The Chairman is in London for a meeting of the British-Irish Inter-Parliamentary Body and I apologise for his absence. I welcome the Minister and his staff, and ask the Minister to present his opening statement.
Vote 34 — Enterprise and Employment (Supplementary Estimate).
This Supplementary Estimate for a number of subheads of the Vote for my Department amounts to £42.023 million gross. As Deputies will note, there are offsetting savings on a number of subheads resulting in an overall net requirement of £11.463 million.
The Supplementary Estimate is required for the following subheads; Subscriptions to international organisations (B); SFADCo grants to industry (C.2); IDA grants to industry (F.2); miscellaneous payments (I); and social employment schemes operated by FAS (Y.4).
In the course of my speech I will concentrate on the reasons SFADCo, IDA and FAS require additional funding. I will be happy to answer questions on these and other subheads during the question and answer session. With regard to FAS, an Exchequer allocation of £83.811 million was made available at the start of the year for the social employment scheme and Community Employment Development Programme. This allowed for average participation of 13,500 persons throughout the year. However, the Government decided in April to increase the number of participants to 15,000 and, in August, decided to increase participation still further to 20,500 by the end of the year. These decisions increased the Exchequer requirement to £103 million which represents an increase of just over £19 million on the original Exchequer allocation.
The additional funding being made available for the social employment scheme and the Community Employment Development Programme is clear evidence of this Government's commitment to providing valuable opportunities for the long term unemployed to gain work experience and play an active and useful role in society. Due to the earlier than expected receipt of some £7 million in European Union moneys by FAS this year, I was able to reduce their 1993 Exchequer allocation for training. However, I may have to make up for this Exchequer shortfall in 1994.
On the IDA, in this Supplementary Estimate it is proposed to make additional grant-in-aid available to that body in respect of its capital grants' expenditure. For the year ending 31 December 1993, the IDA was approved grant-in-aid of £109.9 million for capital grants made up of £89.5 million for normal capital grant purposes and £20.4 million for expenditure arising in connection with the special market development fund which the previous Government introduced in late 1992 to support the development of firms affected by the currency crisis. In addition the IDA was permitted to avail of £14 million of their own resources made up of grant repayments, sale of investments and reimbursements from the European Social Fund. The IDA's approved expenditure, therefore, for capital grants in 1993 was £123.9 million.
The IDA requires additional funding of £16.5 million for normal capital grants' activity in 1993. This has arisen because of the increased level of grant claims in relation to the main grant programmes and this, in turn, arises from faster than expected achievement of job targets by flagship overseas companies which were approved grants in previous years.
The achievement of value for money is a key objective in terms of expenditure on industrial development generally. As a result of recent political developments, however, several new competitors for new mobile investment from Europe have emerged, many of which are more favourably located, geographically, than Ireland.
I undersand from the IDA that Irish-based companies have also been targeted by our competitors who actively encourage companies to locate expansion projects overseas. I am referring in particular to some people or companies in the Dublin area who have been approached by some development agencies from other countries.
These trends mean the IDA has to aggressively pursue mobile investment, both international and home-based, with attractive fiscal and financial incentives while seeking to maintain a high level of value for money for State expenditure.
The third area I want to focus upon is that of SFADCo or Shannon Development. For the year ended 31 December 1993, Shannon Development was approved grant-in-aid of £12,450,000 for the purpose of making grants and taking equity in overseas and indigenous industry at the Shannon Free Airport industrial zone. Due to savings of £2.973 million arising from the non-payment or deferral of grants in the case of other projects at the zone, Shannon Development requires additional funding of £6,189,910 for the purpose of its US $13 million investment in the GPA group, which in Irish pound terms amounted to £9.16 million.
From its foundation in 1975 GPA had grown rapidly and successfully to become one of the world's largest aircraft leasing companies. This year GPA had 470 aircraft on lease to more than 100 customers in 50 countries, in addition to sales of aircraft to investors and airlines, and the provision of a wide range of management and technical support services.
