Committee Reports > List of Committees > Joint > 1984 > Committee on the Secondary Legislation of the European Communities (4th Committee) > Report No. 04 - Community Employment Policy

REPORT

A. INTRODUCTION

Proposals Examined

1.The Joint Committee has examined the following Commission documents in relation to Community Employment Policy:

(i)Commission Communication and Resolution on the promotion of employment for young people — COM(83) 211 final,

(ii)Commission Communication to the Council on Community action to combat unemployment — the contribution of local employment initiatives — COM(83) 662 final.

2. The proposals have been examined for the Joint Committee by its Sub-Committee on Social, Environmental and Miscellaneous Matters under the Chairmanship of Senator Mary Robinson. The Joint Committee is indebted to Senator Robinson and her Sub-Committee for their work. It was facilitated in its consideration of the proposals by memoranda from AnCO, Youth Employment Agency and the Departments of Labour and Education. The Joint Committee wishes to express its sincere thanks to the bodies who supplied it with memoranda or otherwise made their views known to it. The Joint Committee is particularly appreciative of the attendance of Mr. Aneurin Hughes, Chef de Cabinet to the Member of the European Commission with special responsibility for employment and social affairs (Commissioner Ivor Richard) at its meeting on 30 May, 1984 whose elucidation of Community Employment Policy assisted Members greatly with their deliberations.

B. CONSIDERATION OF COMMISSION DOCUMENTS

Promotion of Employment for Young People

3. The Commission’s Communication on a plan for the promotion of employment for young people was sent to the Council on 25 April, 1983. The Communication provided a brief review of the scale and the nature of the problem and of measures taken up to now to solve it. It sought to define the further specific measures which need to be taken within the Member States in order to promote youth employment and otherwise to improve the situation of the young unemployed. It specified ways in which Community action, supported by Community instruments, can be developed. The Communication constituted a follow-up to the work of the European Council in June and November, 1982 and March, 1983, and the meetings in November, 1982 of the Joint Council and the Standing Committee on Employment.

4. The Communication drew attention to the fact that more than 4.5 million young people under 25 are without jobs, out of a total of over 12 million unemployed in the European Community. The situation varies between Member States but, while the average rate for adult unemployment stands at about 11 per cent, that for young people is over 20 per cent. Whilst young people comprise only about 20 per cent of the total labour force in the Community, they represent over 40 per cent of the total registered unemployed.

The solution to the problem of youth unemployment, in the Commission’s view, lies principally in broader strategies designed to achieve economic recovery and employment growth. However, the increasing gravity of the situation of young people and the serious prospect of creating an alienated sub-group in society in the 1980s and beyond call for urgent specific action in the Community.

5. The Communication incorporated a draft Council Resolution which was adopted on 8 December, 1983 by the Council of Ministers for Social Affairs and Employment. The Resolution comprises five Chapters: Chapter I sets out the objectives of the Resolution; Chapter II contains general guidelines; Chapter III lists the measures to be taken into consideration by Members State; Chapter IV deals with measures at Community level, specifically innovatory job creation projects for young people; and Chapter V indicates that the Community measures would be financed from the European Social Fund (ESF) and provides that an interim and a final report on implementation of the Resolution would be submitted by the Commission for examination by the Council before 30 June, 1989. A particular date for the interim report was not fixed in the interests of flexibility.

6. In setting out the objectives of the Resolution, Chapter I places the question of improvement in youth unemployment rates in the domain of macroeconomic policy, by acknowledging that the youth unemployment situation can be resolved only within the overall context of economic recovery and employment growth. The central objective is to bring about a gradual and significant reduction in the youth unemployment rate by way of increased efforts over the next five years to create additional job opportunities for young people. The percentage reduction which could be termed significant would differ, depending on the particular circumstances in each Member State.

The commitment contained in the central objective provides a basis for achieving a desirable balance between, on the one hand, the promotion of youth employment and, on the other, the avoidance of initiatives tending to have displacement effects for older workers. Acceptance of the commitment by Member States may be considered as reflecting a view of likely development in the labour market and of the likely effect of overall employment and economic policies, rather than any quantitative assessment of the likely impact of the actual measures specified in the Resolution.

7. Since the youth unemployment situation differs between one Member State and another, approaches to tackling it differ as well. Hence the flexibility flowing from the provisions in Chapters II and III which recognise, first of all, that introduction of measures specified in the Resolution must take account of the different situation in each country and of the role and responsibilities of both sides of industry and, secondly, that it is solely within the context of their own policies and practices that Member States are expected to take action. The list of proposals in Chapter III constitute the rather limited range of measures on which a consensus between all the Member States could be achieved.

8. Chapter IV of the Resolution proposes a number of Community measures costing an overall total of 40 million ECUs over the five-year period from 1984-1989. These measures represent, essentially, a series of demonstration projects in support of the measures 9 (a) and (d) — listed below — at the level of the Member State. A third set of demonstration projects is also proposed in relation to the creation and development of special guidance and counselling centres for young people in order to co-ordinate, at local level, the services of the various statutory and voluntary agencies involved. The Youth Employment Agency’s proposals for local co-ordination of this kind were developed in 1983 after discussion with interested agencies and public authorities. They are based on the setting up, on a pilot basis, of Community Training and Employment Consortia — COMTECs, and will be submitted for Government approval in the near future. The Commission has been kept informed of the Agency’s plans, and the possibility of ESF aid for the projected initiatives under the Resolution will be explored.

