skills and upskilling workers for a return to the workforce I am puzzled by the fact that on average, in the period 2008 to 2010, on my calculation, there were approximately 15,000 people in apprenticeships while at the beginning of the decade, there were approximately 16,500 people in apprenticeships, despite the fact that there are now a further 200,000 people unemployed. I ask the witnesses to explain.

Mr. Paul O’Toole

Apprenticeship services are demand-led. The nature of the apprenticeship is that a person is employed by a qualified craftsperson or a company which can provide qualified craftspeople who will give the apprentice the required on-the-job training. It operates as an alternance system whereby apprentices move from on-the-job to off-the-job training. The on-the-job training consists of four phases and the off-the-job training is in three phases. FÁS directly provides the phase two training and the institutes of technology provide the phase four and the phase six components of the training. When the construction industry fell off the cliff, the capacity of new apprentices to find new employers also collapsed and the intake decreased dramatically. People voted with their feet and they stayed out of apprenticeships because of the lack of job opportunities. The intake amounted to approximately 1,200 last year but the overall volume has collapsed dramatically.

Deputy Paschal Donohoe

To clarify what the director general is saying, there has been a collapse in the total number of employers providing these apprenticeships and this explains the trend.

Mr. Paul O’Toole

Yes. That is absolutely the case. The problem changed focus. Many people in the system were made redundant and they were caught because they had embarked on a course of study which requires both on-the-job and off-the-job training. Our focus over the past two years in particular and into next year, will be to deal with that cohort of people who have been caught in the system-----

Deputy Paschal Donohoe

They are off the job.

Mr. Paul O’Toole

We need to help them through their off-the-job training components and without compromising the standard required in the craft, to be flexible in helping them over the line. This has been our focus.

Deputy Paschal Donohoe

I refer to the appendix table. Evening courses are included for 2010 and 2009 but they are not detailed as regards the preceding years. I ask Mr. O'Toole to explain.

Mr. Paul O’Toole

This table deals with throughput of people who are unemployed. Traditionally, FÁS operates evening courses on a payment basis and still does, but to a lesser extent. People could attend these courses by paying a fee. As a response to the unemployment crisis and the vastly increased numbers of unemployed people who are looking to access some form of upskilling or reskilling, FÁS opened its evening courses to unemployed people. This was initiated before my time as director general. There has been a very significant demand from unemployed people to take on evening courses. This arrangement works for them and that explains why the numbers have gone from zero to the current high numbers.

Deputy Paschal Donohoe

If one were to take out the component of evening courses from the table, the actual average number of people participating in FÁS programmes over recent years as compared to the years of the boom, is broadly unchanged. Over the past three years, approximately 45,000 people have participated in FÁS training courses as compared to early years of the decade when the number was also 45,000. Why is it the case if unemployment has increased by 200,000 people that the same number of people are participating in training courses?

Mr. Paul O’Toole

The overall number has increased. The table shows that those interventions by FÁS in apprenticeships are delivered by FÁS and by the institutes of technology. These numbers have fallen for the reason we have just discussed. Specific skills training has increased from 7,900 people in 2008 to 25,000 people in 2010. The basic entry level courses have remained relatively static and there have been increases in evening course participation. What is not shown in the table is our on-line courses where participation has also increased dramatically. They are not shown on the table because they are low cost but they provide significant access to unemployed people and we have had a very good response to them.

The context is that our budget and our staff numbers have been shrinking. FÁS is now providing a much higher level of output per staff member within a shrinking organisation and providing more value. We are doing more for less. We have increased the overall interventions and as I described earlier, we have thus far made a tactical response. We have reacted immediately to help as many people as possible to stay in contact and not to all go off the radar. That has been our immediate response in 2009 to 2010. In the future we will need to have a more strategic approach with programmes such as SOLAS, the education and training boards and NEES, the National Employment and Entitlements Service.

Deputy Paschal Donohoe

I refer to the foundation skills statistics shown in the table and these are broadly the same over the period of the last ten years.

Mr. Paul O’Toole

Yes, they are broadly unchanged.

Deputy Paschal Donohoe

Should these figures not be on the increase?

Mr. Paul O’Toole

The foundation skills courses are day courses in those areas. FÁS also provides foundation skills courses by means of the evening course mechanism. The increase is not just happening in the day courses. I will ask my colleagues to speak on this point in case I have not explained correctly.

Mr. Bryan Fields

One of the key points regarding training is that over half of those who register with FÁS have a leaving certificate or higher. We questioned whether it made sense for those who are at levels six, seven, eight and nine, of the national framework of qualifications, to participate in foundation courses. The profile of individuals coming to FÁS has changed dramatically in that period under discussion. We need to build on their skills and to start them at a higher level than the foundation course in order to help them find jobs.

Deputy Paschal Donohoe

The director general mentioned that FÁS is moving towards a strategic response to the training needs of unemployed people. I am sure we are all disappointed that we are still in tactical mode, that there is not a faster evolution towards that kind of work, given the number of people unemployed.

Mr. Paul O’Toole

We are very aware of the need to have that strategic focus and we have commenced this work. We have concentrated over the past two years in dealing with the situation as we find it. It has been a case of downsizing and cutting budgets, dealing with legacy issues, fixing the problems and ensuring the core quality assurance mechanisms of our courses. We are changing our courses and introducing new courses and trying to make our courses as relevant as possible to the labour market and to the needs of the learners. This is where we need to improve our focus.

Deputy Paschal Donohoe

Appendix 5 of the same report, on page 61, lays out the different stages of engagement between FÁS and persons on the live register, with the performance set out by different age cohorts. I assume the reference to LTU in the far right column refers to long-term unemployed.

Mr. Paul O’Toole

Yes.

Deputy Paschal Donohoe

The under 25 age cohort is a particular target of our work. If we do not support these people, the life consequences for them can be particularly significant. There is a reference in the last row to "those placed in jobs programmes". Does this refer to the number of people with whom FÁS engaged, that is, that the figure of 34% is to be understood in the context of the 68% referred to before that?

Mr. Paul O’Toole

These data refer only to national employment action plan, NEAP, referrals. Of the people we engage with through our employment services, fewer than half come through this mechanism, while a further 87,000 make contact with us directly. As the NEAP is a joint programme with the Department of Social Protection, this information refers exclusively to that cohort.

Deputy Paschal Donohoe

Is Mr. O'Toole saying that this table deals only with referrals under the NEAP programme and does not include self-referrals?