The company had also become involved in a number of joint venture companies on a worldwide basis, including two major projects at Shannon, sponsored by Shannon Development, Shannon Aerospace and Shannon Turbine Technologies. Increases in profits were reported in every year up to 31 March 1992 when the company made profits of $268 million and employed 300 people.
In June 1992 the company sought to make an international public offering of its ordinary shares with the intention of raising substantial new equity capital to meet its growing capital requirements. As is well known now, the offer had to be withdrawn due to inadequate market demand and, subsequently, there was a sharp decline in condfidence in GPA in the financial markets. This, combined with a downturn in the civil aviation industry, resulted in financial difficulties for the company and a significantly reduced ability to execute aircraft sales transactions which had been the company's major source of liquidity and profit. This in turn led to a requirement for a major restructuring of the company's business, primarily as a result of which the company made substantial losses in the year ended 31 March 1993, notwithstanding on operating profit of $48 million.
When the Estimates for 1993 were being prepared, the Government was aware that it might be requested to invest further in GPA but it was not in a position to make any specific commitment at that time.
Last March, however, the Government was invited by GPA to invest US $18 million in a $200 million rights issue of unsecured loan stock which was being offered by GPA to existing shareholders as part of an overall restructuring plan for the company. The Government decided that any such investment should be made by Shannon Development because of its role as industrial development agency for the mid-west region.
Shannon Development was requested by my Department to carry out a full evaluation of this investment offer and to make a recommendation on the matter. Shannon Development, having received advice and assistance from financial and legal consultants and after intensive and very difficult negotiations on the very complex GPA restructuring arrangements, which lasted several months, recommended that it should make an investment of a lesser sum of $13 million. SFADCo's overall conclusions were that the investment should be made on the following strategic grounds: ensuring the completion of the GPA restructuring and assisting in the survival of GPA and its associated operations including, in particular, Shannon Aerospace and Shannon Turbine Technologies; securing continuation by General Electric of GPA's current activities at Shannon and protecting the employment at Shannon associated with these activities; and stabilising the local and national aviation industry development programme.
In agreeing with Shannon Development's recommendation, I was fully conscious of the contribution which the activities of GPA and its associated companies have made to the development of the aviation industry in Ireland and at Shannon in particular, as well as their contribution to the economy generally. I was also fully conscious of the need to take all reasonable steps to try to protect the very large number of good quality jobs which these companies provide, both directly and indirectly.
It is hard to do justice to this brief in five minutes. This year has been very grim in terms of employment. Unemployment amounted to 300,000 for the first time and its stability since then was only achieved by massive emigration. Figures suggest that there were 25,000 emigrants this year. There was also a massive surge in redundancies and misguided Government policy, in the form of a foolish currency strategy, cost several jobs. This is the context in which we are considering this Supplementary Estimate.
This year has seen the publication of the Government's national plan. Let us consider the last national plan which succeeded in creating fewer than 40,000 jobs during its period. It provided effectively less than one job for every five persons who joined the labour force. As a result 81,000 extra people joined the dole and 98,000 people emigrated, many of whom were our most talented people. The new plan, despite the advantage that it provides for expenditure which will double the annual rate of investment, is projecting the same gross job figures, which are inadequate and will again be offset by job losses. It looks like the next national plan will provide the same sort of situation where we will be effectively budgeting for very substantial emigration and increased unemployment.
The Minister has not addressed the failure of the last national plan to deal with unemployment problems, some of which I will briefly mention. During this plan there was a 50 per cent decline in small business start-ups recorded by the Minister's Department. The marketing targets set for small to medium Irish businesses were totally missed. The plan projected we would double our share of the EC markets but this decreased during the period. These businesses did not penetrate the European market at all during the plan. They were projected to expand exports by £2 billion but achieved less than one third of that target.
The other major problem is that we have again continued to neglect our service sector. I recently spoke to a major service employer in Dublin and he described — and it could not be more vivid — that after he had paid 21 per cent VAT, 21 per cent PRSI and 40 per cent tax on profits, he had only 3p in every £1 the consumer spent in his business to plough back into it and keep it going. This is totally wrong and we cannot survive if we are to treat the service sector in this manner.
