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

Máirín Quill


8 Miss Quill asked the Minister for Enterprise and Employment the projects approved by county enterprise boards; and the number of jobs created by these projects. [9961/96]

The Deputy will appreciate that matters relating to project approvals by county enterprise boards and jobs created in CEB-assisted projects fall within the day-to-day responsibility of each board and are not matters in which I have a direct function.

From the establishment of the CEBs until the end of 1995, 4,339 projects were approved by the boards. During the same period, 4,663 full-time and 1,078 part-time jobs were created in CEB-assisted enterprises, according to figures supplied by the boards. Those jobs are in place. The figure I quoted earlier related to the number of jobs approved; 6,000 full-time jobs have been approved and 4,600 of those are in place.

Will the Minister accept that the fastest growing industry in Ireland is the job creation agency industry which employs 4,000 people? Will he accept that one of the main recommendations of the Culliton report related to the need to streamline the number of agencies involved in job creation? Will he further accept that the State does not create jobs and that over the past ten years in this economy the number of full-time jobs increased by 48,000, that is 4,800 per year?

Does the Minister accept that we need to reduce rather than expand the number of agencies dealing with job creation nationwide?

Since this question refers to county enterprise boards, I presume the Deputy is asking whether they should be closed down. I do not think that would be a wise decision since they are now taking root and providing a service in their respective areas. Early indications suggest that there is not a high level of displacement and that, as indicated, there are 4,500-plus full-time jobs in projects they have supported. The cost per job is low, in other words, cost-effective. They are responding to a need expressed by many Members that, while such agencies were effective at a national level in the case of large projects, small, start-up enterprises did not have the sort of support to see them effectively through their start-up phase, that we had a very high level of business failure in that phase.

The county enterprise boards have put a great deal of work into supporting start-ups, with mentoring services and other network supports, to ensure they get through the start-up phase effectively but, like any element of public expenditure, they must be subject to scrutiny. My Department is committed to carrying out a proper evaluation of their effectiveness in due course to assess whether they are delivering value for State money. However, there is no indication at this time that they are not adding significant value for the expenditure allocated to them, which is in accord with many locally-based initiatives, in enterprise and in other areas, which have proven their worth in providing solutions to locally-based problems, with the participation of local people. They have often been particularly effective and achieved something that could not have been done from Kildare Street, Merrion Street or indeed Wilton House.

Is the Minister aware of the overlap between the various agencies in many counties which has and continues to lead to intense rivalry between sections of agencies, particularly IDA-Ireland, in its reincarnation, comprised of IDA-Ireland, Forbairt and Forfás — often descending into almost comic relief with constant rows about who should take telephone calls, inquiries or deal with another agency or member of its personnel? What is the Minister's opinion on my Government's division of the former IDA? Does he think it is working? I do not.

The Deputy will probably recall that at the time I was not a great fan of the idea but I have to say that, as a result, there is now a much clearer focus on the needs of indigenous business——

——but they are all minding their own patch.

While that may be a problem which needs to be addressed, there is a clear recognition that there is a huge difference between the needs of indigenous business and those of overseas investors. By and large, overseas investors have very strong management functions, are strong in areas like research and development — not all of which is located in Ireland — very strong on human resource development, management skills within the company and on product development generally. In contrast, Irish companies tend to be weak in research and development, innovation and product design and in their commitment to training and human resource management. Much of the work needed in indigenous companies falls within the arena of company development and requires a different approach.

The argument has been advanced that those two very different tasks were not effectively carried out under the former Industrial Development Authority. At this stage — with the segregation of that agency by the former Government — it would be most unhelpful to revert. The task ahead is to ensure that the policies delivered by these agencies — which now have separate focuses — are effective. If Deputy O'Rourke has concerns, based on her local experience, of how that resource is not being effectively used, I would be very pleased to hear them and I will endeavour to address them. We are at present reviewing enterprise strategy in my Department, a large element of which is to ensure the effective delivery of services by indigenous enterprise. Therefore, I would be more than interested to hear her criticisms and-or suggestions in this area.

In replying to the preceding question the Minister spoke of reviewing the system of funding and so on. Since county enterprise boards have related their funding approvals to job creation, will he ensure that they will receive recognition for that in the event of any review of their effectiveness?

I do not quite understand the Deputy's question.

The first thing identified by the county enterprise board of which I am a member is its job creation element, without which it is considered to have very little, if any, likelihood of succeeding.