Mr. Paul O’Toole

Exactly.

Deputy Paschal Donohoe

With that mind, I refer to the figure of 7,495 for men and women under the age of 25. This suggests that despite the focus of the NEAP, just under 40% - 7,495 out of 18,000 - of the people covered in the plan end up coming off the live register. In other words, almost 60% of them do not come off the live register.

Mr. Paul O’Toole

The Deputy is highlighting a core issue in that the jobs are simply not there for people. We are one actor in this area, our role being to provide training for people seeking entry-level and intermediate skills. Many other things are happening which are not reflected in this table. For example, people who go on to PLCs through the VECs are not included in these numbers. The Deputy is making the point that for young people coming into the system now, the job prospects are poor and the challenges are great. However, if one analyses the overall population, the more acute challenge is for people between the ages of 25 and 44 years. These are the people who were previously in employment and are now facing the major social challenges of unemployment. As such, the 25 to 44 age cohort presents the greatest challenge.

Deputy Paschal Donohoe

Once a person has completed a FÁS course, what level of contact does he or she subsequently receive from FÁS?

Mr. Paul O’Toole

It varies depending on the course. For instance, a person who completes a basic skills or general course and who remains unemployed will receive a follow-up through the Department of Social Protection and FÁS employment services. In the past, such contact depended, to a certain extent, on people's own level of engagement. The volume of people we are dealing with has trebled, but we have the same number of staff. We have tried to deal with this by working in a different way with local employment services and with our own colleagues. The Government has targeted us to work with priority groups. In this regard, we have defined priority groups on which the bulk of our energy is focused and to whom we give the greatest level of attention. For the future, as my colleagues in employment services move in the coming weeks to the Department of Social Protection and the new national employment and entitlements service is created, there will be a much closer link between the income support mechanisms of the State and the activation and individual obligations of citizens.

Deputy Paschal Donohoe

When Mr. O'Toole uses the word "activation" is he referring to the policy of contact between persons looking for a job and those providing the training and support to help them do so?

Mr. Paul O’Toole

Contact is a critical part of it. It is impossible to contact everybody in the same way all of the time, so prioritisation will be a huge factor. Some people require a greater level of support than others. Activation is essentially about assisting those in a period of unemployment to find a pathway to employment through a variety of mechanisms, one of which is training.

Deputy Paschal Donohoe

What is the current level of contact between FÁS and unemployed people in the 25 to 44 age cohort?

Mr. Paul O’Toole

I do not have the exact figures, but there is an average contact rate with the various groups. From a FÁS point of view, we would have three to four contacts with an individual, which would include a live interview. The local employment services might have a slightly greater level of contact. I will come back to the Deputy with specific information on this.

Deputy Paschal Donohoe

To put that figure in context, over what time period would those three to four contacts take place?

Mr. Paul O’Toole

They would take place within one period of unemployment, which could be one year, for example.

Deputy Paschal Donohoe

Will the director general come back to us with information on the actual number of contacts and the target number?

Mr. Paul O’Toole

Yes, I will get back to the Deputy with the additional information I have in regard to this. There will be new targets under the national employment and entitlements service.

Deputy Paschal Donohoe

What level of contact is there between an employer and FÁS once the former has given notice of a vacancy?

Mr. Paul O’Toole

Our on-line job service is provided free to employers. In 2010 our website included I think 69,000 full and part-time vacancies, I will have to check the figure, provided by employers. The level of traffic on the site is huge. Jobseekers can interact with the site and find their way to the employer, who will specify their preferred type of contact, whether an on-line or written CV or whatever. When our employment services officers meet clients, they will scan the job opportunities on the website and refer people deemed suitable to particular employers. The employer will get a pipeline of clients coming to them, presenting their skills and seeking a job. Some 87% of the jobs we advertise through our site are filled within two months. The feedback from employers, by way of our employer satisfaction survey, is largely positive.

Deputy Paschal Donohoe

When is the next two-year survey due?

Mr. Paul O’Toole

The last one was done in 2009, so the next one is due around now. I will confirm that for the Deputy.

Deputy Paschal Donohoe

How many people will be included in that survey?

Mr. Paul O’Toole

I would rather come back with accurate information. We will send the Deputy a note.

Chairman

I wish to return to an earlier question in regard to FÁS headquarters. I presume the site in Birr that was purchased for €1.5 million does not have planning permission.

Mr. Paul O’Toole

It has outline planning for access but does not have full planning permission.

Chairman

I understand that headquarters is not being proceeded with.

Mr. Paul O’Toole

We are awaiting a decision in respect of the decentralisation of FÁS. It is one of the matters under review by the Government.

Chairman

It is still under review?

Mr. Paul O’Toole

Yes.

Chairman

How would Mr. O'Toole rate that purchase in terms of value for money, given the cost of €1.5 million?

Mr. Paul O’Toole

I genuinely do not know. However, I presume it is a lot less than when it was bought at that time. I do not know the answer.

Chairman

The outcome of the review is awaited and if a decision were taken that it should not proceed, then the land would revert to its agricultural value.

Mr. Paul O’Toole

As I understand it, the site is in an area which is zoned for commercial development. I understand, therefore, that it has some commercial value.

Chairman

What is FÁS's plan with regard to the offices in Birr? I understand the agency has offices at a number of locations there. Is that correct?

Mr. Paul O’Toole

In Birr, we have one temporary facility. That was taken on to house an advance party of personnel. The idea was that decentralisation was to occur and the site was bought with a view to its being developed. FÁS took on a temporary premises in Birr for an advance party of staff. This was originally set up to accommodate 40 to 50 personnel. Matters have moved on considerably and the operation is now a great deal smaller. There are now fewer than 20 staff - perhaps 15 or so - housed at the facility in question. There is a break clause coming up in respect of the premises next April and we intend to invoke this. In other words, we will vacate the premises.

Chairman

What is the year-on-year cost of the lease relating to the premises?

Mr. Conor Dunne

The rental cost is €100,000 per annum.

Chairman

The premises originally accommodated 40 staff but there are now fewer than 20 there.

Mr. Conor Dunne

There are 14 staff working at the facility. We have put in place there a jobs club and an employment service clinic.

Chairman

Mr. O'Toole stated that it is intended to invoke the break clause relating to the premises next year, regardless of whether the decision to relocate to-----

Mr. Paul O’Toole

We see that as a separate matter.

