I am grateful for the opportunity of clarifying the Government's position on this matter. I am aware of the issues the Deputy has raised personally with the Tánaiste. In addition, I have received representations from many Members of this House, particularly members of my own party, on this issue.
The primary purpose of the community employment programme is as a transitional programme to reintegrate long-term unemployed persons into open labour market jobs. Community employment has operated at a level of around 40,000 participants for several years. The appropriateness of maintaining participation at this level, at a time of increasing tightening in the labour market, has been under consideration for some time and was specifically addressed in the recent Deloitte & Touche evaluation of the programme.
That report recommended that the participation level should be reduced on a phased basis by 6,000 to 8,000 places. It also recommended a number of other reforms aimed generally at improving the targeting and outcomes of community employment. This year there has been a modest reduction in the number of places on community employment, from a level approaching 40,000 at end 1998 to an average of 37,500 in 1999.
The Deloitte & Touche report was not merely about the size of the community employ ment programme but about the degree to which it was effectively targeted at those at greatest disadvantage in the labour market, and about the quality of training, development and progression supports for participants. It is the Government's intention to proceed with a menu of reforms to community employment, having regard to the Deloitte & Touche recommendations, and on foot of consultation with the social partners. There has already been a degree of discussion on the future of CE at official level with the social partners in the context of Partnership 2000 and a consultative group on labour market measures has been set up under Partnership 2000, which is discussing proposed changes to CE in a structured way. That group has nearly completed its work.
There are two main reasons for the reduction in the number of community employment places this year. There is currently dynamic job growth in the economy, with a good proportion of new jobs going to unemployed and long-term unemployed persons. The November 1998 quarterly national household survey showed a drop in unemployment, year on year, of 33,000. This trend is reinforced by short-term figures. The live register at end-April 1999 stands at 199,000 – down 33,000 on the April 1998 figure. So the number of unemployed and long-term unemployed persons is declining, even as the workforce grows.
Several studies, including the most recent by Deloite & Touche, show that unemployed persons benefit more from programmes more closely linked to the labour market. Consequently, in the Estimates and budget this year we have created an additional 10,000 places at a 1999 cost of £22 million, more directly linked to mainstream FÁS training, and from which participants stand a better chance of getting a job. The Estimates provision for the community employment programme is £308 million in 1999.
The Department of Enterprise, Trade and Employment is completing discussions at official level with the social partners on the reform of community employment. I would like to stress that community employment is and will continue to be a very substantial active labour market programme, but we want to target it more and more at the most disadvantaged in their attempts to re-enter the labour market.
It is also important to note that a reduction in the size of the CE programme takes place in the context of a dynamic labour market where the rate of unemployment has fallen to 6.8 per cent and the long-term unemployment rate has fallen to 3.9 per cent. We are also implementing a twin track strategy of trying to prevent long-term unemployment while proactively assisting long-term unemployed persons to get jobs.
The results from the preventative strategy to stop persons falling into long-term employment are very positive. Of the first cohort of 18-25 year olds approaching six months on the live register, who were referred to FÁS for a guidance interview in September 1998, 80 per cent had left the live register at end-March 1999. Of the 6,010 persons referred to at end-March 3,586, or 60 per cent, had been interviewed by FÁS. Of these, 1,343 were placed by FÁS – the majority in jobs and the remainder in training or education.
The preventative strategy is being extended on a phased basis to 18-25 year olds who have been 18 months on the live register, with effect from March 1999, and to 25-34 year olds who have been 12 months on the live register, with effect from May 1999.
Alongside the preventative strategy we are, overall, bringing a much more targeted and strategic focus to the provision of active labour market programme places through targeted measures to tackle long-term unemployment. These include the development of a dedicated social economy programme; expansion of the local employment service and reorganisation of the employment services to ensure optimal delivery of appropriate supports to the unemployed and socially excluded via FÁS and the LES network; implementation of the FÁS positive action programme on training for the long-term unemployed to substantially increase the proportion of unemployed persons in mainstream FÁS training programmes; enhancing the incentive for persons who are long-term unemployed to participate in training by increasing the weekly top up payment on the training allowance to £25; extension of jobs clubs to provide support for unemployed and long-term unemployed persons who are ready to enter the job market; extension of specific skills places and the development of bridging programmes to allow persons who are long-term unemployed to access mainstream FÁS training.
A secondary objective of the community employment programme is to support the community and statutory sector, and the programme will continue to do this. Any reduction in the number of participants is a matter for FÁS. In making such reductions they will have regard to the quality of the programme for participants and to local needs.
In parallel with the reduction in the numbers of persons on community employment programmes, it is the Government's intention to introduce a dedicated social economy programme later this year. I know this is an important issue and one raised by Deputy Rabbitte. The social economy programme is being introduced on foot of agreement between the social partners in the context of Partnership 2000. It is intended to support the development and regeneration of disadvantaged communities. The dedicated social economy programme will have a budget of £40 million when fully operational. It will complement community employment but will provide a good deal more flexibility for organisations making use of it. Within community employment there has always been a tension between the interest of the participant in progressing to open labour market employment and the interest of the sponsor in continuity of staffing and service. As the focus of the social economy programme is primarily community regeneration and development it should more closely match sponsor needs.
The overall objective in reforming the community employment programme is to have a smaller programme more focussed on older persons with less of the carousel effect whereby people alternate periods of employment on CE with periods when they return to the live register and with greater progression supports to help participants move on to open labour market jobs or to skills training if appropriate. The reduction in the number of places will impact on sponsor activity but to an extent the development of the social economy programme will address needs here.
