Committee Reports::Audit of the 1995 Accounts of: Non-Commercial State Sponsored Bodies::06 November, 1997::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


(Minutes of Evidence)



Déardaoin, 8 Bealtaine 1997.

Thursday, 8 May 1997.

The Committee met at 11.00 a.m.



Tommy Broughan


Michael Finucane

Eric Byrne

Desmond O’Malley

John Ellis




Mr. John Purcell (Comptroller and Auditor General) called and examined.

Mr. Michael Duffy (Chief Executive, An Bord Bia) called and examined.

Ms. Maura Nolan (Principal Officer, Food Division, Department of Agriculture, Food and Forestry) called and examined.

Mr. Raymund O’Connor (Director, CERT Ltd.) called and examined.

Mr. John Dully (Assistant Secretary, Tourism Division, Department of Tourism and Trade) called and examined.

Mr. Jack Hickey (Accountant, CERT Ltd.) called and examined.


Public Session.

Deputy Finucane: Mr. McGowan of the IDA gave us a breakdown in relation to towns of 3,000 to 5,000. Is there a possibility he could let us know where those locations are and tell us about the availability of accommodation?

Chairman: It will be announced on Wednesday.

Deputy Finucane: Mr. McGowan only gave us a summary.

Chairman: It would be worthwhile.

Deputy Finucane: I would like to carry out a national analysis of the land bank. Will you ask him to embrace Shannon Development also?

Chairman: I take it the correspondence is noted.


Mr. Michael Duffy (Chief Executive of an Bord Bia) called and examined.

Chairman: I welcome Mr. Duffy to the Committee. Will you introduce your officials?

Mr. Duffy: I am accompanied by Mr. Gerry Bailey, Financial Controller of An Bord Bia, and Mr. Seamus Kenny, Secretary to the board.

Ms Nolan: My name is Maura Nolan and I am a principal officer in the food division of the Department of Agriculture, Food and Forestry.

Chairman: I ask the Comptroller and Auditor General to deal with paragraph 3 of the report.


3.Voluntary Meat Promotion Levy

A meat promotion levy scheme was introduced with effect from 1991 by agreement between the Department of Agriculture, Food and Forestry and the relevant industry associations. It was designed to provide additional funding for promotion and was to be borne by the meat processing sector. The industry contribution was to be funded by a levy on processors equivalent to 50p per head on cattle, 10p on sheep and 10p on pigs and was estimated to make an additional £1.5m per annum available to Coras Beostoic agus Feola (CBF) for meat promotion. The levy on sheep was ultimately implemented at a rate of 7p per head. This adjustment was made in the light of market conditions at the time.

The scheme was intended to operate in the first instance for the period 1991-1993. The scheme continued in 1994 but in March 1995 An Bord (which replaced CBF with effect from 1 1994) decided that in the absence of a new voluntary agreement it would fund future promotions by way of formal legal contracts with exporters which the exporter would contribute 50% of relevant costs.

Over the period of the voluntary levy the industry contributed £3.67m (46%) towards meat promotion costs of £7.92m (see Table 3.1).

Table 3.1

Industry Contribution and Costs of Meat Promotion 1991-1994


Industry contribution levied


Unpaid to date

Net proceeds

Meat promotion cost

Percentage cost recovery





































1An Bord Bia estimates that the reduction from 10p to 7p reduced potential proceeds by a total of £288,000 in the years 1991-1994.

2Section 38 of the An Bord Bia Act, 1994 provides that a processor may be liable for a portion of the statutory levies.

An Bord Bia informed me that the amount contributed by the industry over the period represented 85% of the amount levied and CBF had adjusted its planned meat promotion expenditure to broadly maintain the joint funding relationship on meat promotions.

The shortfall in the industry contribution was attributed by An Bord Bia to

non-participation of certain sectors9 and partial participation by other sectors10

enforcement difficulties since the levy was voluntary.

The unpaid amount of £650,000 was fully provided for in the accounts of An Bord Bia and was formally written off in the 1996 accounts.

Mr. Purcell: Paragraph 3 refers to the collection of a voluntary meat promotion levy first by CBF and later by its successor, An Bord Bia. The levy scheme was introduced as a result of an agreement between the Department and the relevant industry associations as a means of providing additional funding for meat promotion. The levy was payable by firms in the meat processing sector and operated from 1991 to 1994 when proceeds from the levy dropped to 38 per cent of promotional expenditure.

Some £3.67 million was collected, which is about 85 per cent of what was due. The outstanding amount of £650,000 was written off in the 1996 accounts of An Bord Bia. An Bord Bia has since replace the scheme by introducing co-funding of specific promotional activity whereby 50 per cent of the cost of individual promotions is to be met by the exporters who derived the benefit from the activity. I do not know to what extent the board has been successful in achieving the 50 per cent rate of cost recovery. I have my doubts about some indicative figures given to me but perhaps the chief executive will have firmer figures for the Committee.

3The livestock export sector did not participate in the scheme.

4The home trade only partiall participated in the scheme and not all companies in the meat export sector participated.

Chairman: How does the new scheme compare in monetary terms and in terms of participation by the industry? Have all the moneys due been collected? Is every legal contract the same or are they tailor made for each participant?

Mr. Duffy: The issue under discussion relates primarily to the retail agreements negotiated with retailers. It would be an annual agreement which would cover the promotional activity over one year and would be related to the volume of product which would be sold by a particular retailer. The idea behind it was to have a sustainable relationship with the retailer focused on increasing our exports of vac-pac which in 1990 would have been about 80,000 tonnes. The idea behind the promotional levy was to put in place a programme which would result in retailer agreements. It was largely successful in that vac-pac exports increased to 140,000 tonnes in 1995.

The period of the voluntary levy was 1991 to 1993 and it extended into 1994. Given that it was voluntary levy, that An Bord Bia’s funding basis had changed to a situation where half of its funding came from Structural Funds and given the administration involved in these retail agreements, we though it necessary to review it in 1995. We decided to move to a separate basis where we would do it on a company by company basis - 50 per cent as opposed to the general promotional levy.

Chairman: Have all the moneys been collected to date?

Mr. Duffy: In 1995 our retail promotions would have been £1.2 million and the industry contribution would have been £300,000. It is important to explain the basis for it. We were moving from annual agreements to more project specific agreements which were not necessarily over one year but which were more tailored to a specific promotion. We were running promotions in which retailer funding would count as matching funding as opposed to the supplier funding. The point I need to explain is that the basis for the retail agreements was changing because of funding and the type of promotions being run.

The basis for retailer agreements was changing because of funding and the type of promotions that were being run. On 20 March 1996, when BSE occurred, the retailers were not interested in annual agreements because the whole marketing environment had changed substantially. Whereas in 1995 we would have had upwards of 35 retailer agreements, in 1996 we undertook specific promotional agreements as part of our response to the BSE crisis. To answer your question, the figures show that in each case where we negotiated a retail agreements we collected the money.

