Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Thursday, 6 Feb 2014

Vol. 829 No. 3

County Enterprise Boards (Dissolution) Bill 2013 [Seanad]: Second Stage

I move: "That the Bill be now read a Second Time."

I welcome this opportunity to present the County Enterprise Boards (Dissolution) Bill 2013 to the Dáil. The purpose of the Bill is to give effect to the Government's decision in 2012 to reform the system for delivery of State supports to micro and small enterprises. It was agreed this was to be achieved by dissolving the county enterprise board structure and creating an enhanced enterprise support model to be delivered at local level through the new local enterprise office, LEO, initiative.

This is a technical Bill to provide for the formal dissolution of the county enterprise boards; the transfer of their functions, assets and liabilities to Enterprise Ireland; the transfer of the staff to either Enterprise Ireland or the local authorities; and to make pension provisions for those and any previous staff.

I will outline the background of the rationale to reform the system for delivery of supports to micro and small enterprises. At national and local level, the indigenous microenterprise and small business sector - the lifeblood of our economy - is central to economic recovery, job creation and the future development of the Irish economy. Our vision is to ensure locally accessible supports are available which will nurture entrepreneurship and promote the creation and maintenance of employment, with a dedicated culture of delivery. The programme for Government contained a commitment to merge the local enterprise and job support functions of local, regional and national agencies into a single business and enterprise unit within local authorities. The restructuring of micro and small enterprise supports deals comprehensively with this commitment to create a single business support entity at local level. It does so without fragmenting the national enterprise policy focus on job creation, dynamic regional development and strong export growth.

The Action Plan for Jobs recognises the indigenous microenterprise and small business sector will be central to economic recovery, job creation and the future prosperity of the Irish economy. The Action Plan for Jobs reaffirms the need to ensure the national enterprise support model for these sectors is a premium model delivering a high-quality seamless service. Furthermore, the creation of LEOs in local authorities reflects the commitment to an enhanced economic and enterprise support and development role for local authorities in the Government's action plan for effective local government.

Local authorities will merge the enterprise support elements of their business support units with the LEOs to provide an integrated micro and small enterprise support service at local level. In recognition of the changes to the social, economic and technological landscape of Ireland in recent years, this strategic reform of the system for delivery of support to businesses will make the operating environment more coherent, responsive and conducive to entrepreneurship at local level.

County and city enterprise boards, CEBs, have had an impressive track record in job support over the past 20 years. The new LEO structure will draw and build on the positive enterprise culture of the successful CEB model. On average, CEBs assist approximately 1,000 micro-enterprise projects each year through direct grant assistance, in addition to providing soft supports including training, mentoring and management. In 2013, just over €9.5 million was provided by the CEBs to micro-enterprises by way of capital grant support, with just under €8.5 million spent in providing soft supports. Provisional activity outputs for 2013 indicate more than 26,000 participants were on CEB training courses and more than 6,500 participants were on management programmes, while almost 6,000 clients received mentoring support.

The creation of the LEOs will see the establishment of a local first-stop-shop for new entrepreneurs and existing micro and small business owners. The LEOs will become the front door through which all information on State supports for small and micro businesses can be accessed and they will also provide access to information and advice on other supports and bodies with services relevant to micro and small businesses. Other services will include those provided at present by the business development units of local authorities, the Department of Social Protection, the Department of Education and Skills, Microfinance Ireland, the Credit Review Office and enterprise-focused supports from Revenue. The services to be provided by the LEOs are broken down into four main areas. These are business information and advisory services; enterprise support services; entrepreneurship services; and local enterprise development services.

The key element of this new structure will be its commitment to delivering a customer-focused enhanced service with renewed local emphasis on enterprise and job creation combining the best of the CEBs, local authorities and Enterprise Ireland. It offers a huge opportunity to leverage the skills, resources and experience of these three bodies in tandem with the local business community to create an on-the-ground approach to local entrepreneurs and small businesses and dovetail with national enterprise supports and agencies. It will also open up the opportunity to identify businesses with clear high-growth potential which can be fast-tracked to the next level of support from Enterprise Ireland or other State agencies.

The first-stop-shop service will be delivered through a network of 31 LEOs throughout the country. A high level of co-ordination and collaboration is envisaged between the LEOs and other providers of support to the micro and small business sector. There will also be greater co-ordination of delivery of services between the LEOs and other players in the area to support a regional strategy for enterprise and jobs. They will be incentivised to come together to pool expertise and resources and co-operate on a regional basis to deliver various services, such as running joint training and mentoring programmes. A competitive funding element will also be designed and introduced to support the best projects, to demonstrate success and best practice and to encourage high performance and innovative ways of working across the LEO network.

