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Dáil Éireann díospóireacht -
Tuesday, 26 May 1998

Vol. 491 No. 3

Priority Questions. - Enterprise Ireland.

Thomas P. Broughan

Ceist:

23 Mr. Broughan asked the Tánaiste and Minister for Enterprise, Trade and Employment the way in which the various bodies intended to comprise Enterprise Ireland will carry out their functions in the new organisation. [12311/98]

Enterprise Ireland will be an entirely new agency with a distinctive mission and strategy. The agency will not be a simple amalgamation of the existing programmes and practices currently pursued by Forbairt, An Bord Trachtála and the services to business division of FÁS.

The purpose of establishing Enterprise Ireland is to streamline the number of supports currently in operation in the different agencies and to provide for a more structured development process reflecting the needs and developmental challenges of Irish business.

The intention is to provide Enterprise Ireland with the necessary expertise to enable it to provide a complete and comprehensive service both to individual client companies and to the product and market sectors within which those companies operate. The key criteria for assessing the performance of the new agency will be the extent to which firms are able to expand profitable sales, boost exports and increase employment.

Does the Minister expect that there will be significant redundancies, or indeed any redundancies, as a result of the merger of Forbairt with the trade board and part of FÁS? Can she give an assurance to the House that there will not be any compulsory redundancies?

I can give an assurance to the House that there will not be any compulsory redundancies but I cannot say whether there will be any redundancies. Clearly if there is duplication it may well be necessary to have a voluntary redundancy package, but I assure the Deputy that is not being contemplated currently and there will be no question of compulsory redundancies.

Is that good enough? We are within weeks of the establishment of this agency under Dan Flinter and Pat Molloy. The Minister's Department recently produced a document, Enterprise Ireland Mission Strategy — Clients and Functions. Throughout this short preparatory period there seems to have been little or no consultation with staff in the various agencies involved. In relation to services to businesses, a number of options are considered on page 13 of that document. No decisions have been taken even though we are within weeks of this agency being established. The document states that three major sections of Forbairt — I understand Forbairt in Glasnevin will be the major area — will be closed down and that some of the functions currently exercised by Forbairt would not transfer to Enterprise Ireland.

The Minister is rushing this development. There have been only a few weeks of preparation and now she is expecting the chief executive, Mr. Flinter, and Mr. Pat Molloy to be responsible perhaps over a number of years for the industrial relations fallout which is bound to ensue. A businessman said to me that the Japanese tend to strategically plan things for a number of years and then implement them in a couple of weeks, while the Spanish planned a recent development for a couple of weeks and implemented it painfully over a number of years. The Minister is behaving more like a Spanish than a Japanese Minister.

It is a fact, borne out during my recent tour of Forbairt, that many of the Forbairt staff are demoralised. The Minister has not consulted them. There have been no consultations to date despite the fact that we are a few weeks away from the culmination of this new agency. The Minister is guillotining through this new agency without clearly having thought out what she is going to achieve. She is abandoning the old adage "if it is not broken, do not fix it".

The upshot is that there will be a significant number of redundancies. The Minister is not prepared to face the workers in the agencies concerned. She will leave it to the chief executive, Mr. Flinter, and his staff to spend the early years of the organisation engaged in industrial relations processes rather than in the strategic mission of Enterprise Ireland.

I am more like a Progressive Democrats Minister than a Labour Party Minister in that we get on and do things.

For the time being. She is going into a merger.

What is being done here was recommended by Culliton in the late 1980s. It is not a question of "if it is not broken, do not fix it"— it is broken. Irish companies are not as profitable as they should be. They have not diversified into markets in which they should be. The majority of the exports of the SMEs are into the UK. They have not taken good sectional positioning in niche markets to develop their potential.

The purpose of this restructuring is to ensure that we focus on the needs of companies, not on what agencies think are their needs. There are 45 different ways of helping companies through three different agencies. That is unsatisfactory and time consuming. Many small companies do not have the competence to access the kind of aid which is required. We have no way of measuring the performance of the agencies because each agency claims it was their input which helped bring about a transformation.

The purpose of the amalgamation is to improve the competitive position of industry, particularly in the context of the global economy which is more competitive and the environment where there is a single currency. It will be particularly important because of the dependency which Irish companies have on the UK.

There will be no forced redundancies.

How many redundancies?

The functions which will be transferred from Forbairt are only the core business development functions.

It is only a couple of weeks away.

Does the Deputy want to listen? He either wants an answer or he does not.

I want an answer.

Many functions were given to Forbairt when it was established in 1993 which should not rightly be there. They have nothing to do with company development. Those areas of activity will find an appropriate home but that home is not with the new agency, Enterprise Ireland.

There will be no forced redundancies. I do not know if there will be voluntary redundancies. Clearly, if there are to be redundancies they will be voluntary. If the new management and board, in agreement with the workers, decide there should be redundancies on a voluntary basis in a particular area, that is a matter we should allow to be decided between those two groups.

Contrary to what Deputy Broughan said, there have been extensive consultations throughout with the workers and their representatives. I have consulted with them. The document to which the Deputy referred was published with a view to helping that consultative process.

It is important that we establish this agency quickly. The legislation will be published next week. I intend to enter into discussions with the Opposition spokespeople with a view to agreeing a timescale for taking it through the Oireachtas. To avoid any uncertainty and to allow the agency to establish itself quickly, it is important that the legislation is passed as quickly as possible. I hope I have the Deputy's co-operation in bringing that about.

I will be happy to co-operate. On the client base, according to the Ned Costello document there is a decision in train to restrict supports to companies with a workforce of greater than ten. This means that smaller companies will be thrown back on the enterprise boards. Have the county enterprise boards evolved sufficiently to support the many fine companies which have a workforce of less than ten? Is that an arbitrary decision?

With regard to some of the services which the Minister has already closed down in Forbairt, such as the geological research unit, I understand there is only one other company in the country which can provide those kinds of services. Will companies be faced with a lack of competition in future? There is competition at present because there is a semi-State geological research unit and there is a private company. What the Minister is planning to do looks like resulting in a lack of competition.

Why did the Minister not take Shannon Development within the remit of this area? If there is to be a major industrial development organisation for indigenous industry, why not include the whole country? Why have a separate agency for the Shannon region?

Shannon Development has a wider remit than merely industrial development. With the exception of aviation, its remit is based on internal local organisation within the mid-west region in particular. Shannon Development has a wider remit which includes tourism.

The Deputy referred to the document which we published last week. We want to ensure that Ireland, which is a small country, is appropriately represented overseas and in the main IDA Ireland will look after overseas operations from now on, particularly with regard to food which is currently the responsibility of Forbairt.

I have not closed down anything. I am all in favour of competition, but the private sector can provide much of the competition which the Deputy vehemently urged on me a moment ago.

Not in this instance.

There is no need for the State to be involved in certain areas of activity. We want a State agency supporting the growth of industry to make sure that Irish companies can be competitive enough to increase their profits, exports, sales and employment. That is the purpose of what we are doing. Doing it in this way, by bringing all the expertise together and having a single focus, a one stop shop, is the appropriate way to help the growth and development of industry. If we learn anything from the IDA Ireland experience since 1993, the fact that that organisation has had a single clear focus has contributed to the outstanding success it has achieved on behalf of this country. We can have the same level of success with Enterprise Ireland when some of the things which are not appropriate to it are taken elsewhere to more appropriate homes.

As the time for Priority Questions has now concluded, we move into ordinary time and cannot take Question No. 24.

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