By obtaining a guaranteed loan, SMEs are thus enabled to develop a positive track record with the lender with the objective of returning to standard commercial credit facilities in time. It will also place Irish SMEs on a competitive level-footing relative to other trading competitors, who often avail of a guarantee in their own countries.
It is widely recognised that the benefits from small business growth accrue more widely than just to the individual company who has accessed the credit through the Guarantee Scheme. There are positive spill over effects into other businesses, activities, and to society as a whole.
For the Lender, the successful performance of the guaranteed lending helps develop experience of and confidence in undertaking that type of lending and provides evidence to inform the refinement of policies in respect of lending in cases of inadequate security or to novel propositions which may otherwise be outside the Lender’s existing risk appetite and parameters.
Further information – Further information, guides for customers, FAQ are available at the following links: http://www.djei.ie/enterprise/smes/creditguarantee.htm
This is the third report of the Monitoring Committee established by Government to monitor and drive implementation of the measures contained in the Action Plan for Jobs 2012. As with the previous two reports it outlines progress made on measures due for completion in the preceding quarter, Quarter 3 (Q3) of 2012, but for the first time includes an update on measures described in the Plan as “ongoing in 2012.”
The Action Plan, which was published by Government in February this year, provides a comprehensive framework for actions right across Government and the public sector to support economic growth and job creation. To deliver on this, the Plan outlines more than 270 actions to be undertaken in 2012. Each of the associated measures specifies the Government Department or Agency responsible for implementation, and the quarterly deadline in 2012 by which they will be delivered.
In order to drive implementation of the measures, the Government established a Monitoring Committee which comprises representatives of the Department of the Taoiseach, the Department of Jobs, Enterprise and Innovation, the Department of Public Expenditure and Reform, and Forfás.
Ireland has suffered an enormous dislocation of employment as a result of the crisis. In the three years prior to the Government taking office, over 300,000 jobs were lost, and addressing the employment crisis is the Government’s top priority. The continuing scale of the challenge is evident from the most recent data which shows that, on a seasonally adjusted basis, employment fell by 13,700 (-0.8%) in the second quarter of 2012. This follows on from a seasonally adjusted decrease in employment of 10,300 (-0.6%) in Q1 2012. The number of people currently in employment stands at 1,787,900.
Jobs continue to be lost in construction and domestic financial services, as well as in the public sector, with employment falling by 21,000 and 9,000 in the public and construction sectors respectively between March 2011 and June 2012. However, employment has started to grow in more sustainable sectors since March 2011, including tourism-related activities (+10,500) and ICT (+5,500). Employment in IDA-supported companies has increased by approximately 9,000 in net terms since the start of 2011, while employment in Enterprise Ireland supported companies increased in 2011 following a four-year period in which 30,000 jobs were lost. Exports by Enterprise Ireland supported companies reached their highest-ever level in 2011.
The Action Plan for Jobs 2012 is the first instalment in an ambitious multi-year process which aims by 2016 to create the environment where the number of people at work will increase by 100,000 net – to 1.9 million – and reach 2 million people by 2020. Overall, the success of the Plan will depend on whether it fosters greater job retention and creation.
In the third quarter of 2012, Departments and agencies were to deliver 67 measures relating to 57 of the Action Plan’s 270 actions. 58 of the 67 of the measures due in Q3 of 2012 have been delivered on schedule, giving a completion rate of 87%.
In delivering 58 measures in the third quarter of 2012, the Government has, for example:
- Established new Technology Centres in Cloud Computing, Learning Technologies and Financial Services. These are collaborative entities established and led by industry, focused on research with a direct impact on industry. Action 1.4.
- Enacted legislation that will ensure procedurally–robust wage setting mechanisms. Action 1.12.
- Launched Smart Futures, a science, technology, engineering and maths (STEM) careers partnership between ICT Ireland, the Irish Medical Devices Association, Engineer’s Ireland (STEPS) and SFI/Discover Science and Engineering. Action 1.37.
- Launched the Microfinance Fund which has been open for business since October 1st 2012. The Fund will provide for loans of up to €25,000 for viable businesses with less than 10 employees who have had difficulty accessing credit from the banking sector. Up to €40 million in additional lending will come from the fund in the next 5 years. The scheme can be extended to provide an additional €50 million over the following 5 years. Action 2.3.
- Launched the first programme of Management Works in Dublin, where firms are focused on management team development. Additional programmes in Galway, Cork, Waterford, Clare and Dublin will commence in October. Action 3.19.
