Vol. 653 No. 3
6 Deputy Olivia Mitchell asked the Minister for Enterprise, Trade and Employment the strategy he or the IDA has on recently vacated industrial and business premises in rural locations; the priority he and the IDA give to finding replacement businesses for these premises; and if he will make a statement on the matter. [16752/08]
Under the Industrial Development Act 1986, as amended by the Acts of 1993 and 1995, IDA Ireland has the power to acquire, hold and dispose of land and any other property or any interest therein for the purpose of facilitating an industrial undertaking. Accordingly, the management of IDA Ireland's industrial property portfolio is a day-to-day operational matter for the agency, as part of the statutory responsibility assigned to it by the Oireachtas and it is not a matter in which I have a function.
When client companies of IDA Ireland or Enterprise Ireland vacate a premises on IDA-owned property the agency's first priority is to market the premises for a suitable replacement activity. The use to which IDA property can be put is prescribed by legislation. If the premises is no longer considered to be strategic in terms of the agency's marketing strategy, or is not suitable for Enterprise Ireland client needs, the approach is usually to the local county council to seek an expression of interest in the property. If no interest is shown the property will usually be placed on the open market.
IDA's portfolio of buildings in rural locations has been reduced dramatically in recent years. The policy decision to divest of buildings was taken in the 1990s and this decision was reaffirmed in the expenditure review of the IDA Ireland property programme, which was concluded in 2004. In disposing of these buildings the agency must balance the need to have properties available in key locations that will help it deliver on its mandate. The agency must also seek to maximise the financial return to the Exchequer in disposing of property.
The IDA's current focus is on delivering appropriate facilities in line with the national spatial strategy. World-class business and technology parks and buildings are being developed in regional locations that complement the spatial strategy with the aim of enhancing the overall development and potential economic gains of these locations. The focus is primarily to provide and develop property solutions in the gateway and hub locations. New buildings provided on IDA parks are under a partnership arrangement between the IDA and private developers.
In line with the commitment which we have made in the programme for Government, arrangements are currently being finalised for an enterprise audit to review the use of existing and redundant agricultural buildings and manufacturing plants in rural areas and IDA Ireland is fully co-operating with this initiative.
I am concerned not only with premises owned by the IDA but also those owned by companies such as NEC in Ballivor, County Meath. If a large company departs from a small village, as almost happened in Westmeath recently, the rural area loses its heart. Apart from the jobs in the company itself, other jobs are also affected such as those in smaller businesses, the service industry, the post office and shops. What is the drive to replace these jobs?
I accept that the marketing strategy of the IDA must focus on large towns and large industrial parks. However, where an existing premises exists with a history of having jobs located there does the Minister envisage changes whereby such gaps are filled first? The Minister stated action is taken in conjunction with county councils and enterprise boards. I can only speak from my experience in County Meath, and I will not claim it happens everywhere else, but I fear we have a lack of focus on the empty buildings and the county councils, enterprise boards or the IDA do not take on trying to fill them. They seem to fall between stools and remain empty for a number of years. I am concerned this happens across the board. I do not want to be local. Nationally, is there a drive to fill them first?
Yes, but obviously it depends on the owner of the building and the objectives he or she may have for the building.
I accept that.
In some instances, the owner is co-operative and constructive. If this is so, the agencies will work with the county council to preserve the employment zoning such a building enjoys, which is critical. The IDA or Enterprise Ireland, county enterprise boards and county councils will work together to ensure economic activity can be retained in a particular building or facility. The IDA markets such buildings and facilities and sometimes do so in partnership with the owner. However, the owner must indicate to the IDA that he or she does not have other plans.
If a similar enterprise can be placed in a ready-made facility it can help in the overall drive to bring investment to an area. In other words, if it can be shown that a facility exists and that it can meet the needs of a company with a small amount of adaptation, that can help sometimes although not all of the time. Sometimes the larger buildings are bought by a developer who transforms them into a business park for small business units. This is also acceptable if it keeps the location as a magnet for employment in the region.
Will the Minister take steps to accelerate the carrying out of an audit of these buildings? A significant number of them exist throughout Ireland. Where a disaster happens from a jobs perspective in an area surely a major selling point, apart from the expertise of the skilled workforce which can be retrained under the new upskilling programme, is the availability of a building. This is of paramount importance in seeking to secure alternative employment and industry for an area.
