Vol. 493 No. 3
7 Mr. G. Reynolds asked the Tánaiste and Minister for Enterprise, Trade and Employment the impact, if any, the cut in Structural Funds to Ireland will have on the services provided by FÁS; and if she will make a statement on the matter. [15747/98]
27 Mr. Boylan asked the Tánaiste and Minister for Enterprise, Trade and Employment the impact, if any, the cut in Structural Funds to Ireland will have on the services provided by FÁS; and if she will make a statement on the matter. [15748/98]
75 Mr. R. Bruton asked the Tánaiste and Minister for Enterprise, Trade and Employment the impact, if any, the cut in Structural Funds to Ireland will have on the services provided by FÁS; and if she will make a statement on the matter. [15746/98]
95 Mrs. Owen asked the Tánaiste and Minister for Enterprise, Trade and Employment the impact, if any, the cut in Structural Funds to Ireland will have on the services provided by FÁS; and if she will make a statement on the matter. [15756/98]
I propose to take Questions Nos. 7, 27, 75 and 95 together.
There are clear indications in the European Commission's recent Structural Funds proposals that a progressive reduction in the level of EU aid to Ireland after 1999 is to be expected. However, the actual amount of funding available will not be known until the new Structural Funds regulations have been adopted and Ireland's national development plan for the period 2000 to 2006 has been negotiated with the European Commission. It is anticipated that the new regulations will be adopted in early to mid-1999 and negotiations on the national development plan will follow.
The Department of Finance, in consultation with all concerned parties, including my Department, initiated preparations on the next national development plan which will set out Ireland's key priorities for the post-1999 period. The plan will require approval by Government in due course.
The impact of a cut in Structural Funds on the services provided by FÁS will depend on the level of structural funding available, the extent of other priorities requiring support, the levels of training and related services required by the labour market and the need to reduce unemployment.
Given that the Minister is working in a vacuum at present and does not know how much she will be allowed spend on FÁS training services, has the Government, particularly the Department of Finance, had a discussion on how the shortfall, if any, will be made up and if there will be cuts in any other area? Given the new structural plan for the year 2000-06, decisions will have to be made this year rather than when the hammer falls next year.
There has been no discussion in Government on this issue, but Departments have submitted their proposals to the Department of Finance and it will bring proposals on the national plan before the Government. The Government will be keen to ensure there is an employment focus to any moneys available. If cuts are made, hopefully they will not affect employability, training or moving people from welfare into work.
Of FÁS's current budget of more than £400 million per year, about £74 million comes from the European Social Fund and about £2.5 million from the Regional Fund. Although that is a substantial amount of money, it is by no means the total FÁS budget. The Department of Enterprise, Trade and Employment will endeavour to ensure moneys are available for training and to help people to move from welfare into work, and that will be the focus. There has not been a discussion. Plans have been exchanged and negotiations will follow in due course.
Does the Minister agree with the prediction that there will be a surplus of £1 billion this year? The Minister for Finance, Deputy McCreevy, has said he will use that money to reduce the national debt. A report on Irish investment and infrastructural needs was published today, but with the fall-off in Structural Funds consideration must be given to capital development in the years ahead. With the national debt soaring to about $75 billion, many people wonder whether it would be better to refocus some of the surplus moneys on high quality training to continue the efforts made by FÁS and other agencies.
There is a case for reducing the national debt — if we cannot reduce the burden of debt at a boom time, when will one ever put money aside to do so — or spending the money on capital projects and alleviating the infrastructural deficit. I would be very keen to ensure we do not become involved in current spending which has the potential to cause damage in the economy. We must maintain the tight spending targets we set. Cases can be made for more spending in many areas and it is always a question of priorities and choices, but the first priority must be prudent management of our economic affairs. Otherwise the present boom will not continue.
In the context of the changes that will occur at EU level because of Ireland's wealth, which has increased from per capita income of 75 per cent of EU average eight years ago to more than 100 per cent now, and enlargement, with poorer regions joining the EU, we will receive less money. The issue will be to ensure we spend the money wisely and that we have certain priorities such as employability and training. Many of the deficits that will exist after the EU Structural Funds are agreed when we have less money can be taken up by the private sector. There is huge capacity in the private sector to undertake projects on a partnership basis with the State, or in some cases on its own. The Government is exploring options in that regard to ensure the infrastructural gaps that need to be rectified, particularly for an exporting economy, are not neglected.
We must ensure we do not waste the surplus that will be available this year, which some outside forecasters say will be as high as £1 billion. We must prudently manage that revenue either by reducing the debt or using it for capital projects.
The Minister said we will receive less Structural Funds this year. In terms of securing the maximum Structural Funds for the period 1999-2006, is the Minister aware the 13 counties, including western counties, Border counties and midland counties, have a GDP of 68 per cent and, therefore, qualify for maximum Objective One status? Does the Minister intend to meet the commitment in the programme for Government that Objective One status will be sought in the post-1999 period for the west, Border counties and other regions which suffer from population decline? Will the Minister live up to that commitment to ensure we receive maximum funding by applying for Objective One status for areas which qualify?
It is not the case that we will receive less money this year; we will receive similar funding until 2001. We are talking about after that period. We have not decided yet whether we will hold out for Objective One status for most of the country or have it in transition between then and 2006 or go for Objective One status for certain regions.
Do not shaft Dublin.
The regions must have a certain population base. I am conscious of the needs of the west, the Border counties and the midlands, which are the three main areas which have not seen the same economic prosperity as other parts of the country, for a number of reasons.
Three Ministers are from the west.
Do not forget Tallaght.
There are "micro-regions", such as Tallaght, Clondalkin, Finglas and many other parts of Dublin.
And Coolock.
The idea is to pick specific regions and apply for Objective One status for them. The Government has not finalised its view on this issue. We want to maximise what we can get for the entire country. Within that, there must be priorities on where the money is spent.
The Deputy may have noticed that many of the new projects announced over the past number of months have been for regional locations and that will continue to be the policy. More grant-aid is available even under existing policies for regions such as the west and the more peripheral regions. This is done to try to encourage greater investment in those regions. The west of Ireland is very high on the agenda and I am very sympathetic to its needs.
The Minister should look up page 22 of the programme for Government.
I remind the Minister that she must pass through County Roscommon to get to east Galway and she might consider pouring some investment into County Roscommon. Does she agree that a large number of unemployment blackspots are in the west, midland and Border counties? Will she give a commitment that she will promote Objective One status in Cabinet for unemployment blackspots, including areas in her constituency, but especially for the west, midlands and Border counties?
This does not just involve the issue of Objective One status. Even the new regional aid guidelines which will apply — they will be finalised with the Commission shortly — will ensure that there is a bias in favour of particular locations for grant-aid projects. Almost double the grant-aid will be available for regions such as Roscommon or Galway as opposed to urban regions, particularly the larger cities such as Cork, Dublin, Waterford, Galway and Limerick. It is beginning to happen and we will see a greater emphasis on the regions as a result of these policy changes.
I welcome the Tánaiste's commitment to regional aid. However, is she aware that in the current phase of funding 13 eastern and southern counties received £3.5 billion while western and Border counties and four midland counties received half that amount, £1.6 billion? Will that be redressed in the next plan?