Not only will the new LEOs provide the full range of services delivered by the CEBs, but they will also provide the full range of services, including advice and information for local businesses on accessing public procurement processes, currently provided by the business support units in local authorities. In this context, local authority staff with relevant experience, and who have been trained in providing supports to local enterprises, will also be assigned to the LEOs. Furthermore each LEO will be able to acquire additional resources, with relevant expertise such as planners, public sector procurement and on commercial rates from within the local authority as required.

Local authorities play a leading role in creating a pro-enterprise supportive environment to generate new jobs and sustain existing ones. Last April, the County and City Managers' Association published a report, Supporting Enterprise, Local Development and Economic Growth - Analysis of Local Authority Activities for 2012, together with a database of over 2,300 individual actions that county and city councils are delivering in support of economic development and jobs. These activities range from infrastructure development, including enterprise infrastructure, through to economic promotion, including information dissemination.

They also include the establishment of collaborative structures focusing on economic development, research and innovation and developing employment initiatives within communities, all the way to financial support for festivals and events, and the provision of recreation and amenity facilities.

Regulation by or on behalf of the State plays an essential role in ensuring that economic activity by individual economic actors is consistent with wider social and national objectives. This includes health and safety, consumer protection, environmental quality, competition, and the provision of essential services. It is important, however, that regulation should not place an unnecessary burden on business activity. In this context local authorities, through the County and City Managers' Association, are actively working with the Department of the Environment, Community and Local Government and Forfás in developing a single portal for the delivery of an integrated licensing system for businesses.

To achieve these tailored supports to the highest standards, a robust service level agreement, SLA, has been agreed in a partnership between local authorities and Enterprise Ireland. A copy of that agreement was circulated to all Deputies yesterday. It is a comprehensive document and I strongly recommend that it be studied closely. This agreement sets out a framework for protocols relating to budgets; project evaluation and approval; micro-enterprise policy guidelines as articulated by the Department of Jobs, Enterprise and Innovation; robust performance indicators measuring employment, start-ups and other metrics; roles and responsibilities of respective bodies including Enterprise Ireland, the local authorities and the local enterprise offices, LEOs; and corporate governance.

This detailed service level agreement will provide a framework for the delivery of an enhanced service to micro and small enterprises, and will be periodically reviewed to ensure that impact and value for money are being optimised via the LEO network.

A key element of this new structure will be the consistent application of policy and best practice across all LEOs from the evaluation of applications to the spending of budgets allocated. This will be monitored using the agreed service level agreement in each local authority. The ongoing drawdown of budgets by LEOs will be contingent on them reaching agreed targets.

The highest level of corporate governance will be applied, which will involve the articulation and dissemination of the new national micro-enterprise model, the allocation of budgets in line with agreed funding guidelines, including spot-checking and quality assurance, the management of assets and liabilities, and ongoing engagement with stakeholders.

To ensure the LEOs are delivering best practice supports for entrepreneurship, research into international programmes will be carried out in conjunction with the evaluation of current programmes run by LEOs.

A set of robust metrics form part of the framework service level agreement. They will be tailored to suit the size and capacity of each LEO and included in a local enterprise development plan that will be agreed annually between each LEO and Enterprise Ireland, which addresses the development needs of micro and small enterprises in their respective counties.

The LEOs will be supported by a centre of excellence, which has already been established within Enterprise Ireland. The centre will lead, develop and manage the enhancement of a support service that generates innovative, small and micro-enterprises capable of increasing employment, exports and adding value to the Irish economy.

The functions of the centre of excellence will include promoting innovation and best practice in the approach to supporting start-ups and entrepreneurship; working in conjunction with LEOs to design and deliver appropriate national training and management development programmes at local level; developing a common approach to mentoring and mentor management; providing ongoing training and development for LEO staff; reviewing and benchmarking the services and supports available from each LEO to promote best practice; and development and review of the service level agreements and the promotion of high levels of performance and appropriate metrics.

It is to be expected that, over time, there will be some savings resulting from the removal of costs associated with the individual company status of each county enterprise board and reduced rental costs associated with the relocation of some offices. However, initial direct savings will be modest as it could take some time to realise these savings due to existing rental arrangements.

Some small additional initial expenditure will be needed, for example, for staff training and to develop a single local enterprise office website to replace the 35 existing sites. There will be no savings on staffing arising from the dissolution of the CEBs as existing staff will be redeployed to the local enterprise office.

Section 1 defines certain terms used in the Bill. Section 2 defines the functional area of a city and county council for the purposes of this legislation. Section 3 states that any expenses incurred in the administration of the Act shall be paid out of moneys provided by the Oireachtas. Section 4 empowers the Minister to appoint, by ministerial order, the day on which the county enterprise boards shall be dissolved. Section 5 enables the Minister to dissolve the county enterprise boards on the appointed day.

Section 6 provides for the transfer of the existing functions of the county enterprise boards to Enterprise Ireland; provides for the transferred functions to be performed by a local authority, in the functional area of a local authority, on behalf of Enterprise Ireland; and amends section 10 of the Industrial Development Act 1995 by deleting the words "subject to the prior consent of the Minister" because Enterprise Ireland already has the enabling powers specified.

