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Wednesday, 18 Apr 2018

Priority Questions

Corporate Governance

Ceisteanna (20)

Billy Kelleher

Ceist:

20. Deputy Billy Kelleher asked the Minister for Business, Enterprise and Innovation her views on the robustness of the Companies Act 2014 with respect to corporate governance; and the penalties in operation for breaches under the Act. [16974/18]

Amharc ar fhreagra

Freagraí ó Béal (6 píosaí cainte)

Will the Minister give her views on the robustness of the Companies Act 2014 with respect to corporate governance and the penalties in operation for breaches under the Act? We are all aware of alleged breaches and investigations and everything that flows from that in a prominent media outlet at this time. Is the Minister confident and happy with the robustness of the Office of the Director of Corporate Enforcement and the penalties in the Act to address issues of breaches of corporate governance in plcs and other companies?

I want to begin by congratulating Deputy Kelleher on his appointment as spokesperson for business, enterprise and innovation and I look forward to working with him. I do not have a monopoly on good ideas and I am happy to work closely with Deputy Kelleher, as I do with my other colleagues, in doing everything we can to create and sustain jobs and to support enterprise.

I am satisfied that the Companies Act 2014 is robust. It is an important element in ensuring Ireland's regulatory environment is maintained to the highest standard. All companies, regardless of size, are required to comply with the extensive provisions of the Companies Act 2014.

Moreover, company directors are obliged under common law to exercise fiduciary duties, which include the obligation to act with care, skill and diligence. Alongside company law, companies must comply with a broad range of legal requirements on the treatment of employees and creditors, disclosure to Revenue and the protection of the environment etc. Taken together, these regulations make up a wide-ranging legal framework for the conduct of business.

The Companies Act 2014 introduced some changes that are relevant to the governance of all companies, both listed and not. In particular, one of the key innovations of the Act is that directors' common law fiduciary duties are codified together with the diverse statutory duties and assembled into one place. This makes the law more accessible and comprehensive for directors.

The Act also introduced a new directors' compliance statement at section 225. This places an onus on directors of affected companies to make a statement confirming that a company has policies in place to ensure it complies with "relevant obligations" and that they have conducted a review of the appropriateness of these policies or structures during the financial year. The "relevant obligations" mean the company’s obligations under tax law; and company law obligations, the breach of which would be a serious offence as defined. Section 225 applies to all public limited companies and large private companies, that is, private companies where the balance sheet for the year exceeds €12.5 million and the turnover for the year exceeds €25 million.

The Companies Act 2014 provides for remedies for breach of directors’ fiduciary duties. In general, the company may sue for damages, seek an indemnity for losses or seek an account of profits. In addition, there are circumstances provided for in the Act where a director can be made personally liable for the debts of the company. Examples include reckless trading; fraudulent trading; failure to keep adequate accounting records; and acting in breach of a restriction or disqualification order.

The Government is committed to ensuring that the Companies Act 2014 continues to deliver a robust yet competitive corporate regulatory framework for business in Ireland. Consequently, the provisions of the Act are under continuous review.

I thank the Minister for her kind words. I believe I can be co-operative. The purpose of parliamentary democracy is to hold to account while at the same time to proffer ideas that may address some of the challenges out there.

We speak in hushed tones because the alleged breaches in a company, namely, Independent News & Media, INM, relate to corporate governance. We also speak in hushed tones about the alleged data protection breaches in the same company. I tabled this parliamentary question to ensure that we are confident that we have a robustness, not only around the legislation but also around our ability to enforce the legislation. It is a clear issue. We can have very fine Acts on the Statute Book but we need to be able to ensure there is proper enforcement. I accept that fiduciary duties, underpinned by common law and by this legislation, put an onus on company directors. Equally, it places an onus on the State to ensure the enforcement of such legislation.

The Office of the Director of Corporate Enforcement, ODCE, has played and continues to play a key role in facilitating compliance and enforcement of company law. The ODCE 2016 annual report points to a number of key success during the year. Following the scrutiny of reports submitted to the office by liquidators of insolvent companies, 90 company directors were restricted and a further 11 were disqualified by the High Court. The Office of the Director of Corporate Enforcement examines and reviews all such reports and then makes a determination as to whether or not the liquidator is relieved from the obligations to apply for the restriction of a company director. Some 93 restriction undertakings were obtained from directors of insolvent companies and as a proportionate and cost-effective alternative to formal enforcement actions, cautions issued to a total of 61 companies, 108 directions were issued to relevant parties requiring them to comply with their statutory obligations under company law. In keeping with the ongoing strategic shift towards the investigation of more serious indications of wrongdoings, five investigation files were submitted to the Director of Public Prosecutions. The Office of the Director of Corporate Enforcement is certainly doing a lot of work in that space.

