Dáil Éireann díospóireacht -
Wednesday, 3 Feb 2010

Vol. 701 No. 1

Adjournment Debate.

Job Creation.

Deputy Joe McHugh

I raise this issue in the context of the recently launched mid-west task force because we have an historical task force institution in County Donegal. In 1999 the then Minister for Enterprise, Trade and Employment, Deputy Harney, launched a task force for the county with great fanfare. Her successor, Deputy Martin, came up with a novel idea and launched an interdepartmental working group in 2002 to address unemployment in Donegal. The Government is very much in the business of buying time by setting up task forces. I would like a progress report on the work of the task force and the interdepartmental working group because the figures speak for themselves. More than 20,000 people in my county are unemployed and the stark reality is there does not seem to be a plan or a vision to address this issue.

The Minister needs to examine not only job retention in the north west but also to go a step further with job creation. A company from Houston, Texas, has a Donegal connection and it wants to set up in the county but the problem is there is competition from Invest Northern Ireland, which is offering better incentives to the company to set up in the North. I have highlighted the issue over the past six months. If banks are not lending and commerce is grinding to a halt, investment has to come from Government. In the past peripheral counties such as Donegal relied on capital spending and it maximised its allocation to build harbours and piers, roads and bridges but that investment is not happening. This year's roads budget excludes viable projects such as the Letterkenny-Manorcunningham road and a link road and relief road for Letterkenny. The harbour development project in Greencastle, which has great potential, has ground to a halt. The reason the money was invested in the first place was that the harbour was a health and safety hazard. However, 20 jobs will be lost and this is another example of jobs being lost that could be retained through appropriate investment.

Marine Harvest Ireland engages in salmon production in Donegal. The company has an excellent sustainable and viable business along the west coast but time and time again it comes up against the problem of over regulation and a lack of proactivity in the area of licensing. The Government and Opposition must sit down and realise the company is afraid the 240 jobs it provides will be lost if it does not secure licences. Licensing has been an issue for 15 years. Fallow sites are needed to maintain salmon production. The Minister of State is familiar with agricultural production. One does not set potatoes in the same field every year. The same principle applies to fishing. Salmon cages cannot be left on the same site all the time and they need to be moved.

Those involved in the industry are anxious to ensure fallow sites are secured in order that salmon can be moved in the interest of sustainability and environmental protection but this company is not being permitted to do that. The hands of management are tied. All they need is action from senior Ministers, including the Minister of State, to ensure regulation does not inhibit their progress and to make sure they are not only able to retain jobs but also to create jobs in the future.

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Billy Kelleher)

I am not a senior Minister but I assure the Deputy I am humble.

I thank the Deputy for raising the important matter of unemployment in the north west. IDA Ireland is actively encouraging new investment in Donegal in knowledge-based industries. This is part of a focused strategy to replace the traditional clothing and textile industries, which have declined in the region in recent years. During the past five years, IDA-supported companies in Donegal have created more than 663 new jobs. A total of 12 IDA Ireland-supported companies in Donegal trade internationally and they employ 1,683 full-time and 128 part-time people in software development, systems development and the medical technology industry. Donegal's industry base is transforming from the clothing and textile industry to high-tech, high skill activity. Companies such as Pramerica and UnitedHealth, which have located in Donegal, are continually expanding and recruiting. The agency's emphasis is on building up an international and financial services cluster and it is making strides in delivering on this, as shown by the quality of the existing companies and the recent announcement of an expansion by SITA Inc, creating 123 jobs. In addition, the IDA is actively promoting Donegal as a favourable location for high-end manufacturing, mainly to companies in the medical technology sector. This is proving successful. Companies locating in Donegal have included Medisize and Zeus Industrial Products Inc., the latter of which has opened a European operations centre for the production and distribution of precision medical tubing products.

Another primary focus for the IDA in Donegal is the designated linked gateway of Letterkenny and Derry, and significant investment has been undertaken in developing property solutions through the provision of a business and technology park, along with three advance buildings in Letterkenny. This focus involves developing stronger economic links with Invest Northern Ireland, which includes initiatives such as the north west business and technology zone. This is aimed at promoting the linked gateway of Letterkenny and Derry in line with the objectives of the National Spatial Strategy for Ireland 2002-2020 and the Regional Development Strategy for Northern Ireland 2025.

The delivery of physical, social and economic infrastructure is key to securing inward investment and IDA Ireland continues to be engaged in identifying and prioritising investment in these areas in association with local partners. In that context, the interdepartmental group report published previously by the former Minister, Deputy Micheál Martin — as mentioned by Deputy Joe McHugh — outlined the wide range of infrastructure projects under way and completed which support the environment in Donegal for job creation. Enterprise Ireland is also focused on the creation of new jobs by supporting entrepreneurs who set up new high-potential start-up companies, supporting the retention and creation of new jobs in existing companies and enhancing the innovation capability of Ireland at a national and regional level through support of research in companies and third level institutions.