Section 7 provides for all land and other property, including assets, previously vested in a county enterprise board to be transferred to Enterprise Ireland. All rights, powers and privileges relating to or connected with such land are to be vested in Enterprise Ireland without the need for a conveyance or assignment.

Section 8 provides for the transfer of rights and liabilities of a county enterprise board to Enterprise Ireland. It also provides that in the event of an action to sue, recover or enforce, Enterprise Ireland may do so in its own name without the need to give notice of the transfer to the person whose right or liability is transferred. Finally, it provides that any lease, licence, wayleave or permission granted by a CEB shall continue in force as if granted by Enterprise Ireland.

Section 9 will allow any claim in respect of loss or injury alleged to have been suffered during the performance of CEB functions to now lie against Enterprise Ireland, and allows Enterprise Ireland take the place of a county enterprise board in any legal proceedings to which a county enterprise board is a party immediately prior to the transfer.

Section 10 ensures that anything commenced by a CEB, for example, loan agreements, grants, equity investments etc., does not fall on the transfer to Enterprise Ireland of the functions, assets and liabilities of the county enterprise boards. Section 11 empowers the Minister to designate staff of a county enterprise board to Forfás, Enterprise Ireland or a local authority.

Section 12 provides for Forfás, Enterprise Ireland or the local authority to accept staff into their employment who were previously employed by a county enterprise board on terms and conditions no less favourable in relation to remuneration; the amendment of the Second Schedule of the Industrial Development Act 1993 in relation to the secondment of staff; and the protection of pension entitlements to existing staff and pensioners.

Section 13 sets down the provisions regarding the preparation and submission by Enterprise Ireland of final accounts and final reports of the county enterprise boards. Section 14 provides for the Short Title, the County Enterprise Boards (Dissolution) Bill 2013, and commencement.

These reforms amount to a radical transformation of the way in which supports to enterprise are delivered at local level and will ultimately lead to the creation of more jobs. Small enterprises are a central part of the economy and their ability to succeed and grow underpins our future potential for jobs, growth and prosperity. In this country 98.5% of all firms are small and they employ over 650,000 people in total. It is vital that we continue to focus on delivering a practical programme of actions and enhanced supports that can achieve positive improvements in the operating environment for micro and small businesses. I commend the Bill to the House.

I thank the Minister of State and his officials for providing us with a copy of the service level agreement, SLA. It is an incredibly detailed document, but it has addressed some of my concerns about the Bill. However, while I do not propose to oppose the Bill on Second Stage, I will be tabling a number of amendments on Committee Stage to address my remaining concerns about the role played by Enterprise Ireland. I have discussed these concerns previously with the Minister of State. Enterprise Ireland does a fantastic job, but its expertise and supports are focused on companies that want to export, high potential start-ups, HPSUs, and high technology companies and I fear that the types of company that have previously been supported by county enterprise boards will fall between the cracks. The SLA, section 5 in particular, goes some way towards addressing these concerns, but we should continue to monitor the issue. Not all companies want to be HPSUs. They may just want support in setting up their operations. In many cases, these supports are not even financial in nature. The county enterprise boards provided training, networking and, most important, mentoring support. Quietly and behind the scenes, they facilitated experienced business people in offering a helping hand along the way for new businesses. The SLA provides that such work can continue, but we must ensure it does continue.

The enterprise boards have done a phenomenal job since 1993. They created and supported 33,000 jobs through an average of 900 projects and almost 25,000 participants per annum. They have supported a wide range of business activities, from the traditional candlestick maker to leading edge technology companies. This support has helped to build companies such as EduBills which was established by Sandra Maguire with the assistance of her local enterprise board. As a parent and secretary in her local school, Ms Maguire was familiar with both sides of the issue of school books. She established EduBills to offer an online mechanism for schools to upload book lists and other charges and a secure facility for parents to pay school costs online. This project is now making a big difference around the country.

An economic audit carried by the South Dublin County Enterprise Board in 2004 showed the work that could be done when a proper enterprise board worked in tandem with its local authority. We must ensure that work can continue under the new arrangement. For several years Mayo County Council has been preparing for the new model by establishing an economic investment unit. Having seen how it operates on the ground, this model has assuaged many of my concerns. However, such a model will not be repeated everywhere unless the SLA is robustly enforced and county councils are sanctioned where they do not implement it. However, I do not think the local authorities will be the problem. Enterprise Ireland will have to come to the table with an understanding of local business, as well as the traditional clients. There will need to be consequences for its budget if it does not deliver. The SLA sets detailed performance targets for each local enterprise office, LEO, but what are the targets for Enterprise Ireland and what will be the consequences if it does not meet them? LEOs which break national averages for performance, support and applications should also be rewarded with bigger budgets. That is the only way we will engender a sense of responsibility for the new model.