Within the Office of the Director of Corporate Enforcement, one has the office and within that office, one has the individual, the actual director. Will the Minister clarify that she is happy with the director of the office? Is she uncomfortable with the idea that while every individual is entitled to vindicate his or her good name, people would hold the director personally responsible in acting out his duties under the various Acts that have established the office and under the Acts he is obliged to enforce? This is in the context of references made that the director, Mr. Drennan, would be held personally responsible for alleged leaks and breaches of confidentiality.

It is important to say that this matter is before the courts. We need to respect that ongoing process. I am bearing that in mind with regard to what I say here. I am very confident in regard to the work done by the Office of the Director of Corporate Enforcement. It is an independent agency and it acts independently of my Department. It is the function of my Department to provide the necessary funding. We have increased its funding over the last number of years to enable it to employ more specialised people, such as forensic accountants, and the people it needs to carry out the work more effectively.

With regard to indemnity, it is absolutely the case that any public servant who acts properly and in accordance with his or her mandate, and who does not breach any laws or ethical principles, is indemnified by the State. This point was made by the Taoiseach in the Dáil yesterday. We resource the Office of the Director of Corporate Enforcement and we have increased the resources over the last number of years. It is very much strengthened compared to where it was, and I am satisfied that it acts independently and it carries out its work in a proper way.

Brexit Expenditure

Ceisteanna (21)

Maurice Quinlivan

Ceist:

21. Deputy Maurice Quinlivan asked the Minister for Business, Enterprise and Innovation if she is satisfied with the funding her Department has allocated to the IDA, EI and ITI to enable each body to mitigate the potential effects that Brexit may have on the economy. [16827/18]

Amharc ar fhreagra

Freagraí ó Béal (6 píosaí cainte)

We are ten months from Brexit and my concern is whether the Minister believes the funding provided by her Department to IDA Ireland, Enterprise Ireland and InterTradeIreland will be enough to help those agencies to mitigate the effects of Brexit. I know it is a difficult question to answer because we do not know what type of Brexit we are facing. Does the Minister believe the funding allocated to those agencies will be enough to help to mitigate the effects Brexit may have on Ireland's economy?

I thank the Deputy for raising this issue. I am confident the enterprise agencies under my Department's remit have the necessary support and financial resources to enable them to address the challenges of Brexit and to capitalise on any opportunities it presents.

IDA Ireland was allocated an additional €700,000 as part of budget 2018 to further reinforce the €750,000 funding in 2017 to increase its staffing levels in the context of Brexit. This has significantly strengthened the agency's capacity to engage with firms about investing in Ireland, as well as addressing Brexit-related issues for the agency's current client base. More resources were also made available to the agency to allow for an increase in Brexit-related marketing and communication activities. This has included a new multi-media marketing campaign, targeting international investors, that highlights the advantages of locating or expanding in Ireland.

These additional resources are already helping IDA Ireland to produce results. To date, IDA Ireland has secured approximately 20 new Brexit-related investments from a number of different sectors. There remains potential to attract even more such foreign direct investment and I know IDA Ireland is working hard to convert further opportunities into new projects here in Ireland.

Enterprise Ireland is actively supporting its client companies through its offices at home and across the globe to become more competitive and innovative and to diversify Ireland's export footprint into more markets in response to Brexit. Its capacity to assist Irish firms to deal with Brexit was originally reinforced by its pay provision for 2017, which included an additional €1.7 million to assist in the recruitment of 39 additional Brexit-specific posts. For 2018, to further assist Enterprise Ireland's response to Brexit, the agency was allocated an additional €1.3 million. I understand that Enterprise Ireland intends to recruit approximately 20 additional staff members as a result of this extra funding.

InterTradeIreland also has an important role to play in the context of Brexit, particularly in sustaining North-South trade. The body is uniquely positioned to understand the needs of businesses engaged in cross-Border commerce and it has been working hard to help its clients to prepare for the potential challenges associated with the UK's withdrawal from the European Union.