Will the Minister also ensure that where the IDA has control of an area it works with the local authority to enable it to work with individuals and entrepreneurs by providing land for small incubator units? These could provide five to ten jobs. I come from a rural area and the future of rural areas will be dependent on the provision of large numbers of significant small industries. While we should continue to pursue the objective of attracting 200, 300 or 400 jobs to a rural area it may not be as feasible as it was. We must recognise this. In terms of rural locations small is also beautiful.
I agree with the Deputy and I will work to obtain the audit which is under the remit of the Department of Community, Rural and Gaeltacht Affairs which initiated the idea. We are anxious to co-operate with it and it would be useful. Deputy Penrose is correct to state that property solutions and facilities are important. It is part of the jigsaw which brings investment to a location.
County councils have been involved in many of Enterprise Ireland's community enterprise programme centres through funding or providing the greenfield sites where the centres are built. They have become important centres of incubation. In places such as Mallow and Carlow, I notice county councils are working with local interests on how to turn the Greencore facilities into new economic opportunities.
Deputy Penrose is correct that we should create the facilities to enable the indigenous sector to obtain good quality facilities and business. This is critical and I impress it on county managers. Some are more proactive than others on this agenda. It makes a difference because indigenous companies are growing. People starting off in one location might need to expand and might need a newer facility.
In general, is the Minister satisfied with the way the IDA manages its property portfolio? Without talking about the large land banks, and I accept it must have some land banks, in January I received figures from the IDA stating that 42% of its properties were vacant, including in the Airways Industrial Estate and on Gardiner Street in Dublin. In recent days, I also obtained figures from the Minister to show that approximately 40 IDA properties and buildings have been vacant for more than five years, 20 of which are leased from a private owner and have been vacant for five to ten years. One property leased from a private owner has been vacant for more than ten years.
If I were in the Minister's job, in my first week I would call the IDA to establish why the hell it spends large amounts of money renting buildings from private landlords to leave them vacant for five, six or even 11 years. The Minister must ask the IDA what is going on. Does the Minister have confidence in how the IDA manages its property portfolio?
It is 40% of a much reduced number. Since 1998, the number of properties has been reduced from 523 to 164, which is a drop of 69%. The IDA has had a progressive and dramatic divesting of properties. That said, that any property would lie vacant for more than five years is not satisfactory. I remember on the previous occasion we discussed this I made the point about a location in Carlow which was idle for three years prior to the arrival there of Merck, Sharp and Dohme. We must have patience in respect of quality parks. However, I acknowledge some of these are not in this vein.
Generally speaking, the policy is to have strategic land sites, such as Athenry and Oranmore. In the south east and north east, the IDA is developing land sites that facilitate the type of strategic industries it is seeking and has sold off a whole range of small plots and units. The money earned from the sale of these small plots and units was used to fund the strategic sites initiative.
I would be interested to hear who are the landlords; it would make interesting reading.
The Deputy will not be able to get that information.
7 Deputy Damien English asked the Minister for Enterprise, Trade and Employment the nature of the negotiations between his Department and the parties involved in the Iralco factory difficulties; and if he will make a statement on the matter. [16707/08]
58 Deputy Joe Costello asked the Minister for Enterprise, Trade and Employment the contacts his Department has had with the receiver (details supplied) in County Westmeath; if he has satisfied himself that all appropriate steps are being taken to ensure the retention of the maximum possible number of jobs at the plant; and if he will make a statement on the matter. [16550/08]
I propose to take Questions Nos. 7 and 58 together.
On Monday, 12 April Iralco issued a press statement to the effect that liquidators had been appointed to the company. The company had indicated previously to the IDA that jobs were at risk if specific industrial relations issues in respect of pay increases could not be resolved. Extra funding was also needed to proceed with the investment the company had planned in the Ukraine, which was crucial to the future of the Irish operation.
Prior to the company announcement, IDA had been engaging with the company and had offered to assist by lending its support to resolve the industrial relations situation through discussions with the union and shareholders. IDA had also confirmed to the company that it would look at support for training, consultancy and research and development based on its future business plan in Collinstown. IDA offered to assist if the company decided to seek investment from equity or industrial partners and to work with Enterprise Ireland in the case of an indigenous shareholding investment.
