Statements on the Mid West Task Force in Dáil Éireann

Opening Statement: Tánaiste and Minister for Enterprise, Trade and Employment, Ms Mary Coughlan.

Check Against Delivery

Ceann Comhairle,

I welcome today’s opportunity to address the House on this matter.

I established the Mid-West Task Force early last year, under the Chairmanship of Mr Denis Brosnan, following the announcement of the Dell manufacturing closure in Limerick and associated industrial job losses in the Mid West region.

The Task Force completed an Interim Report which was presented to me by Mr Brosnan last July. The wide range of recommendations in the report cover both local and national issues. Some fall within the remit of my own Department and its agencies. Others fall within the remit of other Ministers and require a whole-of-Government approach in responding to them.

The Government has been responding to the recommendations under all of these headings. Last September, I sent the Task Force a report on responses up to that time. Since then, I have conducted a broad consultation with other Ministers and all relevant Divisions and agencies in my own Department. Ministers are now finalising their responses in the light of their budgets for 2010, and I expect to send a further report to the Task Force shortly.

I shall also set out the main responses in my speech here today, with fuller detail on some of these in the closing remarks of Minister Kelleher.

In relation to the situation in the Mid West region which developed around the Dell manufacturing closure announcement, a variety of actions have been taken.

As an immediate response to the developing situation, a response under the heading of Tus Nua was initiated in December, 2008.

Tus Nua is a multi-agency regional group which was set up to specifically address the issue of the impending business closures and downsizing across companies in the Mid-West. The group includes Enterprise Ireland, the City and County Enterprise Boards, FÁS, Limerick Institute of Technology & University of Limerick.

This multi-agency response to job losses has been taking place at two levels:

At the level of individual employees, information & services to those facing unemployment has been provided to facilitate them to re-train, to re-educate or to start a new business.

At the level of Companies, specific initiatives have been delivered to indigenous sub-supply companies in the Mid-West to explore alternative markets, products and business opportunities.

Supports & programmes include:

Management of the web portal Tus Nua, which provides seamless access to a comprehensive range of information & enterprise supports available via Enterprise Ireland, CEBs, FÁS and Third Level institutions. In addition, the website allows individuals to register their specific request for support with a facility for immediate follow-up by the relevant agency.

Information Events have been held encompassing all Enterprise, Employment and Education institutions together with private & voluntary sector organisations including Financial Institutions, MABS, Citizens Information and recruitment agencies.

A collaborative information brochure detailing contacts, business Start-Up supports & financial assistance available via EI and the CEBs is available.

A series of one and two-night seminars and workshops throughout the Mid-West commenced in March 2009 to provide individuals with information on enterprise start-up & identification of new business opportunities.

A further EI-led 6-week part-time Enterprise Start Programme is due to commence in early February at the EI funded Enterprise Acceleration Centre at LIT, to facilitate individuals to explore Business Start-Up as a new career option. This is in addition to a series of programmes run last year.

An Enterprise Platform Programme also commenced at LIT to assist individuals to commercialise existing business ideas.

A One-to-One meeting facility for individuals interested in business start-up has been available from locally based EI regional development executives.

In addition EI has focused on the sub-supply base in the Mid-west with dedicated sub-supplier events to facilitate supply companies to explore new opportunities, new business leads & new markets with assistance from EI’s overseas market network.

In addition to the Tus Nua initiative, a successful application was made under the EU’s European Globalisation Adjustment Fund in June, 2009.

The application of co-funded assistance from this Fund will support the costs of a personalized package of occupational guidance, training, employment, entrepreneurship and educational measures for workers made redundant at the DELL plant in Raheen and in ancillary enterprises.

This application was approved by the European Union budgetary authorities in late December 2009 and the transfer of EU funds is anticipated this week or next. Provision has been made in my Department’s Vote for the national financing element required. The timeframe permitted for eligible expenditure under the Fund in this case is September 2011.

Having successfully secured EGF funding together with significant Government co-financing, we are continuing with the implementation of the suite of EGF funded measures. Good work continues to be done by State agencies and educational institutions in Limerick and the Mid West region. For example, FAS has already provided guidance services and training courses to over 1,500 of the affected workers.

