Mr. John Murphy:

Mr. Patrick Rochford is not present, but he will join us for the second session. I am accompanied by Mr. Martin Shanahan, Ms Nina Brennan and Mr. William Parnell.

I thank the joint committee for giving me the opportunity to discuss the Action Plan for Jobs in general. We are all aware of the scale of the jobs challenge continuing to face Ireland and the wider European Union at this time. Behind every job lost there are families and businesses struggling to cope with the impact of the downturn. This is not what we want for the economy or society, which is why in Ireland the Government has put the jobs and growth strategy centre stage and made job creation our key priority, matching the priorities agreed in Europe through the Europe 2020 strategy and the various flagships, including the industrial policy flagship. Overcoming the jobs challenge will be greatly enhanced by improving Ireland's and Europe’s competitiveness. This will reduce the cost of enterprises doing business here and also make our economies attractive for multinational corporations in which to invest in their latest projects.

In essence, every economy must continue to adapt to be able to compete and win when faced with the constant flux in global supply and demand. Ensuring we are competitive will give us that ability to adapt and win. As a tool to give us that adaptability, the Government has put in place the Action Plan for Jobs with a dual mandate of encouraging growth and creating and maintaining jobs in the economy. The intention is to transform the economy that suffered so badly during the economic crisis into an economy built on enterprise, exports and innovation. The Action Plan for Jobs does not purport to be a silver bullet that will change our economic fortunes overnight, rather it is about grinding out transformations in how we support business, one by one, to make Ireland a better place in which to do business.

Since it was introduced in 2012, the Action Plan for Jobs has been one of the Government’s key instruments to support job creation.

The objectives of the action plan are to support the creation of 100,000 jobs in the economy by 2016, have 2.1 million in work by 2020 - the original figure of 2 million was revised upwards in the medium-term economic strategy - and make Ireland the best small country in which to do business. It is proposed to achieve these objectives by improving the environment in which businesses operate, encouraging entrepreneurship, helping Irish companies to grow and increase their exports and continuing to attract investment from abroad. The action plan has placed job creation at the centre of policy formulation for all Departments and changed the way in which government operates.

The 2012 Action Plan for Jobs contained 270 actions for delivery across government. Each action was broken down into quarterly milestones which were reported on in published progress reports at the end of each quarter. Some 249 or 92% of the 270 actions were delivered on in full in 2012. Those that were not delivered on either carried forward to 2013 or were replaced by others.

The 2013 Action Plan for Jobs contained 333 actions, including seven disruptive reforms or key initiatives, which were chosen for their potential to make a significant contribution to job creation and-or economic growth in the medium term. Again, implementation of the 2013 quarterly deliverables in the first three progress reports published to date has been high, at approximately 90%. The fourth progress report for 2013 will be published shortly.

The Minister is finalising the 2014 Action Plan for Jobs on behalf of the Government. This year's plan will build on the success of 2012 and 2013 and again set out a series of ambitious commitments on the part of the Government to support job creation and retention. Supporting entrepreneurship and small and medium enterprises will be a key element of the 2014 plan which will also contain a number of new initiatives that build on the disruptive reforms approach of last year.

In the past three years Forfás has become increasingly involved in the central policy-making process in the Department, with the agency playing a leading role in the preparation of the annual Action Plan for Jobs. Forfás has worked closely with the Minister, officials in my Department and other Departments and agencies in the development of the two action plans for jobs published to date. It is continuing in this role in the preparation of the 2014 plan. In addition, under the 2012 and 2013 action plans, it undertook significant sectoral reviews which were brought to the Government. For example, the agency prepared a new strategy for the manufacturing sector, Making It in Ireland: Manufacturing 2020, and an analysis and strategic plan for the construction sector, Ireland's Construction Sector: Outlook and Strategic Plan to 2015. It also prepared an analysis of the potential for employment growth in the social enterprise sector. All three reviews were published in the course of 2013. The agency also carried out many other significant research projects.

The system of quarterly progress reports is a key part of the Action Plan for Jobs architecture which ensures the Government holds itself to account in public on implementation of measures to improve competitiveness and support job creation, thereby maximising delivery rates. As I indicated, the implementation rate in 2013 was very high.

Budget 2013 contained a number of measures which supported the objective of the Action Plan for Jobs of supporting businesses to create jobs. The Minister for Finance followed the same approach in the recent budget for 2014. Creating jobs is the primary objective and last October the Minister announced that he was introducing 25 pro-business and pro-jobs measures. The total cost of the tax elements is in excess of €500 million in a full year. This significant investment is designed to help businesses in key sectors to achieve their full growth potential and create jobs.

On employment data, the Action Plan for Jobs set out a target of having an additional 100,000 people in work by 2016 from a baseline of 1.85 million in employment in 2012. The original action plan also set a target of having 2 million people at work by 2020. The Government’s medium-term economic strategy which was published in December has set a higher goal for 2020 and now aims to have more than 2.1 million people in employment by the end of the decade. While achieving these targets will be extremely challenging, recent data for employment have been encouraging. In quarter three of 2013 just under 1.9 million people were at work. This constitutes an increase of 58,000 people in employment compared to quarter three of 2012, net of reductions which are taking place in the public sector in which employment fell by nearly 4,000 in the same period.

Employment increases have been realised in agriculture, manufacturing, tourism, information and communications technology and professional services, all sectors that have been a focus for the Action Plan for Jobs. Last year IDA Ireland client companies created 7,071 net new jobs, while Enterprise Ireland companies created 5,442 net new jobs. These jobs directly created with the support of the State's enterprise development agencies are supporting in the order of a further 8,500 jobs in the economy. This figure has been calculated using a conservative multiplier of 0.7.