That is the general approach adopted nationwide. What we shall establish more over time is the cost per job created — in which respect Cavan would rank as quite effective — but also the long-term survivorship of such jobs, ensuring that approvals are translated into jobs that survive the acid test of successful selection procedures by county enterprise boards. However, it will be some time before we have sufficient information to build that into a process of allocating future funds.

I was taken aback by the Minister's comment that his view on county enterprise boards when first established has changed. I understand there is a total of some 80 job creation agencies nationwide. When I look at towns where such offices have been established I am of the firm belief that, if they all moved simultaneously to the centres toward which they lean, they would create a traffic jam. I am thinking of Cork city and other large towns in the region where such offices have been established. While they may help to reduce numbers on the live register temporarily, they do not create sustainable jobs. It is ridiculous to have that number of job creation agencies. When spokesperson for his party in Opposition the Minister constantly reminded us about cost-effectiveness and the general conduct of business; now that he is in the driving seat, is it not time he examined this realistically and adopted a sensible rational approach to job creation on the part of such agencies?

Since the Deputy's party established these county enterprise boards and decided that there would be four in Cork, I am surprised——

Does the Minister intend to change that?

I do not know why that decision was taken but I presume the Deputy is suggesting we should review the need for having a Cork city, Cork north, Cork south and Cork west enterprise board. While this is the first time it has been suggested, it may well be something we could examine.

The overall structure is chaotic.

Since this is the first time a Cork Deputy suggested that we should perhaps rationalise that structure, decided by Deputy O'Keeffe's own party when in Government, I would be interested to hear why he thinks it is not an effective delivery mechanism.

This has been a very useful discussion. It is a good exercise for all of us to question structures and departmental functions, especially since, collectively, we have not adequately dealt with job creation. My colleague, Deputy O'Rourke, sought the Minister's views on the fragmentation of the Industrial Development Authority. Within the context of this discussion on the need to provide jobs and get the mechanism right, does the Minister agree that the experiment of the Fianna Fáil-Labour Government of abolishing the Department of Labour and converting it into the new Department of Enterprise and Employment failed? Does he agree there is now need to think seriously about the restoration of a Department of Labour, with a separate one to be known either as the Department of Industry and Commerce or Enterprise and Employment? This fundamental question is at the heart of this debate. Despite what the Minister said, the Department is not working and the unemployment figures speak for themselves.

The Deputy is going beyond the bounds of the question before us.

The Deputy has not produced any evidence to suggest that the fundamental problem is the merger of the Labour and Enterprise portfolios in one Department. Training is the key to success in the creation of employment and industrial development and it does not make sense to separate it from the other aspects of industrial support. The merger has been beneficial and the Department is delivering effective services. It is seeking in its SMI process to focus these services more clearly.

It is important not to divorce labour law and training from the industrial, employment and enterprise milieu where they achieve their ultimate goals. The merger makes much sense in that there is a unified approach to issues. As Culliton underlined, employment is not a one dimensional issue; it spans many issues and the enterprise approach also needs to span these.

I am not convinced by the Minister's arguments. There are many problems with the county enterprise boards and much confusion. Many business people who are confused about to whom they should apply have told me they have applied to all the organisations in case they are left out. Have criteria been established within Department and given to the county enterprise boards to help and guide them on the kind of projects they should grant aid? When I met recently with the association which represents private nursing homes it informed me that some county enterprise boards grant aid the expansion of nursing homes while others do not. It said that this lack of uniformity had led to much annoyance among its members. This is happening also in other sectors — it has been brought to my attention in at least one other case. Will the Minister say if there are guidelines and uniformity and, if not, why not?

The guidelines deal with issues such as displacement and the need to ensure that projects have a viable commercial basis. They ensure that projects are sound, will not affect someone else and could not get off the ground without the assistance of the county enterprise boards. We deliberately encourage boards to look at the strengths of their county and to skew their support towards the areas they want to see developed. For example, some boards may wish to lay emphasis on tourism and as a result their custom and practice in terms of the projects they grant aid will differ from those of other boards. We do not tell them they must grant aid nursing homes; rather we allow them to make those decisions. They make their decisions on the basis of the other projects seeking aid and what they regard as a priority. There is not uniformity and it would be senseless to delegate authority and to then insist on uniformity. We give the boards discretion and they make their decisions on the basis of their resources and the most important and rewarding projects in job terms.

That concludes questions for today.

I wish to resubmit my Question No. 10.