Is it agreed to conclude the meeting between 1 p.m. and 1.15 p.m. as members must attend other meetings? Agreed. I invite the Minister to make his opening statement on the Estimates.
Vote 34 - Jobs, Enterprise and Innovation (Revised)
I thank the Chairman. I do not know whether the statement has been circulated. Does the committee want me to go through it?
It has been circulated.
This is the last year the Estimate will be presented in this format. From now on, we will move to a performance budgeting format. It will be much easier for members to see the impacts we are achieving for our money and it brings together what were two separate statements. We had the annual output statement which purported to show targets and outputs with some programme budgeting and the Estimate process in which we are now engaged and which was entirely divorced from it. Members went through long lists of numbers but did not have the corresponding impacts to make a balanced evaluation. This is being worked on. Having spent most of my elected life on the other side of the bench, so to speak, it will be an improvement and a better and more meaningful debate will be possible than under the old format.
The Department of Jobs, Enterprise and Innovation will be core to the rebuilding, or reinventing, of this economy. The name on the can is the Department of Jobs, Enterprise and Innovation and our target is to ensure that is what we deliver. Our remit is also to ensure fair competition, protect workers and protect consumers. An effective regulatory mechanism working to high standards, protecting consumers and protecting workers and being regulatory compliant is just as much part of a competitive edge as costs and so on. We must look at being able to develop a system where compliance is the norm and that we do not have excessive costs that burden people doing business. We must have effective intervention where mavericks are unwilling to comply. We need to develop a compliance culture which has been developed in many parts of Irish life but not everywhere.
The 2011 Estimates reflect the transfer of certain functions between my Department and the Departments of Social Protection and Foreign Affairs and Trade from 1 January and 1 June, respectively. Responsibility for redundancy and insolvency payments under the social insurance fund transferred from my Department to the Department of Social Protection with effect from 1 January. Since 1 June the Minister for Foreign Affairs and Trade has taken on a role in trade promotion. Both these steps were taken to target Government intervention in these areas through the most appropriate administrative mechanism and I am sure they will deliver positive results.
The gross expenditure Estimate for the Department for 2011 totals €900 million. Appropriations-in-aid amount to €55.6million, so the net expenditure is €844.8 million.On the current side, it is €336.9 million while on the capital side, it is €507.9 million. This takes into account a targeted saving of €14.6 million on programme payroll and non-pay administrative savings for 2011 agreed in the context of the development of the national recovery plan. A number of my Department's agencies expect to generate own resource income and if one adds that in, the total gross expenditure comes to €1.011 billion.
The allocation of the money across the six programme areas is: €515 million, or 51%, on supporting enterprise and restoring competitiveness; €383 million, or 38%, on science, technology and innovation; €46.5 million, or 5%, supporting better workplaces and peaceful industrial relations; €31 million, or 3%, on better regulation and consumer issues; €14 million, or 1%, on administration of strategic goals; and €20 million, or 2%, on obligations to contribute to international organisations and other miscellaneous payments.
The programmes supported by the Department, its offices and its agencies are crucial in achieving a return to economic growth through promoting the export potential of enterprise and enhancing innovation. They are, and will continue to be, monitored and assessed for relevance and effectiveness. They must all continue to show their worth in addressing our problems and I assure the committee that if they fail to do so, they will be reformed as effective contributors or removed from our suite of offerings.
The Department is currently engaged in drawing up its strategic plan and it is obliged to present it to the Minister within six months. We are seeking to engage widely so the plan is well focused, sets realistic targets and reflects the priorities of the new Government.
I will outline some of the key objectives across the programmes. Under restoring competitiveness and supporting enterprise, the budget is €515 million which includes €401 million of Exchequer funds, my Department's administrative costs of €4.8 million and the agencies' own resource income of €108.6 million. I should point out that unlike in other areas of capital investment, demands for enterprise supports have not decreased during the current downturn. Indeed, demand for support from our agencies has risen. The enterprise agencies currently support more than 550,000 direct full-time and indirect jobs, or 30% of the entire workforce in the economy, and they are charged with growing these numbers substantially in the coming year.
In the foreign direct investment arena, the IDA target for direct new jobs is 62,000 by 2014, the target for new investments is 640 by 2014, the target for jobs outside Dublin and Cork is 50% by 2014 and the target for green investments from emerging markets by 2014 is growth by 20%.
It is worth noting that in spite of the difficult global economy, in which the OECD has indicated foreign direct investment declined by 8%, foreign direct investment in Ireland has increased significantly in 2010 and so far in 2011, with a strong pipeline remaining in place. Indigenous Irish companies have also done well achieving €14 billion in export sales in 2010, including a record €1.95 billion of new export sales. As Deputy O'Dea pointed out earlier, this represents a 70% recovery of lost exports and, as he rightly said, we are not complacent that it represents the turning point but it is a sign that exports are doing well in the indigenous sector. The 10% growth achieved last year is the best for a very long time, albeit a bounce back from some difficult times.
Last year IDA Ireland approved 126 investment projects, creating almost 11,000 new jobs. Shannon Development approved a further 15 projects while Enterprise Ireland supported 80 new high potential start-ups. Additionally, the county enterprise boards saw significantly higher levels of engagement with the micro-enterprise sector in line with increased demand.