Enterprise Ireland provides a range of supports for high-potential start-up companies, including financial supports, business and marketing advice, mentoring and product development. Eight such units have been created in Donegal since 2005. Enterprise Ireland approved grant payments of some €5.3 million to companies in 2009. A total of 14 Donegal companies have been approved for €2.2 million under the employment subsidy scheme, with a further five companies being approved for €1.75 million under the enterprise stabilisation fund. A Colab incubation centre at Letterkenny IT, officially opened on 21 September last and was largely funded by Enterprise Ireland, is home to 12 start-up companies which are creating employment. Dedicated office space, business mentoring, access to specialist equipment and research teams for client companies are provided to each of the tenants.

The Deputy referred to salmon farming and Marine Harvest Ireland, which has a number of sites around the coast. The full use of its site at Lough Swilly is currently being examined in the context of full compliance with the requirements of EU directives on birds and habitats. The Department of Agriculture, Fisheries and Food is working closely with the European Commission in conjunction with the National Parks and Wildlife Service and the Marine Institute to resolve this issue on a national basis. Discussions have taken place among the Department, IFA Aquaculture and Marine Harvest on a range of issues with regard to its licences. These discussions are ongoing at present. I assure the Deputy that every effort is being made to resolve these matters in a manner which is fully in accordance with the necessary legislation and also meets the needs of the company.

Greencastle Harbour is owned by Donegal County Council and the maintenance and development of the harbour is the responsibility of the council in the first instance. However, the Department of Agriculture, Fisheries and Food has, in recent years, project-managed works on phase 1 of the Greencastle Harbour development project on behalf of Donegal County Council as well as providing funding. Due to the current budgetary situation, a limited amount of funding — sufficient to suspend the project in a safe and acceptable manner — is being provided under the 2010 fishery harbour and coastal infrastructure development programme. The Department is keeping the matter under review on an ongoing basis in the context of expenditure under the fishery harbours and coastal infrastructure capital programme.

Greencastle Harbour and its facilities continue to be available to fishermen. Concerns have been expressed about changed tidal current patterns in the Greencastle area and an appropriate marine notice has been issued warning all ship owners, agents, ship masters, fishermen, yachtsmen and seafarers in this regard.

It would not be appropriate to discuss any negotiations that may be taking place between Global Flexi Systems and the State development agencies, as the Deputy will understand, because they are sensitive. However, I assure the Deputy that we are fully conscious of the need to promote the north west and the Donegal region. At the same time, it is important that we do not undersell the opportunities that are out there, including Colab at the Letterkenny Institute of Technology, and all that Donegal has going for it in terms of attracting inward investment. IDA Ireland and Enterprise Ireland are out there all the time promoting the north west as a region for inward investment, while assisting companies in the area of trade and technology.

The Deputy mentioned difficulties with regard to Invest Northern Ireland. It is important to remember that we are trying to promote an all-Ireland economy. Cross-Border co-operation is paramount in the context of making the island of Ireland an attractive place for inward investment. I understand what the Deputy is saying but it is equally important that we promote the island economy. It is a central plank of island policy to make sure that investment occurs across the island, thus encouraging the breaking down of barriers. It is difficult to move from this stated position of the Governments of the Republic of Ireland and the UK, especially in the context of the discussions that are ongoing as we speak.

I will consider the views of the Deputy but I assure him that, as Minister of State with responsibility for trade, whenever I am abroad — even though I come from Cork, which is a long way from Donegal — I promote the whole of Ireland and particularly the regional areas where we see niche opportunities for inward investment.

Deputy Joe McHugh

I thank the Minister for going off-script.

Acting Chairman (Deputy Jan O’Sullivan)

And taking an extra two minutes, so I must move on to the next person.

Deputy Billy Kelleher

I thank the Acting Chairman for her indulgence.

FÁS Training Programmes.

Deputy Seán Sherlock

The Minister has not yet declared Cork an independent republic, so we are reassured.

I raise this matter to highlight the potential for exploitation within the work placement programme. I call on the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Mary Coughlan, to instigate a review of the programme to ensure this does not take place. I understand that many employers have signed up for this scheme, under which they can employ a full-time worker for free. It does not cost the employer a penny; the Department foots the bill by offering those who secure a place on the programme a weekly payment of approximately €200, which is considerably less than the minimum wage. The aim of the scheme is to allow graduates and other persons to learn a new skill and gain experience, which is important in the current climate. However, many of the job advertisements under the work placement programme specify that the candidate must be experienced and, in some cases, that he or she must be able to work unsupervised. This defeats the purpose of the programme.

There are currently over 800 work placement programme jobs listed in the FÁS jobs bank. Among these positions are sales representatives, receptionists, caretakers, laundry operatives and construction workers. There is a six- to nine-month training period for each of these jobs. The question arises of whether working in a laundry for six to nine months will offer any real progression and thus whether such jobs are of any real value for graduates. This is why I am seeking the review. It is evident to me that the work placement programme could be used as a means of exploiting well-qualified employees by providing work that offers no real opportunity for advancement.