9. Chapter III sets out the measures to be taken into consideration by Member States which, in summarised form, are as follows:

(a)to encourage both sides of industry to further the recruitment of young people through collective bargaining;

(b)to facilitate the access of young people to employment through employment aids and work incentive schemes (this may be interpreted as, essentially, recruitment subsidy programmes);

(c)to identify and, if possible, eliminate inflexibilities which provide obstacles to the recruitment of young workers;

(d)to help young people to establish, or take part in the establishment of, new enterprises (including co-operatives);

(e)to seek job and training opportunities in the public sector or in Community work schemes;

(f)to develop the occupational skills and interests of young people, while bearing in mind their motivation and interests — particularly social and cultural — which, while not directly related to occupational development, may help to develop their abilities in working life.

Most of the measures proposed for Member States in Chapter III of the Resolution are already in place in Ireland. In particular, there is a developing range of supports for young people creating their own businesses and a number of programmes support community work schemes. There is also a recruitment subsidy scheme — the Employment Incentive Scheme — in operation since 1977. The possible implications of measures (a) and (c) above will need to be explored with bodies such as the Labour Court, the Employer/Labour Conference, etc. and the employers and unions, in the context of present industrial relations structures. A preliminary reaction is that they seem rather limited and, in fact, neither of the two issues concerned has been a major one in Ireland to date. As regards measure (f) above, the Grant Scheme for Youth Employment is increasingly moving into the social and cultural areas since it is felt that, in this way, young people can develop their personalities and abilities, thereby helping to improve their prospects of employment.

Implications of Resolution for Ireland

10. Perhaps the major implication of the Resolution (and associated financial decisions) relates to the development of youth job creation supports. In treating this issue, it may be useful to begin by outlining the present situation in Ireland. It is recognised that, in Ireland, young people find special difficulties in establishing their own businesses, for such reasons as:

— lack of experience

— lack of track record and, therefore, difficulties in getting access to State or private funds

— lack of sufficient personal finance to put into a business.

Yet, with high levels of youth unemployment prevailing and access to traditional salaried employment more restricted, more and more young people in Ireland are considering and are being invited to consider self-employment as a career option.

11. The Enterprise Allowance Scheme represents a radical initiative in this area. Launched in December, 1983 and administered by the National Manpower Service this scheme is designed to encourage unemployed people, both over and under 25 years of age, to establish a business of their own. The scheme provides £30 per week to single persons and £50 per week to married persons who forego their unemployment benefit assistance to set up their own enterprise. Applications are accepted from persons who have been a minimum of thirteen weeks on the Live Register or who are participating in AnCO training programmes. The weekly allowance may be paid as an immediate lump sum in cases where such payment is warranted by the applicant’s business proposals. Because of the huge popular response, the original list of 500 places in the scheme has been removed and the scheme is now being expanded to cater for thousands of participants.

12. In addition to the published range of supports and incentives available from the IDA, and other State organisations and private finance agencies, the following measures and incentives are particularly designed to help young people:

(i)Innovatory Job Creation Projects: A number of pilot schemes are supported by the Youth Employment Agency, including schemes in Cork (Carrigtwohill), Dublin (Glasnevin) and the mid-West (Ennis, Limerick, Shannon). The schemes are ESF supported, the mid-West one as a specific ESF pilot project. Through these job creation projects young people are given intensive assistance in areas such as business and skill training, project evaluation and guidance, administrative, technical and financial support. These schemes are in progress at present and will be evaluated once completed, with a view to determining their wider application.

(ii)The Community and Youth Enterprise Programme: This is a new programme which was established by the Youth Employment Agency in 1983. It is aimed at assisting young people to establish their own businesses by initially mobilising the support and involvement of the local community. Typically, local community or youth organisations, drawing together the expertise of local people, identify and develop specific business ideas. Out of this process emerge businesses involving young people, or run independently by young people themselves, often on co-operative lines. Using this approach, encouragement and practical assistance is afforded to young people and a favourable climate for local enterprise development is fostered. To date under the programme, approximately 25 projects have been approved. The programme at present receives only limited ESF support.

(iii)The Youth Self-Employment Programme: The scheme is jointly organised by the Youth Employment Agency with the Bank of Ireland. Under the scheme, young people with viable business ideas who would otherwise (for reasons stated already) have difficulty in attracting loan support are given guaranteed loans of up to £3,000 per person.

(iv)“Start your own Business” Courses: These are courses funded through AnCO with normal ESF training support which help young people to take their business ideas through the various steps necessary to achieve viability.

(v)Co-operatives: The Youth Employment Agency has a special role in assisting a number of job creation projects organised along co-operative lines.

13. While the approach taken to date in Ireland is consistent with the spirit of the Resolution considerable scope remains for development and improvement. In this connection, the following ideas have been put forward by the Youth Employment Agency:

(i)Development and Support Unit: The Youth Employment Agency is actively considering the establishment of a unit, as a single focus for local communities and youth groups wishing to avail of resources such as training, project evaluation and guidance services, technical help, etc.