I thank the Minister for her response. As I said earlier, Brexit is edging closer and we still have no picture of what it will look like. The issue of the Border has been long-fingered both in December last year and again in March. We need clarity and a firm commitment from the Government on this, the most vital concern to the island and its people. I am extremely concerned that the weak Tory Government in London with the DUP influence could end up scuttling the whole Brexit deal simply to promote the nationalist England-first agenda.

This morning the President of the European Council, Donald Tusk, reaffirmed the position that there would be no withdrawal agreement without a solution to the Border. With the British Foreign Secretary, Boris Johnson, ridiculously talking about London borough borders and the British Prime Minister, Theresa May, recently citing the completely unacceptable US-Canada model, this is a cause for huge concern.

Unfortunately we need to start thinking about real contingency plans for what will probably be a hard Brexit. Has the Department of Business, Enterprise and Innovation come up with concrete plans for such an outcome? For instance, what will the M1 between Dundalk and Newry look like on 31 March 2019 if no deal is struck before then?

I have a range of different supports available through the different agencies to support businesses to prepare for Brexit and help them mitigate the impact of Brexit on their businesses.

The Department secured an additional €3 million in current funding and €5 million in capital funding in 2018, increasing the record capital allocation in 2017. The additional €3 million in current funding will support the recruitment of 40 to 50 staff across the different agencies to meet the Brexit challenge. This brings the number of new Brexit-related staff posts to approximately 100 in the past two years and demonstrates the Department's determination to ensure that it, together with all the offices and agencies, is sufficiently resourced to meet the Brexit challenge.

My Department established a dedicated Brexit unit in 2016. The unit is led by an assistant secretary within the EU affairs and trade policy division. It co-ordinates and represents the Department's and agencies' response to Brexit, and supports me in my position on the Cabinet committee dealing with Brexit. The unit continues to undertake a range of important Brexit-related tasks.

The Government is working very hard to get the best possible deal for Ireland as part of the EU negotiating team. We have consistently called for the closest possible relationship with the UK after Brexit. Considerable work is going on across Government to ensure we get the best possible deal for Ireland.

While I appreciate what the Minister has said, clearly the Government's message is not getting through to those in business to whom we have spoken and who have also appeared before the Oireachtas Joint Committee on Business, Enterprise and Innovation.

PricewaterhouseCoopers recently suggested that with less than a year to go a hard Brexit is the most likely outcome. I appreciate that a hard Brexit is just a possibility at this stage, but citizens and businesses deserve to know the range of possibilities they may encounter. If the past behaviour of the British Government is anything to go by, things will only get worse between now and March 2019. Does the Minister have an explanation for why the uptake of the Government's supports for business has been less than desirable? Are the criteria too strict or the administration burden too great especially for small businesses?

Has the Department secured any commitment from the European Union on funding or assistance for a hard Brexit and if so what is the amount of that funding?

Enterprise Ireland and InterTradeIreland will no doubt be inundated with calls and queries in the lead up to next March and beyond. What plans does the Department have to increase staff numbers and resources even temporarily if such a possibility of a hard Brexit occurs?

I recently launched a brochure which outlines all the different supports we are providing to businesses through the agencies and directly. I recently announced the €300 million Brexit loan scheme. Bord Bia, the Health and Safety Authority and a whole list of agencies are supporting people on Brexit. It is a very short document and is on the Department's website. I believe I also provided it to every Deputy. It outlines what we are doing in preparing for Brexit. I urge companies to contact their local enterprise office. Many supports are available.

We got approval from the European Union for the €10 million rescue and restructure scheme, to be administered by Enterprise Ireland. We have developed a number of different initiatives. IDA Ireland staffing is at a record high and Enterprise Ireland is increasing its staff. Many supports are available and people need to use them. I encourage people to get this very useful brochure.

Economic Competitiveness

Ceisteanna (22)

Billy Kelleher

Ceist:

22. Deputy Billy Kelleher asked the Minister for Business, Enterprise and Innovation the actions being taken to reverse Irish competitiveness deficiencies to make Ireland an attractive location for enterprises to locate in and scale up; and if she will make a statement on the matter. [16975/18]

Amharc ar fhreagra

Freagraí ó Béal (6 píosaí cainte)

I ask the Minister the actions being taken to reverse Irish competitiveness deficiencies to make Ireland an attractive location for enterprises to locate and scale up. I ask her to make a statement on the matter. I raise this because our competitiveness is under continual threat for a number of reasons, including the increased activity in the economy, with rising employment putting pressure on services across the State. Equally, deficiencies in the State's capacity to respond and sometimes reluctance to respond are damaging our competitiveness which will have an impact on our ability to continue to trade internationally. I ask the Minister to outline the efforts she is making to address the issue.