My Department will be the managing authority for EGF funding in the State while the Department of Education and Science, FAS and Enterprise Ireland will be designated intermediate bodies for funds transfer, reporting and monitoring purposes. Approved funding will be made available to public beneficiaries delivering services on the ground to the eligible redundant workers. All intermediate bodies shall certify expenditure in their particular area of responsibility and report to my Department and all expenditure must adhere to relevant EU and national accounting and auditing procedures.

It is imperative that the wide suite of EGF assisted measures being provided to eligible redundant workers is co-ordinated in the most effective and efficient manner locally and regionally. To that end, Minister Calleary and I have charged Fás with establishing a dedicated EGF Co-ordination Unit in Limerick to ensure that all relevant supports across all service providers are coordinated on the ground in a timely, effective and efficient manner. The Unit shall act as the primary coordination agency for the Department in the implementation of the EGF programme for DELL-worker-related supports.

Fás is currently contacting all relevant redundant workers to inform them of the supports being offered with EGF assistance in the areas of training, upskilling, entrepreneurial supports and further and higher education. They are also inviting the workers to a 2-day information fair in Limerick in early February at which all service providers will be in attendance to detail their programmes and supports, to answer queries and to provide for course registrations.

A steering group is also being established to include worker representative bodies in order to ensure that the views of the redundant workers and other key stakeholders are made known and fed into the implementation process.

Minister Calleary will be going to Limerick to meet with redundant workers representatives as part of this process shortly to hear their views at first hand.

A review of the operation of the Fund shall be undertaken by my Department in June 2010.

In relation to the promotion of industrial employment in the Mid-West region, the development agencies Enterprise Ireland, IDA Ireland, Forfás and Shannon Development have enjoyed a close working relationship with the Task Force to date and this will continue into the future. As with all the other stakeholders in the region, the agencies are fully committed to working through the current difficulties and to getting the message out that the Mid-West is a great location and is open for business.

A strong promotion effort is under way in relation to FDI:

IDA Ireland is working very hard overseas in continuing to strongly promote the Mid West to potential investors. This is evidenced by the fact that the agency hosted 18 visits to the region by potential investors in 2009.

IDA is supportive of a continued focus on attracting high technology investment to the Mid West. Intel announced a €50m investment in R&D in the Shannon Free Zone in 2009, a major vote of confidence in the Mid West.

IDA has 52 client companies in the Mid West region employing a total of over 8,000 people on a full and part time basis. While 2009 was been a difficult year for these companies, IDA continued to work with them to protect and strengthen their operations in the region and to assist them in broadening and deepening the range of functions carried out here.

FDI investments take some time to be put in place. In this regard a number of companies who announced investments in 2008 and 2009 are currently recruiting. This includes Vistakon, Channel Advisor, ON Semi, Cook Medical and DTS in Limerick, Microsemi in Ennis, and Intel in Shannon.

Enterprise Ireland client employment in the Mid-West Region in 2009 was over 9,100. Nevertheless, it is clear that the economic downturn is resulting in a negative effect on employment creation.

The effect on job retention, particularly in certain sectors such as construction and construction related industries, has been significant, with a net decrease of numbers employed in EI companies.

A key driver of employment growth in the region will be the presence of innovative Start-up companies. Five such High Potential start-ups were established in the Mid-West in 2009, with EI support.

In the Mid-West region, a recently announced €26m Bank of Ireland Seed and Early Stage Equity Fund supported by Enterprise Ireland and the University of Limerick Foundation will invest in start-up and early stage companies. Its focus will be on high potential university spin-offs and export-orientated start-up companies that operate in the technology, including green technology, food and financial services sectors.

While 2009 was a difficult year for established companies, EI expects the ongoing focus for established industry in the Mid-West to be consolidation, growing Gross Value Added by seeking efficiency and productivity gains through implementing Lean initiatives, with some companies poised for growth on foot of investment in innovation in terms of products, processes and services, and through seeking out new customers in new markets.

Shannon Development, as part of its regional economic development mandate, promotes the Shannon Free Zone for FDI and indigenous investment. In the Zone, 7,100 people are employed in about 100 companies. Shannon Development also provides industrial property across the whole Mid-West region to facilitate the establishment and growth of both indigenous and FDI companies.