(ii)Evaluation of Current Projects: The Youth Employment Agency intends to evaluate the significance and success of the innovative job creation projects identified in paragraph 12(i) above with a view to determining their wider application.

(iii)Local Development Funds: During 1984, the Youth Employment Agency intends to investigate how it might encourage the development of investment funds and support networks at local level for committees and individual young people engaged in job creation projects. This is likely to involve initially working with selected local authorities on a pilot basis.

(iv)Development of Business Training Opportunities: The Youth Employment Agency has already commenced discussions with AnCO on the better integration of business training courses for young people with other aspects of business development for young people, e.g., provision of information, financial support, specialist advice and project “after-care”.

14. In terms of application to the Irish context, any of the areas listed under paragraph 12 could form the basis for demonstration projects in line with the Resolution and qualify for ESF aid.

Information on the position of ESF aid generally, insofar as young people under 25 years of age are concerned, is given in Appendix I of this Report.

C. VIEWS OF THE JOINT COMMITTEE

15. The Joint Committee finds the Council Resolution largely aspirational and lacking in palpable expression and wonders whether the Commission has lost its drive to create new employment. It notes with apprehension that, despite the various measures taken over past years at local, national and Community level to promote the training and employment of young people, their job prospects have worsened as the recession has deepened. As the rate of unemployment has increased, so has its duration. Over 2 million young people in the Community have now been without a job for more than six months, and almost one-and- a-half million for over one year. Youth unemployment is not just a problem for young school-leavers: 16-18 year olds represent less than a fifth of the total of unemployed young people. Youth unemployment in the Community can no longer be seen as the result of a failure to manage the transition from school or further education to working life. It reflects, in a particularly acute form, the wider problem of economic stagnation and sluggish employment creation.

16. In Ireland the seriousness of youth unemployment is emphasised by the fact that over 60,000 people aged under 25 years are registered as unemployed. (Appendix 2 sets out the duration of unemployment in various age groups). The slowing-down of emigration during the 1960s, and the net inflow of population during the 1970s, have led to a very rapid growth of the young adult population. The numbers in the age group 15-24 as a proportion of the total population aged 15 and over have risen from 20.2 per cent in 1961 to 23.6 per cent in 1971 and 25.1 per cent in 1981. (Appendix III sets out demographic trends 1961-91). This proportion is higher in Ireland than in other European Community Member States, where it varied from 22 per cent in the Netherlands to 20 per cent in the Federal German Republic in 1982. In addition to the possible difficulties caused by the unusual concentration of youths in the population, the fact that the growth rates of both the total population (aged 15 and over) and its youth component have been very rapid might also be expected to have increased the severity of the youth unemployment problem. The population aged 15 and over grew at an annual average rate of 1.6 per cent in Ireland between 1971 and 1981, and the youth population at 2.3 per cent. In contrast, in the United Kingdom these populations grew at only 0.3 and 0.7 per cent annually¹. The Joint Committee feels that the special problem of youth unemployment in Ireland is directly related to the numbers seeking work for the first time. With nearly half the population under 25 years of age and nearly a million boys and girls in school or college the problem of youth unemployment is reaching critical proportions.

17. The recently published OECD Report² on youth employment policies for Ireland and Portugal highlighted the particular difficulties in both countries and suggested the following possible solutions to alleviate the problem in Ireland:

—energy conservation measures,

—renovation and modernisation of existing housing stock.

The Joint Committee feels that both these suggestions should be thoroughly examined to see what work opportunities they could yield for young people. Both these areas of activity are unlikely to generate significant additional demand for imports which usually flows from general demand stimulation.

18. The Joint Committee in its consideration of youth unemployment was particularly impressed by evidence available to it on the work of the Youth Employment Agency and the National Manpower Service in relation to the development of pilot schemes as part of innovatory job creation projects and co-operative ventures. It commends the enterprise of a Sub-Committee of the Waterford Action Group who entered the domestic market for the supply of vegetables and now gives employment to seven young people on land leased by the IDA. The Joint Committee draws attention to the potential scope for development in relation to the supply of fruit and vegetables to the wholesale and retail trade and is aware of the willingness of large companies, such as Fruit Importers Limited and Superquinn Limited, to buy locally. It feels that, with attention directed to production and marketing, this area of activity could contribute to job creation on a significant scale. The Joint Committee is also impressed by the initiative of workers who undertake co-operative ventures where their employment is threatened, such as the steps taken by workers to rescue the pottery factory at Carrigaline, County Cork. The Joint Committee sees the resilience of the Irish worker as a strong weapon in their armoury to cope with the unprecedented challenge to their livelihoods and would like to see more emphasis placed on the development of the co-operative principle to provide jobs and rescue firms in danger of closure.

19. The Joint Committee commends the success of the IDA in attracting new industry to this country and its contribution to the growth of indigenous industry. Both these activities play a valuable and significant role in the reduction of youth unemployment. The Joint Committee would, nevertheless, urge that the recommendation of the OECD examiners in their Report referred to above in relation to subsidies and capital expenditure on job creation be carefully considered. It agrees that, in view of the fact that the import content of capital expenditures is generally high in Ireland and that activities using human capital more intensively might offer the best hope for the future development of Irish industry, subsidies directly tied to the number of jobs created and reflecting the skills involved, might increase the overall employment creation effect of development incentives.