I wish to turn briefly to the Estimate. There was an overall budget overrun of 11 per cent. It must be asked whether the taxpayer received good value for that overrun. The largest single item was the overrun of £9 million on GPA shares. The Minister has not demonstrated whether this was a wise decision. It seems the shares are now worthless and the Minister has not acknowledged whether this is the case. With GPA now in the hands of a multinational company it must be asked what the taxpayers' sacrifice has achieved. Do we have commitments that these jobs will be secure in the long term in the Shannon region? That question must be answered today.
The Estimate deals with a plethora of new agencies. There are 36 county enterprise partnership boards. If one looks at the amount the Minister spent this year and the amount he plans to spend next year, the bureaucracy within those 36 boards will absorb as much money as they receive through the client companies they are supposed to help or the new businesses starting up. It is impossible to justify this as value for money.
Last year a duplicate job placement agency was established in the Department of Social Welfare, mirroring that run by FÁS. The Department of the Taoiseach set up a new bureaucracy to oversee the employment schemes in certain parts of the country, again mirroring the activities of FÁS. What conceivable justification can there be for this duplication in two major State bodies?
At the same time the core activities of the Department have been left to wither on the vine. I refer particularly to the science and technology budget, which has been savaged. Between 1992 and 1994 it will have been reduced in real terms by 36 per cent. This has happened at a time when the whole of Europe is being urged to step up its commitment to research and development in order to meet the challenge of freer trade. In relation to the core area, I understand FÁS has been notified that its mainstream training activity in 1994 must be reduced by 25 to 30 per cent. This was the core training activity that Culliton so firmly told us was critical to Ireland's long term competitiveness.
We also see from the Estimates for next year that the IDA's spending is to fall by over 10 per cent and SFADCo's is to fall by 30 per cent — these are direct employment spending areas where the budgets are being savagely cut. The message from the Minister seems to be that he will establish agencies and schemes but will not build on the core competences successful business needs in Ireland.
Finally, I turn to the CEDP. The Minister is spending huge sums of money on this programme. Is this money meeting the needs of the long term unemployed? The only evidence that has been published shows that 85 per cent of participants who complete these schemes go back on the dole and only 14 per cent find employment. The future for people coming off these schemes is very grim. We should build on their capacity to take up other opportunities. The Department, instead of trying to deal with the problem, has made a very crude decision to extend their numbers and the months for which they will be on the schemes. The fear is that at the end of these schemes, even with the extended number and period, 85 per cent will become unemployed.
I wish the Minister to comment on this apparent stop-go. FÁS were to extend the scheme to 18 months but it is now being cut to 15 months. The scheme is stop-go and is not a coherent response to unemployed people, who wish, not only to participate in a scheme for a year but to see it leading them somewhere worthwhile.
As Deputy Bruton has set the context, it would be impossible even to address an Estimate for the Department of Enterprise and Employment without again outlining in some small measure the seriousness of the unemployment situation. Simply put, we have an unemployment crisis. I detect a culture of complacency which fills me with fear for the future. I say to the Minister and the Government that the time has come to put job creation at the top of the political agenda, on a par, in terms of priority and urgency, with Government initiatives in relation to peace and a settlement in Northern Ireland. In regard to one as being of equal importance to the other. I ask the Minister to see to it that his Department gives leadership by bringing together the other Departments in a joint and combined initiative to put the unemployment situation at the top of the agenda and keep it there.
Deputy Bruton mentioned the existing unemployment figures. The National Development Plan predicts that approximately 200,000 jobs will be created over the next six years. However, experts are now predicting that the unemployment figures could reach 390,000 by the end of this decade if we take into account the inevitable job losses which we are unable to stem, the projected growth in the labour force and the uncertainty about what emigration figures will be. This is a frightening figure which demands radical measures. If the country continues in this direction we will have economic failure, social chaos and democratic anarchy. I am not overstating this issue and I am not saying it to shock people but to bring a sense of urgency and realism to the debate about employment and unemployment. The time has come for radical action because we have had our fair share of this problem. We have all the information we need. We have had many task forces, think tanks, and groups of every kind. We need action, not further analysis.