Chairman: Are retailer contracts the same or are they tailor made for each participant?

Mr. Duffy: They are tailor made for each retailer. We work on the basis of legally enforceable business contracts. For each retailer we have a written document - a letter or fax - which would itemise the terms and conditions of the promotion. In dealing with suppliers we would have back-to-back letters with them in terms of the amount they would be contributing.

Chairman: Why was the original scheme a voluntary one and why did you feel it was essential to make the new scheme more formal?

Mr. Duffy: In terms of the background, because the Department negotiated it, I will ask Ms Nolan to deal with that question.

Ms Nolan: The original scheme had to be a voluntary one because under the CBF Acts at the time there was no provision whereby a levy could be imposed specifically on a meat processor. Over the last few weeks I have done some research in the Department in relation to the actual terms of the agreement and it appears there was no formal written agreement as such. The terms of the voluntary arrangement were worked out by the Department in consultation and discussion with CBF and the meat processing associations at the time.

Chairman: Why did some sectors of the meat industry not participate in the voluntary scheme?

Mr. Duffy: It was a voluntary levy and there were discussions with the live exporters who declined to participate. Representations were made to them but they felt the thrust of the promotional programmes would obviously not meet their interests so they declined to participate.

Deputy Finucane: CBF was replaced by An Bord Bia on 1 January 1995. You were catapulted a short time afterwards into the BSE crisis. You had to intensify and refocus your whole approach. Can you briefly encapsulate An Bord Bia’s progress since then?

Mr. Duffy: We were legally established on 1 December 1994 so the accounts are for a 13 month period. There have been two phases. The year 1995 was very much about getting the organisation established. It involved producing a five year plan up to 1999 concerning the different sectors we have responsibility for. Although we took over the food function of An Bord Trachtála immediately, we had to arrange for the transfer of staff, which was completed by the end of May. The priority for us in 1995, before the BSE crisis broke, was to keep the show on the road. We did not want services to industry to be reduced in any way by the fact that we were establishing an organisation. By and large we achieved that. Some 14 trade shows completed, we introduced new grant programmes and approved 147 grant applications. We carried out the programmes that CBF was planning the year before. Our focus for 1995 was to make sure that services to industry were provided, including the computer planning process.

In 1996 there were two main priorities for us. One was the BSE crisis. When one talks about the beef market in 1996, it is divided by the 20 March date when the BSE crisis broke. As soon as that broke we went into an intensive programme of reassurance information both at home and overseas. Our focus was to try and maintain our existing business with retailers. We had to do that by running information campaigns, advertising campaigns, giving information about the quality assurance schemes and explaining the situation in relation to the Republic of Ireland as opposed to the United Kingdom. That was a major priority for us.

In 1995 about 20 per cent of our beef exports went to Britain, but that declined in 1996 to 12 per cent. About 32 per cent went to the Continent in 1995 and that went down to 20 per cent in 1996. The 1995 figure in international, non-European, markets was 38 per cent, which increased to 52 per cent in 1996.

We had an intensive programme focusing on Europe and our existing retailers, trying to maintain the presence of Irish beef in the retailers. At the same time there was an increased level of activity in our non-European markets, like Russia, which were available for the product. Although the value of beef exports dropped over 1996 by 12 to 15 per cent, some 95 per cent of the volume was shifted to commercial markets.

The other priority in 1996 was the horizons project last June in the RDS. It was the biggest trade show and conference we have undertaken, attracting 11,000 visitors and including 660 targeted buyers. Some 102 companies exhibited. It was a major project. We had defined our products as being promotion, buyer contact, market information, quality development and marketing finance. We were trying to deliver those products in a structured way.

Deputy Finucane: You say the UK and Continental Europe markets declined in 1996.

Mr. Duffy: Yes.

Deputy Finucane: You have done a lot of trade promotions in the European context in order to restablise the market in Germany.

Mr. Duffy: Yes.

Deputy Finucane: To what degree have you been successful with regard to those trade promotions and achieving a parallel increase in that market place?

Mr. Duffy: Given that BSE has certainly been the biggest crisis to hit the food industry, never mind the beef industry, we have managed to keep key accounts in our main markets. That was the primary objective. As the BSE crisis unfolded a number of things became clear. Obviously, you had the immediate drop in consumption which depressed the whole beef market. More importantly for us was the nationalisation of those markets; the fact that consumers in each of those markets were turning to their own products. It was a major challenge for us to make sure that with that kind of reaction we were able to keep Irish beef there.

Because consumption was dropping, the other associated factor was that the countries we were exporting to were themselves not exporting as much either. So, great pressure was put on an imported product in terms of consumption, the lack of exports from those countries and nationalisation. The key strategic objective was to make sure we held onto the accounts. We were not successful in every case but we have managed to keep Irish beef there and grow it in certain markets like Sweden, Holland and Denmark. We had successes in Northern European markets but in France and Britain it was much more difficult.

Deputy Finucane: What about Germany?

Mr. Duffy: Germany is the most sensitive market to BSE. Our exports there have declined by about a half.

Deputy Finucane: Looking to the future, from 1997 onwards, can you see an improvement in those market places which have restricted Irish beef?

Mr. Duffy: We now have to become target oriented and have divided up our markets. Consumption in Northern European markets like Sweden, Denmark and Holland, has recovered dramatically. In Sweden, for example, consumption was in excess of the previous year. Markets like Italy have a deficit and they need to import beef. Those markets are very much a focus for us at the moment and we are very active there.

We are continuing to work on other markets, like Britain and France, which are very important to us. We think recovery will be slower there. For example, Brussels will be introducing labelling laws to identify the country of origin. Our consumer research consistently shows that the consumer is not driven by the country of origin. The consumer is more driven by the kind of reassurance the retailer can provide. We are working with the retailers to ensure that the introduction of that kind of legislation will not disadvantage us. If one is looking at a two to three year programme of recovering the markets the most important thing is that there would not be any new scare.

Deputy Finucane: What is An Bord Bia’s relationship with the meat processors?

Mr. Duffy: We get our levies from the producers but we work on a promotional campaign with the processors to whom we provide grant assistance. We also have a quality assurance scheme of which meat processors are members. In terms of the beef industry, we have a very strong business association with them.

Deputy Finucane: Does An Bord Bia have any reservations about providing incentives to beef processors? There is a widely held view that beef processors operate a cartel to the detriment of Irish farmers with regard to the erosion of prices and so on. If that were true and the competition authority moved in, would you think it contradictory that another State organisation was providing incentives in this area?