For 2011, the priorities will remain jobs and export growth for all the agencies of the Department. On top of the IDA targets which I mentioned, Enterprise Ireland will help strong sustainable and innovative Irish enterprises to lead our return to national growth. Through enhanced offerings under the competitive job expansion fund, a new three stage "lean" offer, a revised graduate placement programme, new competitive start funds, venture capital development and contributions to development of the all-island marketplace, we will grow companies to become global competitors. These, coupled with our initiatives in the area of access to finance mentioned earlier - microfinance proposal and the partial loan guarantee scheme - will go some way to address companies' concerns in the area of growth and development.
While the achievements I mentioned reflect very positively on the work of the development agencies and bodies, they remain the benchmark against which we must measure ourselves in the coming year. We must, however, do better if we are to address our current challenges. Building relentlessly on our traditional strengths, namely, our high quality workforce, our low corporate tax, our creativity and innovation and our pro-business policies, will be essential if we are to continue to attract high quality international companies which will assist and grow innovative domestic concerns, ensuring Ireland's recovery. I am confident that this programme area will build on its current success in 2011 even within constrained budgets which we have had to adopt.
Under science and technology, investing in innovative products and services which anticipate and meet the emerging needs of consumers and society is recognised as the key to creating sustainable jobs and positioning Ireland as an innovation-driven location in which to do business. In this context my Department and I are committed to the development and delivery of a broadly based innovation agenda. Investment in science, technology and innovation represents a major component of this agenda. The Minister of State, Deputy Sherlock, has the lead responsibility in this area.
Funding under the science, technology and innovation programme within my Department amounts to €383 million. This includes €379 million of Exchequer funds, my Department's administrative costs of €1.9 million and the agencies' own resource income of €1.3 million. Funding is delivered primarily by Science Foundation Ireland, Enterprise Ireland and the programme for research in third level institutes, PRTLI. However, supports are also provided to the discover science and engineering awareness programme, the Patents Office, the Tyndall Institute and programmes delivered by the Irish Universities Association. IDA Ireland has a complementary role to play in promoting research and development through its allocation under the restoring competitiveness and supporting enterprise programme.
Major targets for 2011 involve driving Enterprise Ireland's high potential start-ups, HPSU, initiative to a target of 85 for the year, promotion of commercialisation of research to maximise economic return, increasing the number of technology centres to 16 by 2015 and establishing a cloud computing technology centre. On the Science Foundation Ireland side, among other things some 28 research centres will be assisted, 300 principal investigator, PI, research positions will be supported and the foundations energy research cluster will be supported to the tune of €6 million. PRTLI will ramp up operations in the Trinity biomedical sciences institute, NUI Galway's advancing medicine, arts and humanities areas and in the UCC biosciences arena to assist in ensuring an ongoing pipeline of research-related projects in third level institutions. These are but some of the programmes being undertaken in the RTDI area and they will place Ireland at the heart of all that is positive in this area for years to come.
The work being undertaken by my Department and its agencies under the strategy for science, technology and innovation is already having a real and positive impact on improving Ireland's competitiveness, not only in high-end innovative products but also across the enterprise spectrum. It is also meeting the objective of improving Ireland's international reputation for generating and using new technology and knowledge. For example, in 2010 some 750 indigenous enterprises undertook research, development or innovation projects. This enabled companies to maintain a competitive edge. In addition, IDA Ireland secured 37 high-value research, development and innovation projects for Ireland with an investment value of over €500 million. Effectively, almost half of all IDA Ireland projects are in the research and development sphere. Science Foundation Ireland operates a range of programmes designed to deliver a world-class standard of research activity.
Continued expenditure in this key area will be critical in the coming year. Key competitors for FDI, such as Singapore, Israel, Finland and Korea, have increased their spend in RTDI during the current recessionary period to prepare themselves for the economic upturn. We can and will be obliged to replicate this behaviour if we are to position ourselves to optimise returns on investments already made and those planned for the coming years.
Safeguarding the rights of those is extremely important. As members are aware, services in this regard are provided by the Labour Court and other bodies. Spending in this area is €46.5 million. Claims to the Employment Appeals Tribunal increased by 61% in 2010, compared to 2008. Overall these structures are coming under considerable pressure. Members will be aware that I have initiated a process to consider how this system can be streamlined and I believe there is significant support for those measures. I hope the consultation process will prompt the introduction of reforms.
The Health and Safety Authority will continue to place a focus on farm safety and the workplace in 2011. Some 14,500 workplace inspections and 3,000 farm inspections are planned. A dedicated team will be developed for the agri sector, particularly in light of the number and range of problems that have arisen in that area. The authority will also develop new approaches and measures to assist small businesses in their compliance with safety and health requirements. Deputy Kyne referred to that matter at the meeting of the joint committee this morning.
In the chemicals area, special support will be provided to industry to implement requirements of the registration, evaluation, authorisation and restriction of chemical substances, REACH, regulation and to address other EU demands. In the area of corporate services, a range of initiatives to support the implementation of the Croke Park agreement will be implemented.
As I mentioned at the meeting of the joint committee, in line with the programme for Government commitment to "reduce the cost of Government imposed red-tape on business, in part by streamlining regulatory enforcement activities" we are undertaking a rationalisation of a number of structures. The system involving the Labour Relations Commission, the Rights Commissioners, the National Employment Rights Authority, NERA, and the Equality Tribunal has become quite complex. I am of the opinion that there are potential gains to be made in this regard, both from the point of view of workers obtaining swifter responses to their needs and from that of having in place a more clear and certain system for employers. What is envisaged in this regard represents a win-win scenario.