There is an old saying from An Fhiannaíocht, and I cannot remember if Oisín or Fionn said it, which states that the greatest music in the world is the music of making things happen. We must make things happen in this country because unemployed people read reports. They hear about bodies being set up, but they see no difference on the ground. The time has come when we must make things happen.
Rather than looking at past failures, the Progressive Democrats would put down some pointers about where we should go in the future. I repeat a key demand for radical tax reform, which is a founding principle of our party. We do not need to be reminded about the impact which the tax regime has on job creation. There is a lack of incentive for people to give up the black economy, social welfare or both and to look for a job.
One figure which sums it up has been quoted by spokespersons from my party on previous occasions. An unemployed person who lives in a local authority house with a dependent spouse and four children would need to earn at least £14,500 per annum to make it worthwhle for him or her to accept a job. That is a frightening statistic and it is an indictment of the taxation system which we are now finding extremely difficult to dismantle. I am not saying it is easy to dismantle the system, but the consequences are horrendous if we fail to tackle the problem. We must have courage and seek cross-party consensus on this issue. In the next budget we should put in place the kind of tax regime which will lead to job creation, give people an incentive and encourage a spirit of enterprise in the community.
The second point relates to measures which need to be taken. We talk a lot about the introduction of competition, but when we examine the factors we find it is, in many ways, a fantasy rather than a reality. Again I will take one example. An Post and larnród Éireann are two subsidised State bodies which deliver the same kind of services to employers and business people. There is no competition between them. Several other examples could be taken. If we are serious about job creation we must introduce genuine competition into the economy.
The bureaucratic impediments to job creation should also be removed. Once upon a time we had an enterprise culture where we had the workshop, the corner shop and the huckster shop and we had people who had a service to give or a job to do and they did it well. We killed successive Government measures with excessive demands for form filling, red tape and bureaucracy. People who had no vocation for such details had to go outside for expert advice to enable them to cope. Payment for that advice swallowed up any profit these people might have made and which could have been put back into the company to enable the creation of one additional job. We must look at this situation carefully and try to change it.
In the modern economies of other countries jobs are being created in small businesses and firms. In America new jobs are created in firms which have a workforce of less than ten. We must look to the small business sector for the jobs we need. We must dismantle the bureaucracy which hangs like the sword of Damocles over people who wish to create more jobs and who want to work, but who have no appetite or vocation for filling forms.
I want to cite one example given to me recently at a meeting with the Cork Chamber of Commerce. A member complained that after taking a lot of time to fill in his forms and sending them to the company office, they were sent back to him because they were not filled out in black ink. He had to go through the process again. It is nonsense that a company office has a scanner which can only take black ink. It is only a small thing, but it is an indication of the nonsensical way we are killing off enterprise and this disheartens people.
Deputy Bruton is pessimistic about the schemes which give work to the long term unemployed. I am not as pessimistic as he. There is no single measure or range of measures which will create the kind of employment we wish for. We must have a mosaic of measures, one of which must be what my party would call a national community employment scheme where the long term unemployed could be offered work as an alternative to social welfare. This would give people who have no other prospects a sense of job satisfaction, dignity and inclusion in the working economy, at a time when we are suffering from social exclusion and poverty. I would welcome some of the programmes described here, provided they are properly designed and delivered.
This is not a budget meeting and there is no point in proposing firm measures under the heading of this Department which are calculated to create jobs if the Minister for Finance is going to introduce in his budget a different set of measures which will kill off those jobs. This is a bizarre situation where the right hand does not know what the left hand is doing. We could mention the last budget, for example, and the impact of the 21 per cent VAT rate on the clothing and footwear industry and on the newspaper industry. There must be an integrated approach and the right hand must know what the left hand is doing.