Mr. Duffy: An Bord Bia must discharge its responsibilities under the Act which clearly places a responsibility on it to promote Irish food and drink. We get almost £4 million of levies from the producers, a large part of which come from the beef sector. We have, therefore, an operational responsibility to promote Irish beef. To do that effectively we must have a reputation in the industry for food safety and quality assurance.

Deputy Finucane: Has that reputation improved since the Beef Tribunal at which time there was a great deal of criticism with regard to the end product being produced by certain sections of the beef processing industry? It would be wrong to tarnish all beef processors. Is An Bord Bia satisfied with the quality of beef that is now being produced by the beef processors?

Mr. Duffy: One need only look at the market performance of the beef industry in Europe. The priority for European markets was the development of vacuum packed boneless beef chilled exports and there has been significant growth in this area. In the 1980s Ireland was exporting 15,000 to 17,000 tonnes of vacuum packed beef. That figure had increased to approximately 80,000 tonnes by 1990 and to 140,000 tonnes by 1995. Irish beef was present in all the major markets in Europe and in all the key retail accounts. Looking at this purely from a marketing point of view, Irish beef was performing on a very credible basis up until the BSE crisis. More and more of the product had been going into commercial markets, more of it was being identified as Irish and the retailers were the driving force behind that. The facts show that Irish beef was successful in the marketplace.

Deputy Ellis: Mr. Duffy spoke about the domestic expenditure of £1.2 million of which £300,000 was recovered. Is that figure correct?

Mr. Duffy: Yes.

Deputy Ellis: The target for recovery was 50 or 60 percent but An Bord Bia only succeeded in recovering 25 per cent.

Mr. Duffy: Yes, but I attempted to explain the fact that from 1991 onwards there was an annual agreement in place which was being negotiated on a very specific basis. An Bord Bia’s funding had changed and the eligibility under structural funding was quite different. If An Bord Bia negotiated annual agreements it did so on a 50:50 basis which was necessary for matching purposes. Where retail promotion projects were concerned, we could use the retailer contribution as funding. There was a slightly different basis for the calculation.

Deputy Ellis: What percentage of retailers in this country are currently participating in promotional work with An Bord Bia? What percentage of domestic butchers, for example, would have a regular involvement with it?

Mr. Duffy: I cannot give the Deputy an actual percentage figure off the top of my head. All the major supermarkets would be involved in promotional campaigns.

Deputy Ellis: The supermarket end of the retail meat trade in this country is the lower percentage of it.

Mr. Duffy: It is about half and half in terms of the volume of meat shifted by butchers and supermarkets. In its most recent campaign, which started last September, An Bord Bia spent £0.5 million on a promotional programme in the home market. Domestic butchers were heavily involved in that.

Deputy Ellis: Does An Bord Bia have a register of everybody involved in the retail meat business?

Mr. Duffy: I am not sure we have a register in the sense the Deputy intends. We do have a list of retailers’ names.

Deputy Ellis: I have a specific reason for asking this. It would seem unusual for An Bord Bia not to have such a register. Most promotional organisations would have a full register of every individual or group involved in a particular sector. It seems unusual that a body, such as yours, which deals mainly in the home market of food and drink products, would not have such a register. That is the only way people could be targeted in order to involve them in seminars or promotions which may be held. Are you dependent on other groups, such as the grocery wholesalers, to provide you with this information?

Mr. Duffy: No, An Bord Bia is not dependant on other groups in relation to the provision of information. The relationship between butchers and retailers goes back many years, long before the establishment of Bord Bia. An Bord Bia has a directory of people involved in retailing; comprehensive and specific information in this area has been built up over many years. The word “register” has slightly different connotations for me.

Deputy Ellis: A directory is acceptable; that is what I meant. How often each year are those people contacted?

Mr. Duffy: An Bord Bia would have formal contact with retailers through its promotions. For example, it is about to embark on a promotional campaign and that will involve formal contact being made. Sometimes that contact would be made through the butchers’ association because of the sheer number of people involved. An Bord Bia contacts groups formally before launching a campaign in order to get their views on the type of campaign which would be run, the use of posters, consumer leaflets, radio advertising and so on. We explain the nature, duration and intention of the campaign. Following that we maintain ongoing contact as we must track the performance of the products at retail level be they beef, sheep meat, pork or poultry. Our home market staff would be in continuous contact with the retail trade in this regard.

Deputy Ellis: How many home market and international staff does An Bord Bia employ?

Mr. Duffy: The Bord Bia staff complement is 60 persons, approximately 20 of whom work outside Ireland. Our home market staff, including regional advisers, would be of the order of 10 to 12 people.

Deputy Ellis: Does that mean that there are approximately 30 people involved in administration?

Mr. Duffy: No.

Deputy Ellis: Mr. Duffy said the full staff complement was 60 persons.

Mr. Duffy: An Bord Bia is structured to have a meat division and a client services division which would deal with issues such as grant applications, trade shows, food missions and so on. In relation to administration, we have an accounts department, a grant processing department and a secretary. There are approximately ten people involved in this area.

Deputy Ellis: On looking at the price of beef and reading the bulletin of An Bord Bia one can see the discrepancy between a price here and in Italy of over 25p per lb. Why can we not exploit the present price advantage to gain market share and get an increased price for our product? Similar grades are between 25p and 30p less here than in Italy and elsewhere in Europe. What has An Bord Bia being doing to bridge the gap? European consumers are paying top prices for what, in some cases, is Irish product. However, the Irish producer is only getting 80p for something with a commercial price on the wholesale market in Italy of between £1.07 and £1.10. Obviously somebody is taking a good cut and this is affecting the economy because money is being lost to the producers. Has An Bord Bia a list of prices achieved by our meat companies in those markets? Is a weekly return made of the price received by exporters to those markets?

Mr. Duffy: Is the Deputy referring to the retail price?

Deputy Ellis: I am referring to wholesale prices.

Mr. Duffy: Regarding the price differential, I mentioned earlier that the majority of beef exports go to third countries which have experienced reductions in export refunds. This compares to the previous situation when over 50 per cent went to Europe. Since November 1996 export refunds have reduced by £140 per animal. Prices in third countries are lower. There is more product going to those international markets. We are the biggest exporter in the EU accounting for one third of EU beef exports so we must shift the product.

Regarding European markets, we are working extremely hard to regain the ground established by Irish beef. However, the big problem is the nationalisation of markets and shifting volume is extremely difficult in terms of retail price. However, our clear objective is to get more product back into Europe because that is the sustainable market and we must regain our presence in it.

Deputy Ellis: I asked if a weekly return of prices received by exporters is available.

Mr. Duffy: We track the price of Irish beef at retail but not at wholesale level.

Deputy Ellis: But the margin would be reasonably constant.

Mr. Duffy: It would be reasonably constant but we track supermarket prices.

Deputy Ellis: What is the average margin being taken from the time it leaves here until it reaches the supermarket? For example, what is the price of Irish beef in supermarkets in Italy?