I have been in direct contact with the company and the trade union and have reiterated that the Government agencies remain available and willing to provide any assistance or to take any steps possible to ensure the company remains in production on terms satisfactory to the management, unions and employees. Following talks between Iralco workers, management and the liquidators which concluded on 20 April, staff returned to work on Monday, 21 April on the basis of an order book for the next six months.
The efforts of the agencies have and will continue to be geared towards saving as many jobs as possible including providing any possible assistance in the event of a take-over or management buy-out option. I assure the Deputy that IDA Ireland is in ongoing contact with the company and will continue to work very closely with its representatives during this challenging period.
I thank the Minister for his reply. The Minister of State, Deputy Kelleher, in response to a Private Notice Question on this matter gave us a great deal of information in respect of what was being done by Government through the IDA. I am happy with the efforts made in this regard.
The announcement by the company of its intention to close was very sudden. Despite offers of assistance and ongoing negotiations, the company opted to close. Previous to this the company was predicting a bright future despite staff issues. Were any of the offers made accepted? The IDA was brought in in respect of employment negotiations. Did these negotiations take place? I accept every effort was made on the Government side. Did the company tap into any of the offers made? Does the Minister believe it will engage in negotiations to save the company?
I am always reluctant to go into the detail of discussions between companies, agencies and so on.
I accept that.
There is a key issue involved in respect of industrial relations. The Deputy is correct that the decision to go into liquidation was sudden and not anticipated. The one general observation I would make in situations like this — I have had experience of a few such situations where we have managed to intervene — is that there are challenges involved for all parties concerned. The ultimate consideration of preserving and protecting jobs should reign supreme. All efforts of mediation should be exhausted in finding a resolution.
People on all sides have perhaps learned from this scenario. I hope we can put together the wherewithal to ensure the continued survival of the company and its capacity to provide employment in the midlands, an area which does not enjoy huge employment opportunities. Iralco is a significant employer in this area. The offers which seek to form part of the resolution remain on the table.
I thank the Minister for his reply and thank also the Minister of State, Deputy Billy Kelleher, who was helpful and forthcoming during our discussions on the Private Notice Question.
I compliment the liquidators, Mr. McStay, Mr. Rogers, Mr. Bolger, Mr. Kenny and all involved in this matter. Everybody has put their shoulder to the wheel and we now have a window of opportunity of six months. I accept it was a matter for the company to opt to go into liquidation rather than examinership. I was surprised by this decision as were some of the workforce. Thankfully, the situation has been unscrambled and an opportunity now exists for the company to be sold as a going concern to ensure the maximum number of jobs, if not all, are protected.
Did the IDA, which I know was working closely with this company, receive from the company in the 48 to 72 hours prior to its announcement any signal it was going to close bearing in mind the far-reaching effects this would have on employees? The company had a full order book which would have ensured its operation for some time. There may be industrial relations issues to be resolved but employees have not received a pay increase since 2005. It is hoped all of these matters can be addressed now.
In the experience of the Department, was it unusual that this company announced its intention to close without providing it with 48 hours notice in this regard?
Obviously, I have had discussions with the IDA officials directly involved in the case.
They worked hard.
The Deputy's assessment is fair. We would have preferred a further opportunity to explore avenues to resolve the issues prior to the company going into liquidation. However, now is not the time to be judgmental. We must try to move forward and create a new atmosphere.
In regard to companies in the manufacturing sector, I have come across a number of cases during the past few years wherein the overall industrial relations background — this reflects the position on both sides — was difficult in terms of communication and understanding. This type of situation allows problems to build up to an extent wherein an eleventh hour scenario is reached, trust breaks down and the situation becomes adversarial. We intervened in a number of cases because we received prior notice of the situation. Senior trade union officials often seek to resolve issues with management and owners of companies.
I have asked the manufacturing forum to consider such issues. We face enough global challenges without shooting ourselves in the foot. I hope we can move forward in terms of assisting and supporting the ongoing development of the company concerned. The company is in a competitive space globally and has a bright future which we are anxious to support.