- Organised regional food showcases in the BMW region, South East and South West regions where over 120 enterprises are matched with potential buyers and producers in the locality and help stimulate the creation of local jobs. Action 7.4.1.
Nine measures outlined in the Plan for completion in Q3 have not been delivered on schedule. These are:
- Implement revised legislation to permit SFI to fund ‘applied research’ (revision to Industrial Development Act (SFI) 2003). Action 1.3.
- Place downward pressure on insurance costs and the cost of legal services via enactment of the Legal Services Bill. Action 1.16.
- Introduce a systematic approach to the national surveying of undergraduate and postgraduate students and employers to inform institutional and programme management and development. Action 1.38.
- Publish legislation to integrate the foreshore consent process under the Foreshores Acts 1933 with the existing on‐land planning system. Action 1.47.
- Enact legislation to give effect to the new structure of employment rights institutions. Action 1.48.
- Publish legislation to improve the legal environment to set up and operate a business (Consolidated Companies Bill). Action 2.13.
- Assess applications and recommend allocations to the Minister under a new round of the Sports Capital Programme. Action 6.10c.
- Make allocations under the new round of the Sports Capital Programme and inform successful and unsuccessful applicants. Action 6.10d.
- Introduce a Voluntary Code of Conduct on Payments within the private sector, with the aim of reducing payments terms from the current average of 70 days. Action 7.13.2.
A further measure has not been delivered as set out in the Plan for Q3 but has been replaced with another job-supporting measure:
- Issue to persons who are over one year unemployed a certificate to present to employers of eligibility for Revenue Job Assist. Action 3.45.
The completion rate of 87% in Q3 follows on the 96% completion rate seen in Q1, and 94% in Q2. This deterioration in delivery is due in part to delays in the publication and progression of legislation in the last quarter. Whereas in the first two quarters of the year delayed actions were subsequently delivered within a relative short timeframe, this will not be possible to the same extent with legislative delays. This issue will therefore likely persist and impact on measures due in Q4 also.
All 160 measures that fell due in the first six-month period have now been delivered in full. This includes the five outstanding measures from the second quarter: accelerate the programme of revaluation of commercial premises, which will provide a basis for an adjustment in the burden of commercial rates, (Action 1.17); submit proposals for Government decision on a new national waste policy, (Action 1.22); building on the work of the Next Generation Broadband Taskforce, agree advanced broadband targets and milestones for Ireland, identify the infrastructure deficits nationally and then develop and implement a plan to achieve these targets, (Action 1.45); following establishment of the Microfinance Fund facility (i) apply to European Investment Fund (EIF) for a guarantee facility and (ii) complete a due diligence process with the EIF, (Action 2.3).
As noted above, this Third Progress Report for the first time includes an update on the 92 measures described in the Plan as “ongoing in 2012”. Although not specifically due in the last quarter (or any specific Quarter), Departments and Agencies with responsibility for actions listed as “ongoing in 2012” have signalled progress on them to the Monitoring Committee for this report.
In progressing measures described in the Action Plan for Jobs as “ongoing in 2012”, already this year the Government has, for example:
- Placed downward pressure on commercial rents in respect of which NAMA has acquired the loan on the underlying property. Since the start of the year, NAMA has approved cumulative rent reductions through debtors/receivers of over €6 million. Action 1.24.
- Brought down the cost acquiring commercial property by reducing the Stamp Duty rate from 6% to 2% and the introduction of a Capital Gains Tax incentive for property purchased up to the end of 2013 and held for at least seven years. Action 1.25.
- Provided bonus points for students taking leaving certificate higher level mathematics from 2012. Action 1.36.
- Through its Discover Science and Engineering programme, promoted the study of the physical sciences to students. Action 1.37.
- Fostered greater alignment between the Further Education and Training sector and the labour market. Action 1.39.
- Invested over €1.5 billion of exchequer capital to ensure Ireland’s infrastructure can facilitate economic growth, including capital investment for direct enterprise support and development. Action 1.41.
- Secured 159 significant (over €500,000) investments by Enterprise Ireland assisted firms in a range of areas which are critical to company growth and job creation. Action 3.1.
- Undertaken ten major sector–specific Trade Missions and market evaluation Missions that reflect the priority markets identified in the Trade Strategy as well as firms’ interest and stage of development. Action 3.12.
- Assisted Irish companies in winning 540 significant brand new customers across almost 50 countries. Action 3.13.