20. The Joint Committee welcomes the inclusion of industry-related services for assistance by the IDA and believes that this recent development, together with the proposal in the preceding paragraph, should make Ireland an attractive location for modern service activities such as research and development, design, consultancy and the like which, while essential for future industrial growth, are not themselves capital intensive. The Joint Committee notes that the major contribution to employment creation in the USA in recent years has come from small firms employing less than 15 people and is convinced that employment creation in Ireland must largely come from the same source.

21. The Joint Committee is satisfied that Ireland has not been slow to reap the benefits of expenditure from the ESF. However, it is concerned about the strain that is likely to be put on the ESF by the projected accession of Spain and Portugal in 1986. Portugal, in particular, has many similar employment problems to Ireland. Both countries have had large agricultural sectors and vigorous population growth, with many workers leaving their homeland to find employment. These similar circumstances have changed though, with Ireland and Portugal experiencing recent industralisation and dramatic slow-downs in emigration. These new trends have contributed to important shifts in the nature of the demand for and the supply of labour, shifts which have had important implications for new entrants to the labour market, especially the young.

22. The Joint Committee wishes to emphasise the role of the education system in gearing young people for employment. The Irish school system has a bias towards academic education to the detriment of vocational education. Educational resources will have to be planned more closely and the dichotomy between secondary and vocational schools will have to be removed. The Joint Committee is pleased to note that this desired development has already taken firm hold with the establishment of community and comprehensive schools in certain parts of the country. Innovatory schemes in schools such as the Special Curriculum Development and Community Work Schemes are acknowledged by the Joint Committee as imaginative initiatives directed at the less academically oriented student and it encourages their further development. Pre-employment courses should be incorporated into school curricula and made available in all post-primary schools including the non-vocational secondary schools during the final compulsory year of education. Work experience courses should also be provided for secondary school students prior to school leaving.

The recently announced major increase in ESF aid for vocational training of young people in Ireland is seen as a welcome step by the Joint Committee as secondary schools will be allowed to provide vocational training courses for the first time. Previously this was debarred under ESF rules from Community aid.

23. The Joint Committee feels that particular attention should be directed to the position of curriculum choices for young girls in secondary schools. The lack of emphasis on mathematics and science subjects has reduced the range of employment options available to girls on leaving school. In view of the imbalance between enrolment of boys and girls for apprenticeships emphasis should be directed towards the setting up of special familiarisation courses in non-traditional occupations for girls with additional allowances to encourage their participation. Few girls are to be found in AnCO centres, other than for traditional female jobs. Yet the rapid development of electronics, electrical engineering and services should offer acceptable opportunities for girls and young women.

D. CONCLUSION

24. The Joint Committee is reluctantly driven to the conclusion that in the foreseeable future there is no likelihood of a return to full employment by means of conventional employment creation policies. The whole concept of employment must undergo critical analysis which may lead to new definitions of work. Youth unemployment imposes high social costs on the community through permanently lowering the productivity of those who experience it. Young people who are denied the dignity and fulfilment and the discipline of work may become alienated from society and devote their energies to anti-social behaviour. While there is no empirical evidence available or any Irish research undertaken into the possible relationship of rising juvenile crime levels and youth unemployment, the Joint Committee is unable to accept that these phenomena are unrelated fortuitous developments. It sees youth unemployment as a serious threat to the fabric of Irish society and urges that every avenue be explored to redress the situation. It generally welcomes the proposed legislative measure before the Oireachtas at the moment to reduce overtime but feels that more determined measures are needed. The concept of work sharing will have to be investigated more thoroughly in order to create job opportunities. The Joint Committee sees the resistance to income reduction as the limiting factor here.

25. The Joint Committee notes the array of schemes to foster youth employment and is concerned that it may lead to confusion in the public mind. Accordingly, the Joint Committee welcomes the assurance given it by the representatives of the Department of Labour who appeared before it that all the schemes are being co-ordinated for easy reference and assimilation. In this connection the Joint Committee notes the recent Report of the Dáil Committee on Public Expenditure¹ which drew attention to the evidence of overlap and duplication in the services provided for training, recruitment and job creation, and the implications for the Exchequer. An extract from the Committee’s Report setting out its views in this regard is reproduced in Appendix 4.

COMMISSION’S PROPOSALS

E. COMMUNITY ACTION TO COMBAT UNEMPLOYMENT — THE CONTRIBUTION OF LOCAL EMPLOYMENT INITIATIVES

26. The Commission’s Communication to the Council contains a draft Resolution which was adopted by the Social Affairs and Employment Council in Luxembourg on 7 June, 1984. These proposals supplement the Commission’s proposal on the promotion of employment for young people. In its Resolution of 12 July, 1982 on Community Action to Combat Unemployment, the Council recognised the need for additional actions over and above aggregate growth policies in order to reduce unemployment.