I thank the Deputy for raising the matter. Despite intense competition, Ireland’s competitiveness performance remains positive. Ireland moved from 16th in 2015 to sixth in 2017 in the Institute for Management Development World Competitiveness Yearbook. In addition, the World Bank’s most recent Doing Business 2018 report shows Ireland is now ranked 17th out of 190 countries, an improvement of one place on last year.

Our improved performance is reflected in strong employment growth across sectors and regions. We have over 2.2 million people at work and our unemployment rate is down to 6.1%. Agency-supported companies now employ over 400,000 people throughout Ireland. The strong performance of clients supported by the enterprise agencies in winning exports and investment, market share and job creation in the face of intense global competition is impressive and reflects the competitiveness of the environment in which to do business.

However, there is no room for complacency. We need to continue to improve our competitiveness and remain vigilant to the very significant challenges in the external environment, particularly Brexit. In addition, the productivity performance of many Irish-owned enterprises is weak and not enough enterprises are engaging in innovation. We have a number of supports available to them in that respect.

Competition for FDI remains intense. Ireland has many strengths when it comes to attracting FDI. We score highly on criteria such as investment incentives, labour productivity, and the adaptability and ability of talent. While we have a proven track record in attracting and sustaining FDI, continued success cannot be taken for granted. Our capacity to continue winning such new investment despite geopolitical changes and intense competition will be aided by the underlying strengths of our FDI offering.

As Minister for Business, Enterprise and Innovation, my objective is to create the best possible environment for enterprise, entrepreneurship, innovation and investment across all regions. The immediate challenge for Ireland is to ensure growth is sustainable, that enterprises are resilient and that we continue to grow Irish enterprises and attract foreign direct investment. We are taking steps to ensure the economy is resilient at sectoral and firm level to deal with imminent competitiveness challenges and to build further on the progress we have made. That is why we are continually examining how we can improve on factors that are crucial to fostering further investment here, including our cost base, infrastructure, availability of talent and innovation.

Additional information not given on the floor of the House

Enterprise 2025 Renewed, which I launched last month, placed an increased emphasis on developing Irish-owned enterprises. There is a strong focus on taking action that will embed resilience in our enterprise base. We are placing a spotlight on innovation and on skills. Enterprise Ireland places a strong emphasis on competitiveness. It supports exporting enterprises with initiatives in LeanStart, research, development and innovation, and management development. The agency helps enterprises to take a strategic approach to understanding and responding to potential implications arising from Brexit and assists them to enter into new markets and diversify their export base. The local enterprise offices offer a suite of supports to enhance the competitiveness of small and micro-enterprises. Initiatives include mentoring, innovation vouchers, LeanStart and access to a Brexit diagnostic and guidance.

My officials and I, as well as the National Competitiveness Council, remain focused on competitiveness, an agenda that requires cross-Government commitment to continue to develop and implement actions to enhance national competitiveness.

We have been here before in terms of competitiveness and the loss thereof as the economy expands and grows quite rapidly. Based on GDP, GNP or any other metrics, there is huge activity in the economy. Key areas in the economy have already reached full employment and we will soon have to address that issue by attracting people into the country. One of the greatest barriers to that will be the costs of housing, childcare, insurance and transport. These and many other areas diminish our ability to attract key labour into the market in order to ensure we remain competitive in key areas of the economy.

While I welcome the Minister's statement that there is no complacency on this issue, proactive policies are needed to address areas where significant competitiveness problems will arise. I refer, for example, to the lack of housing and the inability to address this fundamental issue, not only in the broader context of how society is structured but also in terms of competitiveness. We must remain attractive to foreign direct investment and foreign employees to ensure exports are competitive internationally.

The reason for the shortage of housing supply is that when the country experienced its worst ever recession only a few short years ago, the bottom fell out of the construction sector. The current problems in housing are part of that legacy. We have a plan to address these problems, namely, Rebuilding Ireland, and we are only 18 months into this five-year programme. After 18 months, people claimed the five-year Action Plan for Jobs would not work, yet it was successful. We have to give Rebuilding Ireland time.

