Other Questions
6Deputy Sandra McLellan asked the Minister for Jobs; Enterprise and Innovation if he will provide an update on the review of county enterprise boards being conducted by the Central Coordination Unit within Enterprise Ireland. [33860/12]
Amharc ar fhreagra13Deputy Michael Moynihan asked the Minister for Jobs; Enterprise and Innovation when he expects to abolish county and city enterprise boards; the expected savings; if he will prepare an impact analysis on jobs of the move; and if he will make a statement on the matter. [34018/12]
Amharc ar fhreagra23Deputy Sandra McLellan asked the Minister for Jobs; Enterprise and Innovation the consideration given to determining budgets of the new LEO’s on the basis of need as measured by unemployment. [33859/12]
Amharc ar fhreagraI propose to take Questions Nos. 6, 13 and 23 together.
The county and city enterprise boards, CEBs, receive an Exchequer capital allocation each year towards the provision of grants and soft supports to the micro-enterprise sector. Within this, individual capital allocations are made by the CEB central co-ordination unit, CCU, in Enterprise Ireland. A systematic approach is adopted to ensure objectivity and equity of treatment across the CEBs and determinants include local unemployment rates and trends, population, capacity to spend, existing commitments and regional spread.
The mid-year budget review is a routine budgetary exercise carried out by the CCU to monitor expenditure by the CEBs. This review is due for completion by the end of July. Its purpose is to identify any potential underspend and ensure that the CEBs' allocated funding is utilised to the maximum extent possible.
To enhance the service to small businesses at local level, the Government has decided to create a new small business unit within Enterprise Ireland. Enterprise Ireland will work with local authorities to establish a new network of local enterprise offices, LEOs, in each local authority to act as a one-stop-shop for micro-enterprise and small business. The service will be provided in local authorities and a formal service level agreement between Enterprise Ireland and the local authorities will be put in place. In time, synergies will be achieved in terms of a more streamlined model for the delivery of enterprise supports and interventions to the micro-enterprise sector. Some savings on current expenditure are envisaged in the medium term, for example, on reduced accommodation and administrative costs.
The aim is to provide a seamless and effective service that is of a high standard, supports local businesses and facilitates job creation. Primary legislation will be required and my Department is in contact with the Attorney General in this regard. An implementation group has been established under the chairmanship of my Department. It will develop an implementation plan with timelines and milestones for delivery of the new structure.
This question relates to the experience of CEBs. Today, an individual told me that his CEB had no money when he went to it in April 2011. He did not want to return to it this year because he figured that it would still have no money. When I contacted the CEB recently, it stated that it had money.
There is a great deviation between CEBs' first quarter results. Some have spent 90% of their money and some have spent 50%. What strategic tools are used in the delivery of funds to CEBs? They should base their strategies on demand, population sizes within their areas and levels of unemployment. They need to create demand rather than just respond to it. The CEBs, or LEOs as they will become known, should not be a part of the demand-led experience where enterprise is concerned. They should be used as a tool to awaken and create enterprise. May I contribute again, as a number of questions are being taken together?
The allocations are based on a weighting of factors, including unemployment and the capacity of CEBs to deliver new projects. It is a balancing act, which is as it should be, to encourage high performers and so on.
The Deputy is right, in that practices differ between CEBs. Some are in the habit of committing in advance and have high levels of commitment at any stage of the year while others adopt a different policy. The reform is intended to develop a service level agreement with local authorities, one that will go beyond the allocation of funds and consider the quality of mentoring and training to ensure that standards are being met. We will also use the LEO structure as the conduit for many of the micro-finance applications to ensure that they are backed by quality business plans. New policy instruments are in the hands of the LEOs, which are being developed, but we also want local authorities to knuckle down to their responsibilities and make the environment in each county as good as it can be for supporting businesses.
My question is somewhat different, in that it is more direct. I have spoken to the staff of a number of CEBs and to businesses that have engaged with CEBs previously and intend on doing so again. To be frank, no one has a clue as to what is happening. The Minister stated that he established an implementation group that would devise an implementation plan.
I am trying to ascertain - in a non-political fashion, I hope - on behalf of the people asking me approximately when all of this will be in place.
