Speech by Minister for Labour Affairs Kelleher on the Private Member’s Motion on Employment and Training

Challenging Global Economy

I think it appropriate that we all recognise from the outset that these challenges are faced by virtually every other modern economy in the world today. We have all been affected by the major downturn which is currently gripping the world’s economy. How we respond to this downturn will determine our future and the Government is determined to continue to take the necessary steps to ensure that Ireland will overcome these difficult circumstances.

However, we must acknowledge that as a small open economy, Ireland is particularly prone to the effects of the economic challenges currently unfolding across the world’s financial markets. The worldwide economic difficulties are producing effects of a range and severity that are unprecedented in our modern history. The world financial system is currently experiencing an ongoing period of rapid transformation and the fluctuations taking place are impacting on industry, enterprises and individuals not only in Ireland but throughout the entire world.

Actions by the Government

Difficult and decisive action needs to be taken to ensure economic stability in these tumultuous times. The Government recognised this fact and brought forward its budget by 6 weeks in recognition of the extraordinary circumstances facing us– the challenges we face require an agile response and a willingness to be flexible in the face of ever-shifting circumstances.

The Government has the proven track record and necessary experience to manage the economy during this challenging period. We have proven ourselves by managing the economy to record levels of growth and expansion over the past decade. We have been at the helm of the economy during a period that witnessed a remarkable leap in Irish living standards, which now exceed the EU average at a time when we have record levels of people in employment. This Government has managed the economy in a way that built on our inherent strengths, namely our highly skilled and flexible workforce, our work ethic and our benign business environment.

We will continue to manage the economy in a manner that ensures we protect and sustain the success and prosperity we have created over the past ten years. This Government has displayed the courage and conviction to make unpopular decisions that are in the interests of the State. We will continue to take decisive action that will safeguard our competitiveness and that are in the interests of our citizens.

Live Register

That is why this Government is determined to do all in its power to tackle the rising numbers of people who have been made unemployed, which is of great concern to the Government. New live register figures are being published tomorrow and they will almost certainly show a further deterioration in employment.

The unwelcome conditions in the labour market here reflect the present international economic downturn and Ireland’s openness to events affecting the global economy. We have been adversely affected by the lack of confidence in the world economy, which is manifested in the dramatic fluctuations in stock markets across the global and the severe reduction in credit, which is the lifeblood of businesses.

I acknowledge that the number on the Live Register increased significantly over the summer, with the unemployment rate on this basis reaching 6.3% in September. This represents an increase of almost 50% in a 12-month period. However, it should be noted that the Live Register is not designed to measure unemployment. It includes part-time, seasonal and casual workers who are entitled to unemployment benefit.

Employment and unemployment are best measured by the Quarterly National Household Survey or QNHS, and published by the Central Statistics Office. In the second quarter of 2008, the most recent quarter for which data is available, the QNHS measured unemployment at 5.2%, which compared favourably with the EU27 average unemployment rate of 6.8%. The employment growth for the year was 0.3% above the EU27 average and we were in line with the EU employment targets set for 2010.

However, the Government recognises that the increasing number of people who have been made unemployed represents a major challenge that we must address. Certain sectors of the economy, in particular the construction and manufacturing sectors, have seen a downturn in activity with subsequent corresponding significant increases in unemployment. For the first time in a decade many Irish people are facing a very difficult and uncertain period.

The Government has attached the highest priority to assisting these people. We will continue to direct the necessary resources to the employment and training support services that will provide a helping hand and assist these people in securing other employment as soon as possible.

I realise that the rising unemployment levels coupled with the downturn in the Irish economy represent the most demanding challenge which Ireland has faced in almost twenty years. However, the Government has already taken decisive action to respond to the challenge we are now facing. We have shown leadership and sent out a strong message that Ireland is responding to the global economic crisis in a proactive and prudent manner.

We took early action to address the deterioration in economic and fiscal prospects by introducing the 2009 budget early. We have secured substantial savings across virtually all areas of public expenditure and we will continue to seek out additional savings were possible.

The Government has made many necessary tough decisions in recent weeks in order that Ireland is placed in a position to reap the benefits that will arise once our economic situation improves. We are providing additional resources to assist those people in our economy that need our assistance the most.

We should acknowledge that total investment for Labour Market programmes in my Department's Estimate for 2009 will amount to €1.083 billion, or 56% of the total budget.  Of this, €1.05 billion will be delivered through FAS.  Within FAS' budget:

Funding for Community Employment and Job Initiative schemes will be increased by 2%, to €450 million.  This will enable FAS to continue to support a minimum of 22,500 participants on these programmes next year.

Funding for FAS' services to people with disabilities is also being increased by 2%.  A total of €77.7 million in FAS' 2009 budget is ring fenced for specific employment and training programmes for people with disabilities.  