Chairman

It is a separate matter. Okay. In the context of the current headquarters, who is the landlord?

Mr. Conor Dunne

I think it is a company controlled by Treasury Holdings.

Chairman

So FÁS is locked into an agreement with Treasury Holdings which, I presume, includes an upward-only rent review of €1 million. That is fine. To clarify what was stated earlier, FÁS is continuing to engage with Treasury Holdings in respect of the rent.

Mr. Conor Dunne

We are negotiating with Treasury Holdings at present.

Chairman

Okay. To return to some of the questions posed by Deputy Donohoe, are there job vacancies advertised by FÁS on its website which it simply has been unable to fill?

Mr. Paul O’Toole

The way we handle that matter is that an employer will provide a specification for a job and information on the conditions associated therewith. These details are then listed on our website. If we do not hear otherwise from an employer, we will remove the details from our system after eight weeks.

Chairman

Are employers generally satisfied with the timeframe involved in getting details up on the web and obtaining responses?

Mr. Paul O’Toole

We carry out employer surveys and, generally speaking, the feedback from employers is quite good. Occasionally, some employers are overwhelmed by the number of applications received. In other words, an employer might be seeking a pool of ten or 15 people and hundreds apply. This is because when people see an opportunity on the web they tend to go for it. Overall, the service is well regarded and the website receives a great deal of traffic. Most of the vacancies we advertise are filled. It is fair to state that some job vacancies will be not just advertised through FÁS and that they will be advertised elsewhere. Generally speaking, we receive a satisfactory rating in respect of that service.

Chairman

With regard to apprentices finishing their courses, etc., it is not a question of money. I received a query and when I followed it up I was informed that some apprentices who had tried to obtain positions with employers to finish out their time were told by FÁS that they could not do so because there was a lack of funding. That would not be the case in the context of what Mr. Fields stated earlier.

Mr. Paul O’Toole

In terms of timing, we exceeded our budget in respect of that matter this year. We had a budget for this year-----

Chairman

When did that happen?

Mr. Paul O’Toole

I think we closed it off around the beginning of November.

Chairman

So that is why Members of the Houses received queries.

Mr. Paul O’Toole

Yes. We will be proposing to reopen it, if possible, next year. There has been a good response to it from the employers who took on redundant apprentices and from the apprentices themselves. Due to the fact that the scheme has been so successful and because the amount of money being spent on it has increased, we are carrying out a value for money review in respect of it. We want to ensure there will be no distortion impacts as a result of the scheme being put in place.

Chairman

I am aware of apprentices who identified possible employers, underwent the interview process and obtained positions only to be informed there was a lack of funding and that they could not take up those positions. Given that it is now December, would it not be possible for those individuals to be taken on because FÁS will obtain the same level of funding in respect of this scheme for next year? Surely there could be some flexibility.

Mr. Paul O’Toole

The challenge we face in this regard is that if someone is awarded a place on the scheme in November or December, we are committing funds into 2012. We are waiting to see what will be the implications of the budget.

Chairman

So there is no flexibility.

Mr. Paul O’Toole

We tried to be as flexible as possible. The board authorised us to expand the budget significantly during the year. We felt we had to be careful in the context of pre-committing too much funding into 2012. We were also keen to carry out a value for money audit to discover what is happening to these people as they take part in the scheme. This was a quick response to an urgent need and we are of the opinion that it was the right thing to do. However, because the amount of money involved has increased significantly we are pausing in order that we will not over-commit in respect of next year and so that we can carry out the value for money review in respect of the exercise.

Chairman

Mr. Dempsey's report to the Department of Education and Skills is relevant to our previous discussion on the analysis, the consultant's report, etc. Perhaps he might undertake to forward to us the report we discussed with Mr. Duggan - with some form of analysis attached - in order that we might discuss it at a later date.

Mr. Michael Dempsey

I will certainly do that. To me, that is something to consider in terms of operational information. We have a great deal of information but obtaining good operational information is a challenge. There are gaps which must be closed. This is a matter in respect of which I have been talking for the past 12 months.

Chairman

It is only fair that - like other members - I should recognise the difficult journey Mr. O'Toole and Mr. Dempsey have undertaken. There is a lot done and a little more to do.

Mr. Paul O’Toole

We are not there yet and we will not make any claims to the effect that we have reached our destination.

Mr. Michael Dempsey

I have been involved in performance reviews at senior management level and at board level. I have carried out online assessments of the board and of individual directors on a face-to-face basis. I have also provided individual performance feedback and engaged in a half-day discussion with every member of the board. I wish to make clear the urgency we attach to this issue. The policy has been laid down by the Government and the director general and I consider the strategy. We have set goals for the director general to achieve in respect of the strategy. All his direct reports contain objectives and these are aligned and reviewed at regular meetings. There is a real push on to achieve the kind of improvement in performance to which the Chairman refers. The process starts with ourselves, which should be the case.

Chairman

FÁS is involved with the European globalisation fund initiative relating to former employees of Dell, Waterford Crystal and SR Technics. Has that initiative been successful?

Mr. Paul O’Toole

The European globalisation fund initiative is a challenging programme with which to be involved. It is, of course, highly valuable to have Europe providing specific support to people who previously worked in large-scale and other industries but who are now unemployed. To be honest, it has been challenging to try to administer the initiative. I am of the view that we have done well. In the context of the Dell programme, we had a particular responsibility in respect of co-ordination. With regard to our own programme, we have provided the necessary interventions and we have come in at approximately 97% of our own budget. It is moving forward. It is a relatively new scheme with which not only Ireland but others are trying to come to grips. From my perspective, one of the key challenges is that we are trying to produce tailored interventions and special incentives for one group of unemployed people among a pool of unemployed people. The approval comes later, so trying to put in place new things while we are not quite sure whether the money will come has proved to be a challenge. We are all coming to grips with it. It is welcome to have it and the focus it brings is welcome. It brings energy and focus to the needs of the group. However, we have had some issues associated with the challenges of trying to respond properly to it.

Chairman

Has all the fund been drawn down? Did Mr. O'Toole say 97% of it has been spent?

Mr. Paul O’Toole

The FÁS portion of Dell. I believe the EGF for Dell was €22 million. Mr. Egan might elaborate.

Mr. Oliver Egan

It is €22 million for Dell. While the figures will not be submitted to Brussels until 28 December, we believe approximately €13 million of the €22 million will have been spent.