The Minister mentioned there would be some cost savings but, frankly, I cannot see them. The Minister and his officials have told me on a number of occasions that there will be no reduction in staff and the people in the business development section of the local authorities will join the new people and form a unit that will cover a range of areas. Where will these new one-stop shops be housed? Will everybody move into the local authority building or will there be a separate office? Has the Minister any indication of how this will work in practice and when it will do so?
We have established an implementation group which has had a number of meetings already. Those people are putting together a plan for the implementation which will include timelines, and I expect to have very substantial progress made by the end of the year. There is a legislative requirement which must come before the House, and I do not expect to have that before the start of next year.
The group working on the implementation plan includes representatives of the enterprise boards, the professionals in the field and representatives of the managers of local authorities. Our aim is to gain a "win-win" position from this and enhance the delivery of service locally by supporting those working in local enterprise offices with a centre of excellence in Enterprise Ireland and by developing new tools, setting standards and driving quality. Local authorities will also be embraced to make them part of solving the problem for local business and have a business-friendly system. This is a challenging change and I acknowledge that not everybody would support it. It will none the less deliver a better quality of service for business in local areas, which is the objective.
I have made my points on the dangers of having the local authority involved, as it is a cost and regulation centre for small businesses. Therefore, there is a natural antipathy for small businesses. There is also a lack of culture within local authorities towards enterprise, and I agree with Deputy O'Dea's comment that there is very low morale within county enterprise boards throughout the State. Since the days of the former Minister, Batt O'Keeffe, the people in those organisations have not known, from one day to the next, what will happen to them. It is a limbo-like process for such an important tool.
Local control is very important. Will the Minister ensure the control, development and orientation in each county will not migrate to a regional status through Enterprise Ireland's control and that there will be an orientation towards the needs, knowledge and experience in the locality? There are a number of partnerships and Leader programmes throughout the State which also fund enterprise. There is sometimes at least a perception that there is an overlapping of activities, so does the Minister have plans in that regard?
The Minister mentioned standardisation and equality of training, which is very important. There is much work going on with the creation of SOLAS, and the VECs also provide training. There must be a system whereby standards can be equalised and raised, and there should be an understanding between VECs and SOLAS, etc.
There is now certainty about the future of county enterprise boards, and it will be to deliver a one-stop shop within local authorities as part of the enterprise family. They will be answerable, through a service level agreement, to Enterprise Ireland, which is establishing a centre of excellence for the support of small business. We have a clear structure that will give people certainty. We will retain local control and there will still be a local evaluation committee. Decisions will still be taken and the evaluation will be done locally, albeit under a service level agreement. We will ensure this is being done in a way that stands up to scrutiny, and although we will not interfere in individual decisions, we will want to see that the overall impact produces quality.
I know the Deputy's comments reflect the views of many people that local authorities are a dead hand. My experience with city and county managers is that many have ambition to be part of driving change and enterprise growth in the area. These are dynamic people that we must harness to the support the process. The success of this initiative will depend on local county and city managers, along with local authority members, wanting to make their county or city the best place in which to do business and the best environment for supporting small business and start-up companies. We depend on that.
My experience of city and county managers is somewhat mixed. I have a brief question. I do not want to pre-empt the work of the implementation group but I welcome the information communicated by the Minister that one of the matters it would deal with is the processing of the microenterprise loans at local level through the structure outlined by the Minister. Will the Minister give the House some idea of what other services might be provided? Would they include legal and accountancy advice or help in accessing finance? Does the Minister see it as a vehicle to assist small business in accessing the export market?
Small companies with potential would enter the export market through Enterprise Ireland. It has 31 offices overseas and has expertise and a programme to support exports. It has also put in place a first-time exporters' division.
It will provide a link.
Exactly. For a small business, there will not be a ceiling that cannot be breached. If a company has export potential and there are only two people involved, they will be able to access the system through Enterprise Ireland.
To be clear, I have not said it will process the microfinance loans, and there will still be a "microfinance Ireland", as it were, that will make decisions on applications. The people who will help applicants put together the business plans will be local. They will not make decisions at a local level on loans or issue them. They do not have the authority. They will be one of the brokers, and others will include the likes of Inner City Enterprise in Dublin. These are people who work with start-up companies in high unemployment areas.