The allocation from the National Training Fund for training the unemployed has been increased by €9.5 million, to €208.3 million.  This allocation will, in particular, help workers who have recently lost their jobs, including redundant Apprentices, through training and re-skilling. 

While Labour Market programmes have been refocused to assist the unemployed, funding for upskilling those in employment in 2009 will still amount to €168.5 million and will be delivered primarily by FAS and Skillnets. 

FÁS - Assistance for the Unemployed

This additional allocation in Budget 2009 will enable FÁS to develop new initiatives in addition to the normal delivery of its employment services and training supports to the unemployed. The purpose of these supports is to assist individuals in securing alternative employment either through sourcing possible employment opportunities or by providing them with upskilling opportunities that will increase their employability.

In addition the Department of Social and Family Affairs and FAS are working closely together to respond quickly to the rising Live Register numbers. In particular FÁS’ Employment Services and the Local Employment Services are gearing up to provide increased capacity for expected increased referrals from the Live Register.

FÁS are also providing a range of certified and flexible programmes designed to upskill redundant workers so that they can enhance their prospect of securing employment. A number of programmes are already in place and the frequency and range of these will be expanded over the coming months.

I have already mentioned that there has been a significant downturn in construction related activity since the start of this year. In fact the construction sector is undergoing a major structural change at present and as a result there has been a major increase in the numbers of people within the construction sector who have been made redundant. There has also been an increase in the number of apprentices being made redundant.

FÁS, in addition to the usual supports they provide to redundant workers, has established a training fund to enable them to provide a timely response to identified training/re-training needs for low skilled and redundant craft workers from the construction sector. It is intended that this will enable individuals to secure a speedy return to work, or where this cannot be secured to provide relevant upskilling opportunities in order that the job seekers can secure employment in alternative sectors.

They are also currently focusing on providing retraining opportunities for redundant construction workers in emerging areas such as the installation of energy efficient and renewable technologies, environmental activity, and compliance and regulatory work.

In addition FÁS are assisting individuals in any way they can in securing employment abroad in construction in other EU countries. In that regard FÁS have held Job Fairs in Dublin and Cork, which brought many employers from other EU Member States offering employment in their construction sectors.

Redundant Apprentices

In relation to redundant apprentices, my Department and FÁS have been actively examining this issue and have put in place a series of actions to facilitate redundant apprentices in completing their studies. Among these include redundant apprentices being allowed to progress to their next off-the-job phase of training without having to do the next on-the-job phase.

A register of Redundant Apprentices has been established in order to identify these people at the earliest possible point in time and FÁS have prioritised the need to locate an employer to sponsor the completion of the Apprentices’ off-the-job training.

A proportion of the additional €9 million assigned to FÁS to provide supports for people seeking employment has been provided to enable FÁS develop a specific programme aimed at assisting redundant apprentices. It is intended that this programme will facilitate redundant apprentices in securing the much needed on the job experience that they require in order that they may continue their apprenticeship.

In addition to these measures, Leargas the National Agency for the EU’s Lifelong-Learning programme recently issued a national call for mobility projects. This call, which is taking place under the Leonardo da Vinci Programme, which is an EU vocational training programme, aims to fund apprentices complete a period of on the job training in suitable European companies.

It is hoped that this national call will facilitate apprentices who have been made redundant to complete their apprenticeship.

Community Employment Schemes

Further help for those who have become distanced from the labour market for some time and who are seeking to re-enter is provided by the Community Employment Scheme (CE). CE is an active labour market programme designed to provide eligible long term unemployed people and other disadvantaged persons with an opportunity to engage in useful work within their communities on a fixed term basis. The programme helps unemployed people to progress to the open labour market by breaking their experience of unemployment through a return to work routine and assists them in developing both their technical and personal skills.

The Government is investing €377 million this year in CE with a view to maintaining overall numbers on FÁS schemes at 2007 levels. At present there are over 22,400 people employed on CE schemes nationally.In delivering these places, FÁS operates flexibly in the management of this allocation in order to maximise progression to the labour market while at the same time facilitating the support of community services.

Importance of Skills

While we must continue to provide the necessary supports and services to the people within our workforce who most require our assistance we must not lose sight of the fact that the continuing development of Ireland’s education and training systems will be pivotal in helping Ireland overcome the challenges we are currently facing and in sustaining our economic success in the future.

We must ensure that our education and training systems continue to harness the collective skills and talents of our workforce. We must ensure that our systems are meeting the changing needs of our society from both an economic and social perspective.

That is why it is of paramount importance that we continue to focus attention on developing the skills of our population, so that the Irish labour force can continually adapt and upgrade its skills to meet emerging opportunities and challenges. We must continue to ensure that the flexibility of our workforce remains a key strength in these difficult times.

