Putting emphasis on job creation

 

High unemployment levels are causing growing hardship to families and individuals, requiring extensive State borrowing to fund social welfare payments and causing long-term damage to the very fabric of society. In these circumstances, schemes for retraining and job creation should top the political agenda.

But the Government appears transfixed by the banking crisis and the need to reassure bond markets. This week, in a series of articles for The Irish Times, leading economists will give their views on what needs to be done to tackle the jobs crisis.

Reluctance by the Government to take early and decisive action may reflect ongoing political embarrassment. For not only did the Government drive the economy into the ground by narrowing the tax base and encouraging the emergence of a property bubble, it also presided over profligate spending by State agencies. Fás was a particularly bad example. At a time of effectively full employment, the Government allocated €1 billion to the training and employment agency. As might be expected, some people took advantage. The scandal, when it broke, was so extensive that director-general Rody Molloy and his entire board were forced to resign. Comptroller and Auditor General John Buckley reported that financial controls had existed but were not implemented. Later, the European Commission withheld funding because of inadequate training courses. It amounted to a comprehensive shambles.

The Government’s response was to appoint a new board last January under fresh legislation with stronger accountability structures. Then, in a Cabinet reshuffle, responsibility for various elements of the agency was split between three Government departments. Skills and training went to the Department of Education; jobseekers and community employment services went to the Department of Social Protection; and the remaining elements stayed with the Department of Trade and Innovation. The Fás executive designed new organisational structures. Last month, chairman Michael Dempsey presented Minister for Education Mary Coughlan with plans for a new skills organisation that he hoped would be in place by Christmas. Some hope! The best the Minister could offer was a renewed and freshly mandated training agency sometime in the new year. Her comments were made in the context of saving money and reducing the number of State employees.

With one in seven of the labour force unemployed, a greater sense of urgency is required. Linking social welfare payments with jobseeker schemes and community employment initiatives may discourage people from becoming dole-dependent but it should be carefully monitored to ensure fairness and effectiveness. As for the revamped training/skills agency, its linkage with the VEC sector and the provision of post-Leaving Certificate courses will be of prime importance.

Fás has 1,900 employees and an estimated 100,000 people are receiving training. A fresh start is required. That will require structural changes along with political and administrative determination.