Bruton rejects claims about jobs agency

MINISTER FOR Jobs and Enterprise Richard Bruton has rejected claims that Enterprise Ireland could be “covering up its mistakes” with the additional €80 million Enterprise Stabilisation Fund it has received to support Irish-owned companies.

Independent Dublin South TD Shane Ross expressed concern that the job-creation agency costs about €94 million a year to run, “about €2 million a week including €4.5 million in travelling expenses”.

He said it was difficult to find out what companies were involved, adding it should be a matter of concern to the Minister that more than one-third of its budget was used for administration purposes rather than for grants to small and medium-sized enterprises.

Mr Ross raised the issue in the Dáil as he questioned why the cost of each job created or supported by the State agency had risen from €4,278 to €12,254 over the past decade.

He asked whether the agency, with funding raised to €420 million from €396 million last year, is “costing too much to finance”.

He asked why the agency was being funded to put that money into companies it had already backed which it called “viable but vulnerable”.

Mr Bruton did not believe too much was being spent on the agency when business in Irish markets had dropped by 20 per cent and world markets by 10 per cent.

He said Ireland had to develop indigenous growth and employment in Enterprise Ireland had been cut by 40 per cent.

Mr Bruton said it was “not a huge, top-heavy administrative operation”.

“Enterprise Ireland, as well as the rest of the department, will see its staff reduced in the coming years,” he said.

They had to be “cost effective” but he did not think a “prima facie case has been made that this is an ineffective use of an organisation that is not well-managed. The contrary is my view.”

Calculating the cost of jobs was done on the basis of “cost per job sustained” and at the end of a seven-year period. He added that when equity-related investments were repaid, the funds from this were used in reducing the cost of jobs.

The sale of shares in one company had resulted in a refund in 2000 of more than €100 million, which had affected calculations up to 2006 and had reduced the cost.

The increase was because of additional supports provided by the agency through the stabilisation fund to ensure Irish-owned companies were in a position to withstand the worst recession in decades, he said.