The seasonally adjusted unemployment rate fell from a peak of 15.1% in the first quarter of 2012 to 12.8% in the third quarter of 2013. The long-term unemployment rate decreased from 8.9% to 7.6% over the year to quarter three 2013. Unemployment has now fallen for six consecutive quarters. It is also heartening to note that consumer confidence is at an all-time high compared to six years ago, property prices are rising in some areas of the country and more tourists are visiting. While it is difficult to state with certainty what impact the Action Plan for Jobs has had on the improved labour market figures - there are a range of factors at play in the recovery of the economy - it is clear that a coherent and consistent public policy approach to addressing barriers to job creation is important.

Some of the key deliverables on the part of government which are clear action plan initiatives include the establishment of a suite of new financial instruments for small and medium enterprises, including the micro-finance fund, the credit guarantee scheme and three National Pensions Reserve Fund funds for SMEs. In total, various Government-sponsored schemes, together with private sector investment, are making more than €2 billion available in non-bank financing to business. New structures have been put in place in Enterprise Ireland to assist companies seeking to grow their exports and the number of trade missions has been increased. A strategy for manufacturing was published in 2013, providing a long-term vision for the manufacturing sector to help to realise the Action Plan for Jobs target of 20,000 additional jobs for the sector. The JobsPlus initiative which was launched in the middle of 2013 provides a subsidy for employers who recruit a person who has been on the live register for 12 months or more. A new health innovation hub was piloted in 2012 and built on in 2013 to establish Ireland as a leading location for start-up and growing medical technology and health care companies. A €35 million energy efficiency fund has been established by the Minister for Communications, Energy and Natural Resources to support improved energy efficiency in the public and commercial sectors. This investment will be more than matched by the private sector. Approximately 20 exemplar projects have been selected for support through the fund.

In March 2012 the Government launched the Succeed in Ireland initiative, which aims to create 5,000 jobs within five years by targeting international companies and business people who would not otherwise be reached by the State enterprise agencies to bring employment opportunities to Ireland. Supports for micro-enterprises are being fundamentally restructured to create new local enterprise offices which will be first-stop shops for anyone wishing to set up a new business or seek business advice. Upskilling for those who are unemployed is being provided through courses such as Springboard and MOMENTUM. The ICT action plan is placing a particular emphasis on addressing the skills gaps in the information and communications technology sector.

The action plan has had wider impacts in terms of government administration. At an overall level, the Action Plan for Jobs process has encouraged a whole-of-government focus on supporting job creation in the economy. It has resulted in a breaking down of silos across Departments and produced a more collaborative approach across the public service, with the aim of delivering employment objectives. This is most evident in the disruptive reform projects, which generally require a collaborative approach on the part of a number of Departments and agencies, for example, the health innovation hub involves my Department, the Department of Health, Enterprise Ireland and the Health Service Executive in bringing together businesses and clinicians to identify enterprise solutions to medical issues.

The transparent and rigorous monitoring of commitments on a quarterly basis has also speeded up the process of getting initiatives across the line. The process is carried out by a monitoring committee co-chaired by the Secretary General to the Government and me and involves the Departments of Jobs, Enterprise and Innovation, the Taoiseach and Public Expenditure and Reform and Forfás. The Tánaiste’s office is also represented on the committee.

The disruptive reform projects have also introduced a new approach to the delivery of key initiatives, with the involvement of industry partners.

There are six industry champions helping to deliver the disruptive reforms, each of which was selected on the basis of its proven track record in developing businesses and creating jobs. They have brought their experience and insights to help to provide greater synergy between the public and private sectors in delivering on the key disruptive reform projects.
Through the Action Plan for Jobs 2012 and 2013, the Government has focused on creating a supportive environment for businesses operating in Ireland. The action plans have included a range of concrete measures to address issues which impact on our competitiveness position. The implementation of these actions, combined with the Government’s exit from the troika programme and its return to international funding markets, will play a key role in improving our competitiveness further and realising our ambition of making Ireland the best small country in which to do business. Ireland is currently rated highly internationally in international competitiveness rankings and we have built a strong base on which to compete in global markets. Ireland has moved up to 17th place in the IMD’s World Competitiveness Yearbook 2013, having being ranked 24th only two years ago. It is ranked 15th in the World Bank’s Doing Business 2014 report, while Forbesmagazine recently named it as the “Best Country for Business”, up from sixth position in the previous year.
While Ireland’s competitiveness has improved and the numbers in employment have increased, we must continue to do more to ensure these competitiveness gains are not eroded as the economy begins to recover. The Action Plan for Jobs will continue to be the key vehicle for the identification and delivery of specific policy measures that will bring further improvements to our competitiveness position and support job creation. Through the Action Plan for Jobs 2014, the Government will continue to build on the progress already achieved, as we continue to transform the economy from one based on unsustainable debt to one based on enterprise, innovation and exports. The 2014 action plan is being finalised and set to deliver a further suite of actions to support enterprise.
The Action Plan for Jobs process is relatively new. There have been clear signs of stabilisation in the labour market, with the sustained increases in overall job numbers in the past 12 months. The extent to which this improvement can be directly attributed to the Action Plan for Jobs is difficult to assess at this point. Other factors such as the stabilisation of the euro, undoubtedly, come into play in supporting business confidence. However, given the administrative change brought about in setting and measuring the delivery of quarterly commitments, the enhanced co-operation between Departments and agencies and the singular focus on the jobs agenda across government, it is fair to say that, in tandem with other Government policies, the Action Plan for Jobs process is making a positive contribution to the enterprise environment.

Dara Calleary (Mayo, Fianna Fail)
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I apologise in advance as I will have to leave straight after I speak.