7Deputy Brendan Smith asked the Minister for Jobs; Enterprise and Innovation when the Cloud Computing Implementation Group held its most recent meeting; when he expects to receive proposals from the group for his consideration; and if he will make a statement on the matter. [34004/12]
Amharc ar fhreagraThe cloud computing implementation group held its last formal meeting in March 2012 and submitted a report on its work on 14 June 2012. I have asked my Department to prepare targets and measurements based on the report's key findings which will allow us to monitor progress to ensure we maximise the potential of this important area of the ICT sector.
In conducting its work, the group examined the opportunities and challenges presented by cloud computing for both business and government from the following perspectives: the cloud as a source for exports, growth and jobs; the adequacy of key infrastructures; the regulatory environment; the opportunities and benefits for indigenous enterprises; the opportunities for attracting foreign direct investment; and government as a leader and user of the cloud. The group's work was informed by a parallel process of engagement which resulted in the Department convening more than 20 meetings with representative bodies and individual companies in September and October 2011.
Considerable insight and information was gained during the process and this is being examined to assess the best way forward and the practical steps that can be taken to optimise the potential of cloud. In the meantime, a number of other initiatives related to cloud computing are under way, including under the action plan for jobs. These include the €1.2 million initial research programme in the cloud computing technology centre announced in April, which is aimed at helping to make Ireland a world leader in this fast growing area and at making a significant contribution to jobs and economic growth. The initiatives also include the ICT skills action plan, which was launched earlier this year and includes the provision of courses relevant to the skills required for the cloud computing industry. The National Standards Association of Ireland, with the assistance and support of the Irish Internet Association, IIA, has developed the SWiFT 10 guide, which is aimed at businesses of all sizes considering the adoption of cloud computing.
Additional information not given on the floor of the House.
In addition, the Data Protection Commissioner has placed information on its website which will be useful for businesses moving to the cloud, with an obvious emphasis on the data protection issues related to such a move. I understand the public sector strategy on cloud computing is close to finalisation in the Department of Public Expenditure and Reform and will be published shortly.
I thank the Minister of State for his reply. Do I take it the last meeting of the group was in March and it submitted its report in June?
Yes.
So the Government must decide on how to take the matter forward. Is this where we are?
Yes.
We are all familiar with the Goodbody report and the potential of cloud computing for employment creation. Will the Minister of State ensure the usefulness of cloud computing as a mechanism to reduce costs in the public sector is fully taken into account? The impact of cloud computing on e-learning in schools is very uneven and depends on the extent to which broadband has reached an area. Will the Minister of State ensure this is taken into account? Given that the programme for Government states it is a policy to make Ireland a world leader in cloud computing, which is a very noble aspiration, can we get on with it as quickly as possible?
I agree with everything the Deputy has said. The Minister for Public Expenditure and Reform, Deputy Howlin, is engaging on its usefulness for reducing costs in the public sector and there is much concentration on this in the wider public sector. Membership of the group varies from people involved in industry to those in the Department and the Department of Public Expenditure and Reform. We all realise its value and we know who in industry operates in this sphere, for example EMC in my area. There is a strong sense the cloud computing strategy can set new targets for investment in digital media and the Internet when one considers existing opportunities for technology companies and new and emerging areas. We will marry with this the potential for data centres and the consideration of Ireland for potential inward investment for these.
We welcome the promotion of cloud computing. It has the potential to make savings for businesses throughout the State. Businesses will connect to the cloud through broadband, and we are concerned that at present the State has three broadband speeds, namely, fast, medium and none. We have fallen to 57th place internationally with regard to broadband speeds. The movement towards cloud computing would be great but for the fact it will have the effect of excluding some businesses throughout the State which do not have proper coverage and they will be at a competitive disadvantage. What steps will the Government take to ensure there will be one broadband speed and that instead of being 57th we will be in the top ten internationally?
The Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, has specific responsibility for this area. I do not know whether the Deputy has engaged with him on this matter, but I suggest he does so because he would get a definitive answer on what we are doing with regard to broadband.
For the purposes of addressing the issue of the potential of cloud computing, I realise certain businesses operating in certain geographical areas will face challenges and there is no question about this. We will spend €1.2 million on an initial research programme and a cloud computing technology centre. With regard to the potential of this area, we are looking at hitting global research targets and pitching Ireland's potential globally. The National Standards Authority of Ireland has adopted the SWiFT 10 guide and I would like to find out how many businesses are aware of this at present. If we can build consciousness about the potential of cloud computing in tandem with meeting the challenges with regard to broadband we will be doing well in terms of meeting global measurements.
Is the Minister of State aware of concerns in industry that graduate programmes and courses in our third level colleges may not be up to speed with regard to cloud computing and that those teaching the courses may need further training and upgrading?
If the Deputy is concerned about a specific course I would welcome further information on it and I am happy to speak directly to him on this matter. Cork Institute of Technology, in tandem with industry, has developed a specific course on this. Mr. Bob Savage of EMC is on the governing body of CIT so one is confident this course has large industry buy-in. If the industry has problems with or concerns about courses we need to hear about them.
8Deputy Martin Ferris asked the Minister for Jobs; Enterprise and Innovation the cost of each of the international offices of the Industrial Development Agency; and the number of jobs generated by each. [33874/12]
Amharc ar fhreagraThe total costs associated with administering the IDA's 18 overseas offices in 2011 was €10.5 million. These offices are located in New York, Boston, Chicago, Atlanta, Irvine and Mountain View in California, London, Paris, Frankfurt, Tokyo, Shanghai, Shenzhen, Singapore, Mumbai, Bangalore, Australia, Russia and Brazil. It is not possible to give a breakdown of the cost of each individual office, but the total costs associated with the six offices in the US are €5.4 million; the three European offices are €2.5 million; and the nine remaining offices in Asia and growth markets are €2.5 million.
The IDA's network of overseas offices is required to underpin the agency's overall strategic plan, Horizon 2020. Its overseas offices are the first point of contact for potential new investors into Ireland and also provide ongoing contact between the agency and its existing clients. The opening of additional offices by the IDA in recent years is part of the Government's worldwide strategy to increase the IDA's international presence in the attraction of foreign direct investment.
By their nature multinational corporations are located in various regions globally. The sourcing of any individual project is a team effort involving negotiations with more than one branch of the multinational corporation. These negotiations take place in overseas locations and in Ireland and are carried out by IDA officials based in headquarters and regional offices in Ireland and in overseas offices. The United States remains a key IDA market, with 72% of foreign direct investment in Ireland originating from the US. Europe is the next biggest market, with Germany leading the way and then the UK and France. As the global economy, and in particular the European economy which is a primary target market for foreign direct investment clients in Ireland, is in a low growth phase, the challenge for the IDA is to continue to win foreign direct investment in this low growth environment.
The IDA has 1,004 client companies which provide full-time employment to more than 130,000 people. Just over 50% of these client companies are based in the United States. The European market accounts for 399 client companies providing employment to 29,000 people while the remaining Asian and growth markets account for 90 client companies employing 5,600 people. To date in 2012, 49 investment announcements have been made with the potential to create almost 5,500 jobs, and 37 of these investments were from US companies.
Foreign direct investment is extremely important given the collapse of the domestic market. We are supportive of the successes the Government has achieved with regard to foreign direct investment, but it is not nearly enough considering the major problem we have. We also have problems with the fact foreign direct investment operates in the State as an enclave. I have previously given the example in the House of the fact that 60% of exports comprise chemical and pharmaceutical products and 80% to 90% of their inputs come from abroad. As of yet, we do not significantly integrate foreign direct investment with the State.
We also have a problem with the fact that much of the focus has left the native entrepreneur and gone towards the foreign direct investment sector which is less sustainable. We have made the point previously that we have competing office structures, between the IDA, Enterprise Ireland and Invest NI in the North, and until these structures are merged, there will be cost inefficiencies. It is important to flag the fact that when the North of Ireland gets corporation tax powers of its own and its tax equates with ours, co-operation with this State will end because Northern Ireland will then be a direct competitor for our target FDI market. Therefore, it is important that a merger happens before then.