Chairman

On the €22 million from the European Union-----

Mr. Paul O’Toole

Some 65% of that is from the European Union and 35% is from the State.

Chairman

The total was €22 million. Of the €22 million committed to Dell, Waterford Crystal and SR Technics-----

Mr. Paul O’Toole

Just Dell.

Chairman

Just Dell. Of the €22 million committed to Dell, €13 million was spent.

Mr. Paul O’Toole

Some €13 million has been spent. The FÁS portion of the €22 million was €6 million. The FÁS training interventions part amounted €6 million and we have spent €5.7 million.

Chairman

What is the total fund between FÁS and the others?

Mr. Paul O’Toole

It is €22 million.

Chairman

Of that, how much was spent, including the FÁS proportion?

Mr. Paul O’Toole

Thirteen million euro. That includes us.

Chairman

That includes FÁS. Therefore, €13 million of €22 million is spent. That relates only to Dell.

Mr. Paul O’Toole

That pertains only to Dell. I can provide the details on this.

Chairman

Why was the balance not spent? What is the problem with dealing with the balance given that it is money matched by FÁS's own and given that it is so needed in the area in question?

Mr. Oliver Egan

The director general has already indicated that this has been a challenging programme. Dell was the first one and probably all the public service providers learned lessons from it. I was chair of the steering group for the Dell EGF, which was a cross-public-provider body. We did not have a budget assigned to us but had responsibility for co-ordinating actions across the various budget headings. There was an element of estimating at the very beginning how much we were likely to spend, and a certain element of that mix probably could have been more refined and probably will be as we learn.

As the director general said, the FÁS element was largely spent and the VEC element would have spent significantly on the county enterprise boards. Probably too much money was budgeted for third level interventions. It is largely on that side that there is under-expenditure, although the third level side did come in with some considerable innovation as the programme proceeded. Those innovations will probably help in the other programmes. In the end, we probably bid too much on third level. Also, training allowances were calculated at the higher rates before the budget reductions of recent years.

Chairman

In terms of the balance, is that money lost to us?

Mr. Oliver Egan

It would go back to the EGF. Across Europe, the figures would not be terribly dissimilar to our own in terms of the returns. There are design issues around the EGF that had to be looked at.

Chairman

What is the position on Waterford Crystal and SR Technics?

Mr. Oliver Egan

Waterford Crystal was in a slightly different context in that we were not the co-ordinator. With regard to Waterford Crystal, our target is €2.1 million. We spent approximately €1.5 million. On SR Technics, our target was €1.7 million and we spent €1.36 million.

Chairman

Are there other moneys?

Mr. Oliver Egan

There would be other moneys. I do not have the complete totals because we are not the co-ordinator.

Chairman

What figures has Mr. Egan?

Mr. Oliver Egan

On Waterford Crystal, the budgeted expenditure by FÁS was €2.1 million, of which we spent €1.5 million. On SR Technics, our budgeted expenditure was €1.7 million and we spent €1.36 million.

Chairman

Who is responsible for the other part?

Mr. Oliver Egan

The overall budget allocation is with the Department of Education and Skills. The Vote comes through the departmental Vote.

Chairman

It seems unusual. While Mr. Egan says there is a similar outturn in other European countries, it is unusual that the €22 million in the case of Dell was not taken up given the purpose and the need to tackle unemployment.

Mr. Oliver Egan

We are learning and we are getting better as exposure to the programme increases. Currently, the Department is working on improving how the EGF is dealt with. TalkTalk will probably be the first of the new regime in relation to EGF claims.

Chairman

Does Mr. Egan think individuals or projects would have lost out through not spending the €9 million?

Mr. Oliver Egan

There were certain budgets in terms of expenditure and beneficiary numbers set for all providers. Certainly, on the FÁS side, our budget has been more or less spent and the beneficiary numbers have been exceeded.

We commissioned research on the Dell programme through a company called Franklin Research. Largely, the responses were positive. However, by definition, if we were returning a quantum of money, people would say the services could have been better, and we would have to accept that.

Deputy Kieran O’Donnell

On the Dell issue, as a public representative for Limerick city, I am assuming, in respect of the original design of the application, that procedures are now in place. Certainly, when one looks down through the make-up and rigidity of the actual programming in the European context, we need to have flexibility from Europe's side also.

Let me return to the legacy issue in terms of the Mazars and Lynam reports. What was the difference between the two reports? The Mazars report cost €192,000, excluding VAT, and the Lynam report cost €240,000, excluding VAT. The latter was more expensive.

Mr. Paul O’Toole

The numbers quoted by the Deputy are slightly different from those provided earlier, but I did give the up-to-date figures earlier in the proceedings.

The Mazars report investigated a set of grievances raised by one manager against 17 people, including existing and former FÁS-connected individuals. The Lyman report contained 14 separate investigations; that is the essential difference.

Deputy Kieran O’Donnell

Are the 14 people in the Lynam report 14 of the 17 people who are the subject of the Mazars investigation?

Mr. Paul O’Toole

There is some overlap in regard to the two but, to make a clear distinction, the Mazars report refers to personal grievances of an individual about the behaviour of others as that individual saw it. The grievances were serious in nature and had to be investigated. The 14 investigations carried out by Mr. Lynam were to assess the culpability of individual managers, both those who had left FÁS and those who remained in FÁS, or otherwise, in respect of their contribution to the problems highlighted and expressed in this room and others.

Deputy Kieran O’Donnell

What is the interrelationship between the Lynam and Mazars reports? Does the Lynam report constitute an investigation into issues that arose under Mazars?

Mr. Paul O’Toole

No. Very specifically, the Lynam investigation followed the issue of 22, and subsequently 23, modular audits carried out by our internal audit team. That team reported to the former audit committee of the board, and the audit committee of the former board sought and received the approval of the board to direct me to carry out those investigations. That was in December 2009.

Deputy Kieran O’Donnell

Does it not seem extraordinary that the director general is talking about expenditure of close to €1.4 million between doing the reports and making settlements? This seems to be a huge amount of taxpayers' money. Could Mr. O'Toole comment on that? Mr. O'Toole was before the committee on this matter before. There were certain items contained in the Mazars report that might have misled the committee on particular issues. The committee cannot make a judgment unless it sees the report. Why can it not be provided for the committee? The taxpayer has paid €1.3 million for it, but the committee cannot make a judgment call as to whether the information provided for it was accurate.