In relation to the Estimate, we have no control over the overseas market and any change there is due to currency variations. I recognise the necessity to give grants to the Shannon Free Airport Development Company. I hope it was a once-off payment and that we will not repeat it. It was essential to do so at the time because it helped to copperfasten and maintain the worthwhile jobs in that region and I support that.
There is a considerable overspend on the part of the IDA which give grounds for optimism. There has been an increased level of activity by the IDA in that region as well as others and that is welcome. Could the Minister spell out in more detail what we have received in return for that investment and what we are likely to receive? I appreciate he cannot name the companies but perhaps he could tell this committee what the level of new activity is and the approximate number of new jobs that have already resulted or are likely to result in the immediate future.
I have little confidence in the enterprise development fund and the county enterprise boards, as I said at Question Time. I gravely fear we have created local bodies that will be competing against each other for scarce resources and will deliver little of lasting value. They will amass bills for administration and travelling expenses. It looks good for the optics but I have no great faith in the boards. If the Minister removed that subhead and it did not appear in next year's Estimate I for one would not shed any tears.
Deputy Bruton and Deputy Quill raised a number of points. Perhaps the Minister would address them now.
Deputy Bruton asked me to respond to some specific questions. The shares in GPA are not worthless. I specifically asked Shannon to do an evaluation of their own. Deputies will recall that the original invitation was to the existing shareholders of GPA, including Aer Lingus, to take up their option to contribute part of the $200 million. Because of the manifest difficulties in which Aer Lingus found itself, it was not in a position to avail of the option. Air Canada was in a similar position. Aer Lingus gave that option to the Government who in turn invited Shannon to consider making the investment. It was done on the basis that Shannon would satisfy itself it was a worthwhile investment from its point of view. The original request for $18 million was reduced to $13 million. It went through a process of change from the initial request to the final figure.
Officials were intimately involved in a rigorous evaluation and Members may wish to ask detailed questions. In the course of that evaluation I was anxious to ensure, first, that this would be a once off event; second, that it would not be putting money into an enterprise that was not going to survive; and third, that it would contribute directly to the consolidation of a substantial airline/aircraft business in the Shannon region which is providing good quality employment and incomes. SFADCo went through that rigorous process of evaluation at official and board level and made the recommendation. The investment is secured and we can give the technical details if the committee so wishes; it is a matter of record. It is taxpayers' money and therefore Deputies are entitled to know.
I can return to the economic comments made if Deputy Bruton wishes. He is far more pessimistic about the prospects for the Irish economy in 1994 than most of the economic commentators, particularly the ESRI, whose independence is recognised. It is comforting that the UK, our nearest market, is likely to record growth of between 2 and 3 per cent in 1994. That will have a considerable effect upon the performance of the Irish economy.
We had a working session with my Department yesterday on social employment. I am not sure where the Deputy got the figure of 85 per cent of people going straight back on to unemployment assistance and only 14 per cent getting other employment. Our figure, tested by FÁS and given to me yesterday, was at least 25 per cent and in some areas higher than that. We do not have enough information as to how people progress in relation to these schemes. I would be happy to talk about that at a later stage.
The increases in the Estimates relate to four specific items. Deputy Quill referred to a number of them. I have already dealt with the Shannon issue and the social employment scheme. One of our commitments in the Programme for Government was to extend the amount of third sector social employment activity, given the nature of structural unemployment in the European Union and the projections for growth in the labour force, with which we are all familiar. That is not to say that we are going to diminish our efforts to attract inward investment on the IDA side and it is not to say that we have not been extremely active in the last 11 months in implementing many recommendations of the task force referred to by Deputies.
I understand the impatience of the Deputies opposite because I share it myself. I remind them that the third of the Moriarty task force reports recommending how the Culliton report should be implemented was put on the Minister's desk on the day I took office, 12 January this year. By 4 May we had published the Government's response to over 100 recommendations in the Culliton report and the decisions we had made. Not everybody agreed with the decisions but we are ultimately charged by the Oireachtas to make those decisions as the Executive. Our intention was published in the document Employment Through Enterprise, which Deputies received on 4 May.
