I thank the committee for the opportunity to meet to discuss the European Globalisation Fund, EGF, in Ireland to date. We have already forwarded a briefing note to the committee which I hope it found useful.
The EGF is an EU fund which co-finances programmes of active labour market measures in support of workers who are made redundant as a result of the adverse impacts of globalisation. The fund provides specific, once-off, time-limited support to facilitate the reintegration of redundant workers into the labour market. The EGF has a number of strict eligibility criteria governing when and how applications can be made by an EU member state.
In summary, applications can be made when the number of redundancies is at least 500 in a specific company and any of its suppliers or downstream producers within a four month reference period, or at least 500 in a NACE 2, statistical classification, sector in a nine month reference period. There are also strict eligibility criteria regulating what constitutes globalisation. Under the original 2006 regulations these criteria centred on circumstances where there was major structural change in world trade patterns leading to a serious economic disruption, notably a substantial increase of imports into the EU, a rapid decline of the EU market share in a given sector, or a delocalisation to third countries. Under a subsequent amending regulation in mid-2009, a temporary derogation was introduced which provided that another eligibility criteria could be used involving redundancies that were a direct result of the global financial and economic crisis. However, this derogation ended on 31 December 2011.
EGF measures may include but are not limited to job search assistance, occupational guidance, training and education, outplacement assistance, entrepreneurship promotion and aid for self-employment. Programmes must be completed within two years of the date of submission of the application. All EGF measures must, in turn, be co-financed from national funding sources. With the end of the so-called crisis derogation at the end of last year, the co-financing rate has reverted from 35% to 50%. Clearly national resources available to co-finance EGF programmes are finite and must compete with demands for funding of other labour market activation programmes across the entirety of the unemployed population as well as with demands for funding of other areas of expenditure. This impinges on both the upfront provision of such resources ahead of EGF approvals by the EU and the complementary or additional nature of such programmes.
Ireland first made an EGF application in 2009 through the then Department of Enterprise, Trade and Employment, which then held national policy responsibility for the EGF. In that year it made three applications in support of up 2,840 workers at the Dell computer manufacturing plant in Raheen, County Limerick, 653 workers at the Waterford Crystal factory in Kilbarry, County Waterford, and 910 workers at the SR Technics aircraft maintenance facility at Dublin Airport.
In 2010 the Department of Education and Skills, to which policy responsibility for the EGF had transferred, made the first Irish sectorial application in support of almost 9,000 redundant construction workers. The European Commission subsequently requested that this application, the largest of its type to that point, be broken down into three separate NACE 2 subsectors. On 29 February this year, the Department submitted an application in support of 592 redundant workers at the TalkTalk call centre in Waterford and a number of ancillary enterprises.
In the Department's written brief prepared for the committee, there is an overview of the number and types of EGF applications submitted and approved across the EU to date and details of the Irish programmes. Total EGF potential expenditure across all approved Irish programmes is €93.2 million, of which €60.6 million is available from the EU.
Under the EGF regulations a member state has up to ten weeks after the reference period to submit its application to the European Commission. Applications require to be approved by the Commission, the Council of Ministers and the European Parliament. The full application and approval process is a lengthy and complex one which can take on average between seven to ten months for completion and the actual release of funding to a member state. The Department utilises the statutory collective redundancy notifications issued to the Minster for Jobs, Enterprise and Innovation as the primary early warning system. The redundancy payments system is the primary verifiable documentation used to satisfy the EU, including its audit authorities, of the actuality of redundancy numbers.
In preparing EGF applications and implementing EGF programmes, the Department has in the main to date worked through existing structures and service providers. They are on the ground and have local and regional knowledge to engage in the first instance with employers and workers to assemble relevant data and assess the needs of workers in terms of guidance, training, etc.
To date, three of the six approved EGF programmes in Ireland have been completed with in excess of 10,000 guidance, training, education and enterprise interventions having been provided to almost 4,000 individual workers. Final reports have been submitted in respect of the completed Dell programme in December 2011, Waterford Crystal programme in February 2012 and SR Technics programme in April 2012. The European Commission, in turn, has up to six months after the receipt of all relevant information on a programme to formally close that programme. None of the three programmes has yet been formally closed by the Commission. However, we have indications from the Commission of the likely amounts to be approved which are included in the written brief. The three construction sector programmes are due to finish by 9 June 2012 and the TalkTalk application is under consideration by the European Commission.
The Minister of State with responsibility for training and skills, Deputy Cannon, initiated a review of the three completed EGF programmes to date late last year with both written and oral submissions from key stakeholders, notably the representatives of the redundant workers themselves. The point of this is to examine how we build on the strengths of the process while learning of areas where improvements can be made. This will ensure we put our best foot forward in any further applications.
