I thank the Chairman and members of the committee. As the committee is well aware, Ireland is in the middle of an unprecedented unemployment crisis. According to the latest quarterly national household survey, there are 302,000 people unemployed, of whom 60%, or more than 182,000 are long-term unemployed. The rise in long-term unemployment is particularly striking when for the same quarter in 2008 the rate was only 1.7% whereas now it is 7.6%. Of those who are long-term unemployed, the 25 to 44 age group faces the biggest issues of debt in terms of personal and mortgage debt.
In recent months the live register has fallen for a number of reasons. Unfortunately, it is not that everybody is finding a job; although some are, some are returning to education and training, some are emigrating and others are not making the transition from jokseeker's benefit to jobseeker's allowance. This was an issue the National Economic and Social Council took note of in its report on issues around unemployment and was the main reason for the fall in the live register at the time. People were not making the transfer from jobseeker's benefit to jobseeker's allowance. This has very serious implications for those unemployed people because it effectively means the supports available to unemployed people to get back to work are not available to them because they are not in receipt of a payment.
We have set out our submission in three parts, the areas which are the responsibility of the committee, jobs, social protection and education and have looked at developments in those areas, in particular, the action plan for jobs, Pathways to Work and the development of SOLAS and its implications for unemployed people. As the committee is aware we have seen an amazing reduction in employment in recent years from 2.15 million people in work in the third quarter of 2007 to 1.81 million in the latest quarterly report, a reduction of 16%. The labour force has reduced but not as dramatically by 6%. It is striking that the rate of job loss is slowing down. Finding replacement jobs will be a particular challenge facing Ireland. Within the Action Plan for Jobs 2012, launched in February 2012, a target has been set for an additional 100,000 people to be in employment by 2016. At one level that appears to be an ambitious target given where we are at and given where job creation is at, but at another level it is not sufficiently ambitious, given the scale of the unemployment crisis facing Ireland and the social and personal issues that arise from that unemployment.
We concur with the Taoiseach's comments on the importance of a job but we do not agree with the Government's claim that governments do not create jobs. The Government employs one in six people of those who are employed. It is clear many young people are well educated and are probably the best educated generation we have ever had and yet the obvious employer for them is the State itself. At at time of unemployment crisis, the State is pulling back from creating jobs and, therefore, unfortunately, many young people are emigrating. These young people are bringing their skills and abilities to other countries in the development of their societies and economies and public services.
An issue highlighted in the programme for Government and included in the action plan for jobs is the development of supports for micro enterprises and small business and the absorption of the city and county enterprise boards within the local authority structure. That was flagged in the programme for Government and is mentioned in the action plan for jobs, yet in terms of action and when it will happen, it appears that little will happen this year. We are concerned that in the interim that does not mean the unemployed who are trying to respond to their unemployment, through self employment, are not blocked off from supports. At a time of change it is critical to maintain supports and keep them in place.
We liaise with employers who are creating jobs. We track jobs announcements as well as redundancy announcements and get information out to employers on the PRSI exemption scheme about the Revenue job assist. The actions outlined in the action plan for jobs around those are welcome. It is critical that there is a good flow of information between service providers and unemployed persons and service providers and employers in order that people are matched up with the opportunities available. They are few and far between and it is critical that the administrative systems run as smoothly and as professionally as possible. In particular, Revenue job assist, can offer a win-win to the employer and the unemployed person, particularly the unemployed person with children.
Chapter 6 of the action plan for jobs deals with developing employment initiatives within the community. We were struck by the absence of the community and voluntary sector and community based projects as the focus is on private sector SMEs. We are keenly aware from our affiliates that community organisations play a significant role in local development and responding to local needs in a flexible and accessible manner. In the development of a community investment fund or supports for small and medium size enterprises it is important that the community and voluntary sector and community based initiatives and their work on the ground is supported. Similarly, the role of social enterprise is critical and it is welcome that the Department of Jobs, Enterprise and Innovation is identified as the lead player because it appears to be an issue that sometimes falls between the cracks, partly because the word "social" is in the title, and it is seen as somebody else's responsibility. It has been identified as an area where significant jobs could be created with the right supports. It is important to consider that issue and the whole area of micro enterprises in terms of supporting local communities to respond to both a lack of services in their areas and a key issue of lack of employment.
The role the Department of Social Protection plays in the lives of unemployed people is critical. There has been a significant change in that regard, in that the Department has absorbed FÁS employment and community services and the community welfare officers. The service is being redesigned and its title is the national employment and entitlement service. We are probably one of the few organisations that like the name. While we understand it will have a different title we would like one that indicates what it ought to do, such as employment and entitlement. It is important in redesigning the system and bringing together social welfare, employment services and community welfare services that at the heart of those developments is a culture of enablement that tries to provide a first class service to unemployed people and other social welfare recipients, ensuring people have access to their entitlements in a timely fashion and that they are fully informed of the employment, education and training options that will be available to them. Getting the design and delivery correct would generate more savings and lead to a more efficient and equitable system. Too often in the public area, social welfare reform is talked about only from the perspective of addressing fraud. Fraud, as most people understand the word, is a relatively small issue. The issues around control and misinformation are the bigger ones, particularly misinformation and misunderstanding. If the service was designed well and delivered well, that would address those issues.
