Wednesday, 18 February 1998
Dáil Éireann Debate
13. Mr. Broughan asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will inform Dáil Éireann of her proposals for the merging of Forbairt, An Bord Tráchtála and the industrial training side of FÁS; if she intends to meet the trade unions in the organisations involved to inform them of her proposals and seek their views, in view of the fact that they are partners to Partnership 2000; her views on whether it is necessary; the study or report she is relying on to support her proposals; and if it is her intention to invite representatives of the staff in the agencies to participate in the steering committee which she is reported to be setting up to address the organisational structures for the new agency. [4084/98]
Tánaiste and Minister for Enterprise, Trade and Employment (Miss Harney): I recently announced that the Government has decided to establish a new client centred support structure for indigenous enterprise involving the creation of a new support agency. An Bord Tráchtála (ABT) and relevant elements of Forbairt and FÁS will be incorporated into the new agency.
I have already put in place consultative arrangements with the management and trade unions involved in the restructuring process. The process to establish the new agency is now under way and already four separate meetings have been held with the management from the agencies involved, and three separate meetings with agency staff and their trade union representatives. These meetings will continue on a regular basis.
The policy basis on which the Government decided to restructure the agencies is outlined in New Support Structures for Enterprise Development — the Issues and Concepts Outlined. Copies of this document have been placed in the Oireachtas library for the information of Members.
Mr. Broughan: Some comments that were addressed to the Chair by Deputy Owen have a relevance in my own case in that about four or five questions concerning the Ryanair dispute, in my name and the names of other Labour Party Deputies, were ruled out of order.
An Leas-Cheann Comhairle: That is not relevant to this question. The Deputy should ask the Tánaiste a question. For the benefit of Deputies, I wish to point out that there is a question in the name of Deputy Perry which cannot be taken if we spend more than 20 minutes on the two preceding questions. In fairness to other Deputies, including Deputy Perry, Members should ask questions to elicit information from the Minister.
Mr. Broughan: I wanted to mention that for the record. Does the Tánaiste accept there is deep unease among the constituent parts she is trying to put together in a hotchpotch arrangement? I understand the working title of the new body is the Company Development Agency. There is deep unease among experienced staff in Forbairt, the Trade Board and in the training section of  FÁS at what many feel was the non-consultative way in which the Tánaiste pushed this project in recent months. The Tánaiste referred to some reports, but there is considerable fear that she wishes to push relentlessly something that is deeply ideological to her and her party.
Has there not been minimal consultation with the trade unions involved, especially those relating to Forbairt? Is it not fair to say, therefore, that there is a basis for the staff's unease? Having spoken to a significant number of them it seems to me they are not even aware of the steering committee's terms of reference, nor the method by which the Tánaiste appointed it.
Miss Harney: I do not accept what Deputy Broughan said. It is true that not everybody is happy with the approach, but the vast majority of the staff and their representatives to whom I have spoken — and the vast majority of representatives of indigenous industry, whom we are trying to support — believe the Government's strategy is appropriate.
It has nothing to do with ideology. Whether you have one, two or three agencies is not a matter for ideology. I am certainly no ideologue. What governed this decision was not the number of agencies but rather the strategy required to support and develop indigenous industry. It is a fact that when the IDA was given the sole focus of selling Ireland abroad, it outperformed every other agency because it knew what its focus was and could concentrate on it. A similar focus was not given to the indigenous sector, as a result of which it has not been supported in the most appropriate way.
Bringing things together and creating a new dynamic agency is not an end in itself; it is the result of trying to develop the most appropriate strategy as we head into a new millennium and a much more competitive global economy in which Irish companies must operate. We have to export 84 per cent of what we produce. Irish companies have to be export driven and the support we give them must be provided in that context. Irish companies should get the support they deserve, rather than having to wander around seeking support from three different agencies. That causes confusion, particularly to smaller companies which are not competent to deal with the various schemes and agencies. By bringing things together and creating something new and dynamic, there will be a clear focus. The needs of industry, which is the number one priority of the Government in terms of industrial policy, will be better served.
Mr. Broughan: I understand the Minister has her steering committee in place, but as regards the mechanism by which this will work, how does the Minister anticipate the training side of FÁS would work, for example, given that much of its work is done for multinationals which have just established here?
 Is it not a fact as regards the trade board that a significant proportion of small Irish exporters have severely criticised this move in that they feel a more targeted development body abroad, such as the trade board has been over the years, would be the best way forward?
How does the Minister propose to resolve the difficulties we are led to believe will exist in appointing a chief executive, given the chief executive of the trade board is employed on contract and earns more than £125,000 per annum and the Forbairt chief executive, who is tipped to become the chief executive of the CDA, earns somewhere in the region of £75,000 to £80,000?
Miss Harney: It was wrong in 1993 for the trade function to be taken from what was then the Department of Enterprise and Employment. By virtue of that decision, agencies were established which should never have been established. I will not be driven by the interests of any person, nor do I know who the new chief executive will be. It will not be a matter for me but for the board designate to decide, and they will do it on the basis of fair procedures. However, we must not allow the interests of any one person or board to dictate what should be done in the interests of indigenous industry.
When we took office, I asked officials in my Department to establish a high level working group to examine the support structures in place for indigenous industry. It established a number of facts: that there are 45 different support schemes in place spread across the three different agencies. That is clearly an excessive number of schemes. Some companies were able to benefit from many of the schemes. Others who may have needed them may not have benefited from any of them because they did not have the wherewithal to find their way around that enormous bureaucracy.
Second, it established that 61 per cent of the companies assisted by An Bord Tráchtála were the same as those assisted by Forbairt. It does not make sense to me that Irish companies, small ones especially, must wander around knocking on doors wondering where they will get help.
Miss Harney: That is where I disagree with the Deputy. If we want to support the growth and development of indigenous industry, we must do it by first carrying out an assessment of its needs. At the moment, it is supply driven; the State decides on its needs rather than talking to it to find out what they are.
It is proposed to assist industry in six different ways: first by assessment, second by sectoral positioning, third by research and development, fourth by diversification in terms of export markets, because Irish industry is too heavily dependent on the UK market, fifth by assistance in finance arrangements and sixth by human resource  development and training. If industry is to be given the most comprehensive and appropriate package and if taxpayers' money is to be used as effectively as possible in this process, all that must be brought together.
It is better for Irish firms to go to a one-stop shop where they will admittedly have different people advising them, because different people have different expertise, but they will receive from the one agency the sort of comprehensive support they need and deserve to grow and develop. The approach the Government has adopted is the most sensible one, notwithstanding the difficulties. There will always be difficulties when one seeks to bring things together. It is often better to leave things as they are. However, I am no agency junkie. We must not be dictated to by the needs of specific agencies. We must be governed by the needs of firms, especially in the competitive global economy.
Miss Harney: We must question whether taxpayers' money should be used to assist multinational companies with training needs and whether that is the most appropriate policy. In my experience, these companies have the resources and the commitment to carry out their own human resource development.
The efforts of the State must be concentrated in assisting the indigenous sector which has many shortcomings as my survey has shown. Many Irish companies are still in traditional sectors where they will not be able to compete unless they move into other areas and diversify.
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