Mr. Paul O’Toole

The Mazars report dealt with personal grievances. On foot of this, it identified 18 inaccuracies and two partial inaccuracies in 86 references made. It provides no detail in respect of these because the context in which it was doing this was the impact on the individual. This issue came through the media and the committee asked to deal with it. We engaged with Mazars and received further representations from the committee based on advice it had received. Subsequent to this, Mazars provided additional information on those which had not been contained in its original papers.

Deputy Kieran O’Donnell

In the working papers.

Mr. Paul O’Toole

They were brought here and read into the record of the committee to correct the points made. There was a genuine attempt both by Mazars, operating under confidential arrangements, and us to ensure we dealt with this issue with the Committee of Public Accounts.

Deputy Kieran O’Donnell

It is amazing the working papers are not contained in the report provided for FÁS. If that is the case, it should be possible to publish the Mazars report and make it available to the committee.

Mr. Paul O’Toole

To my knowledge, the committee has not sought the report.

Deputy Kieran O’Donnell

If it were to seek it, how would it get it?

Mr. Paul O’Toole

There are three parties to the report — the publishers, the complainant and the agency. If a formal request was made by the committee for a copy of the report, we would take it up with the other two parties involved.

Deputy Kieran O’Donnell

Would FÁS have an issue with issuing the report to the committee?

Mr. Paul O’Toole

No, we would provide it for the committee. However, it is a report about individual grievances.

Deputy Kieran O’Donnell

FÁS has committed to the tracking of trainees and courses over six months, nine months and 12 months. How long will it take to put such a tracking procedure in place?

Mr. Paul O’Toole

If the Deputy is satisfied for me to discuss this matter with my colleagues who are more expert in this area, I could respond to him later.

Deputy Kieran O’Donnell

Yes, that is okay.

What percentage of new courses provided by FÁS have come on stream? What was the turnover of courses in the past year?

Mr. Bryan Fields

FÁS had 304 course titles operating last year and this year. It archived 100 course titles from 2010 to this year, while introducing 45 new programmes.

Deputy Kieran O’Donnell

That means FÁS archived 35% of its programmes.

Mr. Bryan Fields

Yes. We are also aligning all our level three, four, five and six courses with the FETAC new award specifications. These specifications were developed using award development groups on which employers sit. The specifications will detail the technical and soft skills required for the IT level five courses. We are redesigning our courses to match the new award specifications and the needs of employers.

Deputy Kieran O’Donnell

Does FÁS have any involvement in the new European globalisation fund for construction workers?

Mr. Paul O’Toole

We are in discussions with the Department of Education and Skills on our role in this regard. We will be working at several levels and providing support in the introduction of that programme. Several of the initiatives we have taken for apprentices and construction workers may be eligible for inclusion in the programme. FÁS will be working with the Department of Education and Skills to provide all the necessary information and back-up.

Deputy Mary Lou McDonald

Allegations were made against 14 managers. Has disciplinary action been taken against all or any of the 14?

Mr. Paul O’Toole

Of the 14 managers at the time this was initiated, some had already left the organisation and some were still in place.

Deputy Mary Lou McDonald

How many had left?

Mr. Paul O’Toole

At the time, six had left. To clarify, the audit committee identified 15 individuals. At the time the matter was considered by the board, one of these individuals had already been dismissed, was subsequently tried and received a custodial sentence. Of the 14 managers, nine have now left the organisation, some through normal retirement and early retirement, others through resignation and termination of contract. Of the remaining five, sanctions have been applied where recommended and considered appropriate. These sanctions are lower than dismissal.

Deputy Mary Lou McDonald

Were all five sanctioned?

Mr. Paul O’Toole

Yes, all five received a sanction. Obviously, people have the right to appeal and we may be working our way through several of these also.

Deputy Mary Lou McDonald

Of the 14, there was only one termination of contract.

Mr. Paul O’Toole

Yes.

Deputy Mary Lou McDonald

Have any of these individuals been moved to the Department of Social Protection? I noticed in the report that with the change programme with SOLAS some staff might move over to that Department.

Mr. Paul O’Toole

Up to 700 staff members will transfer to the Department of Social Protection.

Deputy Mary Lou McDonald

Is any of the five managers in question included in that number?

Mr. Paul O’Toole

I think one is.

Deputy Mary Lou McDonald

Is that an appropriate move?

Mr. Paul O’Toole

I believe so. When one deals with a disciplinary matter, one deals with the facts and the timespan involved.

Deputy Mary Lou McDonald

That is appreciated.

Mr. Paul O’Toole

To be equitable and fair to people, if one takes an action that is considered to be appropriate, that should be it. The person would have had to face up to the issue and been challenged on it. A sanction has been imposed where that is deemed appropriate, and the organisation and people involved should then move on. We are not making lifetime judgments about people but we are dealing with a set of issues and how those were handled.

Deputy Mary Lou McDonald

I understand the witness must be extremely mindful of the rights of the individual and natural justice, and that is as it ought to be. We are foraging a little in the dark as we have the numbers and we know about the custodial sentence, the termination and so on. There is gravity in the misdemeanour. If somebody is sanctioned it is because there is a finding that there was a level of culpability at a certain level. I am making no assumptions on the gravity of the matter. We are working in a context where the level of bad governance within the organisation was terrible, which the witness has acknowledged. He is looking to put the matter right.

It is a fair question to ask these questions in that context, where individuals have been subject to a procedure and investigation, and where a finding of sanction has been made. Where are these individuals? One of them will move Department along with 700 other staff and I presume the other four-----

Mr. Paul O’Toole

They are working away.

Deputy Mary Lou McDonald

They would be part of this new SOLAS enterprise.

Mr. Paul O’Toole

Yes. Perhaps I could address that, as it is important. I know the point being made by the Deputy. Having been through the process, reviewed all the matters and applied the sanction we believe appropriate in the circumstances, it is fair to say-----

Deputy Mary Lou McDonald

Will the witness tell us what the sanction was?

Mr. Paul O’Toole

Sanctions varied from a verbal warning to a demotion. I am being careful to respect the rights of those individuals.

Deputy Mary Lou McDonald

We are not asking for specific identities.

Mr. Paul O’Toole

It is important to state that I am satisfied those managers are contributing and will continue to contribute to FÁS, SOLAS and the Department of Social Protection in an appropriate way.

Deputy Mary Lou McDonald

Certainly, and the Mr. O'Toole is very correct if that is his judgment.

Mr. Paul O’Toole

It is my judgment.