I welcome the Secretary General and his delegation. I also welcome his comments on Forfás. I acknowledge the presence of Mr. Martin Shanahan and pay tribute to him and all the team in Forfás for their work. I knew it was to be morphed into the Department this year and ask the Secretary General to comment on this as the transformation process happens. Will he give a commitment that the research budget of Forfás will be ring-fenced within the Department and that the independence of Forfás will be maintained in terms of research? At times it publishes reports that challenge the system.

On the Action Plan for Jobs, I am not enthusiastic about it. There is no doubt that progress has been made, which is a tribute to many people, including the delegates and many agencies. However, I am frustrated that one publishes the fact that 92% of actions are achieved because when one begins to drill down, it is very difficult to get the details.

I want to focus on the issue of finance for SMEs. It has been stated the two pillar banks, AIB and Bank of Ireland, have lent €2.5 billion, a figure we accept to be true. However, when I sought details in a parliamentary question to the Department of Finance as to the where the money had been lent, whether it was to be used for new facilities or to refinance existing facilities, I was informed it could not share the information because it was commercially sensitive. How are we to judge the quality of the lending of €2.5 billion in supporting business and creating employment?

The Secretary General mentioned the new instruments, Microfinance Ireland and the credit guarantee scheme. Microfinance Ireland's team appeared before the joint committee in October when it made a very good presentation. Will the delegates bring me up to date and indicate whether there has been a change in its staffing? It had lent €2.16 million up to the end of last year and the plan was to lend €8 million. What difference will we see in the Action Plan for Jobs 2014 in the case of Microfinance Ireland? Similarly, under the credit guarantee scheme about €68,000 is being lent per month. The target was to lend €150 million. What other changes will we see in that regard?

In regard to IDA Ireland, its recently appointment chairman, Mr. Frank Ryan, appeared before the committee before Christmas. Its end of year report showed that it was not reaching its Horizon 2020 targets in terms of having a regional spread. It has been mentioned that it is important we do not lose our competitive gains as the economy begins to grow. That was a major problem as it grew the last time. If we continue to coral inward investment in Dublin and Cork - 64% or 65% of prime business went to Dublin and Cork last year - it will drive up property and service prices. In the meantime, the rest of the country is not being given a chance to grow. I genuinely believe we are in a position to begin to put pressure on in terms of legal fees and property prices that skewed our competitive position on the last occasion. Will the Action Plan for Jobs 2014 include a provision to address regional imbalances to have more of a focus on the regions in terms of inward investment?

David Cullinane (Sinn Fein)
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I welcome the Secretary General and his team. There is no doubt that there has been good news on the jobs front in recent times. That the live register figures have dropped from 15.1% at their peak in 2012 to 12.8% is good news. However, it appears there is too much of a focus on the percentages. It seems to be a case of "never mind the quality, feel the width", which seems to permeate through the review of the Action Plan for Jobs, which does not deal with the many concerns of people and businesses about the economy and the labour market. For example, the report does not focus on the impact of emigration to a great extent. It does not look at the rise in the casualisation of labour and the number of part-time jobs. The figures show that more part-time jobs have been created than full-time jobs in recent years. A decrease in weekly earnings also features in yearly reviews from the ESRI and Government figures. The use of zero hour contracts and the issue of youth unemployment do not feature heavily in the Action Plan for Jobs and, as far as I can see, there is no real focus, either in the Secretary General's presentation or in the report, on long-term unemployment and regional disparities, which the previous speaker mentioned. In fact, some of the actions included in the original Action Plan for Jobs in this regard have been dropped.

The report on the Action Plan for Jobs refers to competitiveness and labour costs, but it does not deal with energy costs, upward-only rent reviews, an issue raised by members of the committee on several occasions, telecommunications, legal and insurance costs. There is much box-ticking in this respect. These big issues are almost like herds of elephants in the room and not being dealt with. There is a focus on quantity but not quality.

The issue of upward-only rent reviews featured in the original Action Plan for Jobs, but it was dropped in the review. What was the reason for this? Also in regard to regional disparities, the target set for IDA Ireland by the Government in the original Action Plan for Jobs was that 50% of all IDA Ireland jobs should be created outside Cork and Dublin. It has not reached this target.

Yet, rather than the agency, the Government or the Department being held to account for the target, it was dropped from the review of Action Plan for Jobs. It is still in the original plan but it was dropped in the review. Why was that? Was it dropped at the behest of IDA Ireland? I have had several discussions with the chief executive of the IDA who has his own view on regional development and meeting regional targets. Was it because the Department or the Minister took the view that dropping it because targets were not being reached was the correct thing to do? Was there some other reason for it?

I raised the issue of box ticking. Let us consider some examples of box ticking. We had a focus on Microfinance Ireland and the credit guarantee scheme. Again, it is reported in the review of Action Plan for Jobs as part of the 90% implementation that these were set up. However, we know they are not working to the satisfaction of the business community. There is a low or poor take-up of those funds. Although they are set up, the question is whether they are working. Moreover, the succeed in Ireland initiative was established but it has not reached its targets. It is well and good to tick boxes and declare that these things have been set up and are in place but we must examine their performance as well. If they are not performing, are they really of any use to us?

Reference was made to legislation from the Department. The Minister conceded on the floor of the Dáil last week that some of the priorities set out by the Department, including the workplace relations Bill and legislation on collective bargaining, have not been met. We were promised these as far back as 2012 and we were told they were imminent and a priority, yet we are still waiting for the legislation to come through. There is frustration from all Members that some of this legislation, which is important and relates to reform, has not come through.

Those are some of my general concerns. My final comment relates to the scrutiny of EU legislation. The Department officials may be aware that the committee went on a trip to Brussels recently, which was very productive. We went to learn about how the EU does its business, how to improve our effectiveness and the relationship between the institutions of the EU and their contact with the Department and our work in the Houses. Does the Department have any advice or view on how we can improve the relationship between those institutions and our work? One of the issues that came up on the trip related to White Papers. The suggestion is that when White Papers are printed, committees should be more involved at that stage. What is the Department's view generally on the committee's work on scrutinising EU directives and legislation?

