I welcome the opportunity to address the Seanad. I thank my colleague, Senator Ormonde, for her warm words of welcome. I wish her a speedy recovery and wish her well in the forthcoming elections.
I also wish to thank Senator Cox, from my county of Galway, who opened the debate. I noticed that she was accompanied by a major touring party from Galway. I am glad she found the time to attend the House for this debate.
I welcome the opportunity to make a statement on the role of FÁS, the national training and employment authority, and its contribution to Irish life. I want to assure Senators that any proposals and suggestions arising from this debate will be filtered through both the Department and FÁS. I found it a very enlightening experience to have worked with FÁS over the last 18 months and getting around the country to places as far away as Donegal and Sligo. I have seen what is happening throughout the country. I will try to address many of these issues but no doubt, as Senator Ormonde said, we will discuss them again. We will continue to monitor how things are operating, especially now that there is a huge drive in the economy, and will ensure that all the services are working to their full potential.
FÁS's role is well reflected in its recently published annual report, to which Senators referred. I would now like to outline to the House some key features of the report. Approximately 92,000 people completed FÁS employment, skills and enterprise programmes in 1997 compared to 84,000 in 1996. One of the most positive developments of 1997 was the sustained improvement in the levels of apprenticeships being offered by employers. This was referred to by Senator Ormonde. A total of 5,569 new apprentices were registered compared to 4,135 in 1996.
FÁS continued to make progress in establishing traineeships. This skills development programme, which is run in partnership between FÁS and employers, addresses equally the skill needs of employers and the training needs of new entrants to the labour market. A total of 58 traineeship courses were piloted in 1997. Approximately 500 people completed traineeships in 1997, of whom 402 subsequently secured jobs.
During 1997 a total of 11,921 unemployed persons completed specific skills training courses. On completing their training, 73 per cent secured employment in a diverse range of sectors. Specific skills training courses are focused on the specific needs of local employers, with special attention being given to the software, computing, electronics and related high-technology areas.
Targeting of community employment on the long-term unemployed resulted in a significant shift in the profile of participants. At the end of 1997, 96 per cent of participants joining community employment programmes were recruited from the targeted long-term unemployed group.
The Jobstart and Workplace schemes, developed in 1996 as part of the Government's employment support measures to help unemployed people secure work, expanded significantly during the year with a total of 2,083 jobs being supported. The training support scheme provided assistance to 2,084 firms for the training of 21,889 people in key business skills. The scheme gave special consideration to small enterprises with fewer than 50 people.
During 1997, FÁS embarked on a major programme of reorganising its service delivery structure in its ten regions. These structural changes were aimed at achieving a better focus on key customer groups and improving the efficiency of its support and administrative activities.
I would now like to reflect on some of the economic and labour market factors impacting on FÁS's role and the challenges facing it as a consequence. Ireland's gross domestic product — GDP — grew at an annual average rate of just under 7 per cent between 1990 and 1997. This compares with a growth rate of less than 2 per cent in the EU overall. As Senators can appreciate, that is very impressive indeed.
Our GNP achieved a cumulative growth of over 60 per cent in GNP between 1990 and 1998. It is gratifying that we have been successful in translating this economic growth into jobs growth.
In recent years, employment has grown by a yearly average of 4 per cent. This year we have exceeded that and have created an additional 95,000 jobs. Unemployment has been halved from the 1993 level of 15.7 per cent to a current 7.8 per cent. Proportionately, long-term unemployment has fallen even more dramatically — down from 9 per cent in 1993 to 3.9 per cent now.
This provides the backdrop against which FÁS is working. It is different from that which prevailed in the years immediately following the establishment of FÁS. In the 15 years from 1975 to 1990, we barely matched the EU in economic growth and our employment performance lagged behind that of other member states. Irish employment levels were falling for much of the 1980s and unemployment and emigration had reached critical levels by 1987-8.
In the climate of the 1980s the overriding goal was to tackle the significant unemployment problem. Fighting long-term unemployment and social exclusion in particular remains a key policy priority, but the context has changed. The challenge now is not just to address the unemployment issue but also to ensure that our human resources and labour market policies support continued economic growth and rising living standards.
Human resources fuel the engine of growth. We are moving into an era where, as the economist Paul Krugman put it, trade is becoming lighter. Old heavy industries are being supplanted by brainware businesses, such as software and electronics. For example, jobs in international services have trebled since 1990 from just under 10,000 to almost 30,000. This transformation is taking place in the context of globalisation, which can be described as the increasingly free movement of goods, capital, information and ideas across national and continental boundaries. All this creates threats and opportunities.
On the upside, our commitment to education and training has helped us develop young people with the skills and flexibility to succeed in these new industries. This is graphically illustrated by the increase in the numbers of people working in international services. The skills of our workforce have been critical to the development of this sector and to our entire drive to secure foreign direct investment. The downside is that many traditional sectors will face continuing competitive threats. We are seeing that now in County Donegal. In addition, the pace of change in knowledge based industries is such that they too must constantly upgrade and adapt to survive.
A second concern is that we will become victims of our own success. The strength of manufacturing and international services can be encapsulated in the fact that we trade more than 140 per cent of our GNP. The increased wealth and living standards which arise from this out-performance is driving a massive increase in domestic services demand. People are spending more money on consumer goods and buying more domestic services.
