Ceisteanna—Questions. Oral Answers. - County Enterprise Boards Funding.

James Leonard


7 Mr. Leonard asked the Minister for Enterprise and Employment the plans, if any, he has to have additional funding made available to county enterprise boards who have a backlog of applications for job creation projects. [8784/96]

James Leonard


22 Mr. Leonard asked the Minister for Enterprise and Employment if he will provide additional funding for county enterprise boards in view of the backlog of applicants; and if he will make a statement on the matter. [9408/96]

I propose to take Questions Nos. 7 and 22 together.

I am at present examining proposals for a differentiated apportionment between the 35 county enterprise boards of the funding provided for the overall initiative. A final decision on the allocation for each board in 1996 will be communicated to the boards as soon as possible. I am satisfied that the budgetary provision of £19.736 million for county enterprise boards in 1996 will enable them to achieve the broad targets set for the initiative in the Operational Programme for Local Urban and Rural Development 1994-99, under which the boards are supported by EU funding. The planned investment by both the State and the EU under the Operational Programme for this initiative amounts to over IR£81 million for the period 1995 to 1999.

Having regard to the need for a balanced programme of grant approval activity to be undertaken by boards throughout the course of the year, I have allocated provisional grant approval capacity of £180,000 to every board for the first six months of this year. Approval of grants is now a matter of day-to-day responsibility for each county enterprise board and the phasing of the grant assistance they can make available over the course of the calendar year is a sensible means of scheduling their activity and prioritising projects in accordance with their enterprise plans. In this context, the boards were advised, as in previous years, to prioritise projects in accordance with their enterprise plans. A balance must be struck between addressing the pressing claims of projects already on hands and retaining some flexibility to cope with anticipated demand at later stages in the year.

The funding which will be provided to the boards in 1996 will ensure that they can continue to promote small business development and job creation with the commitment which they have displayed thus far. However, there will always be more projects than there are public funds available to support them. Boards will have to priorities their choices, selecting only those development projects which but for this initiative would not otherwise have been able to get off the ground and using their limited resources to leverage additional funding from other sources, including the private sector.

Does the Minister agree that when the county enterprise boards were set up under the National Development Plan they were given clear enterprise and job creation functions for areas not covered by the IDA and other industrial development agencies? Does he agree that while they have proved successful, they are seriously curtailed due to a lack of funding? Some counties will not have enough money to deal with applications this year. If an entrepreneur has a business idea and his or her application for funding is not considered for nine months, the idea will be lost. Lack of funding is retarding the work of enterprise boards.

I agree that enterprise boards have made an impact. They have issued grant approvals of £36 million which represents approximately 6,000 full time and 1,500 part time jobs and they are making good progress in turning those approvals into jobs. As in any State agency dealing with taxpayers money, there is not a bottomless pit of money available. The boards must identify the most important projects and use funding in the most effective manner. By and large, that is happening. Like any Government, we must control public spending and are doing so by allowing boards to grant a reasonable level of approvals. Much of the added value of county enterprise boards is not achieved by giving out grants, but by mentoring and introducing networks for businesses to support one another. The Deputy's county has been successful in developing the loan fund initiative which is partly funded by the IFI. County enterprise boards are adding value to the operation of their counties in many ways other than through the allocation of grants.

Does the Minister agree that substantial funding has been made available to Border regions under IFI, INTERREG and the operational programme and that they are administered by a large number of bodies and eight Government Departments? Does he also agree that funds should be transferred from areas where the take up is poor? Under ten headings in the IFI report there was only a meagre take up of funds in 1995. The funds not taken up could be used for job creation projects by county enterprise boards. The eight Government Departments, including the Department of the Taoiseach, involved in administering funds to Border regions should consider how such funds could be transferred to county enterprise boards for job creation purposes.

I am not aware of the unused moneys to which the Deputy referred, but I will follow up the matter. County enterprise boards are not directly funded by the IFI under the European Operational Fund for Local and Rural Development. However, in many cases they administer a loan fund which is partly funded by the IFI. That fund has been a success and I will investigate if it contains additional resources that could be tapped. The matter would have to be resolved interdepartmentally. Money could be assigned to projects that are slow to take off, but there may still be a commitment to them.

I am not referring to unused money. A number of counties did not use the funding allocated to them under a number of IFI headings. There are two counties, in particular, which need funding from their enterprise boards but did not take up the funding allocated to them under the IFI. It should be possible to transfer that funding to their county enterprise boards.

This area does not fall within my direct responsibility. I can only undertake to find out where the problem lies or if there is scope for doing what the Deputy suggests.

The county enterprise boards are a great resource, but Donegal is starved of funding. A sum of £90,000 per quarter is not enough. While the county enterprise board in Donegal is attracting projects and creating jobs, 27 projects have been approved for 1996 and we are not yet half way through the year. Projects to the value of £1.1 million have been left over since 1995 because of a lack of funding. We have——

I want to assist Deputy Keaveney, but she must ask a question.