Mr. John Murphy:

I am mindful of the fact that Deputy Calleary has to leave so perhaps I will deal with his questions first. The first question was about the integration of Forfás. I am pleased to say we have worked closely together on delivering the Government decision and in particular on delivering the set of objectives and principles which the Minister laid out. Deputy Calleary raised two specific points. The research budget for Forfás is not being reduced. There will be a research budget. It will be managed as part of the overall research budget for the Department. There is no intention to reduce the resources for research. The policy staff within Forfás have reduced in number in recent years but there is staffing in the Department. The staff are being kept in a strategic policy division and I will add some resources to that. There are certain dependents. We have given a good deal of thought to that.

Forfás, on its own account and through bodies such as the National Competitiveness Council, has provided a strong analytical evidence-based critique of policy and implementation deficits over the years and we have no wish to lose that capacity. In fact, I see it being strengthened by the organisation being part of the wider Department and by being more plugged-in to the wider range of policies that the Department deals with, when able to call on resources throughout the Department. Certainly, it is our intention that this capacity to say uncomfortable things - whether it is about the Department, other agencies of the Department or across Government - should be retained because that provides a service to Government. Certainly it is our intention to maintain that.

A question was asked about Action Plan for Jobs. I will cover the question raised by Senator Cullinane as well. The Minister has not been box ticking on access to finance, particularly in the case of Microfinance Ireland and the credit guarantee scheme. We established those two schemes. We have acknowledged that the take-up has not been what we would have wished. The Minister brought forward the review of the credit guarantee scheme because of that concern. We intend to identify several changes we can make to the credit guarantee scheme which would improve its operation.

The case of Microfinance Ireland is relevant to the question raised about trying to get at the detail of access to finance more generally. We have been working closely with the Cabinet committee on access to finance and mortgage arrears, the Credit Review Office and the Central Bank to examine the statistics and what they mean qualitatively as well as quantitatively. We have asked whether there are areas where access to microfinance can be made more readily available. For example, should we wait until someone has been formally refused? Are there other things that could be put in place which would facilitate access? We will look at changes to improve its operation.

I am unsure what the question on Microfinance Ireland staff is about exactly, because MFI operates at arm's length. It is not formally an agency of the Department. It is a sub-agency of the Social Finance Foundation. I know there was a change in staffing before Christmas at one level and I understand a post is advertised at the moment.

There were questions about regional targets. We have not abandoned those targets. However, we have acknowledged that they are difficult to meet. We are not corralling investment in Dublin and Cork. It is not possible to corral investment in any particular part of the country, much as we might like to. We must accept that companies will locate their projects where it best suits their requirements. There is limited scope to influence that.

David Cullinane (Sinn Fein)
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I asked why it was dropped from the review. The 50% target was in the original Action Plan for Jobs. Why was it dropped from the review?

Mr. Martin Shanahan:

Is it that it has changed from one action plan to the next?

David Cullinane (Sinn Fein)
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It has simply been dropped. It is not there now. It was in the original document but not in this one.

Mr. Martin Shanahan:

I do not have it before me but if that is the case, then, as the Secretary General has said, it does not signify a movement away from the target. The target is clearly there. It is articulated in the IDA strategy. That is where the target comes from as part of Horizon 2020. That target will remain until the end of this year, when that strategy runs out. There is an absolute commitment to try to achieve that target but, as the Secretary General has said, there is also an acknowledgement that it is remarkably difficult to achieve that. We do not control companies' decisions. The IDA can influence companies and assist companies in making their decisions but the agency cannot direct them and we should acknowledge that.

Dara Calleary (Mayo, Fianna Fail)
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I have no difficulty in acknowledging that. I realise the market the IDA is in. However, there is a problem when companies do not get to see the majority of the country. They do not get a sniff of what is going on outside Dublin and Cork in terms of client visits. That is the only measure we have.

This comes back to my first question to the Secretary General in terms of the breakdown of the €2.5 billion. I understand a good deal of that money has gone to agriculture. That is great and there has been significant employment growth in agriculture. However, when we meet people from small and medium-sized enterprises who are not involved in agriculture, we hear they are frustrated because they maintain the money is not being lent. I have no wish to know every company that got a loan from Bank of Ireland or Allied Irish Banks but even if we had general headings we could make a call on the action plan and the targets being met. I realise the job of the IDA is difficult but when we consider the nature of client visits, it suggests to me that there will be no change in terms of the actual job announcements and the regional spread of those job announcements in the coming years.

Mr. John Murphy:

There has been a change because in 2013 the proportion of investments outside Dublin and Cork rose from 25% to 30%. There has been some improvement in that regard. I realise that is below the 50% target. Regional investments are run in many regional locations, including Limerick, Dundalk, Sligo, Waterford and Galway.

The IDA is embarking on a programme to provide some buildings in certain regions to address specific deficiencies that it has identified on foot of site visits and so on. We have facilitated this as part of its budget for 2014. There was also a reference to the risk of an increase in costs as the economy recovers. Together with the IDA we have identified a need to address certain issues relating to the provision of the right kind and quality of commercial property, particularly in Dublin and Cork. The IDA has been working with NAMA to identify projects that could ease pressures in that area.

Senator Cullinane referred to legal, insurance and other costs. We have focused on that. Forfás has done substantial work in this area and that will continue to be a focus for Government. Succeed in Ireland is a very interesting initiative which came out of the Global Irish Economic Forum. It was put in place just under two years ago. I would not agree that it has not been successful. It has actually generated a lot of-----

David Cullinane (Sinn Fein)
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I did not say it was unsuccessful. I said it has not met its targets.

Mr. John Murphy:

The target was set over a period of time. One cannot break it down into three month or six month targets and so on.