The number of commencement notices for houses has increased by more than 40% to 18,000. In 2017, the number of social houses built was three times higher than the number completed in 2016. Since 1 February, a new Rebuilding Ireland home loan has been available from local authorities. We have also introduced measures to fast-track the planning process for large developments and apartments. In 2018 alone, more than 2,300 homes and 3,400 student bed spaces have been approved through this process. We introduced rent pressure zones to cap rent increases at 4% in pressure areas. Today, the Government announced that breaches of the cap would be a criminal offence. In 2018, we will spend €1.9 billion on housing, which is an increase of 46% on 2017. I accept we need to do more but building houses takes time.

I thank the Minister for her reply. We must also address interest rates and the cost of credit to small and medium-sized businesses and mortgage holders because it is much higher than the rates available in other countries in the eurozone. The European Central Bank sets the interest rate for the eurozone. The Irish economy must compete with other economies in the eurozone but our interest rates are roughly double those of most of the other eurozone member states with which we compete. As regards the cost of credit to mortgage holders, the variable rates in Ireland are approximately twice as high as the European average. Similarly, credit to small and medium-sized businesses costs approximately twice as much as the European average. As a member of the eurozone operating in the Single Market, we should at least address the fundamental problem of expensive credit costs for small and medium-sized businesses. This has not been done to date. Banks, the State and the European Union have an obligation to create a single market for access to credit across the eurozone.

Supply and demand for credit have improved significantly since the height of the economic crisis. While the cost of credit is falling, it continues to be relatively high and it is vital that is reduced to align our rates with those in competitor countries. The divergence between interest rates for enterprise in Ireland and the rest of the euro area is particularly noticeable for loans of up to €250,000. The interest rate on new business loans was double the euro area average throughout 2017. On 28 March, I opened a Brexit loans scheme for applications to allow for the roll-out of €300 million in funding to eligible Irish businesses. Such businesses can apply to the scheme through the participating finance providers. The scheme, which will be delivered by the Strategic Banking Corporation of Ireland, SBCI, through commercial lenders, will make €300 million available to eligible businesses with up to 499 employees at an interest rate of 4% or less. My Department is working with the SBCI and the European Investment Bank to provide a longer-term facility to assist businesses to deal with the threats posed by Brexit.

Sale of State Assets

Ceisteanna (23)

Richard Boyd Barrett

Ceist:

23. Deputy Richard Boyd Barrett asked the Minister for Business, Enterprise and Innovation if reports that €7 million of debt was written off in the recent sale of the State's stake in a studio, details supplied, are correct; the price secured for this sale; the process engaged in for the sale; and if she will make a statement on the matter. [17123/18]

Amharc ar fhreagra

Freagraí ó Béal (10 píosaí cainte)

I want to revisit the sale of Ardmore Studios. I will be blunt in stating that the sale stinks to high heaven. How much did the State get for the sale of its one third share in the company? I have heard the sale price was €6 million and the sale involved the State writing off €7 million in debt owed to it by Ardmore Studios. This would mean we gave the company away and then gave the purchaser €1 million. I hope that is not true. The House, members of the public and people working in the film industry need to know what is going on here.

In 2016, Ardmore Studios International Limited, ASIL, engaged IBI Corporate Finance to investigate selling the company as a going concern. ASIL, the majority shareholders in Ardmore Studios Limited, were seeking to exit, having been running the company for more than 30 years. An extensive process was undertaken by IBI Corporate Finance to find a suitable buyer, with more than 100 potential parties contacted. Ion Equity emerged as the successful bidder from that process and its acquisition vehicle, Olcott Entertainment Limited, which was recently incorporated by Ion Equity for this purpose, is now the new owner of Ardmore Studios.

With regard to the sale price and other specific financial details, I am unable to reveal what are confidential details of Enterprise Ireland’s minority shareholding disposal transaction in what is a privately held company. This applies to the Ardmore Studios transaction as it would to any other individual investment or share disposal of Enterprise Ireland where it is a minority shareholder in a privately held company. This principle of confidentiality reflects a statutory duty of confidentiality set out in section 16 of the Industrial Development (Enterprise Ireland) Act 1998. In this case, the parties also understood at the time of the sale by Enterprise Ireland and other majority shareholder vendors that, owing to section 16 of the 1998 Act, the consideration and other financial aspects of the sale would not be revealed. Disclosing such information would be in breach of the high standards of confidentiality adhered to by Enterprise Ireland.