I am confident that the Government’s commitment to maintaining our competitive edge in relation to the skills of our workforce will continue to bear fruit in the years ahead. The responsive and flexible training programmes that my Department funds are providing both individuals and businesses with the necessary skills to succeed in the ever-changing global economy.

FÁS One Step Up & Skillnets

In particular the Government has backed and supported innovative initiatives designed to increase the number of people who benefit from training. My Department’s key providers of training to those in employment, FÁS and Skillnets, have received substantially increased resources in recent years and have been directed to increase their focus on the provision of management training and those in low skilled employment in accordance with the findings of the National Skills Strategy.

Both organisations have adopted innovative methods at increasing the number of people who have received training. The Skillnets model is capable of reacting swiftly to enterprise needs. Skillnets follows a demand-led model so their potential offering is evaluated by the end user and can then be adapted to suit the particular training requirements of the sector or region. The training syllabi created by the networks are under continuous review and are amended in response to changed market conditions.

As training the low-skilled is a core part of many network offerings, Skillnets is positioned to effect positive influence on employment opportunities by enhancing the skills and employability of the more vulnerable members of our workforce. Their Low Basic Skills training schemes have higher outputs than comparable programmes in the marketplace in terms of certification and return on investment. This year Skillnets will provide training to 55,000 people.

FÁS through its One Step Up programme are also providing increasing numbers of people with upskilling opportunities. This programme aims to encourage employees to increase their competency levels and promote an ethos of lifelong learning in the workplace. This year FÁS will provide training to appoxmately 37,000 people. Through their innovative Strategic Alliance programme, FÁS has entered into strategic partnerships with third party organisations to deliver specific training to respond to the needs of enterprises.

The current Strategic Alliance programmes are delivering highly flexible and responsive training with a particular focus on two areas. The first in management training to SMEs which is responding to the need for improved training to enable SMEs achieve their potential. The second area focuses specifically on the provision of training to the low skilled and responds directly to the needs identified in the National Skills Strategy.

Between FÁS’ One Step Programme and Skillnets I expect that approximately 92,000 people in employment will receive education and training this year. This figure illustrates the Government’s commitment to upskilling our workforce and will improve the employability of these individuals while opening new opportunities for them.

Review of Labour Market Programmes and C&AG Report on FÁS

This evening’s Motion calls for a comprehensive audit of FÁS to ensure that the taxpayer is getting value for money from the agency. There are two points I would like to make in response to this. Firstly, in the context of ensuring value for money and obtaining the maximum benefit from the operation of labour market programmes provided by both FÁS and Skillnets, a review, funded by my Department, is currently looking at this issue.

As well as analysing the FÁS and Skillnets run labour market programmes, the review will also draw conclusions about the adequacy and balance of resources in the context of current and future labour market policy challenges, including the National Skills Strategy. The Steering Group conducting the review is chaired by a senior official from my Department and includes members from the Departments of Finance, Social & Family Affairs and Education & Science. FAS and Skillnets are also represented on the Group and it is supported by Forfas.

Set against what is an undoubtedly tough global economic background, there are a number of key labour market challenges facing this country. The implementation of the National Skills Strategy, which sets out clear long-term objectives for the lifelong learning of those in employment and for developing Ireland’s human capital through upskilling, training and education for the period to 2020, is intrinsically linked to the future economic prosperity of this country. It therefore follows that the goals of labour market activation of marginalised groups like the unemployed, lone parents and people with disabilities, as well as the increased labour market participation of older workers and women are realised in order to ensure that the labour market and its skill needs will continue to be met from within this country’s workforce.

Against this background the Steering Group will be carrying out a thorough evaluation of all current Labour Market Programmes in the context of their performanceoutcomes, efficiency and effectiveness. The review, including its conclusions and recommendations for an effective future labour market programme strategy is expected to be completed by the middle of next year.

My second point relates more specifically to FÁS and value for money generally. As most Deputies will be aware, a report on Semi-State bodies published in May of this year by the Comptroller and Auditor General (C&AG) featuring FÁS along with a number of other State bodies highlighted a number of issues relating to FÁS. In mentioning this I would emphasise that the C&AG’s findings were based on irregularities discovered by the FÁS Internal Audit Unit itself.

My colleague the Tánaiste has discussed this matter with the Director General of FÁS and has expressed her concerns at the need to secure value for money in public expenditure. The Tánaiste has also requested the Comptroller and Auditor General to carry out an investigation into the effectiveness of existing management and control systems within FÁS and the C&AG has acceded to this request.

Conclusion

In summary I have stated that this Government has made decisions that are designed to get this country over this difficult period. We are committed to continuing this process until Ireland is once again one of the most vibrant and successful economies in Europe.

I will now hand you over to my colleague Minister John McGuinness who will continue to outline the Government’s determination in tackling the issues Ireland is currently facing.

Thank you.

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