Shannon development has extensive industrial property available in 57 separate regional locations in the Mid West.

In relation to the National Technology Park in Limerick, it has appointed consultants to audit the existing infrastructure and to carry out preliminary design work on appropriate layouts, budget estimates and timelines for the further development of the NTP into a more strategic site for the attraction of industrial investment from Irish and foreign companies.

As the agency responsible for marketing the region overseas, IDA Ireland works very closely with Shannon Development in assessing and defining potential investors’ needs. The 70-acre holding in the NTP is recognised by both agencies as being particularly attractive for flagship utility-intensive projects.

EI remains active in bringing the location to the attention of relevant clients. EI is working to develop incubation facilities for innovative start-up companies such as those at Limerick IT and University of Limerick. These help to leverage both human and research capital from educational institutions, driving the creation of companies which will deliver exports and jobs growth to the region. Where these companies successfully achieve scale, the Technology Park will be a very important piece of infrastructure which will aid the further development of these companies.

Extensive collaboration exists between the Agencies as they work together to maximise the impact of manufacturing and internationally-traded services in the region. Strong working relationships have evolved over a long number of years. Progress is regularly monitored at high level and in ongoing local-level review discussions. The Agencies are fully committed to an Inter Agency enhanced collaboration initiative currently being chaired by my Department. Engagement in the Mid-West region will intensify as new initiatives are being explored to address the employment position.

Despite these ongoing efforts, I recognise that the Mid West region has been more affected than most other regions by job losses in manufacturing and internationally traded services in the past ten years, and particularly so in 2009. Across the country as a whole, the areas around Dublin and Cork have fared better than other regions in recent years.

IDA Ireland is currently finalising a new Strategy for the coming decade, with a particular focus on the period 2010 to 2014. I have asked IDA to take account in its new strategy of the trends I have just mentioned in industrial employment. This will see IDA putting a strong effort into the regions, including the Mid-West, which have recently fared less well in employment terms. The broader Limerick City area will be a particular focus of attention. I expect that the new IDA Strategy will be published later next month.

The Mid-West Region has been subject to the competitiveness challenges which have been experienced nationally. Perhaps most critically, the downturn in the domestic economy has put a number of companies under pressure – particularly those with a high dependency on the Irish market. Rising input costs and ongoing exchange rate fluctuation in key export markets, including the United Kingdom and the United States, have resulted in decreased competitiveness, and have had a negative impact on some export focused companies.

The region does have a higher proportion of its workforce employed in the manufacturing and industrial sector than any other region, a number of which are involved in high volume production. Construction provided almost 14% of total employment at end of 2007 and this has been severely affected by the downturn. Reorienting this economic structure will be a particular challenge for the region. While this is the case, there has been notable growth in ICT services activity and internationally traded services activity generally, as well as in the Medical Technologies sector. The region recorded the highest number of EI-supported start-ups of all regions as recently as 2007.

While the Mid-West is relatively well served in terms of access and knowledge infrastructures, particularly with its international airport at Shannon, its deep sea Port and the National Technology Park in Limerick, there remains a need for improvement if the Mid-West is to thrive and achieve growth in industrial employment.

These aspects are covered in the recommendations in the Task Force interim report and have been the subject of my consultations with other Ministers and of my own work in tackling the competitiveness agenda.

Air and road transport facilities are crucial infrastructure in developing the competitiveness of the Mid West region.

In relation to Shannon Airport, the Lynxs Cargo Group signed a Memorandum of Understanding with the Dublin Airport Authority in March 2009 to explore jointly the feasibility of developing a major cargo facility at Shannon Airport. The DAA will shortly report to the Department of Transport on this matter.

In relation to a tourism marketing Strategy for the Airport and the region, the Tourism Marketing Fund in 2010 has a provision of €44.25 million. This will enable the level and value of investment in overseas marketing of Ireland to be maintained in real terms in 2010, as recommended in the report of the Tourism Renewal Group.

Tourism Ireland already engages in cooperative marketing campaigns with air carriers to promote ease of access and to stimulate demand for travel to the Shannon region from key source markets. The “Discover Ireland’s Wonderful West” campaign, which commenced in 2008 as a result of the Shannon Economic and Tourism Plan, highlights the attractions of the western region and the good value packages on offer.