The legislation to give effect to the restructuring of the IDA was enacted with the co-operation of the Oireachtas in late June. The interim boards were established in late July. I have just signed the orders for the legal commencement of those three bodies to be established on 1 January, less than 12 months from the commencement. That is a reasonably speedy response to something which people have been talking about for years. I do not share Deputy Quill's criticism of the county enterprise boards. I was critical of them as originally proposed for two very good reasons. The first was that their focus was far too wide and they were asked to consider training and community development as well as enterprise. Members will recall that we talked about the need to help small business at ground level in the local community. For that reason the county enterprise boards were refocused to have an exclusive enterprise dimension. I make no apology for that. They are reporting to and accountable to the Department of Enterprise and Employment.
I made the other change as someone who served his political apprenticeship in local government. I did not think local politicians were adequately or properly represented in the composition as originally proposed, which would have been by the county manager and the chairperson of the county council. That is an ex officio post and people are so busy moving from one matter to another that they cannot get their teeth into the job properly. Now four members are selected by the local councils. I believe local authorities have to take responsibility at local level for part of the problem of unemployment. The fact that there are 36 boards means nothing to an individual in Donegal or Cork. In each of those counties there is only one county enterprise board. One might as well say that there are 4,000 national schools and that is too many. If one lives in a particular parish there are one or two national schools and that is it.
There are many other bodies there already.
There was no other body to which a person could go to seek £5,000 to £10,000 for an idea which would employ that person or a family member or neighbour to provide a needed service to the local community. We talked about this in the last Oireachtas. The IDA would not talk to someone if the enterprise was below a certain size and was involved in manufacturing activities. It is still debarred by legislation from involvement in local service activities. We were responding to a need. They effectively got off the ground in September and we will have to see how they operate. Other issues were raised but those were the two main ones to which I wanted to respond. If there are other questions or items to which Deputies wish me to respond to I will do so.
Could I have questions, please, as we are running out of time and other Deputies wish to contribute?
How does the Minister think that the community enterprise boards will compare with the small county enterprise schemes operated by the county development teams in the past? The experience of the community development teams was not great. I can paper the walls with letters which I received saying that the Department of Agriculture had been contacted and no further funds were available. We are resubmitting those schemes now to the county enterprise boards. Does the Minister think that we will have more success under this scheme than we had under the previous one?
Has anybody a question related to this item?
I am glad to hear the Minister say that county enterprise boards will be responsible to his Department. In that context, if Dáil Deputies need to obtain information on behalf of their constituents about any aspect of enterprise boards, can they put down such a question to the Minister for Employment and Enterprise? If that is the case, does the Minister agree that it should be possible also to provide that format in the case of the IDA? Deputies experience considerable difficulty in obtaining information on behalf of their constituents. This information should be available to them but they have been denied it for a number of years because the boards do not seem to be answerable to the Minister.
Is it correct that from 1 January the county enterprise boards will be dealing with EC structural funding? If so, the flexibility will be somewhat confined. Will the Minister give us an assurance that we will not get bogged down in a bureaucratic quagmire where applications will go to evaluation committees and to county enterprise boards only to be rejected by the Department and have to be resubmitted? That would destroy this whole scheme. The county enterprise boards exist and whatever funds are available must be used to create as many jobs as possible locally. In order to do that, a fair amount of flexibility must be given to the people on the ground who know the situation and can assess the possible future benefits of a small grant being given to an individual, a small group or whatever. If they find that they are going to be refused at central level this will quickly sound the death knell of these boards.
On this specific point, I am disturbed that very little money has got through this year into business, yet we spent £3.5 million according to the Estimates. Next year we are going to spend another £3 million which will not get through to the people on the ground. At the end of next year we will have spent nearly as much on administration as on new enterprise. Is there any evidence that a local grant-giving bureaucracy, which is what we are creating, was needed? Was there any evidence that it was the absence of such a body which was holding back enterprise?