8 Deputy Denis Naughten asked the Minister for Enterprise, Trade and Employment the steps he is taking to support enterprise development in the midland and western regions; and if he will make a statement on the matter. [11856/08]
The indigenous enterprise development agencies under my remit, Enterprise Ireland and the county enterprise boards, have a clear and unequivocal mandate to develop enterprise in all regions. As in the other regions, their activity in the midlands and western regions has been successful to date.
Enterprise Ireland has a wide range of programmes to address the multidisciplinary demands of entrepreneurship and the diversity of business types. For example, it supports companies to achieve productivity gains, internationalisation, export growth and achievement of scale. It assists with research and development, management skills acquisition, market information and seed and venture capital. It also address micro business with support for incubation space in communities. Enterprise Ireland works with almost 490 client companies in the west region which employ 11,693 people. In 2007, €14.8 million was approved by Enterprise Ireland for clients in the west region. In the midlands, Enterprise Ireland works with over 300 client companies which employ more than 9,900 people. In 2007 approvals for midlands clients was over €7.5 million.
The role of the county and city enterprise boards in the midland and western region is to provide a source of support for micro-enterprise in the start-up and expansion phases, to promote and develop indigenous micro-enterprise potential and to stimulate economic activity and entrepreneurship at local level. The specific types of formal CEB assistance available to micro-enterprise is broken down between financial assistance such as grants for feasibility studies, employment grants and capital grants and non-financial assistance such as programmes covering business management, mentoring, e-commerce, enterprise education and women in business networks.
During 2007 the midland region CEBs, composed of Longford, Westmeath, Laois and Offaly paid out over €1.48 million in grant assistance to 109 clients. This intervention has assisted in the creation of 236 jobs in the region. The CEBs in the western region, comprising Galway, Mayo and Roscommon have paid out over €1.11 million in grant assistance to 104 clients, which in turn, has enabled the creation of 328 jobs in the area.
During 2008 the CEBs in the midlands and western region will continue to support enterprise development through the provision of both direct financial assistance, in the form of capital, feasibility and employment grants, and through indirect or soft support assistance such as management development capability support and the development and delivery of activities to highlight and promote enterprise.
IDA Ireland is also supporting enterprise development in the region through its ongoing strategy of growing and embedding foreign direct investment activity. The agency is encouraging its client companies to add strategic functions to its Irish operations in areas such as research and development and marketing. There are opportunities here for indigenous companies in the areas of sub-supply and service provision.
Apart from the creation of new jobs and development of new enterprises it is important to maintain existing jobs. There is a fear in the midlands and in the north of County Meath that many factories are beginning to lose two or three jobs. Where there were 15 or 20 employees in a company a small percentage, especially in the area of exports, are beginning to lose jobs. In sustaining jobs I ask that the agencies link in with those factors to prevent the loss of employment.
At a recent meeting with FÁS, I was told of a skilled workforce in a certain factory which has no particular qualification or certification but has been doing the same job for 20 or 30 years. It is trying to find a way to give them a certificate or to acknowledge their skills. I ask the Minister to encourage and fast-track that initiative if at all possible so that if certain jobs are lost the workforce leave with a certifiable skill that can help them get another job in the future and can also be used to help attract new industry when one sees a list of people with certain skills.
I agree with the view on experiential learning. The agenda of translating a person's experience in the workplace into a qualification is with the national qualifications framework, FETAC and HETAC, with a view to developing a template by which one can enable somebody who wanted to start a particular programme to get credit for their experience in industry or in services. That is an issue about which I am enthusiastic since I was Minister for Education and Science many years ago. I was involved in setting up the national qualifications framework and in putting the legislation through. At that time I envisaged that the whole area of experiential learning would be accommodated. I am concerned at the pace at which it is progressing. There are complexities attached to it but it is important. Our emphasis on skills development is on the workers in existing enterprises. The 500,000 people we have identified in the national skills challenge, to which Deputy Penrose alluded earlier, are all workers. We have to incentivise people to go on programmes to upskill themselves. The value of their experiences is useful in this context.
