As the Government's representative on the National Economic and Social Forum, I very much welcome its pioneering No. 4 report aimed at ending long-term unemployment. It was unanimously agreed by the forum which comprises Members of this and the other House, the traditional social partners, unemployed people and others outside the traditional social consensus and under-represented in the paid labour force. The forum, which is broadly representative and which has given a voice to the unemployed, the disadvantaged, women's groups and others, has come up with a good programme aimed at ending long-term unemployment which has shaped Government policy and thinking in this area. As a result of that report a commitment was made to immediately set up a local employment service and a task force on long-term unemployment. That task force submitted two reports to Government, the first of which deals with the setting up of the local employment service. Work is proceeding on putting that service in place in 14 areas, the 12 original partnership areas as well as Kildare and Clare. Based on experience in those areas, the Government intends to set up the programme on a nationwide basis as soon as the local employment service is fully established.
The second report of the task force on long-term unemployment recommended changes to the community employment scheme to focus it better on the needs of the long-term unemployed. The task force analysed the differences on the live register between those considered to be reasonably likely to get a job with a small degree of help and those who need more intensive support to get work. Changes were proposed in the community employment scheme such as the introduction of the integration option which would cater for those who have been unemployed for a year or more and who would be considered, with a year's work experience on community employment, to have a reasonable chance of getting work.
The community employment scheme was revamped to put greater emphasis on training of participants and quality work experience. The proposal that one quarter of the places on community employment be reserved for people who have been long-term unemployed, for three years or more, is being put into effect. Under a new pilot scheme there are 1,000 places on offer to the very long-term unemployed, people aged over 35 years who have been unemployed for three years or more and whose possibilities of getting work are extremely limited, people at the end of the queue for employment.
The National Economic and Social Forum welcomes the initiative in setting up the local employment service, the revamping of community employment and the particular focus on the long-term unemployed. I am glad that not only are we creating jobs at a record level — 93,000 new jobs were created in the past two years, the highest level in the history of the State — but the emphasis on tackling long-term unemployment is beginning to pay off. In the year 1994-95, the latest year for which detailed figures are available, with an increase in total jobs of 53,000, there was a reduction of 34,000 in the number out of work. Of those 34,000 jobs, 25,000 went to the long-term unemployed and 9,000 to the short-term unemployed, those unemployed for less than a year. It is interesting to give a disaggregation of those figures. In the year 1994-95 a greater number of jobs went to people who had been out of work for more than two years than to those who had been out of work for between one and two years.
The forum indicated that to address the problem of long-term unemployment it is not sufficient to focus on the issues of economic growth, interest rates and so on. While those factors help to create extra jobs in the economy, the jobs will not necessarily go to the long-term unemployed unless we address the specific problems, handicaps and obstacles facing those people. For example, individuals who have been out of work for some time lose heart and hope. After a period of looking for jobs and finding themselves at the back of the queue, many people no longer believe in themselves and, therefore, it is very difficult for an employer to believe in them. In some cases whole communities lose hope and young people in those communities whose parents do not have a job wonder whether it is worth while staying on at school. Those issues need to be addressed in tackling long-term unemployment.
We must also address issues such as lack of education and training. The long-term unemployed disproportionately include those who had an incomplete education or whose skills are obsolete. Some 74 per cent of long-term unemployed people left school with no qualifications or with minimal qualifications.
In order to address the handicaps facing the long-term unemployed the Government is engaged, through the local employment service, in a policy of turning the traditional pattern on its head of trying to fit the unemployed person into the service on offer. The local employment service is a counselling, training, education and placement service, tailored to the needs of the unemployed person. There is need to offer people an upgrading of skills by way of compensatory education.
There is also need to ensure a job placement service modelled on successful initiatives such as the Job Centre in Ballymun and Contact Point in Coolock. The adoption of a partnership approach at local level, involving employers, unemployment centres and the trade union movement, which concentrates on the skills and potential of the long-term unemployed, offers a bridge back into the world of work in that employers offer vacancies to people coming out of the local job centre or employment service. That model, which was pioneered in Ballymun and Coolock, is proposed by the local employment service in the 14 partnership areas throughout the country. The service is working to put in place a tailored response to the problems faced by individuals.
When I drew up the national plan I laid particular emphasis on rebuilding the economic potential of unemployment black spots. The local development programme, which has been extended to 33 areas selected on the basis of criteria supplied by the Combat Poverty Agency as being the most disadvantaged communities in the country, places major emphasis on rebuilding the economic potential, tackling community problems and restoring hope in those communities.
In the education area the Minister, Deputy Bhreathnach, has directed an unprecedented amount of resources to schools in disadvantaged areas and to remedial education. She set up the Head Start Programme for pre-school education in disadvantaged areas. This year the demographic dividend has been devoted almost exclusively to the Breaking the Cycle initiative to ensure that young people in disadvantaged communities can get help to overcome the education and other disadvantages which would otherwise make them more likely to become today's early school leavers and tomorrow's long-term unemployed.
Other initiatives are in place to address the problem of early school leaving and lessons being learned through the Youthstart, HORIZON and other programmes are being mainstreamed into the school system. The retention rate for young people in second level education is increasing and we are all aware of the strong links between lack of education and long-term unemployment. Identifying people at an early age is an important part of the programme to address long-term unemployment.
We also have in place a series of programmes designed to deal with the disincentives which may face those moving out of unemployment into the world of work and to ensure that long-term unemployed people are financially in a position to take up job opportunities becoming available to them through various policies and in a rising economy. In the past three years there has been a concentration on tax relief for low paid workers in marked contrast to the emphasis on tax relief for high earners during the Fianna Fáil-Progressive Democrats Administration. It is by reducing the tax, PRSI and levy burdens on the low paid we will address the margin between being unemployed and moving into employment. That is particularly important and is paying off.
The back to work allowance scheme is in operation and 17,000 places are now available. The scheme allows people to take three-quarters of their previous dole money in year one, half in year two and a quarter in year three tax free if they move either in an entrepreneurial capacity by creating a job, as Deputy Harney would like, or into the private sector. That scheme is successful and there is a steady demand for it. I am aware of its success in helping people who have been out of work for a long time get back into the workforce.
Changes have been made in the health system so that a person who has been unemployed for three years can keep his medical card for three years after taking up a job.