Deputy Mary Lou McDonald

Does Mr. O'Toole understand the position of the committee and its members? I accept that Mr. O'Toole must be satisfied of what the case is but how do we know, as an Oireachtas committee, that what is outlined is the case? Notwithstanding the need for fair procedure, etc., as Deputy O'Donnell and others have indicated, this has been a fairly opaque kind of procedure. I understand that some of this arose from a turn of events and legal action but we are left in a position where we do not have full clarity in respect of these matters. I emphasise that I am not suggesting anything in respect of these individuals. I would like to know absolutely that the procedure was carried out and sanctions were implemented. This would give a level of assurance, not so much for the committee but for the taxpayer, that everything was dealt with. There should be public confidence that those who remain within the organisations, or those who have moved or are a part of SOLAS, are match fit and fully up to the task they must carry out. I say this because the position was so bad and scandalous within FÁS. Does the witness understand why I am making the point?

Mr. Paul O’Toole

I do.

Deputy Mary Lou McDonald

Will he tell me how we can resolve the issue and provide the information to us in a way that does not necessarily compromise the identity of the individuals?

Mr. Paul O’Toole

I would have to think about that for a moment in order to give a proper response. When I or any other Accounting Officer comes before the Committee of Public Accounts, we have an obligation and accountability to the Oireachtas, represented by the committee's scrutiny of matters. We come with that responsibility and try to deliver on it to the best of our ability. Sometimes we get it wrong but hope to get it right. We also come with the responsibility of an employer and within employers' legislation. There is also a responsibility under data protection. We have an obligation and duty of care to the committee and for myself, to the organisation and to individuals. We are trying to balance all of those. Ultimately, the proof of the pudding is in the eating.

I hope that FÁS, which will be dissolved next year, has shown that it has confronted the various problems it has had to deal with, whether it is in respect of the matters under review through the audits, our training provision or the point made by Deputy O'Donnell about having better and more effective measures. We are looking to be open and to accept our responsibility to do all of this, and we come here to demonstrate that responsibility.

We are on a journey, which started when a very significant State organisation was effectively brought to its knees and is now being dissolved. There was a use of taxpayers' money in a way where probity and value for money was questioned vigorously in this room and through reports of the Comptroller and Auditor General and others. We have acted on that and are making demonstrable bottom-line savings.

Deputy Mary Lou McDonald

I am not questioning any of that. I appreciate what Mr. O'Toole is saying.

Mr. Paul O’Toole

I do not think-----

Deputy Mary Lou McDonald

I am asking about these 14-----

Mr. Paul O’Toole

The 14-----

Deputy Mary Lou McDonald

That cohort, and particularly the five people within that. To be helpful, what level of manager are we talking about, particularly with regard to the five remaining personnel?

Mr. Paul O’Toole

It is all levels of manager. There is a range of level of manager.

Deputy Mary Lou McDonald

Will the witness break that down for the five remaining people?

Mr. Paul O’Toole

I have to be careful in that respect as by breaking it down, I run the risk of identifying people, not so much to the committee but others. I must protect that position absolutely. There is a range of managers within that group. Each manager and every staff member has responsibilities in carrying out their work.

Deputy Mary Lou McDonald

Of course.

Mr. Paul O’Toole

It is our job to manage that and my job to report to the board on the performance of management teams. There is a specific human resources and remuneration committee. We have shared the top level work in that regard with the committee and we will go further with that group within the organisation. Ultimately, I have the responsibility to manage performance. I take that very seriously and that is what we are doing.

Deputy Mary Lou McDonald

I understand all of that and that Mr. O'Toole would probably prefer me not ask the question. I am not raising it to make life awkward but there is a problem, which unfortunately relates to the remaining staff. Sanctions were not imposed without good reason, and I am not making an assumption about the level of culpability. There was something to warrant the action. If we assume the sanction was imposed and concluded, one can draw a line under the action in terms of employment and move on. There is no issue in that respect. However, there is a confidence and, more critically, an accountability issue. We must be assured that in placing these five individuals in the Department or SOLAS, matters have been resolved to the satisfaction of the committee.

It is about accountability and I am uncomfortable with a scenario where FÁS is coming from scandal and grotesque waste, with investigations arising from that position and sanctions applied on a number of individuals, although these do not include dismissal. Those people are still in the system and are part of heralding the new dawn of SOLAS and training regime. I would hazard a guess that if there was any query within the organisation, which is a big outfit------

Mr. Paul O’Toole

It is to be dissolved.

Deputy Mary Lou McDonald

Was there any notion that people who had been found to have been in the middle of the bad situation, at whatever level, received a rap on the knuckles and were rehabilitated into the system? I imagine that would cause considerable bad will. I do not suggest bad will exists but I have observed these scenarios play out elsewhere. Perhaps we will not be able to get to the bottom of the issue today.

Deputy Kieran O’Donnell

How many of the five were demoted?

Mr. Paul O’Toole

One.

Deputy Kieran O’Donnell

Were the other four sanctioned?

Mr. Paul O’Toole

Yes, they were.

Deputy Kieran O’Donnell

How many were moved to different positions within the organisation?

Mr. Paul O’Toole

Nobody was moved but the organisation is changing. By the end of this year our management team will be 50% smaller. Everybody is doing different work. We have not moved people on foot of the outcome of this work.

Deputy Kieran O’Donnell

How would Mr. O'Toole describe the degrees of sanction against the five that remain? Are the sanctions minor or major?

Mr. Paul O’Toole

The level of sanctions start with verbal warnings and proceed to written warnings and final written warnings or dismissals.

Deputy Kieran O’Donnell

How were these five individuals sanctioned?

Mr. Paul O’Toole

Four were sanctioned at the lower end of the scale.

Deputy Kieran O’Donnell

Did they receive verbal warnings?

Mr. Paul O’Toole

The sanctions were between verbal and written.

Deputy Kieran O’Donnell

How many were investigated in respect of the Lynam report?

Mr. Paul O’Toole

Fourteen.

Deputy Kieran O’Donnell

Are these the 14 individuals we are currently discussing?

Mr. Paul O’Toole

Yes.

Deputy Kieran O’Donnell

How many were investigated in respect of the Mazars report?

Mr. Paul O’Toole

The Mazars report did not involve an investigation of individuals. It was a review of personal grievances, which is a different arena.

Deputy Kieran O’Donnell

Were any individuals disciplined as a consequence of the Mazars report?

Mr. Paul O’Toole

No.