The investment in the programme areas to which I refer is underpinned by my Department's programme to support better regulation, business and the consumer. The latter aims to promote high standards of corporate governance - the Office of the Director of Corporate Enforcement, ODCE, has a major role to play in this regard - and ensure that markets work in a fair and efficient manner, competition is promoted and consumer interests are safeguarded. These activities contribute to national competitiveness by providing a secure and stable environment for investment. This programme area provides funding for the activities of the ODCE, the Companies Registration Office, the Registry of Friendly Societies, the Irish Auditing and Accounting Supervisory Authority - which was established in the wake of the DIRT inquiry - the Competition Authority and the National Consumer Agency, NCA. The funding available is €31 million.
One of the priorities in this area is the consumer and competition Bill, which will merge the Competition Authority and the NCA. Work on the companies consolidation and reform Bill will also be a priority. The work relating to this Bill represents an enormous undertaking. There are already 950 sections drawn up under pillar A and those under pillar B have yet to be drafted. The legislation is a major item of work. The company law review group which has worked with the Department on this legislation is to be complimented on the amount of effort it has invested. There is a great deal of enthusiasm regarding the Bill which, when enacted, will make Ireland one of the best places in which to establish and operate companies. Those who have are working to produce the legislation deserve recognition.
The delivery of the Department's strategic goals across all programmes is enabled by the central supports provided by my Department's corporate services division. These supports include human resources, HR services, information and communications technology, ICT, services, financial administration, building maintenance and other services such as processing of freedom of information, FOI, requests and supporting Oireachtas business. The challenge posed by reducing numbers of staff in the Department and its agencies will be a major one during the coming period and will have to be addressed. Proper prioritisation of tasks and resources will be central to the achievement of our goals. The total funding available in this area is €14 million.
The final heading is the other services programme area. As stated at the earlier meeting, subscriptions to international organisations, etc., are made under this heading and the allocation relating to it is €20 million. All lines of expenditure under this heading are currently subject to in-depth critical review. As members are aware, the comprehensive review of expenditure is being undertaken in all Departments.
I accept that my contribution was unduly long. However, I hope I have provided an indication of what the Department does.
In the interests of clarity, I presume the most recently circulated version of the Minister's speech is the correct one. If it is, members may peruse it and then pose questions in respect of any issues that arise.
In the context of the Estimates, it is best to go through each subhead individually. Subhead A1 relates to administration. Are there any questions in respect of this subhead?
I do not know if it comes under administration but I notice that there is no increase in the allocation relating to the enterprise agencies. I take the point the Minister made, quite forcefully, at the earlier meeting of the joint committee.
That matter does not come under administration. We will deal with it when we come to the relevant subhead. As already stated, if it is acceptable to members I propose to deal with the subheads individually.
How many of the Department's offices have associated upward-only rent agreements? How many staff are working in the Office of the Director of Corporate Enforcement?
I do not have the information to hand on upward-only rent agreements. There are 40 staff employed in the Office of the Director of Corporate Enforcement. That complement is currently supplemented by certain Garda resources in respect of the Anglo Irish Bank case.
Will the Minister get back to us with the information on upward-only rent reviews?
Does the staffing of the Companies Registration Office come under this heading?
Yes. The staffing of the Companies Registration Office, including the Office of the Registrar of Friendly Societies, is 112.
Is there provision to move additional staff to that office or will the staff complement remain static?
That number is static.
Does the same apply in respect of the Office of the Director of Corporate Enforcement?
The employment control framework requires the Department, across all its agencies and staff, to reduce numbers in the years to 2014. The departmental allocation, which includes the Companies Registration Office, is to be reduced from the current figure of 850 - down from 1,087 in 2008 - to 771 by 2014. That reduction will be allocated across office heads.
Does that include the Office of the Director of Corporate Enforcement?
Yes, that is the aggregate number including the Director of Corporate Enforcement-----
Surely the Minister is not contemplating any reduction in the numbers in that office? There have already been complaints that staff cannot cope with the workload.
We do not envisage, given the pressure of work in that office, that staff numbers will be reduced.
Yet another quango, the National Employment Rights Authority, NERA, was set up in the last year. What is its purpose and function?
The National Employment Rights Authority works on the enforcement side, overseeing the labour inspectorates. It has not been set up under statute law but is operating on an administrative basis. The agency carries out the important enforcement work in regard to employment registered agreements, joint labour committees and other obligations. Last year it undertook some 5,000 inspections in circumstances where there was found to be a significant level of non-compliance in some sectors. It plays an important role in developing a compliance culture.
We want to see employee's rights respected, and a credible enforcement system is important in that regard. The ideal system of enforcement is one where people understand and respect their obligations, but that must be backed up by a credible inspection and enforcement system undertaken on a risk base. That is our objective, but we are of the view that there is scope for administrative savings by restructuring services across a range of employment rights agencies. Our intention is that the five existing agencies will, over time, be rationalised into a less costly and more effective structure.
I accept that, but what system was in place prior to the establishment of the National Employment Rights Authority?
Prior to the establishment of NERA, the labour inspectorate was directly under the aegis of the Department. NERA was set up as a separate agency under separate management. It is dynamically led and is doing good work. Nevertheless, there is broad consensus that administrative efficiencies can be achieved by devising a more streamlined system across all the employment rights bodies which would give workers a better service, employers more certainty and the taxpayer a more effective system.