For graduates who have no previous experience of their chosen field and who do not qualify for a social welfare payment, the work placement programme has its merits. For others, this programme offers absolutely no benefit but actually comes at a cost when travelling expenses are deducted from the already meagre payment of €200 per week. The only winner here is the employer, who gets a worker for up to nine months for nothing.

The Minister must revisit this scheme urgently, as FÁS is giving the green light to employ staff for work under the guise of a training scheme for which candidates are grossly overqualified. She should also consider requiring the employer to pay some salary or expenses so the person is at least earning a living wage while working a full week. We argue that they should at least be earning the minimum wage, if that is possible. A testimonial on the scheme was posted on www.boards.ie: “I think the work placement programme is a good idea but a person would only be earning the €196 (paid by the social welfare) for a full week’s work. While I agree that any kind of work looks better on your CV this small amount of money has made the uptake of this programme very slow”.

In essence we are seeking to prevent the exploitation of workers. If the scheme is designed so that people can progress and use whatever skills they have to advance in the workplace, even if they are only retaining their social welfare benefits, it should be a real advance and should not be used by employers to advertise jobs that involve no real upskilling. I hope the Tánaiste will at least review this scheme

Deputy Billy Kelleher

Earlier today the CSO published the live register figures for January which unfortunately showed a continued rise in the number of people signing on. However, there has been a marked slow-down in the number of people signing on to the live register compared to this time last year, indicating an improvement in the outlook on the employment front. This is of no comfort to those who have lost their jobs but 33,000 people lost their jobs in January 2009.

Our objective is to ensure that those who are unemployed are given a realistic pathway to employment. This will consist of providing the unemployed with access to quality guidance services and the opportunity to acquire new skills and experience which will assist them in securing employment in the future.

Over successive budgets, the Government has considerably expanded the education, training and work experience provision for the unemployed. This year the Department will provide approximately 147,000 training places, compared to the 66,000 that were delivered in 2008. The additional provision has been achieved through a combination of increased resources, providing a broad range of training and introducing new labour market activation initiatives such as the work placement programme.

The work placement programme is a joint initiative between the Department of Enterprise, Trade and Employment and the Department of Social and Family Affairs and was launched last May. The aim of the programme is to provide valuable work experience for up to nine months to individuals who are unemployed. It is relevant for young people seeking to gain valuable experience in the workplace and for others seeking either to stay active or to gain work experience in a new skills area or sector.

There are potentially 2,000 places on the programme. At present there is a total of 1,300 places offered by providers on the scheme and over 300 of these have been filled. While each placement is unpaid, participants who are in receipt of social welfare payments could retain these while on the programme, subject to the normal social welfare rules applying.

The programme was reviewed by the Department of Enterprise, Trade and Employment in November, in conjunction with FÁS and other Departments, with revised criteria coming into operation from 1 December. The revised criteria considerably broaden the accessibility for participants and providers to the programme. The key changes relating to the programmes criteria include that recipients of most social welfare payments, including job seekers allowance and job seekers benefit, are now eligible to apply; the period for which participants must be in receipt of a social welfare payment to be eligible has been reduced from six months to three months; the programme is open to all sectors of the economy including the private, public and now the community and voluntary sectors; and the requirement for a firm to have at least ten employees has been removed.

Previously firms could only participate if they did not have redundancies in the previous six months; this constraint has been reduced to three months. If, however, the level of redundancies in the last three months was less than 5% of the workforce, these firms will be eligible to participate. The duration of the work placement has also been increased to a maximum of nine months.

The design of the work placement programme contains a mechanism to ensure that participants on the programme have an opportunity to acquire new skills and crucially gain valuable work experience. That is critical, that people can gain valuable work experience in a period of unemployment and fill up their CVs. This is critically important to show a person has been on a placement and has gained experience, something that increases opportunities in the context of applying for jobs in general.

Within the first two months of the commencement of a placement the provider receives a formal monitoring visit from FÁS. The visit is conducted to ensure the placement is taking place as described in the work placement description. The monitor then completes a report, which could contain one of the following recommendations: that the placement continue; that the placement continue with a follow up monitoring visit scheduled; that the placement end; or that the provider should not be approved for future placements.

In addition to the formal application process and formal monitoring of the placement and the provider, at all times any staff member, participant or member of the public can raise issues or make known their concerns about a placement or a provider by contacting any FÁS office. FÁS will in all instances follow up on any complaints made about abuse of participants or of the spirit of the programme.

The Department continues to oversee the operation of the work placement programme and will if necessary conduct a further review to ensure that participants obtain maximum benefit from the programme. In the interim we will continue through FÁS to actively promote the programme across all sectors of the economy.

This is a valuable programme that offers opportunities. If there are any forms of abuse the Deputy can raise them with FÁS or personally with me, any other Minister of State or the Minister for Enterprise, Trade and Employment and we will follow up on them.