David Cullinane (Sinn Fein)
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It was broken down to yearly targets.

Mr. John Murphy:

My understanding is that in addition to the projects already announced it has a substantial deal flow in the pipeline and that generally is how these things go. It takes a while to ramp these things up. We are very interested in this. We do not see it as cutting across what others do. We see it as complementary, as a way of harnessing the contacts, energy and commitment of the diaspora in support of the job creation agenda. We are anxious to support it in the future.

The Senator mentioned youth unemployment and long-term unemployment. Action Plan for Jobs is complemented by other policies of Government, including in particular, Pathways to Work. There is a reference to this in Action Plan for Jobs. That is a sister document. Under Pathways to Work there have been specific initiatives to address those problems. The youth guarantee initiative will be launched at one o’clock today. One cannot consider Action Plan for Jobs in isolation from the other policies that Government is pursuing.

David Cullinane (Sinn Fein)
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I asked about two Bills as well.

Mr. John Murphy:

The workplace reform legislation is very substantial. Drafting is at an advanced stage. We have not been sitting back waiting for the legislation. We have implemented, where we can, on an administrative basis, several reforms in the way the industrial relations institutions work, for example, simplifying forms, single website, point of contact, etc. As we did with the integration of Forfás, we have identified a series of actions to be carried out in order that they can be done side by side with the legislation, as opposed to waiting for it to come first. There has been consultation with the social partners on collective bargaining and I expect the Minister will be in a position to bring proposals to Government on that shortly.

Seán Kyne (Galway West, Fine Gael)
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I welcome the Secretary General and his officials here this afternoon. I compliment the Department and the Minister on the successful implementation of the measures and initiatives of Action Plan for Jobs 2013, and the previous jobs action plans. What initiatives does Mr. Murphy feel have had the greatest impact on job creation or selling the environment to create jobs? Are there any key recommendations that have not been implemented, or not fully implemented? What would be Mr. Murphy’s priority in that regard?

In the 2013 plan Mr. Murphy referred to business trading online. One would support the idea to increase the number of businesses trading online. I made a submission on the 2014 plan regarding the rural economy and broadband. There are many businesses that still do not have the basic rural broadband. The ESB (Electronic Communications Networks) Bill 2013 was published last week, which will allow the piggybacking of communications infrastructure on the network. That is a welcome development. There is a lot of work in that area. Are there any specific recommendations for the Department of Communications, Energy and Natural Resources? The previous national broadband plan looked well and I appreciate it was a realistic attempt, but it was not successful. Many areas were mapped as having adequate broadband cover but the reality on the ground was not that good. That should be a key recommendation for the whole area of rural business.

When the committee focused on the rural economy, we did a tour, visiting several towns, including Ballinrobe, Castlebar and Ballinasloe, to investigate some of the problems retailers have. Part of the focus was on the black market. We passed on our reports and recommendations. Are they feeding into the process? Will the rural economy receive any particular attention in the forthcoming action plan?

Áine Collins (Cork North West, Fine Gael)
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I welcome the witnesses to the meeting today. I thank Forfás for the great work it has done, in particular in the area of mentoring, on which I worked directly with it last year. It was very effective. I am really glad to see that entrepreneurship has finally made it onto the Action Plan for Jobs plan in a big way. That is a huge part of driving investment into regional development. I spoke to some business colleagues in north Cork yesterday about how to keep our regions and towns alive. Some interesting points came up about social enterprise, which is the responsibility of the Minister of State at the Department of Jobs, Enterprise and Innovation, Deputy Sherlock. That is a new buzzword in Europe. We could consider the co-op model with small offices and businesses. If the services are not provided in small towns, business moves to big towns. A social enterprise co-op model might help small businesses, which are a social enterprise, to get off the ground. We are developing something at the moment which might be a pilot scheme. When companies come into Ireland and want to invest where the market, skills and infrastructure are, it is very challenging to bring them down to the regions. We have to be realistic about that. It is a matter of getting them in and hopefully the effect will be felt everywhere eventually.

It is a bit harsh to say that the microfinance guarantee is not working yet. It takes a lot of time to get that out and for people to understand it. People have come to my office recently and talked about setting up business and it has been good to have information to give them and to be able to offer them choices that did not exist before. It is difficult but I hope that when the LEOs are up and running later this year there will be better distribution of information. It is hard to get the message out. The committee has often discussed this issue. Unless people listen and are interested they will not know what is available for entrepreneurship. I understand that there will be a change in mentoring under Action Plan for Jobs 2014. Does Mr. Murphy want to comment on that? I thank him for being here today.

When we were in Brussels we heard many compliments paid to the Department of Jobs, Enterprise and Innovation and its team of civil servants, particularly for the work they did during the European Presidency. I relay those compliments to the witnesses and thank them.

Mr. John Murphy:

I will respond briefly and then pass over to Mr. Shanahan. The Chairman and committee will appreciate that I cannot set out what will or will not be in the action plan for 2014 given that it has not been finalised or submitted to Government for approval.

We have identified a number of priorities and these have been well flagged by the Minister and reflected in budgetary and other decisions, including the focus on entrepreneurship, as referred to by Deputy Collins. Following the report launched last week, work is under way on a policy on entrepreneurship which will be submitted to Government. I expect that some actions from this policy will be included in the 2014 action plan for jobs. Mr. Martin Shanahan will better answer the questions about social enterprise.

On the question of the credit guarantee and microfinance, the Deputy is correct that it takes a while for people to understand these initiatives. We are working to establish better ways of communicating to people. We expect the banks to take responsibility to ensure that their customers are informed about these options. We have also worked closely with the Credit Review Office. We are considering initiatives to enable us to understand why in some cases there are low levels of demand when there is a clear need for financing. We have put a lot of time and effort into developing non-banking financing measures.