Mr. Duffy: I do not have the figures with me but I will provide them to the Committee.

Deputy Ellis: The reason I am trying to identify this is because it appears the cartel operating at present is costing Irish producers between 10p and 15p per lb. What is An Bord Bia doing, as the marketing arm being paid for by the producer, to break that cartel and allow this money be passed back to producers? Can anything be done?

Mr. Duffy: We do not set the market price. Our job is promotional and developing markets for the product. We cannot dictate price. We have a very small market share - less than 5 per cent - in each market. Because of our small market share we are affected by retailer pricing of imported product and consumer reaction. Our job is to recover the ground with European retailers. We are also developing the food service side which has not been developed. Historically, the beef industry has concentrated on the retail sector. Our two clear objectives are to get Irish beef back to its previous level in Europe as markets recover and to develop the food service side to give us a better spread of markets.

Deputy Ellis: I have one final question to which I do not expect an answer today. Can the Committee be told how much each group received in promotional expenses from An Bord Bia in 1995 or 1996?

Mr. Duffy: We will provide that information to the Committee.

Deputy Byrne: This morning on the radio I heard that either this week or last week was urban-rural week. The more I examine the figures from the Department of Agriculture and the agricultural sector the more I become familiar with and alienated from the meat processing industry.

Paragraph 3 deals with the levy which the Comptroller and Auditor General spoke about. It was a levy to be borne by the meat processing sector to promote meat. They did not deliver on this agreement, Irrespective of whether it was voluntary or non-voluntary it was still an agreement and the expectation was that it would be adhered to. Why was it necessary to write off £650,000?

Mr. Duffy: The table in the Comptroller and Auditor General’s report indicates the amount of industry contribution budgeted to be levied. Against this there would have been a budgeted promotional campaign. It was a voluntary agreement.

Deputy Byrne: It was an agreement.

Mr. Duffy: CBF collected the levy and the promotional activity was trimmed to reflect any shortfall from the budgeted amount. This is how the process operated. There would have been corresponding adjustment to the promotional campaign to take into account any shortfall in funds.

Deputy Byrne: The State does not, therefore, have to meet the shortfall of £650,000.

Mr. Duffy: That is the point I am trying to make. It was a budgeted figure and therefore had to be treated as income that would be received. However, because corrective action was taking place it was decided appropriate to write it off.

Deputy Byrne: So some sectors or individual companies did not comply with the agreement. Can the defaulters be identified?

Mr. Duffy: Over the years a number of companies would have been involved and I can provide that information to the Committee if it so wishes.

Deputy Byrne: It is important to know if a common denominator has been identified among the defaulters and those who were diligent in living up to the agreement.

Mr. Duffy: We have not identified a common denominator over the lifetime of the programme. In a given year there might have been companies or group of companies with more of an issue with the promotional agreements than other years. However, over the period there were companies which did not pay one year but did pay the following year.

Deputy Byrne: It was a voluntary agreement. However, does it not strike Mr. Duffy as a haphazard approach by the industry, which, presumably, wishes to market its produce, to allow companies to not pay the contribution in a certain year but pay it in the following year? That seems to be an incredibly lax approach, given our subsequent knowledge about the beef industry.

Mr. Duffy: The point is that the agreement was voluntary and 85 per cent of the moneys involved were collected over the period. Operationally the programme could be adjusted depending on the level of collections. That was probably where much of the emphasis was intended to lie.

Deputy Byrne: I am satisfied that the £650,000 involved was a paper transaction and the Exchequer or the taxpayer did not foot the bill.

Chairman: The Deputy is not quite correct. The Comptroller and Auditor General will clarify the position.

Mr. Purcell: While the expenditure was scaled back, Members will note that in 1994 the contributions represented approximately 38 per cent of the promotional expenditure. In that context, where there was a general target of a 50 per cent matching contribution, it is not a paper transaction.

Deputy Byrne: Therefore, in 1994 the industry contributions only accounted for 38 per cent of the promotional expenditure.

Mr. Duffy: I will try to place that in context. The budget in respect of the contribution levied by the industry in 1994 was £920,000. Against that, the general budget for meat promotions during that year was £2.6 million. In the heel of the hunt £760,000 was collected which, as the Comptroller and Auditor General stated, represented 38 per cent. The actual spend was £1.99 million. However, even when the budgets were drawn up, the £920,000 would have accounted for 40 per cent of the meat budget spend in that year.

Deputy Byrne: Where does that leave the obligation on the industry to meet 50 per cent of the cost?

Mr. Duffy: That plans that were drawn up would have stipulated that on foot of receiving £920,000 a total meat promotion programme of £2.6 million would have been implemented. However, the total programme implemented was £1.99 million of which £758,000 was contributed through the promotional levy.

Deputy Byrne: From my reading of the figures, I am not sure whether the Comptroller and Auditor General is satisfied that an expenditure over and above the shortfall in contributions, for which the Exchequer was obliged to take responsibility, took place. However, if he is satisfied, I have no difficulty in that regard.

Mr. Purcell: It depends where the baseline is established. The Chief Executive stated that An Bord Bia was seeking a contribution of 40 per cent.

Mr. Duffy: Exactly.

Mr. Purcell: If one takes it at that level, there was a shortfall of 2 per cent which is very marginal. I imagine that the aim would have been for matching contributions, which is generally taken as 50/50. It depends on what baseline is taken.

Mr. Duffy: In 1993, the contribution was 50 per cent. In 1994, the contribution reflected the fact that the period of the agreement was reducing and it also highlighted what we were expecting for the future. It was a very complex process to implement and by 1994 CBF had a number of years of experience of operating the voluntary levy and reflected that in its budgeting procedures.

Deputy Byrne: To return to An Bord Bia’s efforts in marketing meat and the incredibly difficult conditions which prevail, I congratulate Mr. Duffy on the good job his organisation is doing. Speaking as a consumer of meat produce, is it correct that An Bord Bia is not being helped by the dirty image of the industry? Does Mr. Duffy share my view that one of the healthiest things to happen to the agriculture sector or industry is that some gentlemen farmers and veterinary inspectors have been imprisoned?

The scandals which emerged at the beef tribunal such as the operation of the Goodman plants, the outrageously illegal activity of many farmers using growth promoters and angel dust, the corruption of one or more departmental veterinary inspectors, the allegations that some farmers deliberately infected their herds with BSE and the well documented illegal movement of cattle across the Border, have undermined many markets, not merely the Iranian, Egyptian and Russian ones. Is it correct that the industry’s tarnished reputation is not helping An Bord Bia’s attempts to present a clean image of Irish agricultural and livestock production? Does Mr. Duffy agree that his organisation is handicapped by the gangster element which exists in the factory and farm production areas and the veterinary sector?