I welcome the savings that are estimated to be achieved in the largest area of administrative spending, namely, salaries, wages and allowances, with a 12% reduction expected in 2011. In regard to the increase of 20% in the allocation for travel and subsistence and of 97% in respect of advertising and publicity, are there any particular programmes or objectives which account for the larger allocations?
The 2011 provision is much the same as it was at the beginning of 2010. The apparent difference is accounted for by the fact that it was possible to manage the outturn for last year more tightly than envisaged. There are additional provisions under this heading for the Employment Appeals Tribunal. There is a considerable backlog at the tribunal arising from the surge of applications since the downturn in the economy and the greater volume of redundancies. There is also an anticipation of increased travel costs associated with preparations for the EU Presidency. These are the two key factors underpinning the allocations under this subhead.
In this time of austerity, transparency is vital. I understand there are 16 agencies within the Department, although I am open to correction on that number. How many staff in these agencies receive bonuses, what is the total sum allocated for bonuses and on what basis are they paid?
There are eight offices and 13 agencies under the aegis of the Department. I will need to assemble the information requested by the Deputy. I do not want to speculate.
That is fair enough.
At the end of our discussion, after we have gone through all the subheads, there should be time for general questions covering a range of issues. We now move on to subhead B, dealing with enterprise development, science and technology and incorporating subheads B1, B2 and B3.
In regard to the allocation of pension payments to Fórfas, under subhead B2, is it the case that the Department has taken over responsibility from Fórfas for the payment of these pensions? There is a 59% increase in the allocation.
What is driving this increase is the anticipation of staff taking early retirement. The closing date for applications for early retirement was initially the end of this year, but it has since been extended to February 2012. The increased provisions are primarily driven by the anticipation of earlier payment of pensions and the lump sums associated with those retirements. Fórfas centrally manages its own pension scheme as well as those across a range of bodies, including IDA Ireland, Eolas, the National Board for Science and Technology, An Bord Tráchtála and the Irish Goods Council.
Why are administration and general expenses expected to increase by 21% when increased provision is being made for staff retirements and lump sum payments?
It is not clear in their presentation, but both subheads B1 and B2 include provision for pension and lump sum payments. They are two different types of pensions involved.
It is to do with the early pay-out of pensions.
Subhead B1 includes Forfás pension administration costs and the pension costs of retired staff of Forfás, Enterprise Ireland, IDA Ireland, Science Foundation Ireland and certain former agencies. Subhead B1 includes those, while subhead B2 is a separate pension scheme. I can provide the Deputy with details.
What was the reason for these pensions figures increasing in the past year?
IntertradeIreland does great work across the Border but there is a cap on it at the moment. Is there anything the Government can do to remove the cap with regard to cost?
What is the cap on?
There is a cap on the number of people working there. For every euro spent by IntertradeIreland, there is a large return to the Exchequer with regard to new business and jobs.
There is a cap but it applies to existing levels whereas other agencies have a cap at a declining level. IntertradeIreland is not facing a cut in staffing whereas most agencies and Departments are. It has been protected but the cap applies to every activity. That body has been protected from cuts.
My first question concerned the jump in pensions.
That is in anticipation of the take-up of early retirement but some of that may not occur in 2011. It is anticipated that some of the retirements will be in the early part of next year because there was an extension of the scheme until February 2012.
Do members have comments on subhead C1, C2 and C3?
From my interpretation of the figures concerning IDA Ireland, administration accounts for €38,577,000 and the total allocated for industrial development, grants and acquisition of property is €86 million. It amounts to almost one third of the overall budget and this seems quite high. Do the Minister and Minister of State have targets to address this?
One of the restrictions is that the IDA grant giving powers are dramatically restricted under regional aid guidelines of the EU. To a large extent, IDA activity has become more promotional and concerns funding its offices overseas. The day job of the IDA is not just administering grants. It involves promoting Ireland, building relationships with companies and promoting our STI programmes and building links to those programmes. Some 83% of IDA staff have client-facing roles. We fund people in the field and, in the case of the IDA and the nature of the Irish offering, it does not involve offering a grant for a standard type of project. It involves building on a range of services provided by the IDA. They assist with property solutions, which does not appear under this, and relationships concerning recruitment. It is not fair to consider the two figures and present one as a percentage of the other. That is not the business they are in.
I believe there is renegotiation with the EU on the number of grants that can be afforded to certain regions in 2012 or 2013. That will be an important job of work for the Department of Enterprise, Jobs and Innovation. If IDA companies relocate, is there a system to redeem or reclaim some of the grants they have received? Is this a regular occurrence? Does it show up in the receipts for 2010, totalling €13.8 million?
A standard condition of any grant is that there will be a refund if the project does not materialise. If a company reaches its job targets for a period of seven or eight years and subsequently declines, there is no claim back of the grants. If there is a decline in employment compared to what is targeted in the early years, the grant arrangements contain a clawback. I do not know the amount of money received through clawback but I can provide that information to the Deputy.
I take the point about the EU restrictions on grant sizes. I hope the negotiations are successful in that regard. Regarding administration, the Minister makes the point that more and more of the activities of the IDA are confined to promoting the attractions of Ireland as a location for foreign investment. In his earlier comments, the Minister expected results of the IDA to improve considerably from what was seen in the past number of years based on the same amount of investment. His response to how this can be done is to say that we must do more for less. We all subscribe to that. Does the Minister have plans for the reorganisation of the agencies? What will change to yield these extra jobs?