That presents challenges for the Department because, on the one hand, it has a payment and control role and, on the other, it is moving into areas where it will have an enabling role. Those roles do not necessarily sit together and the Department could move in opposing directions. We feel it is particularly important that the Department gets it right and that it engages with unemployed people, provides a good service to them and ensures front line staff have the information, skills and knowledge to deliver the service.
The Pathways to Work document refers to improvements in the system in the future and trying to ensure long-term unemployment does not emerge as an issue but, as we are all keenly aware, this issue is with us. The document targets a reduction in long-term unemployment of 75,000 by 2015. That means 75% of new jobs will need to go to the long-term unemployed, otherwise they will be on a merry-go-round going out one door and in the other and it will be questionable to consider them to be off the live register. It is an ambitious target even if efforts are made to ensure the long-term unemployed have access to these jobs and to the right education and training courses to fill them. Given where job creation is at and the number of long-term unemployed currently, which will continue to increase, even if the overall number on the live register is steadying on a monthly basis, that is a huge challenge for all of us. It is critical that the culture within the system is right, the system itself is right and good relationships are developed with employers, SOLAS, the HEA and anybody else who can play a role in job creation, education and training delivery and supporting people to get back to work.
Page 9 of the Pathways to Work document refers to the taxpayer as if unemployed people are not taxpayers. They pay VAT and most of them paid income tax when they were employed and they look forward to doing so again. It is important that we do not refer to taxpayers as if they are floating in limbo when they may be unemployed and struggling with debt repayments.
The issue of unemployed people who were self-employed needs to be addressed. In future, the self-employed need to be given the choice to be part of the PRSI system. Their only access currently is via their pension. The advisory group on tax and social welfare was due to examine this issue and we regret that, according to the action plan on jobs, that has slipped to the fourth quarter of this year, even though the call for submissions was made last November. We are concerned about that. In the interim, that will do little for those who were self-employed and are now unemployed and trying to access supports. They often find themselves in the same position as those who failed to make the transition from JB to JA.
The unemployed can access a range of employment programmes. We are conscious on the basis of representations from our members and affiliated organisations that community employment, CE, plays a key role in many local communities to underpin the delivery of badly needed services and the provision of badly needed jobs. In many communities, CE is a key resource to employ people. However, better links are needed to broader employment support services in order that people can progress better from CE. CE has been successful in this regard where it is specific to a sector. For example, training has been an integral part of child care and people have progressed to jobs, particularly in the community and voluntary sector. This, however, also raises the challenge of getting the wider labour market to appreciate the work done on CE schemes. The cuts to the training grants on CE will have a negative impact on success and progression.
JobBridge has provided invaluable experience for young people seeking to find work and older unemployed people looking to change direction. However, serious concerns have been raised with us about the number of minimum wage positions on JobBridge which should be filled as jobs and not internships and the number of senior positions being advertised. Why would a company senior position be filled by an intern? We have also had feedback from well qualified unemployed people who are concerned at the number of jobs in their sector being advertised under JobBridge, as they feel that is curtailing their ability to return to paid employment.
The maintenance of the basic rate is critical and the wider supports are also critical to enable people to manage and to return to work.
A number of issues arise regarding education, given where the better paid jobs are likely to be generated. It is a challenge to ensure sufficient provision for quality education and training that will support unemployed people to fill positions and get back to work. Matching skills has been a challenge and given there are skills shortages in some areas in the midst of an unemployment crisis, this is criminal.
The knowledge of front line staff in the NEES and SOLAS will be critical in order that they can give people good advice and guidance. This is particularly the case for older unemployed people. Younger people may go in one direction but they can change direction. However, as one gets older, one has fewer options in that regard. That needs to be borne in mind. It is critical that the design and delivery of education and training programmes is right and that front line staff are aware of them. For example, we liaised with the HEA regarding the Springboard initiative but a HEA staff member rang a social welfare local office and when he said he was ringing about the initiative, the welfare official replied that he had never heard of it and put the telephone down. If that is the response one official is getting from another, then what kind of response is an unemployed person getting? If an unemployed person says he heard something about the initiative on the radio, he might be told it does not exist. Information flow to front line staff with whom the unemployed engage is important. These staff need to know and if they do not know, it will be difficult for claimants to hear about and avail of time-limited initiatives such as Springboard.
At a time of austerity, reform is being equated with retraction and cutbacks. We need reform and services need to be delivered in a more effective and efficient manner but we also need to not lose sight of the fact that investment in Ireland's tomorrow is critical. Education will play a key role. If the Government is serious about the knowledge economy, it must invest and deliver on education at all levels but, in particular, through further and higher education as people return to education to reskill. We have skills gaps currently and we must fill those positions. That will require investment and delivering for unemployed people.