Within this context the Council stressed its interest in the job creation process which was apparent in local initiatives and co-operatives and requested the Commission to submit the results of its research and its thoughts on the matter to it so that it could assess the contribution of such initiatives in creating employment.

27. The Communication represents the findings of the Commission following its investigations and consultations into the part being played by local initiatives and co-operatives in the fight against unemployment. In this process the Commission held discussions with the representative bodies that exist, notably the workers co-operative group at European level and held a series of 22 public consultations at the local level bringing together people involved directly in employment creation, regional and local government authorities and a variety of groups active in the employment and social field. The Irish consultation was held in Cork in June, 1982 in conjunction with the Bank of Ireland Centre for Co-operative Studies, University College, Cork.

28. The Commission has adopted the term “Local Employment Initiatives” (LEIs), which is also used by the OECD LEIs are defined as those initiatives that have occurred at the local level — often involving co-operation between individuals, action groups, the social partners and local and regional authorities — with the specific aim of providing additional, permanent employment opportunities through the creation of new, small scale enterprises.

Summary of the Commission’s Findings

29. The main conclusions of the Commission’s investigations are set out below:

(i)LEIs have grown rapidly in number in the last 2-3 years throughout the Community.

(ii)Their importance is not just limited to their direct employment creation since they prepare the ground for the future development of areas in which they occur by rebuilding confidence, maintaining or developing skill usage and restoring the capacity for enterprise.

(iii)While LEIs can provide only a partial response to the problem of unemployment, their rapid growth in numbers and their importance to the areas and the people hardest hit by unemployment in particular, reveal in the Commission’s view, a potential in terms of enterprise, imagination and exploitation of human skills and local resources which deserves more intensive and concerted encouragement.

(iv) LEIs face many problems similar to those of Small and Medium Sized Enterprises (SMEs) as a whole, but in a more acute form.

(v) LEIs generally seek to operate as viable businesses. However, they generally place a higher priority on employment creation than on economic or financial performance.

(vi) Support at regional and local level is particularly important for these small, locally generated enterprises.

(vii) The assistance which the social partners may provide in terms of management expertise or guidance on wage rates and working conditions can be valuable in helping to ensure that LEIs develop as viable enterprises forming an integral part of the small firms sector.

(viii) The existence of development agents and agencies able to provide appropriate support and advice at all stages, particularly for people with little or no business experience, is crucial.

(ix) Whilst LEIs generally require considerable amounts of staff time from support agencies, the total demands which they make on public funds are likely to be modest.

(x) Premises are to some extent being made available for LEIs according to their needs, on an “easy-in easy-out” basis, often with common services.

(xi) LEIs have extensive training and learning needs.

(xii) LEIs take on a variety of legal forms.

(xiii) The potential for replicating successful LEIs in other areas or Member States through the transfer of ideas, techniques and experience is considerable. Information channels are, however, undeveloped and unlikely to improve across the Community without outside support.

Local Employment Initiatives in Ireland

30. In the Irish context, local employment initiatives can be described as those initiatives undertaken by community and youth associations as well as groups of unemployed or redundant workers to create sustainable employment. At their best, they usually take the form of either community-owned and controlled enterprises or workers co-operatives. However, they often require a lengthy planning and investigation process prior to emerging as distinct business entities. Thus, legitimate initiators of local employment initiatives are often engaged in forming representative groups, drawing on all the skills and talents available in the community; engaging in investigation, through resource surveys, etc. of local economic resources and the potential for their development; investigating specific ideas for the provision of products and services. They are also directly involved in providing or assisting in the provision of shortterm employment/training opportunities for young people (such as in community training workshops).

31. The objectives of local employment initiatives in the Irish context are two-fold:

(i)the provision of new sustainable jobs in the economy, often in areas not easily exploited by SMEs or other more traditional businesses;

(ii) increasing the self-confidence and awareness of local communities by fostering a spirit of practical self-help, especially in depressed or deprived areas.

These two factors have to be taken into account in evaluating the success of local employment initiatives. Local employment initiatives are a distinct part of the job creation effort by virtue of the process by which they emerge as well as the higher priority placed on job-creation than solely on commercial or profit objectives. In many cases the individuals involved have no direct personal gain from such initiatives.

32. The role of the State in assisting local employment initiatives is to support rather than supplant local effort. As far as possible, resources provided should have the effect of placing additional professional expertise, in areas like management, marketing, etc., at the disposal of the group and giving access to adequate funds to meet the normal costs of start-up. It should be noted that local employment initiatives can face special problems in relation to capital formation in particular and, therefore, often need additional support to that provided for SMEs.

Summary of Main State Services supporting LEIs

33. Youth Employment Agency: Among its various areas of responsibility, the Youth Employment Agency has been given specific responsibility for encouraging the creation of economically sustainable employment for young people, through community, youth and voluntary organisations. The Agency operates two programmes in this area — the Community and Youth Enterprise Programme and the Youth Self-Employment Programme. The Agency sees its Community and Youth Enterprise Programme as an overall framework for Local Employment Initiatives in Ireland, when these initiatives are concerned with direct, sustainable job creation. The Agency’s approach is, essentially, to help communities to help themselves by providing the following assistance to them:

—Advice to groups who want to take a community enterprise initiative;

—Planning grants for groups wishing to identify and investigate goods and services which might be provided locally;

—Enterprise workers recruited by local community groups, to be funded by the Youth Employment Agency for up to twelve months;

—Linkages into the programmes and grant-aid schemes of other State and commercial agencies. The Community and Youth Enterprise Programme is complementary to the enterprise development programmes available from other bodies, such as the IDA, Shannon Development, Údarás na Gaeltachta and County Development Teams;

—Direct financial aid for groups at the point of “start-up”, specifically to contribute towards capital and revenue requirements and project management costs for up to twelve months.