Mr. Duffy: If the BSE crisis taught us anything we needed to learn or of which we needed to be reminded in respect of meat products, is that consumer confidence in the product is absolutely paramount. Consumers want unequivocal assurances about food safety and quality assurance and they are seeking information about the products they purchase. The use of antibiotics or hormones or any activity that undermines confidence in a product will have a commercial consequence. Irish consumers are responding to level of information and reassurance being provided about the product. That is the job on which I am principally focused. This is demonstrated by the major consumer survey we carried out in February which showed that fresh beef sales across supermarket counters had increased in volume by 1.6 per cent. This increased to 2.6 per cent in March.

Considering the consumer response to promotional activity and the information being provided, we are very encouraged about the recovery of beef on the home market which is very important to our international activities. Anything which affects that confidence, I refer to clearly illegal activities, will affect our efforts. One of the things which is absolutely essential to us, we spend a great deal of time and money safeguarding it, is the image of our industry abroad. The image which gives us an edge overseas is one of a natural product produced naturally.

Deputy Byrne: Is it not correct that deviant farmers and industrialists are engaging in a form of national sabotage? An Bord Bia has done a marvellous job in maintaining the confidence of Irish consumers. However, countries such as Iran, Egypt and Russia, to which we export beef, have embassies in Ireland and they are aware of the activities of farmers who are hauled before the courts and imprisoned. These individuals are, in a sense, sabotaging a national industry. Is there any way that An Bord Bia can oblige the industry to clean up its act before it is fundamentally damaged by these horrendous activities?

Mr. Duffy: Anything that damages our image has a commercial consequence. There is a commercial consequence in my view which we counter in our daily job. The charges laid against farmers in court may date from three or four years ago and, while that is not the current situation, it is reported in the media. We counter those reports in our work and dealings with the trade. We counter anything of that sort which undermines the industry because there is no place for it.

Deputy Byrne: What does Mr. Duffy say to people who read in The Irish Times or Evening Herald of farmers using illegal growth promoters and agricultural inspectors before the courts? What does he do about issues such as the beef tribunal?

Mr. Duffy: The key retailers we deal with have stringent quality assurance procedures and also know the industry. They have great confidence in it and I have shown that in the figures. It is something we must nurture and develop.

Deputy Byrne: I wish Mr. Duffy well.

Chairman: The paragraph from the Comptroller and Auditor General is welcome and the Committee trusts that every effort will be made by An Bord Bia to efficiently administer the new scheme and ensure all contributions are collected. The paragraph is noted.


We now move on to accounts and I will start the questioning on them. What work is An Bord Bia carrying out which CBF did not? Does Mr. Duffy think the changeover has proven successful? What does he hope to achieve in future?

Mr. Duffy: Anything connected with promotion and market development of non-meat products would not have been carried out by CBF. Our brief extends to all food products with the exception of seafood for which BIM has statutory responsibility. Any activity outside the meat area would not have fallen into CBF’s remit. Since establishment, we have developed a range of programmes, such as food service and food ingredients programmes. We now have responsibility for organising exhibitions and we have introduced two new grant programmes. CBF would not have done either of these. We have developed a market information service which deals with approximately 3,000 inquiries per year from retailers, etc. We operate a range of services and products which would not have been relevant to CBF.

The clear benefit of An Bord Bia is that the targets for food exporters are primarily the large retailers and, increasingly, the food service people. In each of the European markets we are prioritising, there are only four or five such retailers. Before 1995, more than four different organisations would have made representations to buyers. Now there is one with a co-ordinated and focused approach working with a common client base. It allows us to target and gives us more focused approach in terms of utilising human and financial resources, which is to the benefit of the industry.

Chairman: How many companies were included in the 1996 write-off of £650,000 in respect of the voluntary meat promotion levy? What was the highest amount and who was it in respect of?

Mr. Duffy: May I respond to that in writing?

Chairman: There is no problem with that.

Deputy Byrne: Will Mr. Duffy give details of all defaulters?

Mr. Duffy: Yes, if that is the Committee’s request.

Deputy Byrne: How long has the Food Advisory Centre been operational and is it successful? What sort of operations are engaged in by the Food Advisory Centre?

Mr. Duffy: The Food Advisory Centre began in the meat centre in CBF where meat promotions were focused on. As our responsibility is now for food, it is now known as the food advisory centre. There are four categories of operation in the centre: consumer education, nutrition, school advisory and food press. We run consumer information programmes in the centre with visits by consumers and retailers. We can also use it for training if we wish to get a certain point across. One of the major nutritional points we are trying to make is the nutritional value of beef, especially the important facts about iron absorption. We use the centre for nutrition seminars to put across nutrition messages. We have an active programme for schools, particularly transition years, a large number of which we deal with. A large number of girls and, increasingly, boys receive a nutrition programme explaining the role of food in their diet. We also use the centre to run promotional activities. For example, when we have buyers in, we use it to have food demonstrations and sampling. We also use it for buyer visits. It is probably one of the busiest parts of the organisation.

Deputy Byrne: Where is it based and how many staff are assigned to it?

Mr. Duffy: It is part of our home market department so the staff of ten to twelve I referred to earlier would be incorporated in their activities. It is based in our head office in Clanwilliam Court.

Deputy Byrne: In the head office?

Mr. Duffy: Yes. It is on the first floor and can accommodate up to 120 people. It is in modular form so we have a very high quality kitchen where we can do food promotions. We use the centre for promotion, education and information. We take into account retailers, consumers and schoolchildren. It is an active part of our organisation.

Chairman: I thank Mr. Duffy.

Mr. Duffy: We will respond to the questions.

The witness withdrew.



Mr. Raymond O’Connor, (Director, CERT Ltd.) called and examined.

Chairman: I welcome Mr. O’Connor and ask him to introduce his officials.

Mr. O’Connor: I am accompanied by Mr. Jack Hickey, our accountant with CERT, and Mr. John Dully, the Assistant Secretary with the Department of Tourism and Trade.

Chairman: Paragraph 14 of the report of the Comptroller and Auditor General reads:



In 1992 the staff complement of CERT Limited (CERT) was 116 which was made up of an authorised permanent staffing level of 72 and 44 staff employed on a long term contract basis. The Minister for Labour conveyed sanction in October 1992 for 19 additional permanent staff, increasing the authorised permanent staff level to 91. The sanction also stated that the Minister for Finance had expressed concern that CERT engaged additional staff on a contract basis without authorisation and that such a situation should not recur.

The total staff complement of CERT in 1996 was 113 made up of 108 full time, 2 job sharing and 3 part time staff. 64 of the full time staff were on contracts and the other 44 were permanent employees.

As this was in excess of the level approved I sought the observations of the Chief Executive on

the reason for the staff complement exceeding the authorised figure

the steps that have been taken or are being contemplated to regularise the staffing levels at CERT.

