Dáil Éireann Debate, Wednesday - 15 July 2015
4. Deputy Dara Calleary asked the Minister for Jobs, Enterprise and Innovation his views on IDA Ireland actively working with companies in securing contracts for the outsourcing of jobs at Allied Irish Banks, in which the State is the main shareholder; and if he will make a statement on the matter. [28721/15]
Amharc ar fhreagraAIB has made a series of jobs outsourcing announcements recently. For example, it announced last week that 230 jobs in its information technology department are to be outsourced. When I tabled a question on this matter to the Minister for Finance some weeks ago, he told me that as the principal shareholder in AIB, he takes "an active interest in how the bank's cost base evolves". He then let it slip that he had been informed by AIB that "the companies involved in the proposed outsourcing are establishing delivery centres in Ireland (in consultation with the IDA)". Is IDA Ireland sponsoring the outsourcing by a State-owned bank of its employees and helping that bank to pass the cost of its employees on to a third party? If so, that is not what IDA Ireland was established to do.
IDA Ireland is involved in the attraction of foreign direct investment to Ireland to service international markets. It is not involved in the day-to-day operational or decision-making functions of companies. There is a growing tendency across the world for companies to outsource certain business functions. Companies in Ireland are part of this trend. In all sectors, companies use the practice of outsourcing to enhance productivity, use their resources better, focus on more core business areas and tap into new technologies without in-house expertise. Such business process outsourcing is a fast-growing economic sector in which Ireland is winning substantial international business. Ten companies supported by IDA Ireland in this sector are supporting 4,940 jobs and 15 companies supported by Enterprise Ireland in this sector are employing 5,700 people. I should make it clear that no support is given to such companies when they are competing for Irish-based business. It would be very short-sighted not to recognise that this sector should be pursued to assist job creation in Ireland and thereby avoid outsourced jobs moving to other countries, given that modern technologies make this easily achievable in most cases. Indeed, Ireland has proven its ability to maintain and develop innovation in this sector, which is winning new business for the country. When such contracts are available, it is in our national interest that companies based here should pursue those opportunities and compete for this work.
Companies based here include AIB which employs many thousands in its IT section, but it seems to be determined to outsource that function. Will the Minister confirm that IDA Ireland is supporting a company which will take the contract from AIB and that the responsibilities of the workers currently performing that role will be transferred to it? AIB has stated there will be no redundancies and that workers will be looked after. I am not referring to a company locating in Ireland and seeking international business, but will the Minister state specifically whether IDA Ireland is supporting a company that will take existing jobs which offer very good terms and conditions in the Irish market?
No, that it not the case. There is a well developed joint strategy between Enterprise Ireland and IDA Ireland, under which competition for domestic contracts is not supported by either agency. However, companies in BPO which are internationalising are entitled to support from IDA Ireland or Enterprise Ireland in the growth of their overseas business. As the Deputy knows, a company such as Eishtech which started from nothing and has grown to employ 950 people in a very short period is one of the success stories. Others include Voxpro and SWS and numerous other such companies are growing. It is only in the context of new international business that they will be supported by either agency.
I accept that, as well as the success of the sector, but if that is the case, why would the Minister for Finance, Deputy Michael Noonan, state in reply to a parliamentary question that companies involved in the proposed outsourcing are establishing delivery centres in Ireland in consultation with IDA Ireland? He framed the response in the context of his officials taking an active interest in how the bank's cost base had evolved to ensure the State's interest as a shareholder would be protected. I did not ask him about IDA Ireland involvement as I did not think it or Enterprise Ireland would be involved, but he put it out there that whatever company was coming in to take over the contract for AIB and, most importantly, its workers, was in consultation with IDA Ireland. The sector is strong, but can the Minister, Deputy Richard Bruton, give an absolute assurance that neither IDA Ireland nor Enterprise Ireland will subsidise a company that is planning on taking existing jobs?
I can. There is an agreement and we would not tolerate a situation where Enterprise Ireland might subsidise one company and IDA Ireland another, both of which would be competing for taxpayers' money. That would be unthinkable, but that is not to say Enterprise Ireland does not talk to companies that are internationalising and which may also have Irish business. It is fine to talk to companies that are competing for domestic contracts, but we do not support them in any fashion. As the Deputy knows, a number of international companies won business here and then grew international businesses from an Irish base, which is very positive. Naturally, IDA Ireland is in consultation with companies that win business in Ireland and wants to see them develop an Irish platform to win European or wider international business. We have a strict protocol that is applied jointly by Enterprise Ireland and IDA Ireland and naturally it has to protect companies in a way that will ensure there will be no unfair competition. That is the way we operate.