My party shares responsibility for pulling local representatives from playing managerial roles in local authorities. I am sure the Minister of State, Deputy John Perry, brought his business experience to Sligo County Enterprise Board. A significant number of public representatives have contributed their time to enterprise boards, not for the glory of it - there is none - but because they want be involved in the economic development of their local authority areas. We have replaced this close involvement with a fluffy commitment in the SLA on establishing a reporting relationship between local authorities and their members in the operation of the LEO. In the past few weeks this House has dealt with a number of reporting relationships that have not worked well. Under the current system, the enterprise boards hold monthly meetings to update board members on activities and councillors have a responsibility to ensure the targets for the county are met. I ask the Minister of State to consider how elected representatives can be involved in the day-to-day operations of LEOs.

There is no sense in changing the entire model of local enterprise if we do not address the elephant in the room, namely, budgets. County enterprise boards had a budget of approximately €18 million last year for client activities, compared with the €89 million IDA Ireland spent on grant aid for its client companies. IDA Ireland does a great job, but I can only imagine what county enterprise boards could do with a fraction of its budget. They certainly need significantly more than what they are getting. They also have the potential to do much more. We have seen from IDA Ireland's visit figures that its investment is not being spread around the country. We are depending on the LEOs to drive economic development in areas where IDA Ireland does not give a damn. It will be up to LEOs to deliver the fruits of recovery and change the culture of the country in order that it understands business is a noble activity and that if it does not work, one starts again. Cultural change is required in many areas, but the new model will have to drive that change. Unless the LEOs are properly resourced, they will not be able to be drivers of change.

I am delighted that the SLA gives LEOs a central role in student enterprise awards. We need to get the idea into schools from an early stage that setting up a business is a valid career option. Unless the enterprise offices are given the resources they need, they will not be able to foster this culture. I would like the SLA to provide more details on the student enterprise awards in terms of the models to be followed and the degree of consistency around the country. All of us have attended the Young Scientist exhibition at the RDS. Can we not do something similar through the LEO structure to have a national young enterprise exhibition?

One of the difficulties I have with the Bill is that we will get the usual spin from the Government about public sector reform. The county enterprise boards will be used as an example of the Government's efforts to abolish quangos.

It will be like the VECs where the Government claims credit for abolishing all of them as opposed to only the one structure.

The difficulty here is that we are abolishing the traditional enterprise board structure. The Minister for the Environment, Community and Local Government, Deputy Hogan, is putting the Leader companies into the local authorities as well. We are pulling the structure of local enterprise support into the centre, that is, the local authorities, and we are pulling them away from the communities. We must look at the management of the LEO to ensure that, as well as local representatives, there is some sort of community involvement. If we hand it over to the executive of the local authority in tandem with the executive of Enterprise Ireland, which is where we are going, then we will get something that will miss the necessary local input and knowledge that the enterprise board structure, with its mentoring and management board structures, can bring to it. That is something the Minister should look at in the context of the amendments on Committee Stage.

As we speak, in a press conference somewhere in this complex, the Taoiseach and the Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, are out clapping themselves on back for the Action Plan for Jobs 2013. No doubt they will throw the Bill in there as an action completed. When one looks at the jobs action plan, there has been considerable change and we welcome the employment growth. However, one third of the actions last year involved commissioning reports and other studies, another 12% was stuff that the Department should be doing anyway, and another 11 of the actions were all FDI and related matters. What is going on in Government Buildings is the kind of thing that really frustrates the 400,000 people who are still looking for jobs. What we need to do with the model contained in the Bill is say to a cohort of that group that they can start a business if they have a business idea. For an LEO to be successful, it needs to be on top of and working in tandem with the Department of Social Protection. We need to be completely on top of the back-to-work and back-to-enterprise allowances and have local resources to roll that out. We need mentoring. Deputy Áine Collins put a good paper on mentoring together at the Joint Committee on Jobs, Enterprise and Innovation and it, and its recommendations, should be rolled out through the LEOs. There is some reference to it in the service level agreement, SLA, but we need to be more successful in that regard.

If this structure does not work, and we are taking a big gamble here with a structure that has served the country well since 1993 and has strong job creation credentials, then we will destroy the chance for many regions to take part in the economic recovery. That is why I welcome the detailed SLA. Unless the SLA is enforced and unless there are consequences if its targets are not being met, for both Enterprise Ireland and the local authorities, then it is not worth the paper it is written on.