I will ask Mr. Shanahan to deal with the questions about online trading. The lead responsibility for that initiative rests with the Department of Communications, Energy and Natural Resources.

A fair deal of work has been completed by the Department of Communications, Energy and Natural Resources - albeit with some prompting from our Department - on the provision of rural broadband and how best to support the provision of broadband. The Deputy is correct that it is critical to the economy in which businesses work. There is a wider focus on rural development other than in specific measures in the Action Plan for Jobs. Work is under way by the Ministers, Deputies Hogan and Coveney, on foot of the report of the commission for the economic development of rural areas, which is due shortly. I expect this will recommend specific actions which, if not filtered immediately into the Action Plan for Jobs, will be in the future.

Mr. Martin Shanahan:

Deputy Kyne asked about the impact of the action plan. It is very difficult to say. One of the arguments made by Forfás at the outset of the action plan is that all these actions need to be done, whether big or small. Sometimes it may seem unwieldy when the actions are set out but they are all important for business by making it easier for business to do business and ultimately to create private sector jobs.

The JobsPlus initiative was introduced during 2013. The take-up of such an initiative is immediately evident. The reaction has been very positive and much more positive than for the preceding schemes. It is evident that we are going in the right direction. Some actions are not always successful and it may be necessary to review and change them. Other areas where there has been a direct impact are areas such as ICT skills. There was a significant focus on ICT skills in 2013. We can see the output from the programmes coming on stream now. Jobs are available for those people who have completed those programmes because there is a shortage of skills in those areas.

The legislative commitments in the action plan are equally important although it takes time for them to work through. The action plan is all-encompassing and there will be a continued focus on certain areas. One would expect a continuing focus on competitiveness, costs, productivity, research and innovation, support for small and medium enterprises, and foreign direct investment. These are the stock-in-trade of the enterprise agencies and on which they will need to continue their focus in the 2014 action plan.

The Deputy referred to broadband provision. The Department is responsible for enterprise and Forfás is the enterprise body. We are continually in discussion about how to improve broadband services and provision. The current action plan includes a commitment on online trading. A trading online pilot scheme has been running in 2013 and a further pilot scheme will be beginning in the next month and the scheme will be rolled out during 2014, with a view to getting a significant number of companies trading online. Undoubtedly this is an expanding market area.

With regard to the rural economy, the action plan addresses the entirety of the country and does not exclude any area. There are multiple enterprise supports such as provided by Enterprise Ireland and IDA Ireland. Enterprise Ireland has a suite of enterprise supports which are available throughout the country. The local enterprise offices will be established and will provide another layer of support. All these layers together will impact on rural development and development outside the main urban centres.

We are conscious of the need to help those areas make themselves attractive for enterprise. There is scope for leadership at a number of levels, including at local level. The provision of advance infrastructure such as factories is part of the support.

Deputy Collins has worked closely with Forfás last year on the aspect of mentoring and entrepreneurship. We hope to publish the outcome of that work in the very near future. It has been very informative to hear the views of businesses and we will build on the work done by the Deputy.

Forfás published a report on social enterprise during 2013. We identified scope for a significant development in the area of social enterprise and allied job creation. If we were to achieve a level of social enterprise relative to the rest of Europe, the number of jobs may be of the order of 25,000. However, it would require work on establishing the correct environment. Coherent governance was one of the issues identified. Since the publication of our report, the Minister of State, Deputy Sean Sherlock, has been given responsibility for this area, supported by an interdepartmental group which is working through the various recommendations with a view to implementation. Bringing coherence in the first instance is a significant advance.

Michael Conaghan (Dublin South Central, Labour)
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I apologise for missing the previous two meetings of the committee.

Michael Conaghan (Dublin South Central, Labour)
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Two members who spoke earlier emphasised and highlighted what has not been achieved in the economy. That is an easy criticism to make. I will speak for what has been achieved which in my view has been considerable, taking into account the process of rescuing the country and beginning to rebuild the economy. The information presented today points to a resurgence in the economy. This may be a political view but it is borne out by international objective evidence. It is the international view that Ireland has rescued itself and is rebuilding its economy successfully.

Instead of always highlighting the negative, we should, as far as possible and without being too political about it, emphasise the role of the various Ministers and the staff of the different Departments and State agencies who have put in the work to facilitate the progress we have seen. Everybody charged with rebuilding our economy has been working in a difficult environment. We can have every confidence that the targets which are not yet achieved will be achieved in due course. It is important to have an objective view rather than perpetuating the sometimes unfair and inaccurate litany of negative comments regarding the economy. That negativity seeps into the public consciousness and turns people off.

The social economy is very feeble in this country but there is potential for it to become a strong and integral part of the broader economy. We are far behind other European countries in this regard in percentage terms. We need to see the development of the social economy as part of our overall economic recovery, as a solid platform on which that recovery can be reliably constructed. We have talked about this issue in previous meetings but it would be useful to revisit it and make it a target of this committee that there be solid progress in this area in the coming years.

Anthony Lawlor (Kildare North, Fine Gael)
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I welcome the Secretary General to the committee for this full and frank discussion. It is vital that we continue on our current path when it comes to job creation. There is a fear out there that our cost base may be starting to increase, with significant implications for our competitiveness. Mr. Murphy indicated that the Department is working with six companies on issues such as reducing red tape, although that was not the phrase he used. Can he identify those companies?

We have spoken on several occasions about the need to ensure that information on the various schemes and options available to people is readily available. I cannot help but think of the For Dummies series of books which offers comprehensive guidance on a range of subjects. I do not mean to cause offence by using the word "dummies", but I am regularly asked about the type of assistance that is available, how people can get started, source finance and so on. There is a range of schemes at all levels and the evidence is that people are failing, for whatever reason, to access the information on those schemes. It might be useful to put together some type of document setting out all the information in one place.