The 2010 Budget includes €4.9 million for regional marketing campaigns, including additional funding provision for the promotion of the wider Shannon Airport Catchment, over and above the funding for promotion of the regions generally. The detail of the marketing activity for the wider Shannon Airport Catchment Ireland’s Wonderful West is being finalised by Tourism Ireland and Failte Ireland at present.

The response of the Minister for Transport in relation to roads in the Mid-West will be included in full in my next report to the Task Force. The region has recently seen the completion of projects such as the N18 Ennis By-pass, the N85 Western Relief Road and the N7 Southern Ring Road Phase 1. The NRA work programme will see further extensive development to the road network in the region, including routes such as the N7, N18 and N17, the M20 to Cork, a number of link and by-pass roads close to Limerick City, as well as the Northern Ring Road.

The Minister for the Environment, Heritage and Local Government is currently putting in place arrangements to develop Governance structures in relation to the broader Limerick area. The Minister will soon establish a statutory committee under the Local Government Acts to recommend changes to the governance arrangements in Limerick. Overall coherence of governance in Limerick has been a major issue of concern in driving forward the regeneration projects.

The Committee will be given terms of reference to consider the most appropriate local government arrangements for the city and county of Limerick; specifically, to consider whether there should be changes to the boundary of Limerick City; whether the City and County Councils should be unified; or whether alternative arrangements should be made, for example, through shared leadership or shared functions and so on. It is anticipated that the Committee will finalise its work in a short number of months. In carrying out its work the Committee will be asked to consider the need to ensure economic and social regeneration and greater integration across the City.

A number of potential nominees to the Committee have been identified. I understand that Minister Gormley hopes to make the formal announcement of the Committee’s establishment, and its membership, very shortly.

Apart from initiatives relating specifically to the Mid-West region, Government has been responding to the economic downturn generally and has taken numerous initiatives. These will be dealt with more fully in the closing remarks of Minister Kelleher.

Issues addressed include competitiveness and cost competitiveness, industrial employment stabilization, and employment activation measures. All of these measures have benefited regions affected by or threatened with job losses, including the Mid West region.

If the regions are to thrive, it can only be on the back of a rejuvenated performance by the country as a whole. Ireland is seeing the first signs of recovery, both here at home and in our main international markets. The Government have taken the necessary steps to build recovery and to position Ireland to take advantage of this recovery. The banking system has been supported and stabilised. The public finances have been brought back under control. And according to the National Competitiveness Council, Ireland's current trade-weighted international price competitiveness has improved since April 2008.

Despite our difficulties, Ireland continues to score well in some key relevant international indices. We were rated 1st for FDI and Corporate Taxes and 4th for ease of doing Business by the OECD “Doing Business Report” and 14th out of 127 by the 2009 edition of “Forbes Best Countries to do Business”. Ireland continues to be a pro-business economy, with one of the lowest tax wedges in the OECD and a commitment to maintaining Corporation Tax at its current level.

Exports have held up and I believe that the answer to Ireland’s challenge remains a return to export-led growth. That is what drove the economy in the foundation stages of the boom and, in Ireland, exports equals jobs. Our export engine of high quality, competitive companies is fundamental to our return to economic prosperity.

The courage and application shown by the measures that we are taking sends a strong, clear message to the international community that Ireland will not hide from the challenges it faces and is very much positioning itself for the future.

In conclusion, Ceann Comhairle, I want to emphasise that the issues facing the Mid West region are the issues facing other regions and facing the country as a whole. The situation in the Mid-West was exacerbated by the Dell decision.

The measures I have outlined emphasise that I have been working with the agencies attached to my Department to respond to the situation. Other Ministers and Departments have been doing likewise.

The work of the Mid-West Task Force has helped to focus the response of Government and agencies. I am very grateful for the work Mr Brosnan and the other members of the Task Force have undertaken to date. I shall continue to keep the Task Force informed on the Government’s work on matters covered in the interim recommendations. The Task Force has identified a number of issues for further study in its Final Report, which I look forward to receiving in the coming months.

ENDS