I welcome the notion of the centre of excellence within the micro and small business division of the Department. That has to be robust, well staffed and well resourced. The Minister for Finance, Deputy Noonan, when he presented the budget in October last, announced that there would be a big initiative in 2014 about the range of supports that are available for business, putting them all in one area and supporting them with a big PR campaign, yet the Minister of State, Deputy Perry's, budget for promotion in the Department was cut by 17%. On the one hand, there is this Government announcement that they will provide more information about the supports that are available and on the other, they cut the ability of the Department to get that information out there. There is no sense in us creating a structure like the LEOs with a strong SLA unless it is properly budgeted, unless they are properly run locally and unless there is proper local accountability to the communities that they serve. If we create another super quango within the local authority, we will choke the chance of economic recovery and entrepreneurial activity and we will frighten those who have a business idea away from setting up a business and they will either continue on the live register or take a job if they are lucky enough to be able to get that chance. We cannot do that. No doubt while the Minister of State, Deputy Perry, is in the position, given his own track record, that will not happen, but he will not be there forever. We will not be in this House forever.

The structures that we put in place now, even though they will be reviewed every three years - that is another welcome idea - need to be robust enough to deliver to a community with high expectations. While they need to be robust, they need to be flexible in terms of where business is going and far more embracing of technology and business trends. For instance, for many local communities in which the LEOs will operate, the core business is retail, their core employer is retail and the core economic driver is retail. The county enterprise boards had a mixed relationship with the retail sector. Some supported the retail sector and some others did so as long as there was not displacement, but the LEOs, as the local enterprise driver, need to embrace retail from the start and be the agencies that drive employment in retail, push retail into new technologies and give it the support available because a local enterprise office has to respond to local enterprise conditions and, around the country, retail is where it is at for the business community. There needs to be a focus from the start within the LEO structure on retail.

A number of the local authorities, my own included, have put the units in place to take responsibility for local festivals, tourism projects and local investment, and the Minister of State made brief mention of it in his speech. That is all welcome. A strong unit, focused on enterprise but reaching out to all of the assets of any particular county, is something we all encourage and needs to get the support.

Every LEO around the country should also develop a relationship with the diaspora, with the Irish abroad who may want to come home and set up a business, the Irish who cannot come home who have set up their family lives across the world but who still have an Irish identity, and many Irish who moved abroad in various waves of emigration and are making major business decisions in companies across the world. Every local LEO should have a database of persons from within its area who are abroad, including where they are and what positions they hold, to use to promote the county and its services. They can use that range of people as part of their mentoring. One does not have to be physically in a place anymore for mentoring, and somebody who has been very successful in business can be made available to an LEO client through Skype or some sort of online presence. Many of those who have left this country want to be asked to serve in some way and the LEO structure offers those in business and technology a way to do that.

I continue to have reservations. I have huge respect and regard for Enterprise Ireland and I see what it does, but I am still not convinced - we fleshed this out with Enterprise Ireland and the Minister of State at the Joint Committee on Jobs, Enterprise and Innovation - that it understands local business that merely wants to get on with the job, that does not want to be a high potential start-up, HPSU, that does not want to take part in trade missions in whatever country is the latest growth market, but that wants the information it needs to provide a local service. God knows, to open a business in this country, the volume of information one needs to have is massive. That is one issue we need to look at and my party will be looking at in terms of its amendment.

Second, on the budget, it is not good enough to place an expectation on this structure, as we are in the LEOs, without properly resourcing it and giving it an adequate budget. In fairness, €18 million, in the context of the Department's budget, is not good enough and will not go anywhere near the kind of ambition Deputy Perry has, and we all share, for the LEO structure.

Third, the Minister of State should look again at some sort of formal involvement for local elected representatives in the running of this. We cannot keep handing power from local elected representatives who have a mandate to the full-time officials of each local authority - this Bill will do more of that - and reducing the role of the local elected representatives I mentioned in the service level agreement. Their role needs to be more robust than that. My party's amendments will address that. I hope the Minister will be open to those amendments on Committee Stage.

This needs to roll quickly. This has been a long time in the pipeline. I am aware there have been all sorts of difficulties, but it needs to roll quickly and consistently. There is no sense in us, in Mayo, having a fantastic operation and our neighbouring counties having not as good an operation. Business is entitled to the same level of service from each of these LEOs across the country no matter what part they are in.

We all have huge ambitions for local enterprise. One of the lessons that has been learned from the past number of years is that we have got to go back and give more support to our local business people and those who want to set up businesses. Those ambitions are invested in this local enterprise model.

They have big shoes to fill, given the success of county enterprise boards over the years. We all want them to succeed and the amendments we will table on Committee Stage are to assist them in that regard. I hope the Minister of State will be in a position to accept the amendments. Most importantly, however, let us get this model rolled out and into operation around the country.

I am here on behalf of Deputy Jonathan O'Brien, who had to go away unexpectedly. I am somewhat at a disadvantage because I have not read the service level agreement. In fact, I did not know that one was issued yesterday. I cannot blame the Minister of State for that, however, because if I did not know I would be speaking on this Bill this morning, he cannot have known it either.

I will supply a copy to the Deputy.

I thank the Minister of State. Some of the matters I will address may be covered in that document and, if so, I ask the Minister of State to forgive me.