Individuals and small local projects often face difficulties in access to loan finance for small amounts of working capital. As a consequence, the Agency has launched a Youth Self-Employment Programme in conjunction with the Bank of Ireland. The Programme involves the Agency in part-guaranteeing loans, provided by the Bank to young individuals and small groups with a commercially viable business idea. The recipients of the loans are not required to have any proven business “track-record” or provide any collateral for the loans. Evidence to date indicates that these additional supports are particularly attractive to local small scale co-operative job creation efforts.

AnCO — The Industrial Training Authority: Many of AnCO’s current activities reflect the spirit of the Commission’s document as it has introduced a number of initiatives to provide specific support to the development of small business activity:

(i)A Small Business Section of the Training Advisory Service advises owners on training matters and informs them of the support structures which are available from the various State agencies.

(ii)AnCO’s link programme identifies and provides the necessary training for employment opportunities at local community level.

(iii)AnCO’s Start your own Business Programme and the Youth Enterprise Programme are geared toward people who have a business idea.

(iv)AnCO run courses designed specifically for the long term unemployed and those made redundant to up-date their skills or retrain them in new skills — some have gone on to establish their own small enterprises.

(v)AnCO initiated a Co-operative Development Training Programme for women in 1983. This programme provides training in the skills necessary to set up and manage a co-operative venture.

National Manpower Service: The Enterprise Allowance Scheme came into operation in late December, 1983 and is aimed at encouraging people unemployed for at least 13 weeks to set up their own enterprises. Instead of social welfare benefits, they are paid a weekly allowance of £50 or £30, depending on marital status, for a period of up to one year. With its introduction on a pilot basis in December, 1983, 500 places were made available, about 300 for persons over 25 and about 200 for younger applicants. The demand has already matched the targets, particularly for those over 25, and the Minister for Labour has expanded the scheme to ensure the maximum possible contribution to the job-creation process to a level of possibly between 4,000 and 5,000 places.

Shannon Development: Since Shannon Development (SFADCo) began an intensive programme of small indigenous industry promotion in the mid-West region, in 1978, it has pioneered a number of communityoriented initiatives designed to achieve maximum growth of small enterprises. It has appointed field officers in each county within the region to encourage and service enquiries at local level, and to work closely with community organisations. The provision of special purpose-built factory units for small industries in “enterprise centres” in villages and towns throughout the region has also been an important recognition of the role of local communities in fostering indigenous resources and talent. From an early stage, the company paid special attention to certain disadvantaged parts of the region through its area development programme and it has worked closely with communities to further local employment projects. The company is currently examining proposals from other communities, and it recently launched a community co-operative support programme geared to provide extensive financial and other back-up support to committed local groups.

Industrial Development Authority: The IDA, the Government’s main industrial promotion agency, operates a dynamic and inventive Small Industries Programme, encompassing a wide range of incentives and advice. Among support initiatives are the Enterprise Development Programme which seeks to encourage first time entrepreneurs, and a small industry walk-in information centre at Mount Street, Dublin aimed at alerting the community to openings which exist in manufacturing.

County Development Teams: The task of the County Development Teams is to foster economic development in their areas by ensuring the maximum use of existing public services and to stimulate ideas for development. An important part of the Teams’ activities is the promotion of the Small Industries Programme of the IDA.

Údarás na Gaeltachta: Údarás provides a comprehensive package of financial and technical assistance to a wide variety of enterprises and with its advice and support over 500 small enterprises have been successfully launched in the Gaeltacht.

OECD Co-operative Action Programme on Local Initiatives for Employment Creation

34. The EEC is working closely with the OECD who also have a programme directly related to the development of local employment initiatives and this liaison is emphasised in the draft Resolution where the Council stresses the desirability of ensuring that the actions of the EEC are closely co-ordinated with those of the OECD.

The OECD programme was incorporated with thirteen participants including Ireland in July, 1982 and was later joined by five other countries including the United States. It has the following main objectives:

—to promote and exchange experience and information on local initiatives to create employment;

—to develop methods and resources for the social and economic evaluation of such initiatives; and

—to provide technical support to participating Member States for the development of possible new national programmes which would enhance the process of local economic and employment development.

The background to these countries’ interest is their recognition of the urgent need, in the current economic political situation, to assist in the development of innovative small enterprises. They have a number of reasons for this. First, high and rising unemployment and the need to emphasise regional and local development make the generation of genuine employment opportunities an imperative. Second, the need to encourage investment and the evidence that most new job creation comes from relatively small firms has predisposed national and regional authorities to explore more flexible small-scale solutions. Third, there is a growing recognition of the need to develop supply side policies which encourage enterpreneurship and risk-taking but at the same time have a positive impact on demand. Finally, projects such as these may offer indications of how manpower policies and programmes could be reorientated so as to provide for a more efficient use of part of the public funds currently being spent on measures for the unemployed.