One of the most pressing aspects of the unemployment issue is youth unemployment. I agree with Deputy Áine Collins that there was great praise for the Department at all of the meetings we have attended in Brussels in terms of its efforts to restore the economy. I proposed at one of those meetings that Horizon 2020 should incorporate a provision on youth unemployment. Will Mr. Murphy indicate whether the Department of Jobs, Enterprise and Innovation is the lead Department on Horizon 2020?

When I met recently with the president of the students union at the National University of Ireland, Maynooth, he referred to the requirement for graduates to wait up to six months before being eligible to access the various employment activation schemes. I accept that the long-term unemployed are a priority under these schemes, but many of these well-qualified graduates are struggling to enter the workforce. The jobs market has changed dramatically in recent years. When I was going to school, a person leaving with a junior certificate could expect to get a job. Now, one needs a primary degree if there is to be any chance of getting into the labour market. In fact, a fourth level qualification is a requirement in many cases. The president of the students union in Maynooth pointed out that the requirement for graduates to be unemployed for up to six months before they can access a scheme means that some will end up disappearing, either out of the country or out of the education system. Would it be possible to amend the action plan for 2014 to accommodate these graduates? They need a pathway into full-time employment.

Anthony Lawlor (Kildare North, Fine Gael)
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I was referring to disruptive reforms.

Mr. John Murphy:

I will reply to some of the points and I will then hand over to Mr. Shanahan and anyone else among our number who may wish to comment.

I will deal with the points in the order in which they were raised. Deputy Conaghan stated that we should focus on what has been achieved as well as on the negative. I hardly expected him to disagree with that. There is no room for complacency. When the economy starts to recover, we must be careful that we do not allow cost or other pressures to get out of hand. We will, therefore, be keeping a very close focus on that. We are conscious that there are significant pockets of disadvantage and categories within the labour force that have not benefited as much as we would like. We need to keep addressing those and identifying what works. In the context of ICT skills, for example, we have had considerable success in terms of increasing the number of graduates. We have overachieved on the targets that were set. However, there is a significant demand for people who do not necessarily need degree qualifications. Rather, these individuals must be tech savvy and, critically, they must be employable. As a result, they need to possess other skills. We must focus on this aspect to the same degree that we focus on the number of projects involved or whatever. A large number of people, including individuals on the live register, who might well be highly tech savvy and who think the only jobs in the area of ICT are for graduates. That is actually not true. It is important to foster very good communications between industry, education providers and the labour market - I include the Department of Social Protection in this regard - in order that we might identify suitable people, make them ready and put them forward, at the levels to which I refer as well as at the higher levels.

The Deputy is absolutely correct that there is potential in terms of the social economy. Mr. Shanahan referred to this matter earlier. We do not control some of the policy levers or instruments that can be used. There are already quite a number of Exchequer measures in place which can support the social economy or which are already supporting it. However, it is not all necessarily as well joined up as should be the case. That is one of the particular difficulties in the sector. I am of the view that we are not maximising the value of Leader, Pobal and the other smaller initiatives that exist. We do not own those levers and, quite frankly, I have no desire to own them in light of what we have on our plate at present.

Deputy Lawlor referred to keeping up the pressure in respect of the cost base. As already indicated, we are very conscious of the need to do that. He inquired about who we are working with in respect of red tape. We like to refer to it as the "administrative burden". We have been working on measures to simplify that burden on business. An exercise was carried out across Government in respect of an EU target relating to reducing the administrative burden on business by 25%. We have met that target, as have a number of other Departments. The remaining Departments have found it more difficult to do so. This is something we will be continuing to pursue.

In the context of ensuring that businesses are aware of what is available, I must admit that I have not read any of the books in the For Dummies series but perhaps I should. Ensuring that people have the right information at the right time is a constant issue. There will be a particular challenge for the LEOs in the context of putting in place first-stop shops which bring together the resources of local authorities which relate to all of the issues which can arise for someone starting a business, including planning, rates and various other administrative requirements. Then there is the issue of start-up capital for these individuals. The Chairman referred to someone who has an idea about a product or service but who does not have much else going for him or her. It is exactly this kind of person which the county enterprise boards, which are going to become the LEOs, are designed to help, including through the provision of low-level funding for feasibility studies. If people are serious about going into business, then they must get beyond merely having an idea and reach the point where they can draw up effective business plans and either present them to banks in order to obtain funding or secure other forms of financing from, for example, the microfinance initiative. There is a fair amount of work to be done but the LEOs should act as the filter in this regard. County enterprise boards have been doing it for the past 20 years.

Mr. John Murphy:

We want the service to be enhanced. If we are serious about increasing the number of entrepreneurs, then more people should be walking through the doors of Enterprise Ireland and the LEOs. That would be a good problem to have.

Deputy Lawlor referred to Horizon 2020 and I can inform him that ours is the lead Department for the latter. The Government has set a target of securing €1.25 billion between now and 2020. We will be working in conjunction with Science Foundation Ireland and the other research institutions in this regard. We must ensure that we can source international partners because that is a critical requirement of Horizon 2020. Having such partners on board will facilitate us in putting forward the right kind of proposals in order to secure the return that is sought and underpin job creation. A much higher proportion of the new jobs being created by IDA Ireland and Enterprise Ireland companies are based on the output of research and innovation or on new products and processes. This is going to be extremely important for the future.

Anthony Lawlor (Kildare North, Fine Gael)
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Is the Department involved in driving the establishment of a research hub in Ireland?

Mr. John Murphy:

There are several research hubs in this country. These were established under-----

Anthony Lawlor (Kildare North, Fine Gael)
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When we visited Brussels, we were informed about the establishment of intergovernmental hubs by Mr. Robert-Jan Smits, head of the directorate general of research and innovation. The idea is that a number of countries would come together to establish hubs that would focus their research areas on specifically targeted areas. Mr. Smits hinted that a marine research hub could be established in Ireland.