I have always looked on county enterprise boards as fulfilling three broad tasks. First, they worked in geographic areas and industries which, because of their scale, did not attract the attention of IDA Ireland. Second, they worked in smaller towns in rural areas without a population mass to attract the IDA's attention. Third, they also worked to support social enterprise as well as the strictly for-profit enterprises that we all try to focus on in these straitened times. In considering any legislation to change the current system of operating county enterprise boards, we want to see that those three things are protected as a minimum and, if possible, improved upon.

There is nothing that operates so efficiently and effectively that it cannot be improved. Sinn Féin will not oppose this Bill today, but I am advised that we will table amendments to enhance the provision of the scheme and minimise the risk of unintended consequences. There can often be unintended consequences when one is introducing such legislation.

The Bill covers a hugely important area. Some 99% of enterprises are SMEs, and these account for over 70% of employment and are spread across all communities and regions. County enterprise boards have played a key role in developing and supporting this sector. They set out to provide a seamless and comprehensive set of supports from start-up and consolidation to growth and sometimes even the export of goods. That sort of seamless system of supports must, at a minimum, flow from this legislation. This concerns the integration of business supports and structures.

The beauty of county enterprise boards was that they were rooted in the community. Small business people did not feel they were walking into officialdom when they visited county enterprise board offices. The Minister of State and I both know the same people from the Sligo and Leitrim county enterprise boards. They had a different way of thinking from local authority officials, who had budgetary and many other responsibilities also. They had to stick within their budgets and ensure that essential services were provided in line with the county development plan. County enterprise board staff had a different framework and a different way of thinking. They were looking for opportunities and explored the potential of business ideas to provide local employment. They worked with people to that end, but it can often be difficult to measure the value of that work. County enterprise board staff could spend days working with somebody, yet not one job might emerge. Does that mean their time was wasted? I do not believe it does. It was a process that people had to go through to be satisfied as to whether there was an opportunity involved. I believe that was a good investment in time.

Having looked at the legislation, I have some concerns that that kind of free thinking - as opposed to the narrow view of some offices - might now change when this function goes to local authorities. I certainly share the concerns that have just been expressed by Deputy Calleary. There is a risk that we will de-democratise this whole process if we put it solely in the hands of officials. That has to change. If we are talking about empowering local government, it has to be about more than adding functions to local government, while keeping elected representatives at arm's length from the operation of those functions. Empowering local government should mean empowering local communities. The only way we can do that is by giving greater, not less, power to those who are elected by such communities to represent their views.

Sinn Féin supports the real empowerment of local government. We also support the idea that local government should play a greater role in the economic development of local areas. That does make sense. A good example, from which we can learn, is to be found in Belfast. The Belfast authorities are actively promoting economic development for that city.

Part of the problem with the county enterprise scheme was that both local authority staff and county enterprise board officials would love to have been able to get out and do that promotional job of selling. However, they did not have the funds to do so. They were operating on a shoestring budget and I do not see that changing any time soon with this legislation unless adequate funding is provided.

The first aspect of county development boards was that they touched on businesses and local areas that did not enjoy the support of IDA Ireland. This was particularly the case with smaller towns and villages in rural areas. I am struggling to see how this legislative change will make it easier for somebody working in a small town or village to envisage a viable business that could be of benefit to such an area. I also struggle to see how the changes being mooted in this Bill will make it better or easier for entrepreneurs, or how it will provide additional supports to such people. Perhaps the Minister of State can help me understand that a bit better. Perhaps it is in the service level agreement, which I have yet to read.

There should be a single point of contact in looking for support. Starting a business is a big risk and people are dealing with uncertainty. It is more difficult now because of difficult negotiations with banks. People need to focus on the business, not on form filling or bureaucracy. In providing support in working through regulations and identifying what is available, including hard and soft support, a single point of contact would be welcome in the new local enterprise office. We cannot have people wondering to whom they should go after this or the next person.

Many Government programmes such as the loan guarantee scheme, micro-enterprise loans and tax support are underperforming. The figures given by the Minister of State demonstrate this point. That is partly because many people do not know about these programmes, which is a damning indictment. It means our communication network and those who should be supporting and advising small and medium-sized enterprises are not getting the message across. We must be 100% certain the new arrangement will, at a minimum, ensure what is available is communicated to those who want to set up enterprises.