In order to provide a suitable vehicle for supervising the programme and ensuring proper liaison with participating countries, a Directing Committee on participating Member States was established and meets twice yearly. (The Department of Labour acts for Ireland). At national level contact groups are being established in each country which will bring together organisations involved in developmental work in this area, both Governmental and non-Governmental. Such a group has been set up by the Department of Labour. The function of this Group is to act as a forum for the interchange of ideas and information, the dissemination of documentation on international experiences, and in time the identification of support systems to community and other groups to assist local project activities. To highlight local enterprise developments and to further foster the growth of contacts between Government Departments, State agencies, voluntary associations, local groups, banking institutions and interested individuals, a seminar on the theme of local initiatives, which was attended by over a hundred persons, took place in Dublin on 11 October, 1983 under the auspices of the Irish Contact Group. Current work is centred on developing appropriate methods for disseminating information obtained from the programme to State and local groups.

F. VIEWS OF THE JOINT COMMITTEE

35. The Joint Committee welcomes the Commission’s Communication and the Resolution adopted by the Council in that they highlight the emergence of LEIs as an element in the development of strategies to combat unemployment across the Community and as a focus for support for the further development of such initiatives in the future. It believes that the development of LEIs is a key element in the provision of additional and permanent employment opportunities and would welcome a more vigorous approach by Irish authorities in submitting innovatory projects for ESF support. The Joint Committee welcomes the emphasis in the Council Resolution on co-ordination of EEC and OECD employment initiatives. However, it feels that there is a real need for national co-ordination in the development of LEIs. At present there are numerous State, semi-State and State supported private and voluntary organisations endeavouring to promote local initiatives with each organisation promoting their own objectives. The development of LEIs should be encouraged with the assistance of a team or committee of experts which would operate on a regional basis and thereby harness the resources of all agencies competent to advise the entrepreneur or co-operatives on all the support services available.

36. The Joint Committee again feels constrained to draw attention to the vulnerable position of women in relation to employment opportunities as evidenced by the fact that of the 1,500 participants in the Enterprise Allowance Scheme only 10 per cent are women. It urges that particular attention be directed to redressing this imbalance and that a determined attempt be made to ensure equal female participation in all employment programmes. The Joint Committee hopes to examine in the near future the Council Resolution¹ concerning action to combat unemployment amongst women. (Appendix 5 to the Report gives a detailed summary of participation in the Enterprise Allowance Scheme up to a recent date).

37. The Joint Committee would have liked to see a reference in the Council Resolution to community and youth associations at local level, as promoters of LEIs. The phenomenon of LEIs in Ireland is often associated with such groups. It would also like to see comprehended within the terms of the Resolution an acknowledgement of employment initiatives undertaken in rural areas faced with depopulation such as the contribution of Gaeltacht co-operatives in Ireland.

38. In relation to the development of measures to improve access of SMEs to finance or public financial support the Joint Committee feels that this area can be of critical importance to LEIs in that additional, legitimate financial blockages can often exist. In its view, additional supports to those already available to SMEs are often needed in the case of LEIs. These supports are usually directed towards addressing the problem of capital formation in community businesses and workers’ co-operatives. With regard to both forms of business, the promoters will often not have the level of personal funds usually required. This leads to difficulties in securing loan finance. Also, due to the fact that LEIs are a largely new phenomenon, they do not always meet traditional banking criteria — i.e. they do not have an established track record in business and their business structure (co-operative or community business) is not always understood or accepted by financial institutions. The Enterprise Allowance and Loan Guarantee Schemes referred to already go some way towards addressing these problems.

39. As regards the local training needs of LEIs the Joint Committee feels that VECs are well placed to respond. This would be particularly significant where it might be expected that members of the VEC would actively participate in the establishment and support of LEIs. Traditional vocational training, especially that leading to formal qualifications is heavily geared towards employee status, in that little attention is paid to self-employment and business management. There is, however, a considerable awareness within education of this problem and innovations such as the Mini-Company Programme, developed by Shannon CDC, are widely offered within education, in some cases linked to bodies such as youth co-operatives.

40. The Joint Committee commends the Commission’s emphasis on the importance of vocational guidance. At present, the level of informational material available to school guidance personnel is very limited. Activities such as teacher secondment programmes and in-service training, in the Joint Committee’s view, should be used to ensure that teachers working with LEIs are briefed in all aspects of their educational and training needs.

41. The Joint Committee wishes to draw attention to the fact that the Commission, in an appendix to its proposal for a Council Resolution, had provided for expenditure on the Community Budget — for consultation and exchanges of experiences as well as for the research and studies programme — of 570,000 ECUs for 1984, and 6,000,000 ECUs from the Social Fund for the same year. These figures would for 1985 be respectively 1,250,000 ECUs and 11,000,000 ECUs, and 1,000,000 ECUs and 14,000,000 ECUs for 1986. No specific financial commitment is now being made by the Social Affairs and Employment Ministers, who merely say in their Resolution that the Community financing will be decided under the budget procedure, in accordance with the legal commitments made by the Council, and, for the actions to be covered by the Social Fund, that the financing will be effected according to the financial possibilities and rules of this Fund. The Joint Committee deprecates the omission of specific funding for LEIs and urges the Commission to take steps to redress this weakness.