Mr. John Murphy:

I do not have any information on that but I would be happy to obtain it for the Deputy.

On internships, there is a balance to be struck in the context of prioritising support for people in the labour market who are in difficulty. It is not unreasonable that someone who has just graduated from college should take the time and trouble to find employment for a period. I do not believe it is reasonable to expect - given the scale of the unemployment problem - that the State can step in when people leave college and hand them-----

Mr. John Murphy:

In recent years, significant emphasis has been placed on improving the links between the higher education institutions and industry and business in order that placements would become an integral part of many more courses. That was one of the issues which emerged at the Global Economic Forum. We spoke to people attending the latter who work in businesses and higher education institutions abroad about how the systems in other countries operate and asked how we could increase the number of placements on offer here. This would help us to address the issue to a significant degree and would avoid the necessity of putting in place a specific State-supported scheme.

I am not in a position to comment on the immigrant investor programme in the context of whether it should continue with it, scale it down or adopt a different model.

Áine Collins (Cork North West, Fine Gael)
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The immigrant investor programme in the UK has been very successful. The problem with our programme relates to the way it is structured. We need to re-examine the structures. I agree that it should be brought within the remit of the Department of Jobs, Enterprise and Innovation.

Mr. John Murphy:

I will deal with two other points raised and then hand over to Mr. Shanahan.

On the question of languages and language policy, obviously, it is a matter for the Department of Education and Skills to identity the measures that can best be put in place, given its range of priorities. As members know, substantial curriculum reform is under way at second level, with a particular focus on PISA and improving our ranking in that respect.

On the question of people not being able to find jobs because they do not have the necessary language skills, we tend to find that the issue is not about them having a knowledge of a foreign language but having the skills of a native language speaker which are of a much higher standard and which we realistically cannot expect to address in a language skills policy in the education sector.

Mr. John Murphy:

It is certainly something we put on the radar screen; I have to recognise that it is one of a number of demands we put on the education system and one of a number of reforms it is trying to implement. I should sound that note of caution.

With regard to job creation, I have some figures which I can send to the committee.

Mr. Martin Shanahan:

The Secretary General has probably covered most of the items raised at this stage.

On the question on engagement and the level of input of businesses, the answer is that it has been quite substantial. There are a number of ways of feeding into the action plan. In the first instance, there is an open invitation and a facility on the DJEI website, whereby any member of the public can make a submission on the action plan. I write specifically to individuals and particularly to representative groups seeking an input. The Minister has met a significant number of groups and individuals, whom we felt might have something to say and offer in terms of suggestions on the action plan. They range from entrepreneurs, particularly young entrepreneurs, to business people managing significant businesses to representative groups of multinationals, indigenous and small businesses. We invite comment from across the public system as they are the ones who will be delivering a good deal of this and thereby seek their input in the first instance. The employee representatives - the unions - have been invited to make submissions, as have the representatives of the unemployed. We have met the INOU, among others. Those operating in academic and other think-tanks have also been invited. To give a sense of the scale of the process involved, it generated in the region of 700 possible suggestions, although they overlap and involve a good deal of duplication and a different take on different matters. Our own research, analysis and so on act as an overlayer and it is then a matter of trying to bring it down to something more manageable.

On the Secretary General's point on language skills, we must recognise that it is quite an ask of the education system. There are multiple areas in which we see the need for additional skills, whether they be ICT or selling skills to sell abroad. Having language skills is not only a requirement for those taking up jobs in international companies here, they also give people the ability to go abroad and sell, which is probably a significant issue for us at this time. Technical skills, the output from apprenticeships and ensuring good connections are all issues. We are constantly in discussions with colleagues in the Department of Education and Skills about trying to ensure there is a match in that regard.

Mr. Martin Shanahan:

And primary school.

Áine Collins (Cork North West, Fine Gael)
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I wish to make two comments. The Secretary General spoke about entrepreneurship and the Chairman responded to his comment on a person who had an idea for a product. This is a key area in which mentoring comes into play. When a person goes into a local enterprise office, the first thing he or she needs is to have a mentor appointed for him or her. It is very important that mentors be properly educated and connected, an issue which is covered in a report about to be published.

Also, in regard to regional development, when the layers are developed, I stress that it is important that they extend outwards. I only know about the position in Cork; I cannot talk for the rest of the country. There has been an issue for Cork County Council in that when local enterprise offices were set up in various towns throughout the county, the council had to fund their establishment. It would be useful if a person from the local enterprise office came to a region one day a forthnight which would ensure more of a spread. People do not know where to go and if we are to get the word out, we need to have more of these offices. That is an important point.

Mr. Shanahan was the first person to mention apprenticeships. That is an issue we need to re-examine. There are a great number of skills that could be learned. All of the conversation today has been about graduates coming out of college and so on, which is very important. However, we all know the importance of education, but we do not talk enough about apprenticeships for unemployed youth who may not have had an opportunity to attend third level or may not be that way inclined. It is an issue on which we need to focus.

Mr. John Murphy:

I am glad the Deputy raised the point on apprenticeships. In referring to the ICT sector I highlighted the importance of non-graduate skills. The Government has just published a review of apprenticeship. It has been designed to streamline the model to move away from the traditional focus on trades to identify ways of developing an accredited training programme to an appropriate standard covering a much broader range of skills and in a much more flexible way. However, critically, it needs the right relationship with industry. Much of the work in which Forfás has been involved is about identifying, classifying and drilling down into the skills needs of enterprise and industry. In that regard, the restructuring of Solas and the development of its strategy will be very important in order that the new provisions identified in the review of apprenticeships are used and that people grab the opportunities available.