The agencies had a negative attitude to the service sector and to small operators but that was a policy problem. It was not necessary to establish new bureaucracies. If we really want to nurture enterprise at local level, we do not need another form filling evaluation at three different levels. We want something which people will put a few shillings of their own money in, own it, have shareholding and let them process their money. If the Government wants to seed such activity it should make some funds available. However, creating bureaucracies with representatives of everyone to ensure a concept of partnership is not called for and flies in the face of what Culliton said.
People with good ideas who want to start a business in response to a local demand or gap in the market have, over the years, told me about the difficulty of obtaining start-up capital. They have also mentioned the difficulties of getting access to technical know-how or marketing expertise. I know the personnel of some of the enterprise boards and I do not think they have the skills necessary to respond to such demands on the ground. I can see great potential for nurturing enterprise from the ground up but I do not see it coming from the enterprise boards. We are leaving the days of grants and so on. We are setting about cultivating a genuine enterprise culture where people will be assisted to raise their own finance and then to move on from that. That is part of the whole enterprise culture rather than operating through another hand-me-down body. A different philosophy is required.
We are constrained for time. I will ask the Minister to respond to those points. Deputy Bruton has another question and we will then conclude.
I wish to answer a specific point which was made by Deputy Durkan. I do think that the boards will be more effective than the county development teams because of their organisational structure and the fact that they will have moneys nationwide in a way which the previous county development teams did not.
With regard to specific questions, I am not going to answer parliamentary questions as to why a particular grant was not made by such and such a board. The reason for this is called decentralisation. Four members are nominated from the local authority. Most of the members of this committee are current or former members of local authorities. In many cases, the county manager is actively involved in the local authority. It would fly in the face of everything we ever said about decentralisation if I were to answer such questions. One can put down a notice of motion or question to the manager at the local council or ask directly. It would be a retrograde step for us to get into the nightmare bureaucracy of finding out why and answering parliamentary questions. Members will recall that we got rid of that system in relation to telephones and social welfare matters. However, if a county board is not providing adequate and reasonable information to an elected member on a matter about which they can legitimately inquire, then that would be an issue of principle as distinct from the specific details of a particular matter.
To summarise the difference and the philosophical approach of these boards in contrast to what was there before, there is more money available in terms of start-up capital, which people have clearly identified as being necessary. There is definitely more decentralisation, which everybody has spoken about for a long time. We are trying to ensure that a decentralised body will be given the flexibility to do the sort of things to which Deputy Rabbitte referred, subject to the caveat that this is taxpayers’ money which we are voting to give to individual groups. We must have some safeguards as to how that money is spent.
Finally, there will be more accessibility. There will be representatives from Forbairt and FÁS on each of the county enterprise boards and if somebody needs expertise in a business plan or in marketing they can be steered in the direction of such bodies. That is why the board has that composition; those people were put on it deliberately.
We are responding to something about which people have spoken about for a long time. The seed capital which is in the form of a grant—there will be no 100 per cent grants—will, when combined with people's own money, hopefully unlock a loan from some of the small business funds which the different banks are beginning to establish. That is how we envisage the scheme operating.
I ask the Minister to show, either orally or in writing, how the GPA shares have a value and how the investment is secured. How can the Minister reallocate £3 million in capital spending from FÁS to social employment schemes? It strikes me as being a "funny money" type operation.
I again ask the Minister why we need a second layer of bureaucracy in the Department of Social Welfare to deal with schemes aimed at the unemployed. Why do we need separate administration by the Taoiseach of something the Minister's own Department is quite capable of doing? Why is research and development being cut by 36 per cent? Is it true that FÁS will have a substantial proportion of its mainstream budget cut next year? I understand the cut to be in the region of 25 to 30 per cent.
We can get the Deputy details of the securities in relation to the GPA loan. They are quite complex and, given the time constraints, it would be easier to write, setting them out for any Deputy who wants them.
The Department of Social Welfare has introduced 50 facilitators around the country because they are trying to encourage people who are signing on to look for work. These are people who were not going to FÁS offices in the first place. We will not have two people doing the same job; in a sense, there will be two people doing complementary jobs. People were signing on and never going near FÁS. As a consequence of an increased use of electronic data, they are now being interviewed by the facilitator in the unemployment centre and steered in the direction of FÁS.