How will £90,000 per quarter cover the backlog? Projects are deselected after 12 months if they are not taken up. We do not have funding to deal with the projects left over from last year not to mention the 27 that have been submitted this year. How does the Minister propose we fund those projects?

I appreciate there are constraints on funding when large numbers of projects are involved. Under the operational programme a budget of £81 million has been allocated over five years. This year we are allocating approximately £20 million which is in accord with the programme we expect to be able to fund over the period in question. We must live within the available resources for the programme.

The Deputy also asked if the flat amount which has been allocated to date to all counties, irrespective of size or need, is a fair way to approach the matter. We need to examine the possibility of introducing an element of differentiation that would take account of need, capability of producing quality projects and performance. I am currently examining the best way to do this and hope to be in a position to introduce an element of differentiation for counties with a high need, project capability and proven performance. I do not know the precise position in Donegal but from listening to the Deputy, it appears it would benefit under such an approach.

I support my constituency colleague, Deputy Leonard, in his efforts to link cross-Border funding to ensure we get the best value for money. Deputy O'Hanlon referred on numerous occasions to the small number of foreign industries we have attracted to Border regions. The county enterprise boards must act as a one-stop-shop in providing funding for people trying to get businesses off the ground. Therefore, they must be properly funded and organised. I hope the Minister will take account of the difficulties being experienced and I have brought individual cases to his attention. It is difficult to get the different funding sectors to work together.

I am encouraged by the Deputy's generous support for the county enterprise boards and the effectiveness with which they are delivering. Some Deputies have been decidedly derisory of them and have complained of duplication and waste of resources.

The Minister should not include me in that compliment.

Does the Minister remember when he was derisory of the boards?

I was never derisory. We must be realistic. A certain amount of Exchequer money has been set aside for this project. I have to manage that, share it between the boards, and the boards have to prioritise in that context. The county enterprise boards in the Border areas have been particularly effective in levering IFI money for loan fund initiatives that have been the envy of many other enterprise boards.

Will the Minister agree that it would be preferable if the county enterprise boards did not have to refer to the Department of Enterprise and Employment when their grant aid goes beyond a certain limit? Can he say how many of the 6,000 jobs mentioned by the Minister were displacement jobs?

We are committed to conducting an evaluation of the county enterprise programme, and one of the issues that will be assessed is the extent to which it has been successful in delivering net new jobs that survive into the long-term. The county enterprise boards work within a rule that requires them to consider the issue of displacement, and many of the boards are turning away applications precisely because of the displacement problem. They have evaluation committees which carry out detailed evaluative work that ensures they are not creating a new project that simply puts someone else out of business.

They are tied to the Minister's apron strings.

That is not accurate. There is a new agreement which allows them to decide what they want, within their approval capacity. Obviously, they would not approve a very large project that would absorb all their budget. There is an upper limit on what they can pay out — £50,000 per project — but they are no longer required to have the decisions of their evaluation committee rubber-stamped by the Department.

The Minister has done a "Scrooge" job on them — they have to return every ten months. It is all there in the paperwork, and they do not even have a glossy brochure, only recycled paper.

I do not have the information requested by Deputy O'Rourke in my brief because it was not directly referred to in the question, but I am virtually certain that under the new rules they no longer have to refer to the Department, although they are limited by an approval capability.

I must ask the Minister to check the position.

I will certainly do that.

The Minister referred to county enterprise boards in the Border area working with the IFI, but would he accept that there is still a lack of co-ordination among the agencies that can assist entrepreneurs, particularly in the Border area? Two new agencies were established recently to administer the Delors package, the peace initiative money. What initiatives has the Minister taken to ensure good co-ordination, because there are still many people with worthwhile projects who have to go from one agency to another to ensure that their applications are processed by one of the various agencies that have money to distribute?

I accept that there can be user confusion, but in the case of most county enterprise boards — I cannot confirm whether it is so in the case of Cavan — first stop shops have been set up to enable people get clear information at one location about what is available in the county and the appropriate agency to assist them. The Taoiseach's Department has established county enterprise teams representative of all the key agencies involved in support for enterprise. This ensures that there is no overlapping or waste of resources.

There will, obviously, be some confusion while a new devolved initiative of this sort takes hold. Each of those initiatives is adding value and that is reflected in some of the comments. We must work through an effective system, provide good first stop shop access and avoid waste. That is being delivered.

Let me confirm for Deputy O'Rourke that, since 1 January, county enterprise boards must submit details of what is being approved, but they do not require approval from the Department for their activities.

Too much time has been spent on this question. I am moving to Question No. 8.

As this was my question I thought I would at least be allowed ask a supplementary question. This is not fair.