G. CONCLUSION

42. All parts of the Community now suffer from unemployment, but the problem is increasing most rapidly in areas such as Ireland which are undergoing major industrial restructuring, and it is having its most serious impact on those people already in a weak position on the labour market. Many local economies and local labour markets have been decimated by structural changes, especially in areas which were dependent on a limited number of large scale industries and firms whose labour requirements have fallen rapidly in recent years, as a result of efforts to reduce structural over-capacity. Even in regions and areas which had attracted newer branches of industry or services, the process has been halted or reversed. Rural areas have seen their prospects of more diversified employment disappear even further into the future, while problems of under-employment and depopulation persist.

43. In the Community as a whole, the decline in industrial employment opportunities has been paralleled by a slow-down in public service employment creation due to constraints on public spending. This decline in public employment opportunities has occurred at all levels — national, regional and local — and in all types of services, including transport, education, health and social caring services. Moreover, it has tended to cut most deeply into newer activities, notably in areas of health and education, where demand and employment had been growing fastest. Public temporary job creation or work experience schemes for specific groups or the longer term unemployed — widespread in the second half of the 1970s — have also been drastically reduced under budgetary pressure.

The task of the Community to cope with youth unemployment is daunting - the creation of almost twenty million new jobs over the next ten years. Failure to deliver on this objective will consign millions of young people, many of them in Ireland, to a life in the dole queues of the Community.

H. OVERALL VIEWS OF JOINT COMMITTEE

44. While acknowledging the appropriateness and success of certain action programmes (such as the first Social Action Programme), Communications and Resolutions as instruments designed to achieve Community objectives, the Joint Committee feels that the efficacy of these approaches in times of deep recession, as at present, is open to question since they have no validity in law. The Joint Committee would prefer to see the primacy of binding measures such as Directives re-established.

45. The Joint Committee would like to stress the importance of the availability of accurate statistical data on unemployment so that effective measures can be formulated on the basis of dependable criteria. The Live Register of unemployment suffers from distortions, due to eligibility conditions for social welfare payments, and is therefore a somewhat misleading indicator of the unemployment position. The introduction of an annual sample survey would refine the information available from the Live Register.

46. In relation to the redefinition of work away from conventional concepts the Joint Committee feels that local community development, such as care of the aged and infirm, and environmental projects, could be classified as pursuits attracting wages and salaries. Under the present system where work is measured by economic criteria a return to full employment appears unachievable. This means a narrowing of the horizons of creative well-educated young people and the Joint Committee views with alarm the social and human cost of youth unemployment. State transfer payments are but a mild palliative to this appalling situation. The Joint Committee urges a radical approach to the problem and unpopular measures such as the reduction of working hours, with the resulting drop in incomes, should not be shunned.

The Joint Committee hopes to examine in the near future the principles of the Community policy with regard to the reduction and re-organisation of working time.¹

47. The Joint Committee must question the whole approach of Community employment policy and casts doubts on its effectiveness. The OECD Co-operative Action Programme, in its view, holds out more hope for progress. The OECD programme has offices in all member countries and in Ireland the Programme’s national committee has representation from all organisations involved in job creation. The Joint Committee welcomes the publication by OECD of an index of co-operative initiatives which will be available to all national committees shortly. It sees publication of the index as a useful guide to young people starting up their own business who will be able to draw on international experience in their particular field.

48. The accession of Spain and Portugal to the Community in 1986 will put further strain on the Common Agricultural Policy. This could lead, unless the basis of Community financing is overhauled, to the diversion of badly needed funding away from the ESF. Accordingly the Joint Committee hopes that agreement on the reform of the Community Budget can be reached shortly.

49. Unemployment continues to be the most serious economic and social problem facing this country and the Joint Committee hopes that the Commission’s proposals can be translated into meaningful tangible measures which can be exploited to alleviate the problem. In view of the recent forecast¹ by OECD that our jobless rate could reach 18 per cent by next year it urges that all bodies, both voluntary and statutory, co-ordinate their approaches and ensure that the resources of the ESF and domestic resources are marshalled to launch a frontal attack on the scourge of unemployment, particularly youth unemployment.

MAURICE MANNING, T.D.

Vice-Chairman of the Joint Committee.

27th June, 1984.

¹ “Does Ireland have a special Problem of Youth Unemployment?” Brendan M. Walsh, Policy Paper No. 10, Centre for Economic Research, U.C.D.

² “Improving Youth Employment Opportunities — Policies for Ireland and Portugal”, OECD, 1984

¹ “Proposals to Establish a Centralised Agency for Persons Registering for Unemployment”(31 May, 1984).

¹ Draft Resolution COM(84) 74 final, adopted 7 June, 1984.

¹ COM(82) 809 final.

¹ OECD Economic Outlook, VOL. 35 (published June, 1984).