It should be possible to identify the cost of each office in each region. There is no Irish business operating internationally that could not tell us exactly how much that office costs. Also, do IDA staff who bring in jobs get incentives or bonuses for the jobs created? While those jobs are supported by another office, could they be tracked to just one office?
I would like to take issue with the suggestion that foreign enterprise is some sort of an enclave. Foreign enterprise employs 150,000 people and the agencies supporting indigenous companies employ approximately the same number of people. The global spend of both sectors in the Irish economy is about equal. Foreign-owned export-oriented companies spend as much in the Irish economy as indigenous companies. They spend on services and materials, and while there has been a decline in materials, there has been a growth in services. Therefore, the sector is embedded.
As Deputy Sherlock would tell the Deputy, the development of the science clusters we have is crucial now. There are very close relationships between multinational companies and our higher education institutes, which provide research and links, through technology centres, to indigenous companies. We have been successful in creating strong clusters in many areas, such as financial services and medical devices, and these are a mix of indigenous and multinational companies working together. This has given us a competitive edge. Therefore, I refute the notion that we are some sort of enclave. Equally, many Irish people are now in key leadership positions within global companies. Our strategy is not some sort of oasis in the middle of an ocean, but is embedded. I accept we need to make it more embedded and that we need better linkages on all fronts.
On the question of bonuses and the performance of the different offices, the IDA operates the most stringent performance tests for its people. It works individuals hard and has bright and enthusiastic people working on Ireland's behalf overseas, who work to the highest standards. It is not a question of giving them bonuses. They see their job as delivering for Ireland overseas.
I have no problem with individuals getting bonuses for good work. That is not the point of my question. The point is that I want this Chamber to be able to review the work of individual offices, because while some offices may be successful, there is no reason we should not be able to measure what is happening in all of the offices. As a parliament, we should encourage such transparency.
Second, the export-to-jobs ratio in the FDI sector is far lower in this State than the domestic export-to-jobs ratio and far lower than the international average. While good work has been done with regard to clusters, FDI is less engaged with the domestic economy than the international average.
That is a different issue. The Deputy suggested it was an enclave. We know that output per person in foreign-owned companies is much higher than output per person in domestic companies. That is the case for all sorts of reasons, such as the sectors involved. The pharmaceutical and biopharma areas, for example, have very low labour contents by and large, and that is true wherever they are located. The fact that these industries are significant in Ireland and that the companies involved are foreign-owned influences the figures.
I am sure we can look with more granularity at the different offices, but one does not need to be Einstein to know, for example, that offices in Mumbai and Bangalore or Shenzhen and Shanghai will not perform to anything like the level of offices in the US if we are talking about the number of jobs they deliver per office. However, these are long-term investments and we need to build long-term relationships in those BRIC countries to build for the future. We can try and get more information, but it cannot be simplistically interpreted. We cannot just look at the jobs delivered per office and decide to close one and develop the other on that basis. We need a long-term strategy to build the overseas opportunities.
9Deputy Michael Colreavy asked the Minister for Jobs; Enterprise and Innovation the additional steps taken by him and additional measures he will put in place to promote employment for the 199,249 long term unemployed. [33867/12]
Amharc ar fhreagraThe Government is tackling unemployment generally through the twin strategies of the action plan for jobs and the Pathways to Work scheme. The aim of the action plan for jobs is to support the creation of 100,000 net new jobs by 2016, while the objective of Pathways to Work is to provide those who are unemployed with the appropriate training and skills to avail of the job opportunities which will arise as the economy recovers. The long-term unemployed are a priority target group for the measures in Pathways to Work.
While many of the new measures included in the action plan for jobs are not confined to those who are long-term unemployed, they will be of particular relevance to their needs. For example, the microenterprise loan fund will provide funds for people who wish to start businesses in their local economies but have been refused credit by the banks. Other measures such as the Revenue job assist scheme, which is used by employers to take on persons who are long-term unemployed, are being promoted both by extension of the coverage of the schemes in the Finance Bill and through the dissemination of information. The employer job (PRSI) incentive scheme has been simplified and extended. This scheme provides exemption from the payment of employer PRSI contributions for 18 months when a qualifying unemployed person is recruited.