Something else should be done in conjunction with this measure. The Minister of State probably agrees with me, but, because of his role in government, he cannot say anything about it. There is a risk that good legislation which I hope this is what this will eventually be will be of little value unless we change the system of rates for businesses. This is particularly true of small and medium-sized enterprises. The current system of having a notional, rateable valuation and assessment of rates is regressive and unfair. It can only be fair if it is linked with the profit and income derived from the business. If there is one single thing that scares people and stops them from going into business and also forces businesses to close, it is the current regressive system of business rates. I asked the Minister of State to persuade the Government to examine the system of assessing and billing businesses for rates. It need apply only to small and medium-sized enterprises. If we had something like this, along with this legislation, it could make a huge difference. I am told his proposals were included in the programme for Government and that there was not much consultation with the smaller medium-sized enterprise sector or the existing county enterprise boards. County enterprise boards have contacted me and probably every other Deputy in the House and believe there was inadequate discussion, even though it had taken three years for the legislation to be tabled. The delay creates uncertainty and people do not know what is going to happen. Perhaps it has undermined confidence in the county enterprise board structure. Small and medium-sized enterprises need certainty and a stable environment. They need certainty that the support will be available when they need it and that it will be available in three or five years. I hope the protracted timescale in introducing legislation has not dented this certainty.

The county enterprise boards have built up knowledge, experience and expertise in local areas. We need to see something in the legislation or the guidelines associated with the legislation and the policies to ensure the experience, knowledge and way of thinking to which I referred translates to the new bodies. We will have questions on the transfer of assets and liabilities which may be covered in the service level agreement. Are physical assets being transferred to local government? Will liabilities be transferred to Enterprise Ireland or local government?

With regard to staffing, I am sure a commitment will be given that the terms and conditions of workers will be honoured. I am aware that there are long-term temporary contract workers involved and we seek to ensure their terms and conditions will be covered under such a guarantee.

Sinn Féin does not oppose the Bill, but it will table amendments. We see this as an opportunity and the key criterion is whether the outworking of the legislation will mean disadvantaged areas like the one I represent will be better or worse. Will assistance be provided for areas that do not have the benefit of IDA Ireland support? Will there be positive discrimination and extra support for particularly disadvantaged areas? Will there be the minimum of bureaucracy and form filling for those who have the idea and the commitment to set up an enterprise? Will it cover social enterprise, those enterprises that do not set out to make a profit but to make a better community? We will also look at the risks of moving responsibility for local development further from the people elected to represent the views of local communities.

I propose to share time with Deputies Richard Boyd Barrett and Catherine Murphy.

Examining the Forfás annual employment survey for 2012 it is difficult to discern what is being done by State bodies such as Enterprise Ireland, Shannon Development and Údarás na Gaeltachta to promote Irish enterprises and job creation. What makes it even more difficult is the footnote at the beginning of the survey that states, "The population of firms covered in the survey includes companies receiving assistance at any stage from these agencies or their predecessor agencies". In effect, this renders the numbers in the survey inaccurate as a representation of the work being done by these State bodies.

The Minister for Jobs, Enterprise and Innovation, Deputy Richard Bruton, has repeatedly boasted that in 2012 the 35 county and city enterprise boards created 4,858 full-time jobs, but he has failed to mention that, according to his figures, the net increase in the number of full-time jobs in firms engaged with the enterprise boards was only 256. According to him, speaking in the Dáil, in 2011 and 2012 his office spent over €1 billion and in that period companies which at some stage in their history had received assistance from IDA Ireland, Enterprise Ireland, Shannon Development and Údarás na Gaeltachta created a net increase of 9,754 full-time jobs. In the same period 35 county and city enterprise boards spent €30.2 million on current investment and €40.8 million on capital investment and there was a net increase of 456 jobs, approximately half of which were part-time. These figures seriously question the claims of the Department of Jobs, Enterprise and Innovation in the Action Plan for Jobs that the Government does not create jobs, as it is successful businesses and entrepreneurs that do so; it is obvious that the Government does not create jobs and that companies and entrepreneurs that have money thrown at them also seem to be struggling to do so. Every time IDA Ireland and Enterprise Ireland announce a new project, there is a barrage of statements and public relations reminders on what a good job they and, by association, the Government are doing to stimulate the economy. Two weeks ago the Minister quoted Central Statistics Office figures which indicated that the number in employment had increased by 58,000 in the year to the third quarter of 2013, with promises of another 48,000 jobs in 2014. How many have been created with the aid of State agencies is not clear, but if the 2012 figures are anything to go by, it is only a fraction. We are eagerly awaiting the 2013 Forfás employment survey.

What is excluded from the public relations effort is a discussion of the number of jobs the Government has destroyed. The position on the ground is quite stark and certainly does not provide scope for self-congratulation. In October Mr. Michael Taft collated data from both the ESRI and the Nevin Economic Research Institute, NERI, to give a rough estimate of the effects the previous two budgets had had on employment. Looking at the outcome of six fiscal adjustment measures, he estimated that budgets 2012 and 2013 combined had resulted in the destruction of between 43,000 and 57,000 jobs. He noted:

In other words, if there were no fiscal adjustments, there would be approximately 50,000 more people at work. And this does not count all tax measures (e.g. capital). That is a lot of jobs. Even if this crude estimate is off by 25%, this is huge.