One of the changes is how we reposition ourselves as a competitive economy. Deputy O'Dea is aware that we took a wrong turn and we are at the end of a six-year period of declining export market share. Thankfully, that is being reversed and, correspondingly, there are signs from the pipeline of increasing interest in investment in Ireland. It is not a just the supply side issue; it involves supply and demand. The more successful we are in reinventing our economy and building connections through research and development, which is increasingly a feature of what attracts companies to Ireland, the more we can build a successful pipeline.
What needs to change is Ireland's competitive offering across a range of issues. There are heartening signs this is happening. There is a second coming in the ICT area through the social networking companies. There is a new buzz among start-up companies interested in having a foothold in Europe. Opportunities exist and we are well placed to seize them without having to budget for substantial increases in resources. There will be more demand to invest in Ireland if we can improve our rating across a range of issues. There is constant pressure on the Department to ensure our offerings are attractive. Earlier we referred to utilities, tax competitiveness and a range of matters that are vital to the IDA success.
Do members have questions on subheads D1, D2 and D3 concerning Enterprise Ireland?
I refer to the number of high potential start-up units suggested for development. The total of 85 is a low number to aim for in this State considering the thousands of people coming from high-tech jobs with excellent experience and serious knowledge, and who represent an opportunity to the State in terms of development. Should we not set the number of high potential start-up units at a much higher figure than 85?
The ambition is to build that year on year over the next number of years but this is not the only instrument. We recently had competition for entirely new start-ups, many of them in digital gaming, where relatively small amounts of money, €15,000, are being given to each company. That was very competitive. Two hundred potential companies came in for an allocation on the first round of approximately 16 places.
The high potential start-up unit is not the sole instrument aiming at trying to attract start-ups but I share the Deputy's belief that Enterprise Ireland must look at a wider range of companies and offer some form of support. A competition for what are largely spin-outs from some of the research centres is a useful instrument. We are keen to apply a sharp focus on the success of different initiatives to ensure we can examine whether there is potential to expand. There is potential, without getting into big spending of public money, to provide capability improvement tools to companies. In a recent study, which I do not have before me, the Irish Management Institute, IMI, essentially stated that if companies were being managed to the highest standards, the potential additional output would be approximately €2 billion. That is across every company in all sectors, not just the Enterprise Ireland area. There is potential to tap into some of those opportunities and have a wider range of instruments available, and part of the review work we are doing would target that. The Minister of State, Deputy Sherlock, may wish to comment on that.
The target is 85 per annum reaching approximately 100 per annum up to 2016 and beyond. One cannot give a definitive figure because many variables enter into the fray, including intellectual property and commercialisation of research, but the most important point is that we are in a space where we are seeking to spin out as many companies as possible on an indigenous basis. I believe the number for last year was 31. One would hope to see that increasing but on the high potential start-ups, the target is 85 reaching a final target of approximately 100 per year from 2016.
I ask the Minister to comment on subhead F2.
Have we concluded the discussion on subhead D?
Sorry, Chairman.
We will move on to subhead E. Are there any questions on that?
Subhead E1 states that it provides for an Exchequer grant in respect of Shannon Development administration expenditure. In practice, most of Shannon Development's costs in these areas are generally funded from the agencies own resource income. First, will the Minister indicate the net cost to the State now of Shannon Development? Second, I notice a reference to Shannon Development and its future in the programme for Government. Has the Government made a determination yet on the future of Shannon Development? Naturally, I have a local interest in that.
The net cost is as set out in the subhead. There is no cost currently on the administrative side but there is a cost in grants to industry and pension payments, which is set out also. The Estimate is €3.6 billion on grants to industry and €3.5 billion on pension payments.
A review is occurring of every agency and activity. One of the pressures coming on Shannon Development is that traditionally it funded all of its activities out of its property portfolio and the management of that property portfolio. That source of funding is drying up and as a result that self-financing model does not look robust for the years ahead. That is what has triggered the need to examine how we can best deal with it. For instance, my understanding is that there is no expenditure on tourism marketing by SFADCo which traditionally had been part of its spend. It is spending on tourism in managing and promoting different tourism products. There are issues around the ability of the existing model to continue, and the mid-west task force has also raised issues around the way that should be done. We are examining the different submissions to determine how best to deal with these challenges. That is being undertaken at present.
We move on to subheads F1 to F3.
Dublin City of Science is the heading. Will the Minister comment on that?
I know Paddy Cunningham well. He is the person heading it up and he happens to be a neighbour of ours from old days. The Minister of State, Deputy Sherlock, is the front man on this area. It is an exciting project but I will ask the Minister of State to reply on it.
I had a meeting with Mr. Cunningham yesterday. The budget line is important because the event, which will take place in mid-July next year, will attract researchers and persons within the scientific community at the highest level to our shores. This is a pan-European win, so to speak. The fact that we were able to win that competition against stiff competition from places like Vienna is a good testament to where we stand within that global scientific community.
That win and this investment is vital in terms of our reputation because in enabling us to attract top level researchers we are sending out further signals into the research and science field. That will result in added wins for us in the future. We will gain from it by virtue of its profiling in the first instance. The programme is comprehensive and intensive. It will roll out across the State over the 12 months but will be focused primarily within those four or five days. The fact that there will be industry involvement and all of the stakeholders involved over those four or five days will ensure we will be able to lay a further foundation or ramp it up, so to speak, to ensure we can make further gains in this field ultimately in terms of foreign direct investment.