The dairy investment fund had a good impact on the midlands. Under the dairy investment fund which is managed by Enterprise Ireland and announced by the Minister for Agriculture, Fisheries and Food, Deputy Mary Coughlan with European funding, Glenisk Limited in the midlands was awarded €3.1 million and €8 million for an organic yoghurt and milk project. If one goes into the self-service restaurant one will see its products proudly displayed. I recommend them to all concerned. Projects such as this did very well out of the dairy investment fund.
I was in the US last week and it was fantastic to hear what a company such as Boston Scientific had to say about the workforce in Galway and the degree to which the technology developed there impacted on its global performance. There is a great deal of strong technology in industry in the west and in the midlands, for example, in Athlone, in pharmaceuticals and life sciences. In respect of SISCO's recent announcement in Galway there are 200 highly qualified research and development people. There are a lot of positives there.
I thank the Minister. I want to advocate Kellys organic production of similar products in Ladestown, Mullingar.
I will have to head back to Mitchelstown.
We should recognise somebody who started off small, as did Gerry Kelly and his wife, Mary. That is very important because they provide employment in that area and utilise a natural resource. We should encourage jobs in that particular area. I hope the Minister will not be found wanting.
In the Athlone, Tullamore and Mullingar, ATM, region, Mullingar is the principal town, irrespective of future events.
Senator Cassidy is in the US.
I do not know what he is doing there. Those are the important towns. I appreciate we are marketing them as a triangle and I advocate that is the way to proceed. Will the Minister give a solemn commitment that he, Enterprise Ireland and the IDA will leave no stone unturned to ensure that a positive development takes place in Mullingar in a 70 acre industrial park which is well developed and geographically centred? While we have good access what is important for the people the Minister spoke with in the US is that an airport is located near at hand. I know that one has been mentioned for Horseleap which is on the Longford-Offaly border. I hope that happens. One of the disappointments is that the former Taoiseach, Albert Reynolds, did not develop Abbeyshrule, on the Westmeath-Longford border. Does the Minister agree that is critical in the context of developing the ATM region?
I certainly do. We were digging the sod in that business park which is a significant one in Mullingar.
There is no reason to develop it unless we fill it. I will use the comparison I used earlier with Carlow and other areas. That the facility is being put in place is a reflection of the IDA's commitment to market it. It is the triangular marketing of the region that says to a multinational that if one locates in Mullingar one has access to the population base in the region of approximately 400,000 people.
For technology graduates and so on.
Exactly. Enterprise Ireland recently announced a €50 million development for the institutes of technology — equipment grants and grants for the incubation centres — to facilitate business development and incubation to provide added capacity to help companies to start up. The institutes are located regionally. The idea behind that is to give a stronger regional focus to enterprise development among Irish-owned companies. I agree wholeheartedly with the Deputy's perspective on this issue.
9 Deputy Joe Carey asked the Minister for Enterprise, Trade and Employment if his Department will complete an efficiency review and audit of all State agencies and bodies under the responsibility of his Department; if he has plans to merge or abolish any State agencies or bodies; and if he will make a statement on the matter. [16703/08]
In accordance with the initiative announced by the Tánaiste and Minister for Finance in his 2008 budget speech, my Department carried out an efficiency review earlier this year which encompassed the Department, its offices, agencies and associated bodies.
The efficiency review for my Department will be considered by the Government, along with similar exercises carried out by all other Departments. The overall objective of the exercise is to achieve efficiencies which will reduce the cost of the delivery of public services and achieve greater value for money. It would be premature to comment on the specifics of my Department's efficiency review in advance of a full consideration of the overall exercise by the Government.
The current efficiency review must also be seen in the context of ongoing efficiencies which have been initiated by my Department and its agencies over a long number of years. My Department and its agencies have a proven record of proactively seeking to achieve efficiencies and finding better ways to deliver services to clients. These actions have included, where appropriate, the rationalisation of agencies to eliminate duplication and provide a more strategic focus to service delivery. The establishment of Enterprise Ireland as a single dedicated agency to promote indigenous industry is a case in point. This merger brought together Forbairt, An Bord Tráchtála and the services to business function of FÁS.