I can confirm, however, that Enterprise Ireland negotiated the sale of its shareholding with the benefit of comprehensive due diligence undertaken by independent consultants and is satisfied that it realised full market value on a par with the other majority shareholder parties. The Government had committed that the company would be sold as a going concern and the final decision would be taken in consultation with me, as Minister for Business, Enterprise and Innovation, Enterprise Ireland and the Minister for Culture, Heritage and the Gaeltacht. This is what happened, while realising full commercial value for the shareholders selling the company, including Enterprise Ireland.

I will be honest; this is a load of rubbish. The public is having the wool pulled over its eyes. Ardmore Studios are located on a large piece of real estate. A recent attempt by the current chief executive officer to have part of the site rezoned for residential development was blocked by Wicklow County Council. One property expert estimated that if Ardmore Studios were rezoned for residential development, the site would be worth approximately €100 million. I would like to know if it is true that the Government was advised on the sale of this very valuable property by a director of Savills, the property people, who is now on the board of the company that took over Ardmore Studios and has a record of trying to rezone the site.

What guarantees are there that film production at the studios will continue? Only one of seven stages at the site is being used, while films are being made in buildings owned by the National Asset Management Agency, including a factory in Tallaght and the former John Player factory on the South Circular Road where a dispute is taking place and four workers were recently sacked for kicking up about conditions. Films are also being made in the Dublin sport hotel, while Ardmore Studios are empty. This stinks, yet the Minister cannot answer my question as to whether the State wrote off €7 million in debts held by the studio.

Is the Minister seriously suggesting this House does not deserve to know that?

To be clear, this was a commercial deal. It was negotiated commercially. There was a guarantee for the workers and I believe their future is secured in terms of there being investment in Ardmore Studios. I visited the studio some time ago. It badly needed investment. This is an opportunity to expand the facility there. The Deputy talks about planning permission. Both he and I know that it is the preserve of the elected members of Wicklow County Council to change the zoning of any area. That is outside my control and that of the Deputy. I am quite sure that when the local authority sees the advantage of this investment in Ardmore, it will be quite happy to make sure that it remains a location for the film industry. Altering the current zoning restrictions cannot be done without the agreement of Wicklow County Council. The State will continue to support the film sector through the Irish Film Board, tax incentives and other measures. The Irish Film Board also welcomed the acquisition of Ardmore Studios by Olcott Entertainment Limited. It stated that:

The Studios continue to represent a vitally important part of the infrastructure of the Irish film industry. It is very heartening to hear about the commitment of the new owners to their investment in and the development of these historic studios.

There is a commitment on the part of the new owners to invest in the site.

The public has a right to know what is happening with the expenditure of public money. The Minister is just not answering the questions. It is reported that Ardmore owed the State €7 million. According to the Irish Film Board's accounts, I suspect that this figure included moneys given by members of the board to themselves when they were working in Ardmore - people like Kevin Moriarty, the former CEO, who got €594,000 in two different loans. Were these loans ever paid back? No, I think they are part of the €7 million debt. Somebody else-----

I ask the Deputy to refrain from mentioning names.

People on the board who were also working in Ardmore effectively gave themselves loans for a studio that now sits empty. The CEO of Ardmore prior to the sale attempted to rezone the land for residential development and will remain the CEO with the new purchaser and the Minister is telling us that Ardmore is secure for film production in the future when they have already tried to rezone it for residential development. Sure, Wicklow County Council blocked it but why did we sell to people who have shown a record of wanting to run the place down and possibly get it rezoned for residential development? The Minister cannot tell us about the €7 million owed to the State in loans that were given to Ardmore. It is extraordinary.

It is not a case of somebody blocking zoning. The facts are, and the Deputy knows this as well as I do, that the Ardmore site is currently zoned for film industry use only. This can only be changed by a decision of the elected members of Wicklow County Council so as far as I am concerned it could not be in safer hands. Why would anybody want to rezone an area that has huge potential for an area where there are other-----

The owners can push.