- Cascaded Management Development learnings to a wider number of companies, with over 120 participant companies on significant management programmes, and over 460 on short-course management development programmes. Action 3.20.
- Established a Manufacturing Development Forum to assist the Government in identifying the needs of manufacturing enterprises and to progress a transformation agenda in this area. Action 7.1.2.
- Implemented the Action Plan on ICT Skills to address the skills needs of ICT and related sectors, with currently more than 600 participants on the Level 8 ICT Skills Conversion programmes that have been rolling out since March 2012, and more than 1,300 people now due to graduate from ICT courses provided under the first phase of Springboard. Action 7.5.1.
One of the “ongoing in 2012” measures - marketing the Infrastructure Fund to Irish investors, Action 1.42 - is currently delayed.
The Action Plan for Jobs is a rolling plan and, above all, a plan that will be judged on its results and impacts. In this context, some early stage impacts, linked to the implementation of measures in Quarters 1 and 2 aimed at enhancing the operating environment for firms, are now being seen. For example:
- In the first six months of this year, investments by 44 multinationals in Ireland were announced with associated jobs for Dublin, Limerick, Mayo, Sligo, Cork, Louth and Kildare (Action 5.1).
- In the first six months of the year, 53 new High Potential Start-Up (HPSU) companies were supported by Enterprise Ireland that together plan to create over 900 new jobs by the end of 2014. Both the number of investments and the number of jobs to be created are significantly up on the same period last year.
- Over 280 employers have been awarded Employer PRSI exemptions in respect of over 635 employees in the first six months of 2012 (Action 1.13).
- There have been tens of thousands of visits to the ConnectIreland website, under the Government’s Succeed in Ireland jobs finder’s fee scheme. “Connectors” have submitted 349 company names. Project activities range from software to professional services and from engineering to business support. Employment potential is generally in the range of 10-50 people. One project has already been announced - Intergeo Services is to establish its EMEA Headquarters in Carlow, with the potential for 30 skilled jobs (Action 5.6).
- More than 6,000 additional free part-time higher education places for unemployed people have been rolled-out under the latest Springboard call. The places are available free of charge to unemployed people on 220 different courses in 36 public and private higher education providers across the country. The courses address the skills needs of key growth sectors of the economy, such as ICT, international financial services, medical devices and the green economy. Courses that address cross-sectoral enterprise and generic skills needs are also available. Over 60% of courses include a work placement element (Action 1.34). More than 1,300 people have graduated from ICT courses provided under the first phase of Springboard 2011. A further 2,200 places on ICT programmes from Certificate to Masters Degree level have been made available under Springboard 2012. (Action 1.35).
- In May 2012 the JobBridge Scheme was extended providing an additional 1,000 places and widening the eligibility criteria to include recipients of One Parent Family or Disability Allowance. Up to Q2 2012, 1,310 interns who completed their JobBridge placement progressed directly into employment on immediate completion of their internship. This represents 37% of all JobBridge finishers to-date and compares favourably with European averages in this area. In excess of 6,000 companies have participated in the scheme to date (Action 1.35).
- The successful buyer forum, Marketplace 2012, involving 176 Irish companies and 500 international buyers, has by end June achieved sales contracts of €5 million. The target is to exceed the sales contracts of €8 million and €11 million achieved in the two previous Marketplace events.
- There continues to be a significant number of enquiries from potential applicants and their representatives for the Immigrant Investor and the Start-up Entrepreneur visa programmes. To date, one application for the Immigrant Investor Programme has been received as well as eleven applications for the Start-up Entrepreneur Programme. One application under the Immigrant Investor Programme has recently been approved, as have two applications under the Start-up Entrepreneur Programme on foot of recommendations from the Evaluation Committee (Action 4.7).
- Irish firms have signed multi-million euro contracts with international customers, made international acquisitions, and launched new products, while education institutes have agreed memoranda of understanding with numerous universities overseas on foot of trade missions undertaken in the first six months of 2012 to the US, China, Finland, Sweden, Turkey, UK and Russia (Action 3.12).
- The National Procurement Service has an ongoing campaign to encourage registration by SMEs on the eTenders website. Since the start of the year, New Supplier Registrations on eTenders exceeded 18,000. When the new eTenders system is operational, companies that register will be required to provide information in relation to employee numbers, thereby facilitating reporting in relation to supplier registrations by size of company (Action 3.52).
For further information contact:
Department of Jobs, Enterprise and Innovation (DJEI)
Department of Jobs, Enterprise and Innovation
Ph: 631 2200