Does the Government have objectives with regard to the level of money it puts into research in the State and the outcome in terms of jobs created or increased output? For every euro spent, what are the expected outcomes with regard to research and development?
From Enterprise Ireland's perspective it has objectives in terms of the number of companies that invest at least €100,000 in research and development and the number that invest €2 million or more. Enterprise Ireland has measures in terms of the number of companies that are playing in this space. It also examines the performance of companies investing in research and development, research and development, versus those that are not, and there is an enhanced performance. It is clear there are significant returns.
To be honest with the Deputy, we must develop more effective performance indicators across the portfolio, both Enterprise Ireland and SDI, science, technology and innovation on which the Minister of State might comment. There are measures of the number of patents and the number of spin-outs, and to be fair they are all increasing, but we must drill down a little deeper in terms of what we are funding and what we are getting from that to be able to show to the Deputy, as the guardian of the taxpayer, that we are getting best value.
One way of looking at the overall picture it is to consider the level of FDI in 2003, for example. In that year, the proportion of IDA client wins with a research and development component was approximately 10%, valued at €120 million. In 2009-10, some 50% of FDI was research and development investment and it was valued at €500 million. That is one important metric upon which we can work.
If one considers the budget for Science Foundation Ireland, €15.3 million, and the collaboration involving over 500 companies on joint research initiatives, one will note the arrangement supports €73 billion in exports. It is a valuable component but we need to consider further how many indigenous companies we can spin out. We must consider whether there is a value to continuing with the investment in the centres of excellence and research clusters. I believe there is because it maintains a vital FDI component because of the collaborations with industry. One must take cognisance of the investment in basic research because, if we do not continue to invest in basic and applied research, we will not be able to achieve the spin-outs in the medium to longer term. We need to ensure we get the balance right between the investment in basic and applied research, maintaining Science Foundation Ireland investment through the clusters and centres of excellence and trying to set metrics or targets.
Progressing from basic research into the commercialisation field remains a challenge. We must ask where it is best for the State to invest. This conversation is taking place and will continue.
I am conscious we could go into more detail but there are time constraints. I ask all members to proceed a little faster, if possible.
With regard to Dublin City of Science 2012, some €370,000 was spent in 2010 and the allocation for 2011 rose only to €832,000. I presume there will be further spending requirements next year, the year of the event. The Minister of State referred to potential wins. Does he have an estimate for next year's expenditure? Does he intend to evaluate expenditure after the event to determine the wins, the return on the investment and whether, if we had spent more, we could have got more.
The hosting of the event will cost €6 million. The Exchequer contribution over the period 2009 to 2012 is to be €2.973 million. The funding provided for 2011 is based on the 2009 decision by the previous Government. One will not know the wins until the event takes place; they cannot be projected. We want to use the event as a showcase for Irish science and research across all the disciplines.
Let us consider the next EU framework programme, which I am told should be called Horizon 2020 rather than Framework 8. If we are involved in this programme in its early stages, we will be able to influence funding lines by virtue of the enhanced reputation we hope to gain as a result of the hosting the event, which will attract top researchers and scientists from across the world. There will be a win for tourism in that 5,000 delegates will be brought to the Convention Centre Dublin.
We must move on.
There is potential for delegates to spend up to €4.8 million, according to one estimate, and to raise €1.1 million in taxation. There is a win by virtue of holding the event itself but there will be a further medium-term gain because of the reputation enhancement.
Regarding subhead F1, there is a very substantial increase in current non-pay. What is envisaged in that regard?
To what is the Deputy referring?
The figure for current non-pay under F1 has almost doubled.
I might have to revert to the Deputy on that. I have no explanation for that at present.
We will deal with subhead G on county enterprise development, which pertains to the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Perry.
The enterprise boards have been shown to be very efficient on a per-job basis. The sad aspect is that we are only dealing with approximately €15 million. The Department may be trying to find out where it spent €9 million on the basis of the increase in capital non-pay with regard to science but it has been shown that grant support for small indigenous start-up businesses has proven to be very profitable for the country as a whole. Although a recession, particularly one where many people are unemployed in all sectors, gets people thinking outside the box, we are cutting capital spending this area. Perhaps we should consider where can invest further in this area because enterprise boards have run out of money at this stage of the year.
On the same subject, which we discussed previously, the county enterprise boards are extremely significant players in small business development and job creation locally. There is a considerable blockage in the pipeline in that these businesses are seeking to obtain capital so they can do feasibility studies and marketing and research studies, or even get started. It is a no-brainer that there should be further investment in this area to allow jobs to be created and businesses to start up.
I concur with the previous two speakers. As a former member of a county enterprise board, I saw at first hand the excellent work it did. We need to be careful not to throw the baby out with the bath-water when trying to reduce expenditure. The enterprise board model is fantastic and deals with the very small companies that will lift the country out of recession. I refer to those employing two, three or four staff.
We had a discussion at the previous meeting on the role of enterprise boards. There is an evaluation at present and there will be an agreement in the coming months on the one-stop shop for generating business ideas within local areas while respecting county boundaries. The reason for the decrease this year over 2010 is that there was a special allocation in excess of €3 million for 2010. Unfortunately, it could not be allocated on this occasion.