The Chief Executive informed me that the unsatisfactory situation with regard to CERT’s staffing dated back to 1984, when CERT requested the Department of Labour to sanction an increase in its staffing from the then approved level of 72 permanent posts. When no response was forthcoming, CERT made a formal submission to the Department of Labour and ultimately to the Department of Finance in September 1989 for an increase.

In response to the Government’s policy priority to increase the training provision for unemployed adults, CERT established long-term permanent Training Centres in Cork (1988) and Limerick (1990) and the staff required for these operations were appointed on a long-term contract basis with the knowledge of the parent department.

In January 1990, a tripartite working group, representative of the Departments of Labour, Finance and Transport and Tourism, was established to review CERT’s staffing requirements. The group’s report was presented to the Minister for Labour in April 1990 and, CERT understands, recommended an increase in staffing.

At a meeting in the Department of Labour in January 1991, CERT was informed that the findings of the inter-departmental review group had not been accepted and that a firm of consultants were being commissioned by the Department of Finance to carry out an independent study of CERT’s staffing requirements. At that time CERT was given a commitment that the findings of the study would be implemented in full.

In January 1992 the Council of CERT decided, in the absence of a Departmental decision, to authorise the Chairperson to sign employment contract extensions for the essential additional staff to achieve the training targets as set out in the Operational Programme for Tourism (1989-1993).

A Departmental sanction was finally given in October 1992 for 91 permanent positions, subject to the condition that no additional staff be employed. In effect, CERT’s ongoing request for additional staffing resources had been rejected and the commitment to implement the consultant’s findings had been set aside.

CERT decided to appeal this outcome and retained the services of consultants to assist it in conducting a further critical review of staffing and training targets, with particular reference to CERT’s increased responsibilities under the Operational Programme for Tourism 1994-1999. The resultant report showed that the organisation needed a minimum of 115 permanent posts and an additional 18 contract posts to deliver on the targets of the new Operational Programme for Tourism. The review study was completed and submitted in October 1993.

In early 1993 the Department of Tourism and Trade had become CERT’s supervisory department thus increasing its specific remit in the context of Government policy on tourism.

Meanwhile, the unions in CERT continued to express their frustration at the delay in arriving at a final solution and at the perceived inaction in addressing the situation which, at that stage, left the majority of CERT employees engaged on a contract rather than a permanent basis. In August 1995, CERT adopted a Strategic Plan for the period 1995-1999, based on a staffing need of 115.

In January 1996, CERT presented a paper to the Department of Tourism and Trade setting out the application of the existing 115 staff to CERT’s Strategic Plan and the potential consequences of reducing the staffing level to 91. Quite apart from reductions necessary in the level of training, recruitment and placement, projected reduction in the level of resources would, in certain instances, adversely affect CERT’s capacity to earn its own income and reduce the drawdown of eligible EU funding. At a further meeting with the Department in May 1996 it became clear that a maximum of only 91 permanent staff was permissible.

CERT has, accordingly, decided to institute a fundamental renewal programme addressing all the organisational and structural consequences including staffing matters. One of the primary aims of the renewal programme is the resolution of all staffing resource matters and professional assistance has been retained for the purpose. The approach to this important exercise will be inclusive and will be done with the involvement of staff and in consultation with the union. The task is expected to be completed by the middle of 1997.

The Chief Executive pointed out that CERT’s training remit for tourism had grown since 1984 (as indicated in Table 14.1) and that the demand for training had increased significantly during the period and that CERT had struggled to cope with the increased demands placed upon it by the Government and the Operational Programmes for Tourism.

Table 14.1

CERT Activity Levels




Total Revenue



Full Time Trainees



Unemployed Trainees



Mr. Purcell: Paragraph 14 is the only one relating to CERT and draws attention to its employment of staff in excess of the number authorised by the Department of Tourism and Trade. The issue has its origins in the 1980s when CERT’s request for extra staff fell on deaf ears. It went ahead and appointed staff on a long-term contract basis to deliver its expanded range of services. After much toing and froing, the matter came to a head in October 1992, when the Department, after various submissions and reviews, finally sanctioned a staff complement of 91. At that time, CERT employed 72 permanent staff and 44 on long-term contracts, a total of 116. CERT appealed the Department’s decision and also engaged consultants to support its view and to carry out further reviews.

It continued to employ approximately 116 staff and its operating strategy was based on this number. All the while it persisted in making its case but the Department would not budge from the 91 figure. As a result of a meeting with the Department in May 1996, CERT has, apparently, belatedly accepted the situation and has instituted a fundamental review of its operations based on the lower staff numbers. I understand that the results of that review will shortly be made available.

Chairman: Mr. O’Connor would you like to explain to the Committee why CERT continued to exceed Department guidelines despite numerous refusals for increased staffing?

Mr. O’Connor: The primary influence is that, when set up, CERT’s role was largely one of co-ordinating training. Circumstances involving the growth in the industry, a change in Government policy, including priority for young people and unemployed adults, has forced us into becoming more a deliverer of training than was originally envisaged.

The primary example of this is that, in relation to college-based tourism training which is largely undertaken within the regional technical college system, CERT has a good partnership with the Department of Education. The capital programme, as it applies to facilities for tourism related training, is almost four years behind. In other words, the capital programme originally planned to encompass tourism training has a provision for 92 places in Cork, 154 in Tallaght, 128 in Tralee and 50 in Waterford - a total of 424 places we are currently short of. That has obliged CERT to undertake direct training by leasing centres in Killarney, Rosslare, Lisdoonvarna and others to make up the shortfall of places within the regional technical college system and because of the evident growth of employment in tourism. There is a 100 per cent placement following these programmes.

This has been the primary factor in relation to staffing resources. That is apart from the growth of training which has been driven by Government policy. This has involved the training, and provision for the training, of unemployed adults and this was the start of our difficulties.

In the mid to late eighties we were asked to develop further training facilities for unemployed adults. We did this in Cork and Limerick where there are permanent centres in addition to the centre in Dublin. We increased the capacity of the training centre in Dublin. In other words, we are currently providing direct tourism related training for, approximately, 1,600 unemployed adults. The employment take up is around 89 to 90 per cent. That is direct training for which we have to provide the necessary staff. Those would be the two primary factors which give rise to the problems confronting us.

Chairman: I have a question for Mr. Dully. Why did your Department and the Department of Finance refuse numerous requests for additional staffing from CERT despite support for their cause from the tripartite group and the firm of consultants? What action have you taken since this matter was raised by the Comptroller?

Mr. Dully: To put this into proper historical context, this issue long preceded the establishment of the Department of Tourism and Trade. It is now going on for over five years. The total staff number was set by the Department of Finance having considered various reports and assessments. I am sure that this had as much to do with financial constraints on the Exchequer as with policy in relation to the control of total staff numbers in the public service.