I am amused at the Government's newfound interest in efficiency. Everyone knows my view on this issue and the extent to which the Government has been a proliferator of State agencies has been phenomenal. There are nearly 1,000 such agencies. One of the worst offenders is the Department of Enterprise, Trade and Employment which has almost 100. I doubt the sincerity of the Government's new-found interest given that the legislative programme features 19 Bills which will establish 17 new agencies, extend the power of five agencies and allow one agency to establish a sub-agency. Much of what the Tánaiste says is bluster and of no substance.
A number of departmental agencies — the National Employment Rights Authority, NERA, Rights Commissioners, Equality Tribunal and Equality Authority — have a role in the area of employment law compliance. Is there not a case for establishing a single pathway for employment law compliance? Could we not take action on training given that six organisations are involved in this area? The figure is 41 if one includes the city and county enterprise boards which award training grants. Is there not also a case for consolidation in the awarding of grants for alternative energy, which is done by Sustainable Energy Ireland, the Environmental Protection Agency and Science Foundation Ireland? There is considerable potential for achieving efficiencies in these areas.
Does the Minister agree that the establishment of NERA and the National Consumer Agency was a knee-jerk reaction to the scandal involving Gama Construction Limited and the "Rip-Off Republic" television series by Mr. Eddie Hobbs? What was really needed was the appointment of a substantial number of labour inspectors. The establishment of a quango, with a board, website and headquarters, will not necessarily achieve the desired objective. If sufficient inspectors had been in place, it would not have been necessary to spend a fortune on a new agency.
This argument also applies in the area of consumers. If the Director of Corporate Enforcement was properly resourced and empowered, we would need a massive new agency with a large number of board members who incur substantial expenses. There is little evidence to show the establishment of the National Consumer Agency has reduced prices or improved conditions for consumers.
The Deputy's predecessor as Fine Gael spokesperson on enterprise, trade and employment attacked my predecessor and me for what he claimed was our delay and prevarication in establishing a national consumer agency.
We called for the appointment of a consumer enforcer, not the establishment of a quango full of the Minister's appointees.
When we introduced the relevant legislation the Deputy's predecessor said it was about time, only to oppose it later. Even in the context of NERA and Gama Construction Limited, we heard cries from the other side that we needed——
The Minister is in Government.
I will return to the issue of the Government's role. The cries were not only for a greater number of inspectors but also for sufficient legal capacity to take on unscrupulous employers who exploit workers. This requirement could not be satisfied by appointing additional inspectors without legal context or proper capacity to take on such employers in the courts. The Deputy will recall that our first attempts to address the problem with Gama Construction ended in the Supreme Court, where the matter has not yet been resolved, because we could not publish a report under the existing legal framework. It was for this reason that the legislative template had to change.
The Government adopted a constructive approach based on partnership with the social partners because it emanated from the social partnership agenda. While it remains within the aegis of the Department, it is a separate stand-alone approach which has sufficient focus to ensure compliance with employment law. It was done in a good, informative manner from a policy perspective.
The Government's approach to the consumer issue emerged from the consumer strategy group. It was not a response to the series of programmes by Mr. Eddie Hobbs but was well advanced prior to its broadcast, as anyone who reviewed the sequence of events would discover.
On labour law, I ask the Deputy to consider the number of strikes we had in the 1970s, review the performance of the Labour Court and Labour Relations Commission and assess the current status in terms of industrial conflict and the reduced number of strikes. The performance has been phenomenal.
While some agencies work well, there is scope for others to amalgamate. Why were the county enterprise boards established more than a decade ago in a policy initiative taken by the then Taoiseach, Mr. Reynolds? The reason was that people on the ground believed the larger agencies had no interest in minor enterprises of the type we discussed a few moments ago.
The county enterprise boards and development boards could easily be amalgamated.
The main problem with the large number of agencies is that Members cannot obtain a reply from the relevant line Minister when we raise an issue in the House. In other words, no one is accountable to the people or their representatives.
It is not feasible to abolish some State agencies. Bodies such as NERA are essential if we are to pursue those who do not comply with the law. While I accept there is duplication among certain agencies and it will be necessary to focus our attention on this issue, the main problem is the lack of accountability to the Oireachtas.
I accept the need for reform to make State agencies more accountable to the Legislature, through the relevant Minister. The OECD report makes an important point on the need for greater connectiveness in the wider public service, Civil Service, political system and, ultimately, Parliament.
Written Answers follow Adjournment Debate.