The allocation of €15 million was responsible for the paying out of 1,061 grants. The value of the grants paid in 2010 was €11 million and the value of grants approved amounted to €14 million. Clearly, it is a question of obtaining value for money regarding the soft supports associated with mentoring, education and business with a view to encouraging and supporting the private sector. I refer to the provision of education to businesspeople developing business plans and carrying out evaluations.
With regard to obtaining value for money, I agree entirely with the Deputies on the importance of the micro-economy and creating potential for the 250,000 small companies. The Government has understanding, concern and respect for the role of small companies and this will be evident in the plan of action to be announced shortly on refocusing the role of a one-stop-shop facility for small companies which will respect county boundaries. While I fully respect there is a decrease, €27 million is a huge amount of money in difficult circumstances. On the previous occasion an exceptional payment was made it was at the end of a calendar year. Every county enterprise board director has autonomy to frontload expenditure, and some of them tend to frontload their allocation earlier in the year which means they have little or no money for the remainder. Unallocated money can be moved from one board to another and this is closely monitored by the central enterprise board monitoring unit, which reallocates funds not spent in other areas. Money can also be allocated but not drawn down.
We are evaluating enterprise boards and fully recognise their critical role. While the allocation of funding is important, it is not the only critical factor that makes the difference in creating a job, and working with third level colleges is also involved. A clear announcement will be made in the coming weeks on the role of enterprise innovation, research and development at the micro level.
I thank the Minister of State. We will return to subhead F1.
Forgive me for not being able to answer in the first instance. The figure of €8.5 million includes a new programme of €2.5 million born from the enterprise platform programme which was transferred from Department of Education and Skills. It is funded from current funds. I can get Deputy O'Dea a more comprehensive explanation in writing.
We will move on to subheads H1 and H2.
What plans does the Minister have to try to maximise Ireland's gain from FP7 funding? I understand calls are to go out on 20 July and that the EU is setting €11 billion aside for it. Does the Minister have specific plans to try to maximise knowledge of this and to maximise the number of Irish companies which can avail of it?
We had a meeting here at which the Commissioner launched the programme, alerting people to the opportunities. I attended jointly with the Commissioner a meeting with a number of potential players. As Deputy Sherlock stated, these have been a fruitful source of funding and we are organising ourselves to exploit this programme.
On the earlier question about the IDA and administration, I should have referred to the fact that like SFADCo, its own resource income from property management decreased and as a result the departmental sum has increased and this is reflected in the figures.
We will move on to subhead L on labour force development.
Much of the data and initiatives presented today refer to the high-tech and scientific areas of economic activity and development, which are very important and welcome. However, many communities and people are very distanced from the impetus of job creation that will come from these sectors. I am thinking of communities in the area in which I live such as Ballyfermot and Cherry Orchard with high levels of young male unemployment. We will have to consider-----
The Deputy's question is more general than the specific subhead.
Will the Minister and Ministers of State examine applications for programmes to tackle this from community groupings which have a record of creating successful employment strategies in the past? We will have to-----
We could have discussed this at a previous meeting. However, we will deal with it and forward a recommendation to the Minister and Ministers of State. I do not think it fits into a discussion on the Estimates. Perhaps the Minister would like to give a brief answer.
I recognise what Deputy Conaghan is stating, which is that high-tech jobs will not answer every employment opportunity. This is why Government action has been taken across a much wider range of sectors. The attempt to drive tourism recognises we must exploit other sectors. The social employment sector represents an opportunity. The Minister of State, Deputy Sherlock, is interested in this area and the Department will examine what role we may play. Traditionally, it is predominantly other Departments, such as the Department of Social Protection, which are the lead players in the management of resources and various schemes of support, activation and training for putting unemployed people back to work . Much of this work is not directly funded by the Department of Jobs, Enterprise and Innovation. If the committee makes proposals we will certainly-----
The committee will discuss it.
Will the Minister examine the proposals we send to him?
Yes, this is what he confirmed. This will be done.
Subhead L2 shows the employment subsidy scheme is coming to an end this year. Will the Minister indicate how many jobs have been supported by this scheme?
It closed on 31 December and retained 14,863 jobs.
Has any analysis being done on the impact of the scheme being withdrawn this year? The employment situation is still very fragile.
I do not know whether an evaluation has been done. A total of €130 million was approved to support the approximately 15,000 jobs. I have been informed it is being audited by the Comptroller and Auditor General and it is being evaluated by Enterprise Ireland. I only have these raw numbers at present.
I propose to deal with subheads M, N, O and P regarding employment rights and industrial relations. As there are no questions we will move on to subhead Q.
Subhead Q indicates an 12% increase in the grant to the Competition Authority. We are not discussing subhead R, but it indicates a 14% increase in the grant to the National Consumer Agency. I understand that under the legislation referred to by the Minister earlier, which is the consumer and competition Bill, he intends to amalgamate these agencies. Is this correct? What does he envisage the saving will be from the amalgamation?
We have not finalised what the saving will be. A small saving will be achieved but to be fair to the two agencies they have been working with very tight allocations, and under the previous Government the numbers working in these agencies reduced considerably. They already engage in a number of shared service and outsourcing initiatives to keep down their administration costs. Considerable savings have already been pocketed.
Sorry Minister-----
The question is on next year's Estimates.