The figure of 91 was conveyed to CERT at the start of the Department’s involvement. We have maintained a constructive dialogue and a good relationship with CERT since 1993 and believe that the acclaim that CERT gets for its work is fully justified. However, we did not wish to impair progress towards achieving the results set by the Tourism Operational Programme. We resorted to discussion as opposed to any real physical pressure on CERT. We still believe that 91 is the correct figure. As a lean organisation, CERT would be capable of delivering its high standards of service with that staff complement.

Deputy Broughan: Is this a deliberate policy by the Department in the sense that the cost of contracting staff is cheaper and that the Department prefers to have a lower permanent staff? In other words, is it industrial relations and a deliberate cost cutting policy by the Department?

Mr. Dully: No. It may or may not have been a factor in 1992. I was not involved then. The industrial relations aspects are, and have been, handled by the public service side of the Department of Finance.

Deputy Broughan: When the Department examined the accounts before us, would it be its view that, effectively, it is a cheaper option to have a significant amount of staff on contracts rather than as permanent staff?

Mr. Dully: No, that would not be our approach. We are still quite satisfied from discussions with CERT and a fairly close familiarity with the management of the Tourism Operational Programme that CERT can achieve its tasks with 91 or 92 permanent staff. This is supported by knowledge of what other organisations are doing and what resources they have. This is our simple, uncomplicated view. We do not have a standpoint as between temporary or permanent staff except that it has been brought into play by others, such as CERT and the Department of Finance. We are happy that the permanent figure on offer is sufficient for the organisation.

In reply to the Chairman’s second question, we have met CERT quite a number of times particularly since May 1996 and impressed on it the need for quick and effective action to meet the overall number. Raymond O’Connor has confirmed that CERT has been working hard on this and is optimistic that it will be achieved within a few months.

Deputy Byrne: I have every sympathy for CERT. Quite frankly, having read this report, the question of staffing starts as far back as 1990 and still has not been resolved. I can understand that, with our partnership in Europe and various commitments to providing training for the unemployed which is a progressive decision, CERT has had a difficult job in managing with the figures allocated to it. In that sense, Mr. Dully said he was happy. Mr. Dully is with the tourism division of the Department of Tourism and Trade. How much of the decision to pitch the permanent staffing level at 91 is a Department of Finance decision? Is he happy to mimic the Department of Finance. Is this independent Government Department happy with 91?

Mr. Dully: I would not mimic the Department of Finance but Deputy Byrne is right in that this issue started long before the establishment of the Department of Tourism and Trade and was considered by the Department of Finance in response to a number of reports, in that sense I represent what has been the view of the Department of Finance.

Having a good knowledge of CERT, I am satisfied that, as much as was done with Bord Fáilte, CERT could accommodate a reduction in staff numbers to achieve higher goal levels.

Deputy Byrne: Say that a permanent staff quota of 91 was adopted. Where does Mr. Dully see the role of part-time, contract workers? Are they to supplement the 91 or would he be opposed to additional numbers?

Mr. Dully: What I see is what the Department of Finance has indicated as the acceptable level of staff. That Department decides these things with reference to the financial implications for the Exchequer, and, as Members will know, with reference to all public service numbers.

The Committee was suspended at 12.22 p.m. and resumed at 12.38 p.m.

Chairman: Why did you decide to draft a strategic plan based on 115 staff when only 91 had been approved? Did you discuss the plan with the Department before publishing it?

Mr. O’Connor: The plan was produced on the basis that 116 staff would be granted. That was being prepared at the time consultants had found that the staffing complement required for the organisation was 133, that is, 115 plus 18 on contract.

Chairman: Did you discuss the plan with the Department before publishing it?

Mr. O’Connor: Yes.

Chairman: But Mr. Dully said that he is satisfied that a staff of 91 is sufficient.

Mr. O’Connor: That is a post-plan situation. In other words, the plan preceded the pronouncement by the Department of Finance on 91 staff.

Chairman: What action do you intend to take if the Department does not accept the terms of the renewal programme? Have you appointed consultants?

Mr. O’Connor: The appointment of consultants only relates to the industrial relations issues. In other words, we are in negotiations with the trades unions on the matter of the reduction.

Deputy Byrne: I note that the trades unions are very frustrated and that is understandable because this has gone on so long. Mr. O’Connor will appreciate that the contract staff have been employed for quite a while. How long are the contracts?

Mr. O’Connor: We have had people on contract for the past ten years. They are short term renewable contracts.

Deputy Byrne: Does Mr. O’Connor share my concern about the dedicated staff on contract, particularly those who are married and are trying to plan their future? They are rightly aggrieved at such a long duration of contract work. Does he foresee industrial relations difficulties if the Department compels him to dispose of in excess of 91 people? Has he got a contingency plan in place?

Mr. O’Connor: I hope it does not come to that. Of course, there are inherent industrial relations issues involved and that is why we are consulting the unions. Consultation has slowed the process down. We are approaching it on the basis of best change management practices and inherent in that is high level consultation. Industrial relations issues have to be considered as one element and operational issues as another. One cannot decide to pull out of a training programme aimed at young people that takes place over six or nine months. One can withdraw from it but one must see what will replace it. Our aim is to have some of the programmes included in the regional technical college system. There will probably be no saving for the State. There will be a relocation of resources to the programmes.

Deputy Byrne: What is the total number of staff engaged? I am trying to figure out who is holding the gun to who’s head. CERT has recruited 115—

Mr. O’Connor: The figure currently stands at 109. We are doing it by a process of wastage and that has limitations. Because of the national structure of tourism we have seven regional training advisors. We are not just filling the vacancies that arise. The Cork/Kerry region has been without a regional training advisor for four or five years. The mid west area covering Limerick, south Tipperary and Clare has none. Even where single staff vacancies arise they are not being filled.

Deputy Byrne: I applaud CERT for upgrading the quality of Irish cuisine to the extent that it can compete with the best in the world. The variety of food in our restaurants, hotels, etc. is phenomenal and the quality is fantastic. I was very disturbed to see an attack on CERT and the Irish catering industry per se by a well known lady. She runs Pasta Fresca and made a startling statement that she could not hire trained Italian chefs via the Irish college system and had to raid the market in Italy. That was disappointing because I am supportive of CERT and the College of Catering in Cathal Brugha Street. Chefs from there have gone overseas to attend international competitions and have won awards. Are we producing quality Italian chefs to be employed by such a lady?

Mr. O’Connor: Ethnic cookery is an integral part of the curriculum that they follow.

Deputy Byrne: Does Mr. O’Connor think this lady was wrong? Can CERT produce qualified chefs?

Mr. O’Connor: She has made announcements on more than one occasion with which we took issue. We have spoken to the trade association of which she is a member and gathered from her professional colleagues that she did not command a great deal of support on this issue.