The owners cannot zone anything and the Deputy and I know that. It is up to the elected members. It is zoned for film production. There is another film production centre down the road from it. I see that as offering huge potential for a cluster for the film industry. As the Deputy and I know, the amount of interest in increasing that industry is tremendous and many more people are coming in from abroad along with a lot more indigenous Irish industry. Enterprise Ireland has an investment portfolio of €300 million and 2,000 investments. It has investments of circa €30 million per annum and sells shares worth €25 million. These are all confidential transactions. I cannot give that information because it would be wrong of me to do so. Enterprise Ireland's accounts detail how all of its funds are appropriated or otherwise. It issues an annual report every year.

Small and Medium Enterprises Supports

Ceisteanna (24)

Thomas Pringle

Ceist:

24. Deputy Thomas Pringle asked the Minister for Business, Enterprise and Innovation her plans to address issues facing small businesses in County Donegal including concerns regarding the retreat of rural services and the lack of Government supports for small businesses outside the remit of Enterprise Ireland and the IDA and if she will make a statement on the matter. [16256/18]

Amharc ar fhreagra

Freagraí ó Béal (10 píosaí cainte)

What Government supports are available for small businesses in rural Ireland that are outside the remit of IDA Ireland and Enterprise Ireland?

I am taking this question in my capacity as Minister of State with responsibility for small business. My Department and other Government agencies operate a number of programmes and schemes to assist the start-up and expansion of small businesses. My priority as Minister of State is to drive the creation of high-quality and sustainable jobs around all the regions and counties of Ireland, including Donegal.

The local enterprise office, LEO, in Donegal is the first-stop-shop for providing advice and guidance, financial assistance and soft supports such as training and mentoring to anyone wishing to start or grow a business. Funded by my Department, LEO Donegal plays a critical role in supporting micro-enterprises in the start-up and expansion phases.

LEO Donegal has invested significantly in micro and small businesses by way of its core suite of supports since its establishment in 2014. Between 2014 and 2017, LEO Donegal paid out over €1.4 million in grant funding in respect of 121 projects. Clients supported with grant funding have consistently added new jobs with 100 new jobs supported in 2017 and 621 in total over the past four years. During this time, over 5,200 participants attended LEO training courses and 132 participants received mentoring. Furthermore, 211 applicants from the county entered the Ireland's Best Young Entrepreneur competition since it was launched in 2014.

I secured an additional €4 million in capital funding for the 31 LEOs for 2017 to fund a range of LEO Brexit supports across the country, including Donegal. This additional funding has been maintained for 2018. These supports are aimed at strengthening the capacity of micro and small businesses to cope better with the changing external environment, especially the impacts arising from Brexit. The supports include grants to assist LEO clients in diversifying their markets, targeted training and mentoring to address Brexit-related challenges and opportunities as well as a Lean for Micro programme to help micro-enterprises to address competitive issues within their businesses by building the capability of their employees to identify problems and improve operations.

In May 2017, my Department with Enterprise Ireland launched the regional enterprise development fund, REDF, with funding of up to €60 million. The first call under this fund concluded last August with results announced on 11 December. Three projects across the north east-north west secured funding under the first call, including Donegal Digital Innovation, which will involve the creation of an innovation ecosystem in Inishowen by delivering a three-year enterprise capacity-building programme based on the peninsula's location factors, high tech skillsets and applied research potential in traditional sectors. The second call for projects under REDF opened for applications on Monday, 16 April.

Additional information not given on the floor of the House.

The LEOs can also assist businesses in accessing other Government supports, for example, business loans from Microfinance Ireland or trading online vouchers for businesses that want to improve their online sales.

The regional action plan for jobs, launched in the north east-north west in November 2015, is a central pillar of the Government’s ambition to create more jobs in rural areas including Donegal. Under the plan, the aim is to increase employment in the region by 10% to 15% over the period to 2020 resulting in the delivery of 28,000 jobs. A total of 12,000 more people are in employment in the Border region from quarter one of 2015 to quarter two of 2017 representing good progress towards the target of 28,000 jobs by 2020.

Finally, the action plan for rural development takes a whole-of-Government approach to the economic and social development of rural Ireland. The plan contains over 270 actions to be delivered by a range of Departments, State agencies and other bodies. The plan seeks to support sustainable communities, support enterprise and employment, optimise our rural and recreation potential, foster culture and creativity and improve rural connectivity. A key objective of the plan is to support sustainable communities through the enhancement of local services in areas such as rural schools, post offices and convenience shops.