Deputy Kieran O’Donnell

Why not?

Mr. Paul O’Toole

The Mazars report was about an individual's grievances with a variety of people. It was not a disciplinary process.

Deputy Mary Lou McDonald

We have a degree of information but it is incomplete. Notwithstanding Mr. O'Toole's duty of care as an employer and the balancing act he must strike, I find the situation to be unsatisfactory. I am not sure how we will resolve the matter. I might put it back into the Chairman's court for us to ponder.

Chairman

We can ponder it for a minute. While four of the aforementioned five individuals received verbal or written warnings, at least they stayed within the organisation to face up to their culpability. The fifth individual was demoted. A lot can be said for those five and I agree they should not be marked for life because that would be unfair. I am more interested in the nine individuals who did not face up to their culpability.

Mr. Paul O’Toole

One individual's contract was terminated. Others would have had no findings made against them.

Chairman

Of the nine against whom adverse findings were made, the question arises of whether they faced up to their culpability. I am not asking the number.

It must have been a shock for all concerned to see the director general retire with a package. I cannot overlook that aspect of the matter and it would be wrong of the committee to overlook it. Simply in terms of general commentary, ordinary staff faced up to their responsibilities and took their medicine. Some of the nine left but the director general agreed his package. I recognise we are not going to discuss this issue in detail but it sends out an awful message to the public we serve and the organisation Mr. O'Toole is left to steer through difficult times. I suggest that is the most shocking part of the matter and if any lesson needs to be learned, it is about how that was achieved by the then director general. I accept some elements are matters of policy or agreement but, looking back on this shocking saga, this was an even greater scandal. It sends a bad message to those who are still employed in the public service at junior or middle management level. Yet again, the ordinary worker had to carry the can and the shame for what happened in that organisation. I would almost say "fair play" to those who remained for taking responsibility. I continue to be shocked by the absence of a similar response by the former director general.

Deputy Mary Lou McDonald

Arguably that is the biggest scandal of all.

Chairman

Exactly.

Deputy Mary Lou McDonald

I am not saying that in an accusatory manner.

Chairman

Deputy McDonald asked me to respond. That is all I can say.

Deputy Mary Lou McDonald

I support the Chairman's views. Peace and harmony reigns.

Chairman

We will start a new party.

Deputy Kieran O’Donnell

Am I a witness to something?

Deputy Mary Lou McDonald

There was a debate on the ESRI report which issued in May. In fairness to Mr. O'Toole, he accurately portrayed its findings. In light of the evidence that the interview process was seen to have a negative impact on getting off the live register, what communications has he entered into with the Minister on the national employment action plan?

Mr. Paul O’Toole

Is that on the back of the issues arising in the ESRI report?

Deputy Mary Lou McDonald

Yes.

Mr. Paul O’Toole

Deputy McDonald's understanding of the nuances is important. When we get a report of this nature it is important to clearly understand the message. What the report says in effect is that many people who are unemployed are self-motivated and they get back into the workforce quickly. They are able to deal with the system even though they are frustrated with it. However, a group of people who are more remote from the labour market find this process difficult. Change for them is having a structured day. My colleagues in FÁS are aware of these people and have extensive experience in dealing with them. They are also very committed to working with them. Under the system as it existed to date, income support was separate from encouragement and motivation along the pathway to employment. While the reporting lines were in place to indicate whether an individual showed up, in practice this information was not followed up to the necessary extent.

Deputy Mary Lou McDonald

Who fell down in that regard? Was it a systems failure?

Mr. Paul O’Toole

Ultimately it is a systemic failure. That has been recognised in the model that is under development and which will begin its implementation with the transfer. The income support and the activation process to help unemployed people on the pathway to employment will be joined. That is happening at the end of this year. Colleagues in the Department of Social Protection are developing a range of new systems, including a profile system that provides that where State resources are scarce, they are targeted at the people in greatest danger of getting into long-term unemployment. As this is worked through, hopefully, there will be a much better relationship with the citizen. The income support needs to be there for them but they are at a particular stage and, therefore, whether they are the most vulnerable and, therefore, need the most care and tracking or whether they are the closest to the labour market, that is recognised and dealt with in a more systematic fashion. That is how we should improve it. That was the core message of the ESRI, which we share.

Deputy Mary Lou McDonald

I am pleased that Mr. O'Toole referenced the most vulnerable. At this stage, the long-term unemployed comprise a mixed and ever growing cohort of people and it was not always this way. I would like to zoom in on a few elements of the targeting agenda. According to the figures, FÁS spends a fair amount on local training initiatives, LTIs. My understanding is they are considered to be an effective intervention but I have come across instances where requests from LTIs have been knocked back.

I hope the Chairman will indulge me being a little parochial for a few minutes. One of the requests was made by a community development project, which is not backed by FÁS, in the North Wall for a business skills LTI in an area of high, intergenerational unemployment. It was knocked back but I struggle to understand, given targeted and tailored approaches must be taken, why that happened. I do not expect Mr. O'Toole to furnish the committee with all the details of the different LTIs today but if that has happened in the North Wall and Sheriff Street area in Dublin, have other good initiatives been knocked back in areas of acute need? The project has lobbied frequently for this initiative and it was oversubscribed but it was knocked back.

I understand there was a review of special eligibility criteria for projects geared towards the fight against drugs. That process has caused a great deal of angst among different projects because the consultation around it was partial and unsatisfactory. I again hark back to the north inner city. Everyone will appreciate why I would do so when the fight against drugs is mentioned. However, CASPr has run two very successful community employment programmes, one of which was governed by the special eligibility criteria. That was taken away because it was not deemed to be a rehabilitation project, although it was much more valuable in some respects. It was a preventive project and, because the special criteria allowed the administrators to take in trainees and participants who were younger, it was ideally suited to the needs of that particular community. It was well governed and tracked and it was an excellent project. I am struggling to understand, on the one hand, tailoring and facilitating initiatives and, on the other, the evidence of what is happening on the ground.

The third element refers to quality control. I understand that the award of qualifications by a number of projects was handled by FÁS for them and, because of the changes, these centres will have to individually obtain FETAC approval. That has caused a huge problem for a number of good projects, one of which is on Manor Street, Stoneybatter, Dublin 7, in the north-west inner city. I raise these because they are the ones I am most familiar with but if these projects are encountering such difficulties, they are not on their own. The Chairman might find this is playing out in Kilkenny. If the strategy is to be focused and targeted at people with the greatest need, there must be consistency.