Deputy Byrne: Did CERT take it as a slight on its professionalism?

Mr. O’Connor: Our concern was that it implied that ethnic cookery was not included in the training; it is.

Deputy Broughan: What proportion of income does CERT generate?

Mr. O’Connor: About 10 per cent - £1.4 million.

Deputy Broughan: How can CERT decide on its own staffing in defiance of a Government Department even in terms of funding?

Mr. O’Connor: I will clarify earlier points. When I referred to the fact that we were asked to undertake the opening of three new centres for the training of unemployed people, their staffing was approved. It was done with the knowledge and agreement of the Department at the time.

Deputy Broughan: Does CERT need the complement of staff it asks for even though it does not agree the Department?

Mr. O’Connor: Yes, in terms of the scale of the operation and our commitment to the operational programme for tourism, that is the case. It was independently assessed by Price Waterhouse which was engaged by the Department of Finance and that was its finding. It found that we needed 133 staff.

Deputy Broughan: CERT has doubled the number of full-time unemployed trainees since 1984. Are they graduates?

Mr. O’Connor: The two figures in the Comptroller and Auditor-General’s report refer to two programmes - full-time trainees and first time job seekers; and unemployed adults. We trained 592 in 1984 and are now training 1,627. They do not refer to an additional activity which is our training in and for industry - upgrading skills. Just over 5,000 people were trained last year.

Deputy Broughan: How many people has CERT produced for the tourism industry so far?

Mr. Hickey: Over the past five years, we have trained in excess of 11,000 people per year. In 1985 we trained 7,000, while in 1995 we trained almost 12,000. Mr. O’Connor referred to the two particular categories where that growth has taken place.

Deputy Broughan: Are most people employed?

Mr. Hickey: Yes - 100 per cent or as close as makes no difference on school-leaver programmes. Any graduate who comes off a full-time grant course is effectively guaranteed a job. On the more socially disadvantaged programmes, unemployed programmes, the placement rates are approximately 80 to 85 per cent. The selection criteria would not be as strict, but we are still getting those placement levels.

Deputy Broughan: The Committee congratulates you for the role you have played in the massive development of the tourism industry, especially with regard to the outstanding performance of the Dublin region over the past number of years. In assessing and providing for the kind of staff you will need you must gauge how the industry will development. Is that correct?

Mr. O’Connor: Yes.

Deputy Broughan: What do you anticipate happening over the next five years?

Mr. O’Connor: We completed an employment survey of the industry six months ago. Growth over the past five years has been 20 per cent. In terms of the area of our training interest, it has increased from 155,000 to 188,000. The forecast for growth in the current year of employment is 4 per cent, before allowing for new hotels or other tourism attractions that may open. It is the figure provided to us by existing operations before new operations come on stream. Taking Dublin as an example, there is a high number of new operations.

Deputy Broughan: Do you still consider that the extra staffing component is needed?

Mr. O’Connor: Yes.

Chairman: The Committee has a certain amount of sympathy with the council in so far as it was required to expand its range of services and to the extent that it was understaffed to do so. However, we cannot accept a situation where a State funded organisation wilfully ignores the directive of its parent department, no matter what the circumstances. Considering the time frame of the matter, the Committee expects the council to comply with the sanction as soon as possible and would like to be kept informed.

CERT - Accounts 1995

Turning to the accounts, why has your income from industry courses fees fallen by £85,000, while the expenditure on industrial training has increased by £120,000? Should there not be greater correlation between these figures?

Mr. Hickey: Revenue has decreased in that year. There was a heavier concentration of training in training of trainer programmes. Up to, say, five or six years ago, industry training programmes were divided largely between in-company training, which was largely at operative level, and external programmes, which aimed more at management level programmes. There was a concentrated effort in that year to increase the industry’s ability to train in-house staff itself at operative level and so CERT mounted a large number of training of trainer programmes to put persons skilled in training techniques in as many establishments as possible.

At the end of this programme, we expect to have approximately 2,000 qualified accredited trainers across the industry carrying out large levels of in-company training to complement what CERT is doing in its mainstream training. There was a shift away from operative level training. There was also a level of overseas income, which is shown under other income. To some extent there is a classification issue here. Under “other income” approximately £100,000 was earned on overseas income with regard to CERT’s involvement in EU projects. If this is added to the industry income it is a further explanation for the drop in income.

Chairman: I note from Appendix 1 of the company’s social report that you also employ 57 temporary staff. Was sanction given for this employment and if not why not?

Mr. Hickey: Sanctions given on an annual basis refer to the temporary training centres to which Mr. O’Connor referred earlier, where we engage people at approximately six to eight temporary training centres on three month and six month contracts. They are approved on an annual basis by the Department, subject to an overall ceiling of 78 at present.

Chairman: With regard to your income as set out in the income and expenditure account, your total income is approximately £12 million. Of that you get almost £8 million from the EU social fund and £2.6 million from the Department of Tourism and Trade with the balance made up of fees. That means two-thirds of your expenditure is provided by the EU. How do you propose to handle the situation after 1999 when it is anticipated that we will not be getting that type of funding?

Mr. O’Connor: We are addressing that issue at present. It will not be resolved by any single measure, but by a number of measures. Industry will have to contribute more than at present and we will have to sell our services at a greater level than at present, which are only being sold in terms of response. They are not being promoted as such. We also engage in odd work in international consultancy as subcontractor, which is work we are requested to do without promotion.

It will also depend on Government and EU policy at the time. Will EU support disappear overnight? Neither the EU nor Ireland will have solved their unemployment problems in their entirety and the training of people for entry to the workplace will still require either State or EU support. I doubt if industry will meet the direct cost of that, except indirectly through taxation.

Chairman: Do you get 100 per cent support from the industry at present? The fees income for the industrial course had fallen by £85,000 while expenditure on the industry increased by £120,000. You mentioned that you would go back to the industry to fill this gap.

Mr. Hickey: To answer that question we need to look at the three component activities in our training programmes. We have training of the socially disadvantaged unemployed people, young school leavers in the RTC systems and in CERT colleges and training within industry, to which you referred, and which only consumes approximately 10 per cent of our budget. Against this there is a direct contribution of approximately £600,000 by the industry by way of an industry contribution, negotiated approximately eight years ago, and industry fees. If one takes the contribution the industry is already making against that £1.4 million, or CERT’s 10 per cent of total budget for continuing industry and training, it is already making a substantial contribution.

The question of who should fund the training of the unemployed and school leavers is more a political question than one for CERT alone. That does not mean that we are not conscious of the potential income difficulties post 1999, but it is probably a bigger issue than one for CERT to answer.

Chairman: Are you looking at the situation as of now and are you planning ahead?

Mr. Hickey: Yes.

Chairman: I thank the delegation.

The witnesses withdrew.