FÁS must be doing its job.
The Deputy is missing the point. We are trying to direct and encourage people. They are interviewed and asked why they are signing on and if they have looked for a job. There was no compulsion on anybody to go to a FÁS centre. People who were signing on every week had a point of contact where one could intervene and with the available records and information one could identify them. This is the reason for what they are doing. We think it might work and there are resources available in the Department of Social Welfare because of the improvement in information technology which has released a number of people in that area.
The provision for measure six has been cut back because of the overall changes in the moneys which it is anticipated will be available for science and technology in 1994. That is one of the reasons the overall reduction in the budget has been seen in the Estimates published for 1994. These are in addition to the Estimates we are discussing.
Is that sensible? Jacques Delors told us we should be aiming at 3 per cent for research and development. We have 1 per cent and we are moving away from what is sought. Prudence in Irish terms is that we should be improving research and development, which is very weak.
I take the Deputy's point.
The Minister did not answer the question about FÁS training next year.
The final Estimates for 1994 have not yet been published. We expect to be able to clarify the exact allocation of money between now and the budget.
My understanding is that FÁS has already been told that they must cut those mainstream training activities.
There are certain reductions in the overall budget and we are looking at the exact way in which they will affect the operation of FÁS in 1994.
Maybe the Minister would inform us because the reality is that FÁS has been informed that they must cut. The cut will be in the area of mainstream training.
A question was already asked in relation to the considerable overspend by the IDA. Could the Minister give us an approximate indication of the return on that overspend in terms of new companies or jobs? I would appreciate it.
We will take a final question from Deputy Doherty and the Minister will then conclude.
It is my experience and it may be the experience of some of my colleagues that young men and women who do training courses with FÁS find it is necessary that they have some experience in businesses or field work. It is often difficult to get that experience as part of their course or at the conclusion of it. I suggest that the Minister consider setting up a directory of employers who would be in a position to offer opportunities to those who have undergone FÁS training to gain further experience or develop skills. There is a deficit in this area and I would be interested to hear the Minister's views on the matter.
Does the Minister believe that the projections in relation to job creation in the National Development Plan are likely to be met? If one takes account of all the people involved in schemes and so on, there are approximately 382,000 people available for but unable to obtain employment. Only one third of the projections in the last national plan were met.
I ask the Minister to deal with those questions and make whatever concluding comment he wishes.
I will take the last question first. I expect that the projections over the five year period of the plan will be met. The ESRI commented when the plan was published that the job figures projections were slightly cautious. Many of the factors that will determine it are outside our immediate control, for example, the rate of reduction of employment in the agricultural sector and the performance of adjoining economies to which we are significantly connected and which in turn will affect other factors.
Work experience is essential to enable people to improve their prospects of obtaining employment. The Deputy will be aware that we have, at various stages, tried different work experience and employment schemes to encourage employers to take on young people in particular. There have been mixed views as to the success, suitability and effectiveness of those schemes but we should consider looking at them at all times. Work experience is a critical component and it is now clearly recognised in the education system that work experience is an essential part of the schooling process. How one can get it without creating a dead-weight subsidy for employers who would otherwise be employing people anyway is not clear. However, we will examine the area at another stage.
Deputy Quill asked how many jobs were created by the additional money provided to the the IDA following the initial shortfall. The note I have here indicates that approximately 12,000 new jobs were created by the IDA. It says that the return for IDA investment is the coming on stream of approximately 12,000 new jobs, which is part of the target they have already. We have the details here which are available to the Deputy in written form.
Was that the target without the extra money?
The amount of money required in some cases varies. In the last year, the Government has said that it is allocating money based on the demand of the IDA for funding. As Deputies know, every year presents a difficult budgetary situation but we clearly said to the IDA that we would not starve them of additional funds if they could show that there is a demand for money resulting in real jobs coming on stream. That is why the additional money was provided.