The increase in the allocation to the Competition Authority seems to be related to pensions. A saving of €170,000 is to be made by not having a board. On the wider issue, there are potentially some extra savings but to be fair to the two agencies they have been-----
I am trying to ascertain the motivation. The thinking behind the amalgamation is not to make savings but for administrative purposes.
The thinking behind it is that there is a belief that merging the two agencies which operate to have an effective market in which consumers are protected from the point of view of competition and consumer protection, which covers issues such as price display, creates a more effective body which uses resources more effectively.
With regard to subheads R2 and R3, which provide for allocations to the NCA and the Consumers' Association of Ireland, will the CAI be brought into the quango the Minister proposes?
No, the CAI is an advocacy group; it is not a public body like the NCA. I do not propose a board of outsiders. We should have a body modelled on the Competition Authority where commissioners would manage the quango rather than having an external board. In line with a general Government view that we should not establish boards unless they are necessary and that agencies should be more directly accountable to Ministers and the Dáil, I do not propose to have a board in this case in order that there is more direct accountability. That involves savings as well.
Any questions on subheads S1 to S3, inclusive?
S2 relates to the allocation to the Irish Auditing and Accounting Supervisory Authority. What role has it? It was established under the Companies Act 2003. Poor auditing was a undertaken in the financial services sector. Who does the authority audit?
It essentially polices standards and it was established following the DIRT inquiry. It oversees the prescribed accountancy bodies. These bodies have adopted a form of self-regulation. The supervisory authority also oversees the EU aspects of audits. Recently, there was an inquiry into the standards of auditing in the banking sector and while the investigation was conducted by the professional organisation, the IAASA set the standards against which it was conducted. The authority insisted that there would be external, independent, non-Irish involvement in the study. It supervises how the prescribed bodies operate.
The IAASA also has a role in overseeing the style of bank audits and I understand the authority issued a number of directions to improve the standard of oversight. I can get a detailed note for the Deputy. The authority rides shotgun on the front-line professional bodies to ensure they operate to the highest standards.
Any questions on subhead T?
I would like an emphasis on tackling the on-the-farm deaths issue. It is a problem and I would like more focus on it.
The previous Ministers of State met the farming organisations to encourage a higher standard of compliance in this area. That would be well worth doing again. The HSA regards this as one of the areas in which it wants to increase compliance. It plans 3,000 farm inspections, which would be an increase of more than 1,250. This is recognised as an area in which we have ground to make up.
The HSA appeared before the previous committee and made a useful presentation, which would be worth looking over. It might enlighten the Deputy regarding its plans.
The approach is important in this regard. It must be one of co-operation as opposed to being antagonistic.
That is accepted. The HSA is bending over backwards to develop BeSMART tools and ways to enable businesses to self-comply. They are simple online tools to ascertain how they measure up to their expectations and make the workplace safer for workers and, for example, farmers.
The final round of questions will be on subheads U to Y, inclusive.
Under subhead X1, will the High Court judgment on JLCs make a difference to the Estimate for 2011? With regard to the cost of company law and laws, generally, to the Department, legal fees have increased by 12% since 2006 and Ireland is one of the most expensive places to access legal advice, especially regarding employment and companies. Will the Government reform that sector to bring costs down? In other words, if a business has a patent or copyright to legally enforce, it needs to employ a barrister but, because of our antiquated system, it must go through a solicitor in the first place. The costs are higher than in other EU states.
A few issues cross over in this regard. Clearly, the Government is determined to reform the framework surrounding access to lawyers and the Minister for Justice and Equality is working on that agenda. The Competition Authority did a report on this and some of its recommendations for change related to the issue of direct access to barristers and rules concerning whether they could form partnerships and so on. I am conscious I am under the eye of a lawyer and, therefore, I do not want to get this wrong.
A secondary issue is the quality of public procurement by the State in respect of legal fees and that will exercise the Minister for Public Expenditure and Reform as he seeks to investigate how better value can be achieved. There is an attempt by the State to drive better value, particularly from companies to whom we give a great deal of business across a range of agencies, and to try to look at that in a block. There is scope for savings.
I do not anticipate that the High Court judgment will have an impact on subhead X1.
I read the Competition Authority report and, naturally, I was interested in that section. It is an excellent report and I agree with all the recommendations in the section. I understand they will be contained in a legal services or legal costs Bill. Perhaps the Minster could indicate when it will appear.
My understanding is it will be introduced early in the autumn session.
Subhead W is subscriptions to international organisations. A little more than €17 million is allocated under the subhead, of which the lion's share - €16 million - goes to the European Space Agency.
We will not send the Deputy. He should not worry about it.
What value does Ireland get from this?
It may be paradoxical but we get good value from it. The companies that have taken up opportunities through that agency well outweigh our contribution. It has returned more than €20 million
A total of 20 companies and eight research groups won new contracts for 2010 amounting to €10 million. There is a return on the investment. I visited a company, SensL, in Cork recently, which is doing work in this space. The subhead supports indigenous industries and start-ups. One would have had a healthy scepticism about this. I believe we are getting the return on the investments.
There was a programme for training astronauts.
I noted the heading for a work place safety programme. Will the Minister elaborate on this? Should it be under the remit of the Health and Safety Authority rather than his Department?
This was a special line for funding for the construction partnership involving trade unions and employer groups. The Health and Safety Authority is the inspectorate for ensuring safety at work. The work safety initiative was a collaboration rather than enforcement.