Under Pathways to Work, the Department of Social Protection is committed to supporting over 85,000 job placement, work experience and back to education beneficiaries this year, including through the JobBridge internship programme. The Minister for Social Protection, Deputy Joan Burton, has announced 1,000 additional places on JobBridge this year. The Department of Education and Skills will provide more than 450,000 education and training places this year across the range of provision in the higher education, further education and training sectors, including through the Springboard programme. More than 3,500 people have graduated from the first round of Springboard programmes, which were put in place in 2011, and the Minister for Education and Skills, Deputy Ruairí Quinn, recently announced a further 6,000 new places on the programme for 2012.
People cannot eat every section of the jobs action plan, nor will the Pathways to Work scheme pay people's mortgages. What people want to see are real jobs and not some kind of self-created score card the Government can tick off and feel it is succeeding. It is disastrous that we have 200,000 people who are long-term unemployed. At the personal level, this means a significant number of individuals whose confidence and ability to engage with society is reduced. Their feeling of self-worth is reduced and they find it soul-destroying not to be able to engage with the economy. From an economic perspective, the skills and experience of these individuals are not being harnessed. No matter the lengths the Government goes to with its score card, it is failing the people with regard to long-term unemployment.
A figure of 5,000 places was mentioned with regard to the JobBridge programme and it was suggested there will be 1,000 extra places. However, this number - 1,000 - is the same as the number of people who will emigrate between now and next Thursday. The proposals are completely inadequate to deal with the problem. The Government should instead look at the cost base for start-up companies, deal with upward-only rents and consider progressive taxes, targeted reductions of energy costs, reductions in red tape and reductions in insurance costs. It should also look at job activation programmes that have been used in Germany. As I mentioned earlier, it should decide that the banking industry will orient credit around the needs of business, rather than the economy being oriented around the needs of banks. Will the Government come out and indicate that it will introduce a multi-billion euro Government stimulus plan to kick-start the economy?
Based on my experience in business, I support the points made by Deputy Tóibín. There has been a significant focus by the Government and the European Union on reform, deregulation and the flexibility of the labour market, but the biggest challenges are still energy costs, upward-only rents and rates. There was much talk about rents and rates before the election but we have not really seen activity and stimulus in that area. Most of the employment in this country is in the domestic market but businesses are struggling. These are three crucial areas which would make such a difference. Energy is so expensive in Ireland. It would be very positive if, in some way, this Government helped businesses with energy costs, aside from the upward only rents, on which obviously the banks were not very keen.
We all acknowledge that over the past years this country has gone through major restructuring in terms of how the economy works. The Minister already stated that if all the eggs are in one sector and if it fails, it has a monstrous effect on the economy. We are trying to put in place a set of programmes which will allow people to upskill and retrain, so that we have a skillset. I mention the number of construction jobs alone which were lost. The only way we can get people back into the workforce is to upskill and retrain them but that does not happen within one, two or three months. We must allow time for that to take effect.
All sides of the House must acknowledge - let us be apolitical about this - that we have provided incentives on the Revenue side and on the employer side and we have allowed for credit to be made available through the micro-enterprise partial loan guarantee scheme. The Government is actively intervening to try to stimulate the economy and to create the right conditions.
I take the point made about the cost to business and a reduction in the regulatory burden. I would acknowledge that we need to do more on EU targets in terms of the cost of the regulatory burden but I would also say there is a discussion at Cabinet level in regard to local authority funding and the cost to business at local level. Local authorities cannot continue to rely, in the way they have done, on the ratepayers who have been squeezed in terms of funding local government. The Cabinet is discussing this issue. However, one must acknowledge that because of the tidal wave which hit us as a result of the collapse in the construction sector, in particular, which had fuelled the economy, we had to restructure the economy on macroeconomic grounds and put in place these types of programmes which do not bear fruit in the timeframe about which the Deputy spoke. It will take longer.
Written Answers follow Adjournment.