The Minister of State gave an overview of supports. Again, it focuses on export, development and businesses. I am talking about small businesses located in all the rural towns and villages right across Donegal and the whole country. I recently carried out a survey of those businesses to ask them how they felt they were doing. These were small businesses with between one and five employees. I wanted to focus on them because they fall outside the remit of Enterprise Ireland and other bodies. The type of businesses that took part in the survey were coffee shops, hairdressers, furniture shops and newsagents. The results were quite stark. I received over 100 responses that showed that the sector is struggling and that there are barriers facing small businesses across the country across the board. Small businesses are emerging from the recession but the problem they face is the lack of Government policies that actually support them. An overwhelming majority of respondents were not aware of any Government initiative to help improve local enterprises and are concerned about the impact of rural depopulation and the closure of services for which the Government has direct responsibility through closing post offices and Garda stations. This all has a knock-on effect on small businesses and their confidence.

There is the question of rates, but also networking and the ability of those businesses to work together. That is something the Government could actually do that would make a real difference.

Donegal has so much to offer in respect of small to medium enterprises. I visited Donegal myself on a number of occasions, both in a personal capacity on holiday and also visiting the local enterprise offices, LEOs. The LEO in Letterkenny is doing really good work.

I say to Deputy Pringle that the branding of Donegal is really good internationally. It is recognised as the coolest place on earth to visit, which is really good. We need to continue to develop Donegal, particularly those small enterprises in the tourist capacity. The Deputy should look at the branding the LEOs have done in respect of The Food Coast, which was an LEO initiative. The Food Coast is a fantastic initiative to build on the success of the Wild Atlantic Way. There is so much that can happen along the Wild Atlantic Way in Donegal with its fantastic Atlantic coastline, small resorts and villages and wonderful beaches. I have seen the shops myself, the cafes the Deputy talked about, small enterprises, all growing as a result of that fantastic initiative, the Wild Atlantic Way.

My colleague, the Minister of State, Deputy Brendan Griffin, will be in Donegal next Monday to open Fanad lighthouse officially, which has been a tremendous success. I visited it myself last year in Donegal. I have seen the success of Loop Head lighthouse in my own constituency, which brings 30,000 or 40,000 visitors a year and is growing all the time. The same can be done in Donegal. We have seen a huge drop in unemployment in Donegal in recent times - 43% over the last four years. There is real potential to grow micro-enterprise in Donegal and to work with the LEOs. The LEOs play a fantastic role in that. There is Project Ireland 2040 as well, the road network and the collaboration that is going to exist between Strabane, Derry and Donegal. All these are initiatives that will build Donegal.

I wish the Government would stop citing the fall in unemployment figures, for its own sake. The reason the unemployment figures have fallen is emigration. That is why I am asking this question. It is not because of anything the Government has done to create jobs. Some 8,000 people have left the county and that why there is a decline in unemployment figures. That is what we are getting at.

From the survey I have done, 75% of small businesses rely on local trade. They do not rely on tourism trade. Local trade is what we need to develop and foster to ensure they stay there. It is the thing the Government needs to concentrate on to ensure that local businesses can survive, which is the only way to ensure the county survives. If there are not people there, all the tourism factors the Government wants will not make any difference. It is the people whom tourists come to meet and see and that is what we have to protect.

I do not accept that at all. Tourism creates jobs and that is what we are talking about - micro-jobs, small jobs - and that is one element of it.

We depend on local trade.

Only last week we had GTeic and the whole digital hub concept which we are developing in Donegal - a fantastic initiative. The future of work is changing and we have got to adapt to that change, particularly in respect of digital technology. The local enterprise offices are putting in place many initiatives. They created 100 jobs net last year. Some of those jobs are in the food sector, which is extremely important. We talked about that branding earlier in respect of The Food Coast. Whether it is small cottage industries, all of this is extremely important. It is also important to look at what is happening in Donegal currently in the branding it is getting. It is a really positive message out there. I say to the Deputy that he should sell his county in a positive way and not be complaining about it all the time. Our policies are working. There were 21,000 people unemployed in Donegal a few years ago and the figure is now down to 12,000.

Some 7,000 people have emigrated.

That is falling all the time and will continue to fall with the policies we are putting into place. The Deputy should work with the LEOs, Enterprise Ireland and IDA Ireland. I assure him that the Government will continue to ensure that the infrastructure is put into place in Donegal because Donegal deserves that.

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