If we are to continue to grow, we need to have the human resource base which can respond to these demands across all sectors of the economy. Unless we can do this, we run the risk that the Celtic tiger will cannibalise itself. We must, therefore, ensure that unemployed people are provided with pathways back to employment and with the skills to access them; that new labour market entrants have the right skills mix and that enterprise constantly upgrades its base of skills and competencies. FÁS has played, and will continue to play, a key role in all these areas.
It has been a major concern of the Government since it came to office to see FÁS focus on the needs of the long-term unemployed. This is particularly important at a time of economic well being. Probably for the first time in the history of the State it is within our grasp to redress the problem of structural unemployment, provided we pursue the right strategic mix of policies. This means we should increase participation by long-term unemployed and socially excluded persons in those programmes with the best employability outcomes, reduce participation in those programmes with poorer employability outcomes and enhance the training and progression element in those programmes. We should increase the participation by long-term unemployed and socially excluded persons in specific skills training, reduce participation in community employment and enhance the progression and training element within community employment.
Ireland has in excess of 80,000 active labour market programmes and supported employment programme places. There is a ratio of one such place for every two persons in receipt of an unemployment payment and looking for a full-time job. This is a much greater quantum of support than envisaged in the 1995 report of the task force on long-term unemployment which provided much of the rationale for expansion of community employment in different employment circumstances. The Government has no intention of reducing such supports but it has the objective and the duty of refocusing such supports.
FÁS and the economy do not operate in isolation. I have already mentioned globalisation and, in that context, we must have regard to the operation of labour markets in other countries and to the operation of the benefit and job broking functions. This is particularly the case with regard to our EU partners. Like the other member states, we have signed up to the EU employment guidelines and this is given effect by the adoption and implementation of a national employment plan each year over a five year time horizon. The guidelines and the employment action plan represent a critically important development in Government policy on unemployment. For the first time we are adopting a policy of preventing people from falling into long-term unemployment as well as providing supports and progression to persons already long-term unemployed.
FÁS and the Department of Social, Community and Family Affairs are the key agents of delivery of the employment action plan. The first phase of the systematic activation programme, dealing with 18 to 25 year olds approaching six months on the live register, came into operation on 1 September this year. Under the programme, the persons concerned are provided with quality supports on the basis of individual need to help secure a job or other employability support as appropriate. The intention is to extend the systematic activation programme to over 25 year olds approaching one year on the live register.
It is too early to come to a definitive conclusion on the success of the activation programme but the initial results are promising. For example, the position at the end of October 1998 of persons referred to FÁS in September is that almost 41 per cent, or 345 out of a total of 852, had signed off. Of those interviewed by FÁS, 12 per cent were in jobs and a further 30 per cent were in training or about to take this up.
Implementation of the employment action plan requires significant resourcing of the placement service within FÁS and this has taken, and is taking, place. Programme places have been ringfenced for the 18 to 25 year olds and a similar approach will need to be adopted for the over 25 year olds. This will be in addition to the positive action programme on training for the long-term unemployed which aims to double participation by the long-term unemployed in mainstream training.
As regards developments for the future, it is relevant to note the recommendations of a review of our public employment service by the OECD which was published earlier this month. It makes the case for better linkages between FÁS, the local employment service and the Department of Social, Community and Family Affairs. These trends are already under way in national policy. It also calls for proactive engagement with employers with regard to vacancies and for more frequent interviews with unemployed persons. The report calls for the scaling down of large scale job creation programmes in the public and community sector as the economy improves and for greater emphasis in programmes on progression to unsubsidised work and on job search supports.
FÁS has shown itself to be flexible and responsive to labour market circumstances in the past through, for example, greatly increasing the proportion of women on both training and community employment from a low base to a point where there is parity of participation with men. Similarly, it has been possible to resource the drug strategy teams in part through FÁS. I expect FÁS to be equally responsive both to supply and demand in the labour market in the future.
There is a need for us to constantly review the needs of clients, job seekers and customers to see if we can respond to them in an imaginative way. It is this position of reflecting on how to deliver more targeted supports that is leading us to introduce a dedicated social economy programme from early next year. This will replace an element of community employment with a programme which is more flexible from the point of view of the employer or sponsor and we hope it will develop economic activity in disadvantaged communities.
I reiterate a continuing commitment to a substantial community employment programme with a more focused element of progression for participants. The resources devoted to FÁS are vast; they will be substantially in excess of £400 million in 1999. For that investment, it is critically important we get targeted programmes attuned to labour market conditions and responsive to the need for measures which tackle long-term unemployment and enhance social inclusion.
The strategic direction of this policy approach is reflected in the budget. In addition to supports for ongoing programmes, the budget saw 8,375 additional active labour market programme places in targeted initiatives at a cost of £13.75 million. These are directed at supporting the integration of groups at most remove from the labour market, such as over 35 year olds who have been unemployed for five years and lone parents.
I thank Senators for the opportunity to address them. I regret I do not have time to speak for longer, but I appreciate the restraints on my time as Senators are anxious to get involved in this debate.