The issues, therefore, are people getting knocked back for the LTIs even though they come from areas of high need, gratuitously removing a project that is working and preventing younger men, in particular, from getting involved in drugs in an area plagued with drug abuse under the special eligibility criteria and changes to the process of certification with projects in limbo because they were reliant on FÁS for that service and now they do not have access to it anymore.

Mr. Paul O’Toole

I will probably not be able to address every point made by the Deputy but I am happy to research the specifics a little more and come back to her directly in respect of them because I would be straying into detail I do not have.

Deputy Mary Lou McDonald

Shall I write to Mr. O'Toole on the specifics?

Mr. Paul O’Toole

Yes, and I would be happy to respond to this. The LTI is a very flexible mechanism but it is like everything else that FÁS has been involved in. It is subject to scrutiny in terms of value for money and we are reviewing our approach in relation to it. The obligation is that the people get appropriate certification at the end of their work on the LTI. It is a highly flexible mechanism for them to do that but it needs the same rigour in terms of assessment and certification generally in respect of that and, for that reason, we are progressively reviewing our approach to the LTI. I do not say this is the answer to the Deputy's point but, sometimes, things fit into a programme that they are not designed to. I do not say that is the case here but I would like to look at that and come back to the Deputy if she writes to us in this regard. I will bring in Mr. Egan in a moment who will have a little more information.

On the Deputy's point about the FETAC transition, we are trying to find a mechanism to help that. Basically, what has happened is all the community employment programmes will transfer to the Department of Social Protection. FÁS will disappear over time. The other related matter is that there is also a new approach where FETAC will be subsumed into a new body so it is also changing. Within all these changes, the particular issue raised by the Deputy has occurred. We are trying to find a solution to bridge the gap so that people are not left hanging while they get the necessary appropriate authority to issue or manage quality assurance. That is a vague answer and I am conscious of that but if the Deputy writes to me, I will get her more specifics.

Deputy Mary Lou McDonald

Is Mr. O'Toole saying he is aware of the issue and it will be addressed? Has FÁS given that reassurance to individual projects?

Mr. Paul O’Toole

I will bring in Mr. Egan who has a little more detail on this and he might be able to deal with it.

Mr. Oliver Egan

I am conscious of CASPr because I am familiar with the parliamentary questions tabled by the Deputy and the responses to same. We have given a commitment to CASPr that we will not affect existing participants on the scheme and that the funding will be maintained but the issue is around trying to ensure 1,000 places ring-fenced for the fight against drugs are used for that purpose. I take the Deputy's point about the programme being used to prevent people falling into drug abuse, but we are trying to square the circle in the governance of that with the need. As the director general has said, we would be willing to look at that.

Deputy Mary Lou McDonald

There are 1,000 ring-fenced places. Are all those places taken up?

Mr. Oliver Egan

I do not have the exact numbers for the 1,000 ring-fenced places but I can revert to the Deputy and let her know how many are being used at present.

Deputy Mary Lou McDonald

There is a sense in the sector, if I can use that term, that those places are not all filled. It would be useful to know that. Does the witness take my point? It is sound that they are ring-fenced for drug rehabilitation, but does the witness understand that the organisation could be missing something critical, which is the preventive aspect of it, particularly for men? People involved with this issue tell us that if one misses a particular point in their life, it is very difficult to get men aged from 25 to 30 onwards to engage in such projects. CASPr has been very successful in getting a younger cohort of men involved. There is a huge bonus in that. If it is an issue of classification, that is, it is rehabilitation and nothing else, that is fine, but then there is clearly a gap in respect of the preventive aspect, whereby one has the flexibility to go under the strict age criteria in the programme.

Mr. Oliver Egan

I take the general point. We will certainly work with the Deputy on that and examine it.

Deputy Mary Lou McDonald

Is the age criterion a policy matter for the Minister?

Mr. Oliver Egan

I would have to look over the documentation but it appears to have come from the drugs task force. That is my understanding but I will double check it.

Deputy Mary Lou McDonald

The flexibility on age for the rehabilitation places comes from there?

Mr. Oliver Egan

Yes.

Deputy Mary Lou McDonald

Okay.

Mr. Paul O’Toole

We are conscious that we are giving the Deputy incomplete answers. We will try to get her a more clear answer. When it strays into the policy area we will also make that clear.

Deputy Mary Lou McDonald

Certainly. An focal deireanach, how many training centres have been closed over the last three or four years? One was closed in Jervis Street as was the one on Bannow Road in Cabra, which went down like a lead balloon. To close a training centre at a time of soaring unemployment was just crazy. I realise the witness will tell me there was a problem with the roof, but we Cabrarians are not buying that. We could do with that training centre being reopened, and I am making a pitch for that. It was a very successful training centre and many of the apprentices who went through it won international awards and so forth. It also catered for a very big catchment area.

Mr. Paul O’Toole

We closed those two main training centres in Cabra and Jervis Street. We had a number of what we call satellites which were taken on board on short-term leases on foot of responding to the construction boom, and we have exited a number of those. Mr. Dunne may have the number.

Mr. Conor Dunne

No, but it would be half a dozen or so.

Mr. Paul O’Toole

Those are the new satellites that were taken on during the boom on a short-term lease. In terms of main centres, we have closed two.

Deputy Mary Lou McDonald

What does FÁS intend to do with the premises in Cabra or is that a responsibility for FÁS?

Mr. Paul O’Toole

Yes, it is on the market at present. We are exploring a range of options for it. We hope it would get some use but it is on the market at present. There is a fundamental change in the arrangements in that the FÁS training delivery will be devolved to the reconstituted vocational education committees when the legislation is passed next year. Hopefully, one will start to see more integration of effort between further education and training in terms of use of premises.

Deputy Mary Lou McDonald

So FÁS might be back in Cabra.

Mr. Paul O’Toole

We probably have some training issues in Cabra. As for the reality of whether we will build a training centre again in Cabra, we probably will not, to be honest.

Deputy Mary Lou McDonald

I thank the witnesses.

Chairman

Does Mr. Buckley wish to make a further comment?

Mr. John Buckley

I have nothing further to add.

Chairman

Does the committee agree to note the 2010 annual report of FÁS? Agreed. I thank the witnesses for attending.

The witnesses withdrew.

The committee adjourned at 2.15 p.m. until 10 a.m. on Thursday, 8 December 2011.