I can provide a further insight into Mr. Taft's research. It indicates that the Government had cut public investment by approximately €1 billion in the previous two budgets, with the NERI estimating a loss of between 18,000 and 19,000 jobs and the ESRI estimating a loss of between 9,000 and 10,000 jobs, although the ESRI admits the estimate in this category is an underestimate. The Government has raised approximately €1 billion in indirect taxes, mainly in VAT and excise duties, with NERI estimating a loss of jobs of between 9,000 and 10,000. The Government has cut social transfers by approximately €1.3 billion, according to the budget papers, but some have not been implemented. Therefore, we can estimate the cut at an even €1 billion, with the NERI estimating a loss of jobs of between 9,000 and 10,000. Since the Government has taken office, public sector numbers have fallen by 12,000. The ESRI estimates the number of job losses at 14,500. The level of non-wage consumption has remained stable in the past two years, but in 2014 the Government intends to cut it by approximately €300 million, with the NERI estimating the number of job losses at between 3,000 and 3,500. Property tax is being introduced in two phases, with the ESRI estimating the number of job losses, when property tax is implemented in full, at between 1,000 and 1,250. What is clear from these figures is that all of the fiscal policies pursued by the Government are hurting the people, but most damaging of all are the cuts in public investment, an issue I will address.

One question concerning the Government’s preoccupation with foreign direct investment must be discussed. The Minister and others in the little neoliberal cabal that speckles the Government benches relentlessly and unquestioningly repeat the free market dogma that foreign direct investment and private sector initiative will perform the magic in looking after the economy only if our legislation - now a product competing in an international market of norms - is tilted far enough in favour of big business that they might be attracted to use us for a while. In this arena where legal systems are for sale, social protections for workers, environmental protections, decent wages and anything resembling a fair tax system are about as attractive as syphilis. This dependence undermines our ability or inclination to regenerate our own industry with anything resembling imagination; the dependence becomes stronger, the majority of profits leave the country and the likes of PricewaterhouseCoopers advise on how to best avoid taxes to enable these companies to stay longer.

Dr. Proinnsias Breathnach has recently pointed out that while US firms invested $129.5 billion in Ireland in the five years to 2012 and there was a total foreign investment inflow into Ireland of nearly €30 billion in 2012 alone, the vast majority of this inflow goes nowhere near productive activity; roughly 60% goes into financial activity, mostly financial intermediations which "have little connection with the real world where people work in producing goods and services". Given this situation, the question that arises is what the Government is building in Ireland, if not a tax break funnel for international capital, with little or no lasting benefit for the people. When these figures are reported in the press, minus any meaningful context, the Government gives itself a little pat on the back. Dr. Breathnach provides a little context when he questions how so much foreign direct investment in the country can be coupled with a drop in employment of 8% in foreign firms in the past five years. He states:

The main part of the answer lies in how statistics agencies measure foreign direct investment, FDI, flows. Thus, earnings of foreign companies that are reported in an economy but are not taken out are considered to be "reinvested earnings" (even though very little of it may be directed to productive activity) and are counted as an inward investment flow. Last year, these earnings accounted for three quarters of the total recorded FDI inflow into Ireland. Most of these earnings actually originated abroad but were declared in Ireland for tax purposes.

There are other avenues that the Government could take to create jobs, one of which was touched on by Mr. Taft. He argues that the State must be willing to contemplate being an employer of last resort through local authorities or the provision of social employment. The idea behind the State being an employer of last resort is that in times of high unemployment and when the private markets cannot employ enough people who want to work, the State should employ people in the interim until the market recovers. This has been done many times and with great success. As Mr. Kieran Allen and Mr. Brian O’Boyle remind us in their recent book Austerity Ireland, de Valera and Fianna Fáil proclaimed that it was the duty of the State to guarantee a right to work. Roosevelt’s New Deal, in circumstances very similar to today’s, put hundreds of thousands of people to work in building the public infrastructure of the United States, while today China has avoided the worst of the recession partly because it has ignored the failed advice of the IMF, borrowed a lot of money and embarked on a massive public spending programme. In 2013 alone it increased spending on health care by 27%, on education by nearly 10%, on the environment by 19% and on culture, sports and media by 9.3%. Its unemployment rate now stands at around 4 %; it seems, therefore, that government intervention works, not just when one wants to protect the bondholders of failed banks but also if one cares to protect people's jobs and livelihoods and the institutions and services that increase standards of living across the board.

The Government might state it is not the role of the State to provide jobs, but it forgets to mention that that viewpoint is strongly ideological, namely, a neoliberal belief in the primacy of the demands and powers of the free market. History has proved and is proving that ideology to be socially bankrupt and corrupt in that it exclusively favours corporations, their shareholders and CEOs. It is also now clear to the people that any power that professes we need less government involvement in providing social protections such as employment, health care, education and transport-----

I ask the Deputy to adjourn debate. He has reached the end of his time allocation.

Debate adjourned.